The Wolf Of All Streets - Bitcoin Bears: Prepare To Suffer, Bitcoin To Reach $200K This Cycle | Macro Monday

Episode Date: November 18, 2024

Join Dave Weisberger, Mike McGlone, and James Lavish as we break down what's happening in macro and crypto! Dave Weisberger: https://twitter.com/daveweisberger1  James Lavish: https://twitter.com/jameslavish  Mike McGlone: https://twitter.com/mikemcglone11  ►►LET ME KNOW YOUR BITCOIN PRICE PREDICTION FOR 2025!  👉https://roundtable.rtb.io/shortUrl/ApwkJIW ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEKDAY! 👉https://thewolfden.substack.com/   ►► The Arch Public Unleash algorithmic trading. Discover how algorithms used by hedge-funds are now accessible to traders looking for unparalleled insights and opportunities!  👉https://thearchpublic.com/  ►►TRADING ALPHA READY TO TRADE LIKE THE PROS? THE BEST TRADERS IN CRYPTO ARE RELYING ON THESE INDICATORS TO MAKE TRADES. Use code '10OFF' for a 10% discount. 👉https://tradingalpha.io/?via=scottmelker  Follow Scott Melker: Twitter: https://x.com/scottmelker Web: https://www.thewolfofallstreets.com/ Spotify: https://spoti.fi/30N5FDe   Apple podcast: https://apple.co/3FASB2c   #Bitcoin #Crypto #MacroMonday The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

If Bitcoin bears haven't suffered enough over the past few weeks, Bernstein says that Bitcoin is going to $200,000 and outline the path to get there. We love hyperbolic price predictions for titles. So we're just going to roll with that. But we have a lot to talk about with Bitcoin and of course, the election, all of the appointments and everything that's happening in macro. And I've got the best three in the business here to do it with me, James Lavish, Dave Weisberger, and Mike McGlone. Macro Monday, it's the best hour of the week. Let's go. Let's go. swimming through his vault of gold Bitcoins there. I love it. I love your new backgrounds. Could only do it in the virtual world, Scott.

In the real world, sailors buying too many of them. You just can't afford that much. We are going to get there, but first we're going to go back to, now that we're back to a normal life to some degree, the election has set in.

Bitcoin now trading kind of around 90,000. Mike, what are you guys looking at generally? What happened in the morning meeting today? It was quite the good one. The consensus is the Fed probably is done easing for now. Ana 1 expects the core PC deflator to actually tick up. Fed FOMC expects it to tick down. The key quote from Ana was the Fed, and Paul used that word, careful too much, which is Fed speak for we're done, we're pausing, expects the next unemployment number to be a little stronger to make back for the October weakness.

And the key thing is the Fed wants to avoid the biggest, one of the biggest mistakes in history when they were easing too much. And we kept getting inflation despite that American Rescue Act. So they're really cognizant of the fact that we're going to get some more fiscal stimulus and they have to offset that because inflation is actually high above their targets. IRA Jersey said 447 is key resistance in the 10-year note yield. I point out that copper and crude oil probably likely decrying, which might solidify that resistance. Our key equity strategist, Jillian Wolf, just pointed out the tariffs, 60% and 10% in all countries are typically short-term inflation, longer term, more disinflation. I like to point out, just read the book, No Trade is Free, and expect a pretty hard ham, sledgehammer on tariffs.

And our chief FX strateg strategy says she doesn't see what's going to stop the dollar bullshitter for now dollar dollar going up that's that's interesting i think a lot of people are looking for sort of the dollar to head back down after all this sets in i do i did one thing i want to add to i do enjoy that it's a thing every single time i hear people say bearish things about the dollar, I'm like, look over at crypto dollar. What's the most widely traded crypto? It's still the dollar. I mean, which is December 18th, right. Is it's down to 58%. So, you know, the, the economic numbers have been strong enough. And I agree with Mike. I mean, like inflation has been sticking above 3%.

It's been stuck there, which is, you know, it's only 1% higher than the 2%, but that's 50% higher than what they, you know, what, what their so-called target is. So it is going to be interesting. The long end of the curve, it's not slowing down. I mean, what's the 10 you're at today, Mike? Is it above 10 yet? 4.46.

About 4.50. It's 4.45. So, you know, I mean, it's right there. So, yeah, I mean, the bond market is telling you, continue to expect its strength and higher inflation expectations in the long term, period. And James, we had CPI and CPI both up even slightly, or at least versus expectations last week. That was the first time we've actually had that happen in quite a while. Yeah, and you've just watched it. It just kind of leveled out and it's been sticking at 3% here or higher for, for months and months now. So, you know, um, will it, they, just like Mike said, the Fed

doesn't want to make the mistake of a resurgence in inflation all of the, uh, the seventies, you know, they don't want to have, we've talked about it ad nauseum, how, um, how Powell doesn't want to be, he, he, he wants to be Volcker, not Burns, you know? I mean, that's the, that's the, he, he has a legacy here. I mean, he declared he's not gonna, he's not gonna resign and that Trump can't fire him and all that. But I think his focus is again, how he is seen, um, as, as the, the person who the authority who has kind of ushered the economy through this, the COVID crisis and out of it. And it really matters to him, in my opinion. Yeah. I think Mick Jagger said it best. I think Mick Jagger said it best in terms of power. You

can't always get what we want. Right. How about i can't get no satisfaction that too that too i i mean we can bring the respects on look at that chart of the dollar i mean you know the the dixie the dixie is bumping up against the top of its year-long range you know i mean it did go a little bit higher almost exactly a year ago it came right back down to this channel between you know 107 and and 100 and now we're at 106 and a half i mean yeah i mean the dollar could break out to the top of the upside if it does it's because people are buying it uh to take advantage of treasury yields because they're much higher that is the reason uh but the question that begs the question is, well, if that's true, then why are they demanding so much that those yields? Why are yields going up if there's demand?

Because, you know, people are trying to buy in. And it's an interesting question. The reality is, I think Mike is on to something. The world denominates stuff in dollars. As long as it's the denominator, people need to park their money somewhere and we know that the entire cryptoverse stores their dollars you know when they buy tether tether takes the dollars and buys treasuries with them so you have this interesting trade that every time there's a bull market in crypto people buy print tether in the tether treasury to buy altcoins or bitcoin but mostly all coins in the tether case. And then Tether takes that and buys treasuries with them. Meaning what's good for crypto is good for

treasury yields and allows people to do that. And therefore, people then buy dollars. It's an interesting washing machine. And it used to be so insignificant. We could just kind of talk about it, but it would be irrelevant. It's not so insignificant. No, you know, you when you're in the top 15 of buyers or treasuries, your buys are no longer, you know, irrelevant. They're now potentially the marginal price setter or or at least part of the marginal price setter. So it's interesting. So you know, it's it will start Monday was something where Mike

and I agree. I just want to mention this. Someone type this, Matt. Mark it down. It happens. This is that 70s chart, by the way, just for people who have not been watching or have not been listening. This is to 2023 when you're comparing them, by the way. So you're watching Arthur Burns up there in the front end, right?

And then you've got Volker in the back end. Well, let's be clear. James, you've talked about this. Volcker had a 34% debt to GDP. I know. We're at 135%. We are 100%. Literally, you can't even compare the two.

If you did what Volcker did now. Raise rates up to 20%. I don't know what the word is. We don't have a word. We have recession. We have depression. What's the word for cataclysm? I mean, I remember my parents in the 80s paying, you know, 14% mortgage.

So, Scott, I got to follow up on this. I got to show you one chart based on what you said. It was in a chat this morning, on a Bloomberg chat. And the guy I pointed out, Crudell's probably going to 40. Gas in the price, average price of gas, which is three, it's probably going to two. Diesel, which is closer to 350, is probably going to 250. That's because we have a massive excess supply. We need to export it and there's going to be a trade war. And he says, what does that matter with CPI? So I just showed you, here's crude oil typically versus the 60-month

moving average. Always gets cheap. It's not cheap yet. Here's CPI. But the bottom line is the difference when people talk about the 70s is it's completely different. Number one, we had one major event that caused the inflation. But the bottom line is we have U.S. stock market at two times GDP. In the 70s, it was half GDP. So to me, when people talk about inflation, if I'm looking for a trigger, that's it right there. If we just get a little backup in the stock market, there is deflation and you need it to keep going up just to keep inflation stable. Now that we're up a third on a one-year basis, sure, you expect PPI and CPI to stay strong, but that's how far away we are. And that's why I just, I know I hate the,

people hate to hear it, but the Bitcoin beta to the stock market is usually about 3x. So this to me is, when you talk about inflation, inflation or deflation risks, the US stock market, it's usually about 3x. So this to me is, when you talk about inflation, inflation or deflation risks, the US stock market has to stay elevated. Everything else is kind of, in my world, is tilting, certainly commodities with gold going up and everything going down, is tilting towards deflation. So obviously we've got, go ahead, really quickly, I just want to say, so you've got what stops crude, typical, too cheap track. So there is a level at which the deflation or the disinflation, whatever you want to call it, of oil prices is track. So there is a level at which the deflation or the disinflation, whatever you want to call it, of oil prices is problematic. But if we have tariffs that are

going to be inflationary, but gas prices and oil are going to be coming down this much, can they offset and be healthy? That was the thing what I published this morning. Also, the key point is tariffs are short-term inflationary for goods. And this country trades about 10% of our GDP. Most of the rest of the world who has to export to the US just to stay stabilized, it's closer to 20% of their GDP. So sure, in the short term, the more significant thing is tax cuts and fiscal stimulus. But that's my point is if you see gasoline go down to two, which I think it will, that's pretty deflationary. But does that mean that the prices of consumer goods? Will that counter inflation we'll see from the tariffs? For instance, like food. Food's going down. Corn right now is four bucks. It's

the same price it was traded in 1970s. It's dropped 50% from the peak. But most of the food you see in grocery stores is transportation. No, my corn is $90,000 right now. Corn is $90,000. I missed that one. The bit kinds. The bit kinds. The point is, when you talk about foods and take them, let's talk about food. Food is a major component of CPI. A lot of the cost of food is not the actual cost from where you produce it.

It's the transportation. Yeah, the energy cost. It's the largest component of CPI without a doubt. It's the largest driver of it. without a doubt. It's the largest driver of it. And that's a really good point. We had the oil embargo way back in the 70s. That was the driver of inflation. That's exactly right.

I agree. The question is just how much easier we're going to see, how much expansion of the money supply are we going to see in the coming 6, 12, 18 months? I'm betting we're going to see more easing. I think you're right, Mike, that if the stock market pulls back 20%, 30%, that would probably be healthy overall long term. However, we are a nation that is, we're an economy. The whole Western economy is addicted to debt and there's, it's a very difficult, you know, it is going to be like landing a jetliner on a piano wire, you know, to avoid an upward spiral of debt from all of this borrowing. I mean, if you have GDP come down, we're so financialized,

you have GDP come down 10%, 20%, I mean, then you're just talking about it. You're talking about expanding on those deficits, which I think they're not going to... All we talk about Doge and all we talk about the, you know, Department of Government Efficiency. I mean, I'm going to be talking about this out in New Orleans this next week about how difficult it's going to be to to actually overcome, you know, these deficits. You just where can you cut?

You're not going to be able to cut until you get into the bone to get to get past all those deficits that we have too many entitlements. So and that will only get worse if we have a recession. If we, if we, if we have a pullback that only gets worse because entitlements gets, get worse in a recession. And then you have both your expenses going up and your income coming down. And it just, so this is what they're trying to avoid. But Powell is trying to avoid it without having a resurgence of inflation. Good luck. I would not want to be in his seat.

That's my thing. I just wouldn't want to be in his seat because I don't see how he wins. And like Lynn Alden likes to say, nothing stops his train. I mean, that's not what I'm saying. Let's pull this apart into two pieces. First, when I look at Mike's chart, I see the relationship between oil and inflation and understand that I agree. I think drill, baby, drill. And I know you wanted to talk about this, Mike. We'll down to 40, but it's certainly dropping. And I think most people believe that that will happen. That directly impacts consumer inflation directly. And so that lowers inflation. The problem with the thesis of deflation is we're printing money like, you know, the old money printer go Birmingham. And so financial asset inflation is likely to offset consumer

inflation which by the way is exactly what they want so you know when the government wants something to happen they're doing something and it's happening they're not going to change that so you know the there's this really interesting dynamic i mean stocks are stupidly expensive in the aggregate yes you're right you know two times g GDP. The government wants it to be, you know, up if they can, because they want the wealth effect. America in the 70s was a producer economy. America in the 2020s is a consumer economy. That is a massive difference. You pointed that out yourself. And so when I hear that, I think that the trend toward financialization is still here, isn't changing anytime soon. And so I don't resolve that as deflation because you can't have deflation when the denominator continue to get gets printed at

the rate that it gets printed. And so it needs to go someplace. And that's where I think this cycle is the Bitcoin D-Link from the stock market. This 3x beta is really, anyone who's ever traded will tell you, beta is incredibly unstable. And so beta basically means when something goes up, the other thing goes up more if it's 3x. And it can be measured in a billion different ways. Right. And so when you look at comparing NVIDIA to the NASDAQ, NVIDIA's beta is pretty high too, right? But that actually intuitively makes sense, right? When you look at Bitcoin to the stock market, when there are days like last week, when the stock market dropped 2% and Bitcoin went up 5%, what the hell does that mean? And so, yeah, you smooth it out and you look at it.

It is a really interesting question. Are we reaching the critical mass moment? The answer to that question will be determined by what happens with strategic Bitcoin reserves. And that's a totally different conversation. Let's table that for later. Okay, go ahead. I was going to say that we know someone else who has a strategic Bitcoin reserve. I do want to go back to oil later, but this is just getting ridiculous in the most amazing way. dollars per Bitcoin. This has to be by far, at least for dollar value, by far his biggest purchase for MicroStrategy, $4.6 billion worth right here. But I want to show you guys something. I just saw this article come up actually on the block while you were talking. Marathon has announced a $700 million convertible note intention to acquire more Bitcoin. So now we have a Bitcoin

miner that's going to follow the microstrategy playbook of raising debt to buy more Bitcoin when they're already buying and mining Bitcoin. Right. So if anyone was curious if some of these miners are selling, I don't think they're selling if they're raising a convertible note here, obviously, to buy more Bitcoin. I mean, finally, we have another company here that's going to do the same thing. Big enough. Big enough to do it. Yeah, I mean, it is worth pointing out,

as I just noticed that funding rates, according to Coinglass, are back up to the levels, you know, it's 0.0325 standard is 0.01. So triple standard based on open interest funding rate. When that happens recently, when that happens, that's generally a sign of a local top. That doesn't mean much. We're at 90,000. So, you know, whatever, you know, it always takes a while to get through these kind of, you know, psychological levels, but people should be careful. What it is indicative of is people seeing the micro strategy in the marathon news

and buying on leverage. Now that doesn't mean it can't go higher because people, there could be spot buying underneath it. But it is worth those people trading the markets to understand that. 51,780 Bitcoin. What's that, like four months worth of mining at the current supply? I got to riff off of that a little bit. This is the first time in my almost 40-year history in this business. Within two months, I had two fathers ask me about their son's holdings of MicroStrategy. They were concerned. I've just never had that happen before. Now, full disclosure, being said, at Bloomberg,

I can't really trade Bitcoin and things, but I was able to do proxies. So I bought some MicroStrategy a few years ago, and I was kind of shocked how easily he got me a 10x. That was not usually my work. So when I get a 10x. That was not usually my work. So when I get a 10x in something, you usually don't want to be joining it. So I had to sell a bit of it because it became overweight. The key thing I want to point out is just riffing off what Dave said a little bit is I'm completely biased towards the key thing I've been saying about gold for years is you can't hold gold anymore without some Bitcoin in that space. So you're just missing what's happening in this world of rapid advancing technology. But the way I look at it and still keep this same, as long as beta is going up at this pace, you're better off having that risk adjust overweight in Bitcoin.

But at some point when we have some correction and downward drift in beta, which does happen, and obviously I've only seen it, some of us have seen this longer term, we're overdue for that. Then we should see that test. Now, of course, Dave and you all think Bitcoin's going to outperform. I would love to see it. And it certainly has lately because we have this wonderful hopium of a new president, the crypto president. But we still haven't seen that period when we see a little bit of a bear market equities in Bitcoin outperforming that. That's to me the macro big picture. So to me, that's at some point is going to switch. And that's the bottom line why I'm still completely bullish gold. I don't see, you know, when you talk about, you know, debasing the currency or something, gold's been outperforming beta for three years now, the stock market, on a total return basis.

And that's just not a good sign when all you hear, I see on CNBC, is AI-driven stocks, yet the rock is beating it. Now, we've seen lately Goldman's tilting towards gold versus equities. That's kind of significant. But maybe we should comment on that a little. Yeah. I mean, I think when you look at that, and I've always been somewhat of a gold bug in a sense. I just think that the monetary component of gold, I wrote a post over the weekend where I tried to explain to someone what the case for Bitcoin was. And the short answer is that gold be monetized silver. And effectively, if you look at it in the Earth's crust, it's 15 times rarer, and it trades at 85 times higher. And so I look at this

and very simple math conclude that around 80% of gold's value, its price is its monetary price, its denominator to everything that's going on and I believe that Bitcoin will be monetized gold or at a very at a very minimum equate to gold because gold as a whole represents seven eight percent of monetary aggregates when it used to be a hundred and you know a proper denominator would be 100. So there's room for both. And I think that that makes sense. But the bull case for Bitcoin is it getting into that league.

And that is something that is, Saylor talks about it, but he goes hyperbolic to all financial assets. And he also believes, and he may not be wrong, that financialization is, if anything, accelerating. And therefore, the terminal state of all this has to be higher. The problem with all the analysis that we do when we look backward is we're looking at a regime where we've been in the fiat era since 1971. And so you have a rich history of 50 years of financial

markets to look at during which financialization, which is what James talked about, has been accelerating the whole time. And so you kind of have to lift back the, you know, peel back the curtain there and say, okay, what's going on? And so your point, correct, that mark the GDP, you know, 50% of GDP, you know, 50% to, you know, to 2% or two times, meaning relative to gross domestic product, to what we build, the stock market is four times more expensive than it was in the 70s is an incredibly important point. The question is, is that structural because of financialization, which or may not reverse because if it if it reverses i mean i don't know how the us is a consumer economy anymore if you literally cut its ability to consume by 75 which is essentially what you're saying i'm not saying it's going to happen i'm

just saying that that the the if then else as comp you know first first year computer science would say it's kind of a dangerous scenario. And so that's sort of why you get me looking at funny when you go through that, because you're not wrong if then else. I mean, what happens? Yeah. And look, Bitcoin's got a bunch of things going on for it.

You know, the ETFs are maturing, uh, that, uh, I, I remember reading this weekend, uh, gosh, I can't remember who was writing about it. I apologize, but, um, he did a, he did a, uh, an analysis that it looks like it's about, maybe it was Fred Kruger saying it was about 30 X. It was, it was Fred Kruger saying it was about a 30X multiple trading friction on those ETF buys, meaning that the price moves by 30X the amount of dollars that comes in. So the ETFs maturing is important. That's one thing. The hopium on Trump, well, it's part hopium that we get the Bitcoin reserve.

And that's really more on Lummis than it is Trump. But it's also just a relief. It's a relief that this administration has been so antagonistic on the whole industry that it gives people the green light to go ahead and dip back in. And then you get to a price here that it's like, well, it's above that all-time high. That all-time high was years ago. Now it's holding it. And so institutional investors, not just hedge funds anymore, family offices, small institutions, they're starting to add to this as a small position, pension funds, adding a half or 1% to their positions. You do have the microstrategy effect where

Michael has a two and a half times multiplier on this thing. So every time he buys some, his stock goes up. It gives him ability to tap into his ATM and buy more. It's madness. It's a little bit of a money glitch. How long can that go on for? I don't know. What should the multiple be on MicroStrategy? I don't know. I think it's more than one.

I think it's less than six or seven. Who knows in between? He doesn't even know and he'll admit that. But the reality is that you've got that going. You also have the gap accounting that's coming up in 2025, where you can actually mark your Bitcoin holdings to market, which allows more companies to buy it and put on their treasury without worrying about damaging or impairing their balance sheet. And so these are important developments and it's not just that risk asset anymore.

Is it maturing? Yes. Is it maturing rapidly? I mean, it's slow. And I think that the institution adoption is going to be really important in this cycle. In this next 18 months, it's going to be a really important driver of stability in this price. And hopefully it'll help dampen out some of the volatility until we get to that ridiculous blow off top as usual. And then it draws down in an equal amount of frenzy or pace. It's worth noting on the corporate side that the law changed in 2024,

but the way it worked is you have to start it when your next fiscal year started post-January. It's worth noting that a lot of companies have fiscal years that start November 1st, that end October 31st. And so I think that part of the buying you're seeing is starting now. So anyone who has a calendar year, you're right about January 1st, but it depends when the fifth school year is of companies and different companies in different years and frankly the hell if i know where the majority is so james i got to follow up with you you nailed it on october august 5th bitcoin dropped below 50 you're like yeah i'm buying so great call great move dave scott you

all agreed but i have to ask you now about position management. Even if you can answer the question, now you're basically up about 100% in two months, three months. What do you do? Well, I mean, it's different for me because I'm on a Bitcoin standard in my hedge fund. I don't hold US dollars and everybody knows that. That's what our hedge fund does. That's what our investors expect. And so I weigh everything on a risk reward to Bitcoin. So what it means, Mike, is that at this price, I'm probably more willing to use some of that Bitcoin, underlying Bitcoin at a risk reward versus an underlying company that will benefit from the expansion of the ecosystem over the next five to seven years. So it gives me a different baseline in order to reallocate to other opportunities that are longer term than right here. So that's one thing. You're investing Bitcoin into Bitcoin companies.

Yeah. And I know that the ones I'm investing in, I expect for long-term growth. And so it's just a different risk reward. And so where does that risk reward play out? Now, I still believe, Mike, that if we don't, you know, I still believe that we ultimately do have more money printing, that we do have easing in monetary policy, that we do not see a massive drawdown in the market. If we do see a drawdown, it's going to be short-lived and just opportunistic for us.

And so I do believe that Bitcoin is going to take and hold this $90,000 level. It'll bump up against $100,000 a bunch of times. It may dip back down into the 80s or 70s for a minute. But then once it gets through $100,000 and holds that, I think that's it. It becomes, it's just self-fulfilling. You know what it's like. You and Dave know exactly what it's like. Scott, you've been watching this for a while. But institutions, they want to know that there's stability in the price and then they'll start dipping in and really start accumulating after that. And it just becomes self-fulfilling. And when it takes a hundred thousand dollars, I mean, the, the, this is an asset that cannot be denied anymore. I mean,

you're talking about something that you, you, you pull up the, uh, the largest assets in the world, right? And there's that, there's that, uh, the list of them, Scott. Um, I can't remember what, yeah. Yeah. I mean, the largest assets in the world and Bitcoin's hovering around seven or eight on the day. It's, it's right up against Saudi Aramco. I mean, this is, this is the largest energy company in the world. It had passed it by the way, when we were at 93. I mean, look at this. It's right there. It's above silver. I mean, so it can't be denied that this is an actual asset now. You know, people talk about, they talk about risk.

It is up here with the risk assets. And I will absolutely admit that it has been the tip of the risk sphere for a very long time. However, what people are getting their heads around is that I got to do some work on this because this is real. It's not going away. They've declared it dead countless times over the last 10 years. And here it is again. So again, can I follow up, Scott, with one of that? We all know how history is going to view Bitcoin. I mean, not for certain. You can't judge history, certainly. But I believe with Saber DeNomis' book, The Bitcoin Standard, the question is, how is history going to view Doge and Shibu Inu? I knew I'd have to.

I mean, honestly, what are we going to look at that and say, you know, it was kind of silly? I think they may view Doge differently than Shibu Inu, actually, just because of the current status of the government. I think that Doge has potentially memed its way into extreme long-term relevance for better or for worse. I mean, when you have a government agency or I don't know whether it's officially an agency or not, but that is called Doge in a presidency with Vivek and, and Ilan running it.

I think that Doge may actually somehow find its way into a relevant part of the conversation. And it's a proof of work. It didn't have the immaculate conception. But, you know, it was made over the weekend as a joke, right? I mean, so I think to answer your question, though, Mike, on the meme coins, I think this cycle, and I was talking about American HODL with him the other day. I think this cycle, investors, traders, fast money, they are admitting that this stuff is just nonsense. They're just trying to pick a fast horse to get some money out of it. I mean, they don't think that there's really any utility and there's no-

That was the point. There's no pretense that this picture will rock. By the way, there's an interesting conversation there, James, which is that we had this, I would say year, six month period, whatever, that really peaked in March and April, but meme coins now, Google searches are the highest they've ever been.

But we had this period where the SEC and the United States government pushed so hard against everything crypto that people started launching meme coins specifically with no utility to say, hey, these are actually fine from a regulatory perspective. We can do whatever we want with these. They were sort of a pushback against- And we can actually put the senator's names on them. Exactly. But we don't need to do that now. So it's actually an interesting place for meme coins if you don't need to only do meme coins to be squared with the regulators

and you can actually start to launch things. I mean, we had the rumor last week, obviously, which I will put my money against happening. But the rumor last week was that Trump is going to make any crypto launched in the United States or anyone who brings their company back tax-free, literally no capital gains taxes on anything launched in the United States.

I don't see that necessarily happening. But you don't really need to launch meme coins if you can launch anything you want from a legal company in the U.S. I'm not saying BlackRock would push against that. BlackRock would probably push against that, you know, unless there's a way that it would work with the ETF. And Dave, you're a little bit, you're much more, you know, attuned to the inner workings of ETFs, but I don't know how that would work.

So, you know, I just, the point is though, I think this cycle, Mike, people realize that these mean coins are just mean coins. There's nobody even putting, there's no even trying to pretend that they have value. It's just like this rock is a picture of a rock. It's a JPEG. You can copy it and put it on your profile if you want to. And it's worth, it's not worth $2 million, but maybe we'll trade around it because it's a fun thing to trade around. I just think Doge, I think Doge maybe will transcend the meme coin category as a sort of standalone asset because of the government and how long it's been

around. I don't think you can compare Doge to like cat with dog face. Dog wifi hat. I know. Yeah, exactly. Yeah. I mean, we've talked about that a a lot though the fact that meme coins were sort of a pushback against gensler and if you're not don't have to push back against gensler does that mean we'll see people start to focus more on utility or launching things that at least have some sort of reported use case well i mean yeah i couldn't help it i couldn't find the the i just used grok to draw a virtual image the uh the there is a long-term thesis and a short-term thesis the long term is if you are a mean coin that is going to be worth anything and these guys are worth billions so i mean this is just kind of crazy there will need to be a way for the holders

of those coins to participate in some sort of monetization community benefit they're going to need to transition in the short term they've been the people who built these things built it specifically so they wouldn't and so meme coins are more or less like fractional ownership of beanie babies and there's nothing wrong with that. I mean, you know, there's Birkin, I always use the analysis on NFTs, Birkin bag versus Beanie Babies. I mean, Birkin bags, you know, you can buy a Birkin bag for $40,000. It's,

you know, $30 worth of leather and packaged in a way that people pay a lot of money for it. And that's held their value, whereas Beanie Babies, we anyone, and by the way, I think it's actually a decent movie where Zach Galifianakis plays Ty Warnerer uh whatever it was called i can't remember uh you know people for a dollar fifty worth of fluff uh bought things and spent you know thousands of dollars right you know for particularly rare beanie babies now when it comes to mean coins

where there is depending on how the supply is organized, you're basically buying fractional pieces of that. Is that really a sustainable trend? I mean, maybe. I mean, who knows? I mean, I don't know. But what is a sustainable trend is if you have a community of people who are logging into something and putting their eyeballs there, and you can monetize it and create merch and other assorted stuff, then it's fine. I mean, but if not, then those things are going to zero. It may go to zero

in 30 years, but it will go to zero because you have to have some value, right? And that matters. Now, the thing that I found amusing is I don't see how Dogecoin benefits from a department of government efficiency unless there's some way to make that bridge. I mean, it's no different than Long Island ID from Long Island, Long Island blockchain. Right. And so,

you know, it's, it is what it is. I mean, people just like are jamming into this stuff and, you know, it's the great washing machine of, of money.

I mean, you know, and Mike talks about this all the time. And this is just money, liquidity searching to find a home. And it should be the opposite. It should be liquidity flow to what's going to be the most economically relevant asset. But that's not what we have here. And so it's, yeah, I think it's a great, I think it is the question, you know, all this stuff that we think is bullshit, you know, what will happen to it? And I think Bitcoin is dramatically not bullshit. I think that there are multiple platforms that can generate, you

know, actual revenues into their platform and that, you know, to holders, but then we have all this stuff that there's nothing. And so who knows? I mean, I don't know. I'm not, I don't want to get a lot of hate, but like you, when you want to value assets, you actually have to know what the economics are going to be. It's like XRP is my favorite one for asking the question. And we can't have a show where XRP is basically doubled over the last week and a half, two weeks, give or take. Right. You know, it's it's pretty close to a double. Right, Scott. And that is interesting because they're saying, well, XRP is going to get used for all these big bank applications. And so my answer to that is, OK, cool.

That's great. What does that do to the demand? How much XRP is necessary? Right. And so you need to understand supply and demand. I mean, when Mike talks about oil, it's supply and demand. Yeah. And just to be clear, when I talk about Doge and I recommend Doge, I'm recommending Department of Government Efficiency. The issue is, you know, the Department of Government Efficiency. I mean, so, yeah, you need to know where the value is for sure.

That's 100% accurate, Dave's a hundred percent, uh, accurately, but it's got to like, take a look. I just want to show you something. Where's your, where's your background, Mike?

I looked this up. I looked this up. So Dogecoin is the 428th largest asset in the world. Wow. That's big. Actually 428th at $53.6 billion market cap. I think today it's about 53. It's bigger than Vanguard.

I mean, it's... Vanguard is 435. Holy crap. How'd you see that? Vanguard right here, 435. That is astounding. So it's a wonderful thing. I just have to interject some of the sensibility I learned listening to the Rolling Stones in high school.

Because they were like, you can't listen to an to Led Zeppelin and things. But just a headline on CNN, Trump vowed to make US crypto capital the planet. I do enjoy all this. And I do enjoy hearing the things that I've heard similar stuff back during major asset market peaks that all these crypto people are using spies and queues as a store of value. Oh, okay. So it's just a massive Ponzi scheme that keeps going up. That's why my radar is on gold. And when some of the alts realize that, yeah, they're just silly speculative access, that's great and nothing wrong with trading to make it go up. But at some point, we know these things just don't last forever.

Well, I mean, keep in mind something. So like if trump actually did pass the rule or got a rule passed that did what he said that is a very big deal because the rule that's that they've talked about is american companies issuing cryptos can do so tax-free what will that encourage that will encourage a lot of new cryptos which means that all of a sudden now there's a lot more supply. What ended the internet bubble? A lot of people talk about lots of things, but one of the things that ended it was a massive spike in IPOs. And so massive wall, incredible amount of supply hitting the market for all this

crap. Now, does any of that have anything to do with Bitcoin? Not really. Does it have a lot to do with everything else? Yes, it does. I mean, put yourself in the situation of a U.S.-based crypto company that's languished for four years, that all of a sudden now, not only could you, where you basically couldn't issue a token as any form of financing, now all of a sudden the administration says, you know what? If you're a U.S.-based crypto company, not only can you issue a token, but here, we're going to help you and make it tax-free to anybody who buys this thing. Well, if you're a US-based crypto company, you're going to issue tokens. I mean, I kind of sit on the board of a US-based crypto company. And if that rule came in, we'd be crazy not to issue a token, right? Just think about that.

Think about what that actually means. Of course, it also means the value of US-S.-based crypto companies that have done nothing are probably higher today than the other time. But it's also quite possible we won't be able to pass that. So we have to adopt a wait and see. But it is a big deal. And supply and demand, we'll be talking about this as these rules come to fruition, you know, what that happens. And, you know, you guys were talking earlier about Treasury Secretary. I think that's kind of an interesting conversation, too. I'll pivot to that. Let's talk about appointments because I think that's a good conversation. So what were we saying about L Secretary. I think that's kind of an interesting conversation, too. I'll pivot to that.

Let's talk about appointments because I think that's a good conversation. So what were we saying about Lutnick there, Dave? Well, I mean, look, I'd rather let me go after because you guys had some interesting comments that I want to piggyback on the why. But rather than me saying everything, I mean, you know. James, you were talking about Lutnick for Treasury. Mike, I think you were talking about effectively oil. But maybe, James, start there and then we'll go back. Look, I haven't done I have not done enough.

We know who these guys are, but I haven't done enough research on what their recent statements are and what their recent positions are. You know, Lutnick, Mike, you can you can get into that because you have a better visibility there. But he would not be your typical pick. You know, it's just not – that would be kind of a – not an outsider, but he would be known on Wall Street. So it's going to be interesting to see what these guys say in, in, in their, in their interviews. And, you know, the, the most interesting part about this whole conversation actually for

me is that you had Elon out there saying, Hey, can you guys give me comments and who you think should be nominated? And, you know, like on a, on a expo, on a tweet, an ex post. And so it's really interesting to see people weighing in on that. Mike? Well, the inside scoop on Letnick, this is not my view, as I point out facts, is I started trading treasuries in 1988. And I've worked for a number of primary dealers. I've never heard anybody in the treasury business say anything nice about him.

He's just very widely hated. And maybe because he's this tremendous businessman and he makes it very difficult for people like me. He used to do business with his firm and I paid him a lot of commissions to canter. I still have my $4,000 sweatshirt from a friend of mine who died in 9-11 because I did a trade with him. It cost me $4,000 commission. I made money in the trade, but it could have been $3,000. So it's just a unique thing that, you know, not that Trump's very widely liked in New York either. It's just kind of a unique thing. The thing is, Treasury, to me, what's going to be Trump's major goal? He's got a problem right now.

The bond vigilantes are starting to show problem. Yields are going up with the Fed cutting is part of the reason Fed had to stop cutting, because this is not a good sign for inflation expectations and the massive increase in deficit. James is all over that all the time. The point is, right now we're kicking in where we might be having that point where yields going up is a problem. And the Treasury, he's going to need the Treasury to do everything they do to keep bond yields down. Maybe that means they issue more bills and bonds. So whoever he appoints is going to have to help his mange focus.

He needs the stock market to go up. The key thing I wanted to tilt over that was a substantial statement that hit this weekend was the Trump. He chooses the oil fracking boss right as the energy secretary. And I had to mention that because the current energy secretary boss is Jennifer Granholm, who's a lawyer from California. Look at that juxtaposition. That means massive drill will, massive supply, and already pre-existing trends of commodities, crude oil, gasoline, diesel going down. We'll gain some fuel pretty significantly. So if he can get a treasury sector to keep bond yields down, however he does that, maybe getting the Fed to buy them, issuing more shorter end stuff. That's pretty deflationary. I have to mention that because the word inflation and Trump are all in the same sentence. It's a complete consensus. So maybe I'm pointing out from this standpoint, at least what I'm seeing

what's happening in treasury secretary and what's happening in energy is more potentially deflationary. It's just one of those things you do as a trader. When you see the market all leading to one side, maybe it's a little bit signs it might go the other way. It's interesting as you say that about, about Lutnick, because both Dan Lowe from Third Point and Kyle Bass both weighed in this past weekend saying that Lutnick, that percent would be far more qualified and, and, and, and a better, and a better pick. So it's interesting that that's where Wall Street is kind of coming out on it and the front end yeah i think that it's really interesting if you and elon actually tweeted this but if you know the history i mean the reason howard lutnick is his impression on wall street is what it is and i and i had well like a lot of people, I had friends and colleagues who perished on 9-11.

So I know the story well. I worked for a company called Jeffries for a while in between Morgan Stanley and Salomon Brothers. And Jeffries was trying to, you know, trying to compete with Cantor in the natural trading market. But, you know, Cantor Fitzgerald and Howard Lutnick have been innovators and frankly disruptors. People hated eSpeed, hated it because it took out a lot of the edge of the dealers in the market. So if you are someone whose reputation is as an innovator and a disruptor, that has enormous appeal to Trump. And don't underestimate that because that is his reputation. And yes, there are a lot of people who said he was sharp elbowed while doing so. You know, speaking of someone with exceptionally

sharp elbows over my career, I, you know, kind of, you know, shrug my shoulders at it. I understand that. You know, I do it to you guys on occasion sometimes i'm trying to moderate myself i'm calmer than i used to be but people who innovate piss off people it's that simple i mean i i can't tell you how many stories i have of people and at morgan stanley while i was there building program trading or at solomon brothers through solomon smith barney doing you know other automation and building a central risk look i mean i've unemployed more Wall Street traders than most. I mean, hundreds of Wall Street traders I've helped unemployed by developing technology over my career. And trust me, every one of them, not everyone, but a lot of them are like that son of a bitch kind of person about me. So I am quite confident that that's a large part of why people believe that way about

Howard Ludman, because I've heard the same thing. I've never met the man, so I have no personal interaction with him whatsoever. We probably know hundreds of people in common, one degree of separation, but that's the reputation is disruptive. I think that's a qualification in this administration as opposed to a detraction. Move fast and break things on steroids is our new government. Yeah. And so it's interesting, but Mike, I think, you know, what you pointed out, obviously about a lawyer from New York versus a fracking boss, I think that bipolarity is present across almost every appointment. That's the story because

actually the current administration had pushed so far in one direction that those people were not moderate. Now you're getting the natural pendulum swing to the farther side of the other. So it's going to be probably, I haven't been alive as long as some of many of you, but this should be the largest gap between the appointments and generally just what the government does than we've probably ever seen before i mean like a bush a bush senior to clinton switchover really wasn't that big a deal because they were both sort of in the middle yeah yeah they were much much closer i mean listening to vivek talk you know a year and a half ago i mean i couldn't help but smile when he talked about

taking a chainsaw uh to government which then Miele and Argentina campaigned with. And I don't know who came up with it first. But, you know, it is fascinating to watch what's going on. Now, if you ask me, you know, and you've heard it on the show, I really do believe the only way out of our deadfall. I'm not saying it's going to work, but I think the only path, I mean, I feel like Dr. Strange in Avengers Endgame, but the only path that works is a massive wave of deregulation to create economic hypergrowth, leveraging AI, et cetera, et cetera. Because otherwise, with 200% debt to GDP, which is what we have if you factor in social security and medicare you can't escape that i mean japan has been you know printing their way to to live with it for three decades but you can't escape it the only way to escape it is hyper growth and the only way to get hyper growth is to unleash a wave of innovation now can it be done i honestly don't know i do know that's the only

possibility though well what's making people nervous aboututnick is that when I think in his speech at the at the RNC or at Madison Square Garden, he was talking about how in the 1900s we had no tariffs. I mean, we had no income tax and all and all tariffs. Yeah. Only tariffs. And so that's kind of making people like a little bit like, well, hold on, let's think through this for a minute, you know? But Dave, I don't know what unleashes that massive productivity. I mean, it's hard to, like that this is, we're in a tough spot. We must have BDP expand. And people say, well, there's an AI, you know, there could be an ai explosion here there's there's the ai miracle but ai is deflationary so what does that do to your gdp you know the greatest expansion in human quality of life ever occurred during a period of deflation it's called the industrial revolution right that's what they're trying to replicate and i do not i think that

that you're right i think that trying to fight trying to use history as an exact repeat is a fool's errand. It rhymes, it doesn't repeat. And I think there are, and we could dive into that. I don't want to do that now. There are many ways of looking at it, but just as a general form of policy, disruption is necessary. There is definitely a need for disruption. Now, the question you have to ask yourself is what does the Treasury Secretary have to do with anything? Treasury Secretary needs to

print and potentially needs to trade. The one thing you get of Howard Lutnick as Treasury Secretary without any question is just like when Robert Rubin was first sworn in as Treasury Secretary, and I had the pleasure of working with him. I mean, I had two meetings with him, so I'm not going to say I know him very well but before he he went into that administration was you you end up with a trader in that seat if you have a trader in that seat then this whole notion of a bitcoin strategic reserve you could expect two things first they'll do it second you won't know about it until after they've purchased a substantial amount. That's been the key thing that's been missing at the Fed in my career is someone who had a little more trading acumen. And you're right, he sure knows trading.

And so we need to understand what that means. So what does that mean? That means buy Bitcoin for the long term. But understand that you're not going to hear boo about it until the US government is already in position. Because why would they? They don't want everyone to front run them. Because the instant we announce, if you did something like pass the Lummis bill without actually doing anything, every other country in the world that was thinking about it will buy it before. It's sort of like, ask yourself the question, and a lot of your audience doesn't understand them, but ask yourself the question, why do institutions use dark pools to trade?

And the answer is institutions who are buying positions in less liquid stocks always try to keep that intention to buy a secret until after they're forced to disclose that by a Rule 13F 90 days later or whatever the hell it is. And the reason is because if everyone knows they're buying, then the price is going to go up before they get to buy. It's the same reason why CoinRoute built algorithms to hide when our clients are buying or selling until they're done. And then they can tell you or not tell you.

And by the way, Coinbase that Saylor uses does exactly the same thing. And there's iceberg orders have become pretty standard across most crypto exchanges. Yeah. Back in the, back in the day, you know, large hedge funds would float around a block of a million shares to sell.

And, you know, while that was floating around, they would step into the market and start buying it. That's called spoofing. You're not allowed to do that. Theoretically. You can't do that.

They would literally float. You know, I got a million shares to sell, float around to big JP Morgan, Morgan Stanley, Merrill Lynch, Goldman, float that around. And they'd say, yeah, the price is not right. And then as they're in there buying it. Right. So day one. Yeah. Day one story.

That stuff happens. Day one story of the first day I was sitting on the OTC desk at Salomon Brothers. Day one story. That's the day one story of the first day I was sitting on the OTC desk at Solomon Brothers. Day one, literally day one. I was talking to the traders and I was watching them train a new trader. And so the new trader says, OK, when you get a buy order to buy 500,000 shares of Microsoft, what's the first thing you do? I said, oh, no, start bidding for Microsoft. He goes, no, you put your quote offering Microsoft heavier than where your bid is. That was day one. Now that is actually illegal now, but that was how we trained an entire generation of traders. When I started trading crypto, I thought that sell walls meant that you were in trouble and buy walls meant that somebody was buying heavily until I watched enough to realize that a sell wall is just someone holding price down so they could buy.

And a buy wall was just somebody selling and then letting the floor out from underneath. It's literally the opposite once you take a look. It's a classic Wall Street trader mantra when the junior says to the boss, I want to buy this stock. And the boss says, OK, sell 500 shares. And the trader says, no, I want to buy. So just do what I said. So that was easy. OK, now buy 5,000 shares.

Just want to test the liquidity first. You've got to push the price down to where the liquidity lies. And that's where people stop losses or buy orders. I can't tell you how many times instant was called. Oh no, I put the offer in. I meant to be making a bid. It was an error. Cancel the trade. But sorry to go down the route at all, Scott. But the point here is if there is a trader at the helm of Treasury, expect that that changes market dynamics. It just does. And it's worth understanding what that would be. We'll be talking about that when and if there's an appointment made. and FCC or FCC and CFTC, as well as OCC and FDIC because of the continued existence of

Operation Chokepoint even now, which has been documented on X and you've seen it, James, I know Caitlin Long is still out there pointing out what's going on up till the bitter end. So, you know, there's a lot of these appointments are going to matter a lot, but they do seem to be moving at a significantly faster speed than prior administrations. Yeah, they're ready for it this time. You know, obviously, I think there was the sentiment that nobody knew Trump would win last time. And it took months and months and months to get these appointments in order this time, they've been long ahead of it. And he I think has the mandate to get done what he wants. I mean, the inevitable consequence here, the inevitable situation will be that we will deregulate everything, probably push too far in the other direction. And then in

two years, the Democratic voters will be pissed off and we'll get either Congress or Senate or something. It's just how it goes every time. Scott, that's a key point. It's not understate the human nature of this emboldened human being who's now a president. We've got to go with it. He survived a couple of assassination attempts, major impeachmentboldened human being who's now a president we've got to go with it he has survived a couple assassination attempts major impeachment everything now he's got a complete carte blanche he's got two years minimum and then it's all about his legacy what's he going to be do and this is going to be get on the you know hit the ground running as much as we've ever seen it's just and it's just exactly what at war with ourselves by mr general mcmaster expected you're going to get a complete um u.s government that's nothing but yes men they're going to do what trump says and one

thing i have to really give him credit for his complete complete flip on cryptos remember five years ago cryptos were horrible remember what mansion tried to do right before he left treasury sector now it's complete flip that was impressive how he did yeah but i think i 180 on that i think he's listening to the vac i think he's listening to Vivek. I think he's listening to Elon. He's listening for the first time in my experience and not just being the bulldozer. But the reality is, and what the long bond is telling you, is they expect him to pour fire on the economy one way or another and ease somehow or other in order to expand the money supply and liquidity to make this thing rip during his administration. That's what he wants.

He wants the economy to absolutely rip. Whether that's in nominal GDPs or real GDP terms, that's the question. That's the point. To make the rip though, he got to take a little pain. That's my point is before you get to the end of his career, do it first, do it right away. Like all these tariffs and things that's going to be paying right away. The regulation takes a while to work through. So exactly. I mean, I agree with you. That's why markets price for perfection.

Now we get the normal little correction. Just give me a hundred, you know, the S and P 500 near it's a hundred week movement average, you know, stuff that used to happen, get that over with before it becomes towards the end of his term. And that's my thought is, yeah, he wants it to rip, but you got to take a little pain first. Yeah, I think that, look, I would push back on the McMaster thing. I mean, listening to anyone who's ever run a company, you're going to have an employee who is unhappy, and they're going to all sorts of crap about you. So I honestly don't really give a crap what he says. What I can tell you is Elon Musk is nobody's yes man. Vivek is nobody's yes man either. These are people who have actually created wealth and done things and have very strong opinions. And yes, they want to make sure

they're aligned, but I don't think this is a yes man thing. I think this is a, what the hell could we actually do? And I think it's going to be interesting because in the Wall Street Journal. J.D. Vance is going to quietly be influential. That's right. The Wall Street Journal is saying something, the number two most popular opinion piece is opinion. Disruption won't work at Treasury. So, you know, you have the traditional financial markets that to from from their perspective, this group of people who are now going to be running the country are something they haven't seen before. And it is a difference.

And I'm not going to say they're not going to break a few eggs as they do it. I'm going to say is it's the right thing to do. I mean, they're specifically taking on the tweet that I mentioned where Elon said that business as usual isn't the right thing to do. And they're specifically saying, well, no, it is. We need business as usual because that's what reassures financial markets. And by the way, we've believed that for a long time, right? When you talk about the Fed, people want to know what's going to happen. So transparency, this isn't going to necessarily be a transparent, everything even keeled kind of thing. The U.S. economy is like an aircraft carrier, and they want to try to steer it like a motorcycle. And it could be very interesting, and we can see what happens. I would have used speedboat there.

Yeah, whatever. You get my point. My point is that we don't know. What we know is what they want to try to achieve. And what they want to try to achieve is turning America back into where it was 50 years ago, which was a manufacturing powerhouse that builds stuff as opposed to a financialized marketplace that consumes stuff. And that is not a trivial transformation, but that is literally what J.D. Vance's entire book is,

you know, entire economic policy is about. And it is going to make a lot of people uncomfortable. And there are huge pathways to investment in that, some good, some bad. And we'll see. But let's see where it is and talk about specific policies as time goes on. One thing I know is that this isn't going to stop. On Friday, I know we got to wrap. It's not official, but that's estimated that we've crested it.

Yeah, but I was on with NLW on Friday here. And we jokingly happened to put it on and I watched it pass $36 trillion. I said, you know, happy $36 trillion debt day to those who celebrate. Well, we got an extra $9 billion now. Since Friday. No big deal. And last I checked, when you've got your debt per citizen at $106,620 and your revenue per citizen over here in tax revenue at $15,000, I don't know who fixes that. Nothing stops this train, right?

So all that's telling you is that we are spending $4 billion more than we're making every single day. It's nuts. God, if only I could do that. Life would be so much more fun. Here we are having to be fiscally responsible as a fiscally responsible as the United States citizens. Guys, 1005. Thank you.

That was an awesome show. Mike, we're going to teach you how to get a Doge background at some point. I learned in real time, for being honest. I could have, I usually just do this, but I learned in real time. Guys, that's all we got. We will absolutely be back next Monday. That was an amazing show. Appreciate you guys showing up.

The best part about making content in Macro Mondays at this point is that we're going to have a hell of a lot to talk about for a while now. There's going to be no dull weeks, I don't think. That's all we got for you today. Dave, Mike, James, give them all a follow. Thank you, guys. We'll see you next week. Bye.

Dave for president. Look at that. Bye.