The Wolf Of All Streets - Bitcoin Bloodbath | China Collapse | Is The Bull Market Dead?

Episode Date: August 18, 2023

Bitcoin massive dump, China collapse, and more. David Lin and I discuss the week's biggest macro and crypto news of this week. Tune in! David Lin: https://www.youtube.com/@TheDavidLinReport ►►MELD MELD will bring to bear the full power of decentralized financial instruments to the masses. Banks are at the heart of the economy, MELD will become a new set of banking tools that are by the people and for the people. 👉 https://bit.ly/meld-early-access  ►►OKX Sign up for an OKX Trading Account then deposit & trade to unlock mystery box rewards of up to $60,000!  👉 https://www.okx.com/join/SCOTTMELKER  ►►THE DAILY CLOSE BRAND NEW NEWSLETTER! INSTITUTIONAL GRADE INDICATORS AND DATA DELIVERED DIRECTLY TO YOUR INBOX, EVERY DAY AT THE DAILY CLOSE. TRADE LIKE THE BIG BOYS. 👉 https://www.thedailyclose.io/   ►►NORD VPN  GET EXCLUSIVE NORDVPN DEAL - 40% DISCOUNT! IT’S RISK-FREE WITH NORD’S 30-DAY MONEY-BACK GUARANTEE. PROTECT YOUR PRIVACY! 👉 https://nordvpn.com/WolfOfAllStreets   ►►COINROUTES TRADE SPOT & DERIVATIVES ACROSS CEFI AND DEFI USING YOUR OWN ACCOUNTS WITH THIS ADVANCED ALGORITHMIC PLATFORM. SAVE TONS OF MONEY ON TRADING FEES LIKE THE PROS! 👉 http://bit.ly/3ZXeYKd  ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEK DAY! 👉https://thewolfden.substack.com/   Follow Scott Melker: Twitter: https://twitter.com/scottmelker   Web: https://www.thewolfofallstreets.io   Spotify: https://spoti.fi/30N5FDe   Apple podcast: https://apple.co/3FASB2c   #Bitcoin #Crypto #Trading 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.

It is an absolute bloodbath in markets, particularly crypto, which dropped at a point over 10% on the day, breaking through the 28,600 support we were talking about and going all the way to the next one at 25,200 or so, retracing the entire BlackRock ETF announcement move. Is this because SpaceX sold all their Bitcoin? Is it because of Evergrande in China? Or is it just a whole bunch of traders getting liquidated at once? Or is Bitcoin once again a risk on asset that's telling you what's about to happen in the stock market? There's a lot of narratives and a lot of news. We're going to discuss it all today, as always, with my co-host here on Fridays,

David Lin. You guys don't want to miss this. Let's discuss this bloodbath. What is up, everybody? I'm Scott Melker, also known as the Wolf of Wall Street. Before we get started, please subscribe to the channel, hit that like button. And I've got David, I think I'm pointing in the right direction over there, joining from very early on the West Coast. David, what a day, huh? Good morning. How are you?

I'm doing well. I'm going to be honest. Very, very surprised at what we saw yesterday. I don't know about you, but very surprised. Yeah, I think there's some bigger macro forces at play. Yeah, of course, the crypto specific events that you brought up are important. But this morning we're speaking right now, 9 a.m. Eastern. Stock futures are down. So it's going to be a down day for stocks as well.

And yeah, and a bad. Right. And I think the worst week and actually quite a stretch here. And stocks do seem to be looking down day for stocks as well. And yeah, and a bad, right. And I think the worst week and actually quite a stretch here and stocks do seem to be looking very toppy. We have a lot of bad news. I see over here, we have a comment or weren't these experts super bullish 48 hours ago? Well, if you listen to the show, you know, we were talking about price predictions for six months to a year to 18 months out. So don't let it fool you. If you guys have been watching, I talked about how it looked very toppy at 31,000 and things could likely go down. Dave, you mind if I look at a few charts here and we kind of dig into this one bath a bit? Yeah, let's analyze some charts.

Perfect. So we've got, of course, the Bitcoin weekly chart. I want to tell you guys, I've switched finally. I've made the move from Bitstamp over to Coinbase for my longer time frame charts because yesterday Bitstamp only went down to about 26,200 and every other exchange went to around 25 or even lower. And so I wanted to have accurate price action. So now the area that I was always talking about, that sort of resistance that became the higher high gave us a new bull trend after the bear market was 25,212. It's now 25,214. This'll be fun to look at, David. Look exactly, exactly where this move ended. I'm not saying it'll hold, but it is literally to the dollar

a retest of the level that was the most important in this entire trend and for the last year, arguably. Of course, losing potentially the 200 MA on the weekly here, losing already the 200 MA on the daily. I'm not saying it's all good news, but I am saying that when you have a series of low, high, low, lower, high, lower, low, lower, high, lower, low, that was the line where it broke above that. So if you were looking for bids, I had bids there that I talked about just on Monday. They were kind of my oh shit bids. That was the area. If you look at the daily chart, kind of zoom in on the same thing, we now have RSI on the daily at 20 after having that bearish divergence at the top when it was overbought. You go from overbought to oversold on RSI. That's how this works. Again, tagging that

line perfectly and breaking the 200 MA. I think we're going to get some relief soon whether we continue down or not. And this is what really has me convinced. If you guys look, I posted this earlier. For our RSI, which down here shows whether you're overbought or oversold, it actually hit two on the dump, which I've never seen ever. 30 is oversold. Closed at 5.27. If you zoom back, I went through all of time. It's the lowest it has literally ever been in the history of Bitcoin. We are seeing the most oversold conditions ever, period. And so to give you guys an idea of the gravity of this drop, that to me is just astounding. So of course, you guys know I'll be looking for a lower low on price and a higher low on RSI for a clear divergence there to signal. But I would be very

surprised if immediately, I should say, this goes significantly lower. And I'll tell you the biggest surprise for me, because I was talking about this with Ben Cowan, I think on Wednesday here, is that we both made the case, the obvious case that if Bitcoin dumped altcoins, we're going to absolutely get slaughtered versus Bitcoin. The opposite happened. Altcoins actually outperformed Bitcoin on this move. The last two days, Bitcoin dominance has absolutely fallen off of a cliff. So a bit of a surprise there. And I think a lot of people pointing to the fact that that could be related to the Ethereum futures ETF potentially getting approved. But very, very surprising that Bitcoin dominance is back below 50% and that altcoin Bitcoin pairs are performing well. I know that that's a lot, but that's how I'm

looking at the market for the moment. I got a question. Okay. Why is it that the ETH ETF is getting approved before the Bitcoin one. I've unfortunately lost audio here. One second. I'm sorry. If I can, I guess I've lost audio. I don't know if you can hear me. I can hear you.

Yeah, it's back because I cannot hear anything. And I can. You can't hear me. Hello. Hear me because I cannot hear anything. I can hear you. I'm sorry. I'm going to have to figure this out somehow.

I just had my AirPods nuked, and you're not coming through the main screen, which means I would have to do a refresh, which means we would lose our stream. So just give me a moment here, and let's see if I can get it back on. Try one more time. Can I hear you? No, I can hear you. I'm not getting a connection. Okay. You guys, I'm gonna need like 30 seconds to do a thing with the stuff and the place. David, you can talk to them while I'm trying to figure this out. I'm sorry to put you on the spot. Well, that's okay. Wouldn't be anything without my co-host. Uh, it's of All Streets show anyway, so we can wait a minute.

But I will say that, yeah, it seems to me that markets risk assets overall are just plummeting on a lot of news. We got the Evergrande collabs. I'm sure we'll talk about that later. Argentina, China is defending the RMB. The 10-year yield is rising to its highest level since October 2022. This came after this week's Fed meeting minutes revealed that perhaps there could be further rate hikes down the line. Now, it's interesting how the 10-year yield has been diverging from the S&P 500. So they've moved in lockstep. The yield has moved in lockstep with the stock markets all year until about two weeks ago. And so this divergence is really interesting because it potentially may show that your stock markets are due for a rally or expectations for another rate hike are kind of overblown.

We'll see. We'll see what happens. Scott, are you back? It kind of. It keeps going in and out. So we're going to try for some reason when i lose the airpod it doesn't come through the computer but uh we'll keep going here i i heard some of that summary which which i thought was great i mean does this i just want to ask you does this crypto bloodbath surprise you at all i mean the velocity of it or is this like uh we should just come to expect that when things go bad they go bad in in grand fashion. We always try to assign some sort of event to this.

And let's think about what's happened in the crypto markets over the last 48 hours that could have caused this sell-off. What were the major news items from crypto besides the ETH futures? Yeah, not much. I mean, this seems to be the story, right? Crypto traders suffer a billion in liquidations and sharp sell-off for Bitcoin and Ether. And to be clear, when that happens, you tend to get this even compounding bearishness. Funding rates on leverage exchanges right now are at historic lows, meaning that people right now at this price are paying the most to short that they've paid ever, which usually means you get a short squeeze in the

other direction. But this was a massive long squeeze, wiping all of this out. The other narrative was obviously SpaceX, that they had a Wall Street Journal article using very vague language that still has everyone confused, saying that over $300 million SpaceX position in Bitcoin had been written down, which is an accounting measure, by the way. And then it kind of vaguely mentioned a sale. Nobody knows if they were actually referring to Tesla. Nobody can get clarity on this. But to be clear, if that happened, it happened months ago. And 300 million is nothing. So that would be purely narrative if you think people sold because they think that Elon Musk lost faith. I mean, the reality here is, again, it's probably a long

squeeze. And if you look at any of the data, this was the largest wipe in OI that we've seen. And then we have two other kind of bullish narratives, right? The Ethereum surge 11%. Maybe that explains why dominance actually went up, but that we could see an Ethereum futures ETF approval as soon as today. And then of course, we have Grayscale, right? Which could get a decision against the SEC today. But there's really, as i wrote in my newsletter this morning it's actually kind of encouraging that we didn't have terrible news right uh if this was some awful very clear news event and it dropped i'd be much more concerned

yeah um no actually i'm gonna take the other side of this. OK, I would like some sort of clarity as to why the price dropped. If something is dropping because of its correlation to other markets, that to me still signals that Bitcoin and ETH and the rest of the crypto markets can't move on its own yet. And so what I would like to see is a crypto specific news event that has moved down the price. But what you've just described makes a lot of sense. And so if we're seeing a move on other macro news, that's pretty bad for the markets overall. I think that's actually a really fair point. And people always, we've been talking about the fact that we've lost sort of the correlation again, that the correlation has

been exceptionally low. But McGlone comes on here. We have a lot of people that say Bitcoin has become a leading risk indicator, right? When Bitcoin raged up from 25 to 31 and before that from basically 17 to 25, it was ahead of the stock market going up, right? So is this the harbinger? Is this the canary in the coal mine that we're going exceptionally risk off when we see Bitcoin selling off this aggressively. And that could be very true. I have thought, I've been saying here, I think that the stock market has topped. So it could be really interesting. It could be. I don't know if it's a leading or lagging indicator for the stock market. I do know that Bitcoin, even Bitcoin, the less volatile of the cryptos, I guess, has been a higher beta play to the stock markets.

So you can expect bigger moves up and down, especially on the downside. When stocks move down, Bitcoin typically moves down even more. But yeah, you know what, guys? I'm not personally too concerned about short-term volatility. Just zoom out and look at the chart for a bit more, with a bit more history. And we're still at what? What's the price of Bitcoin right now? About $26,000.

$26,000, yeah. It's not looking great, but it was $29,000 a few days ago. But the stock markets have been sliding ever since mid-July, like you mentioned. So it's not a Bitcoin specific. It's not like people

are dumping Bitcoin and Ethereum and the rest of cryptos because cryptos in particular are going down the toilet. I used stronger language there, but I couldn't. You can hear, but maybe not for your image.

But for my image, you're not going to hurt it. No, but the point I'm trying to make is that I think crypto-specific news will be even worse because that would signal an even worse loss of confidence. Because think about all the bad news we've gotten this year. Coinbase lawsuit, which you talked about. Binance lawsuit. We've basically lost confidence in on-ramping new users. That's terrible. And for a good six weeks or something,

Bitcoin moved sideways while the Nasdaq traded up. And now it's finally starting to move back. Yeah, it's not great news, but things could be worse the way I see it. I totally agree. I mean, we're talking about that four-year cycle, and I was talking about this as well with Ben Cowan just the other day. Every time we've had this bottom, you do get at least one more flush that kind of revisits, makes a higher low, but you can see it. I mean, maybe we should zoom in to make this much more clear. But obviously, we had this bottom in 2014, 15, January 15,

and then you come back down to visit. The next bottom, you had this bottom down at 3,100 in December of 18. And then COVID, you come down and revisit. Even after that went from 3,000 up to 14,000, right? And so maybe we're just, you know, we bottom at 15. We come down, it could be this high, or maybe we come down in here to 20 at some point here and then go up.

But nothing here is surprising when you zoom out, as you said, and look at that longer term sort of cycle. But do you think this could be China? People in the comments are saying this is a healthy correction, by the way. Yeah, and I don't necessarily disagree with that because $25,000 might be just the natural key fair value for Bitcoin right now in this environment. And I don't think that would be surprising. We always overshoot to the upside and overshoot to the downside. So maybe $31,000 was just a little too exuberant

for that BlackRock news and for the SVB news where it had sent it up to that area before. So I think you get these excitable moments where people price in that it has happened. SVB crashed and then Bitcoin went up and effectively priced in. Banks are all collapsing. Major bank event. And that didn't happen. So the price retrace. BlackRock ETF has not been approved. Take some time to absorb that information and maybe we just see it dropping. But I don't think anything here is too surprising. Go ahead.

Yeah. I have to make a correction because people correct me in the comments. I was referring to the ETH ETF. Ethereum is a futures ETF. It's not a spot Bitcoin. It's not a spot Bitcoin ETF, like Bitcoin. But to the point about Bitcoin having a spot ETF, what price movement would you expect to see on that news? It's the most telegraphed ETF in the world right now. Is that really going to add to the price?

Yeah. Well, that's my point, is I think 25 to 31 was the market saying this thing got approved, not just the news that it happened. So now you have to get approval to sort of push back to those levels and above. But I do think that fundamentally, and Mark Yusko broke this down pretty well yesterday. Mathematically, if you look at how much actual float there is on Bitcoin, how much supply there is and how much would have to be effectively bought by BlackRock and then how that would open it to RIAs and such. You should see a slow and steady rise to the upside just because that supply will get eaten through. But yes, I think that the market basically at 25,000 said, holy crap, BlackRock's getting an

ETF and price went to 31. That's a massive move. And so now to stay at 31 or above, we actually probably need to see an approval if that's the reason. Would you buy at these levels? I did. I did. I did buy at these levels. And yeah, we were on the show on Monday and I actually asked the panel. It was Mike McGlone, James Lavish and Dave Weisberger. I said, what's your kind of I called it the oh shit level. And I said, I'm bidding just above 25-ish. And then if it really gets bad, I'll be bidding 20. Just because maybe we make that higher

low I was talking about. I think James Lavish said 19,400. Mike McGlone said double bottom. So 16,000. I think Dave Weisberger was looking at 24,000 to 25,000. So in no way, shape, or form, to be clear, did I believe I was filling those bids this week. I wasn't even sure I was filling them at all. If we get below 25, I'll start to think, wow, we're back in sort of that bear market range. It's a bit scary here, but it always is when you hit support and it always is when you bottom. And like I said, there's a lot of indicators and signals right now that at least temporarily this will be at bottom. I want to ask you though, how big is this Evergrande news in China? I mean, I can go ahead and bring it up, of course, but do you think that this could

be the thing? Because if we believe that Bitcoin could be the leader of risk off and we believe that this is big news, then this could be more of a fundamental macro thing. China Evergrande group files chapter 15 bankruptcyidentally, in New York. I find it sort of ironic. I know I don't really understand the mechanics, but bankruptcy in New York for a Chinese real estate giant that has been under distress for quite a while here. How much does this news matter? And what have you found out when digging into it? The China property crisis has been an ongoing issue for a few years now this is not

um this is kind of just the uh uh end symptom of this problem if you want to call it that the bigger problem is slowed down in chinese growth the consumer sector has seen deflation uh we've seen the chinese central bank drop rates by the the most in years to prop up the economy uh that signaled act that was a surprise move that they'd done which signaled a complete lack of confidence uh the youth unemployment is now so bad they stopped publishing that number they were just like no we're not gonna tell anybody how many people are not employed um the bigger problem is that the world's largest second largest economy is already potentially in a recession which uh is not good for the is that the world's second largest economy is already potentially in a recession, which is not good for the rest of the world.

We don't know if it actually is. They're still reporting positive growth. People are saying you can't trust those numbers. The AVN takeaway is that things are bad in China. Now, the Evergrande filing for bankruptcy, so the developer has sought protection under Chapter 15 of the U.S. Bankruptcy Code, which shields non-U.S. companies

that are undergoing restructurings from creditors that hope to sue them or tie up assets to the United States. So it's just to protect the U.S. assets, I guess. They have been facing a liquidity crunch ever since 2021. So no, to answer your question, I don't think Evergrande itself is the cause of the market sell-off. I think the markets are selling off

in continuation of all the bad news we've been hearing out of China from this week is my interpretation. Yeah, I tend to agree with that 100%. If we're talking about things being priced in, like you're worth Bitcoin, an Evergrande collapse has been priced in for at least a year, right?

And the question is, and I think I've heard it referred to as such, and I don't know if this is hyperbolic, is this a Lehman moment, as everybody loves to say, in China, or just trying to have the levers to continue to manipulate their data and their economy and keep this party going? And then I guess, how much does the United States depend on the Chinese economy?

We sort of exported the global recession in 2008 because of our real estate issues. So is that something that could happen in reverse in 2023? Somebody actually brought up a pretty good point in your comments. This could be a reflection of global economic weakness. I'm paraphrasing. Germany is in recession. New Zealand's in recession. Just off the top of my head, which other countries am I missing, Scott?

Yeah, they're saying the whole Eurozone is effectively in recession. I mean, and then you start looking at hyperinflating currencies, countries like Argentina that are massively massively struggling the world's not in great shape i think that's clear uh if you're traveling to argentina let me just show my screen here uh if you're traveling to argentina i would suggest you don't buy ice cream because apparently the ice cream price doubles in a month so if you were to if you were to go there and live there for longer than a month, you should stock up on... I think they're using ice cream as an example, but it's pretty much everything. Hyperinflation in Argentina, I think the interest

rate is already... The inflation rate is at 113%. They had to raise the interest rate to close to 100%. This is not... This obviously didn't happen overnight argentina has seen this for a while um yeah and now they've got uh another candidate sort of trying

to fix things but anyway i'm going to stop sharing my screen and pass it back to you that was just a point of how bad things are in argentina uh if you're traveling there soon uh yeah and they're even worse well you're you have a lot of power if you're traveling there soon. Yeah, and they're even worse. Well, you have a lot of power if you show up there with dollars. But things are even worse in countries, obviously, still like Venezuela and Lebanon, even Turkey. So this is not uncommon. It's happening all over the world. I think it's interesting news that we have this libertarian candidate, Millet, who is promising to abolish the central bank in Argentina.

By the way, this was the catalyst for the last tail end 16% of that inflation, basically, right? Absolutely, the peso died when this guy started to lead in the election because people believe he will dollarize the economy, which might be a good thing for them, and that the central bank could be abolished. But that's what's leading it here. One of my best friends actually lives in Argentina. He has an Argentinian wife. He moved down there maybe six years ago. And he keeps sending me pictures each month of the size of his stack of cash in pesos that he has to use to pay his rent down there. It's pretty astounding. To the ice cream example, it just gets bigger and bigger and bigger and bigger. He said, listen, we're just going to move back.

I wonder how much the population just uses dollars. A lot. But they've made it very difficult. They've made it very, very difficult. Because that would just make sense. This is essentially what happened when we had hyperinflation in Yugoslavia. People just used the,

at the time, people just started using the German mark before the Euro. people just use the um at the time people just started using the um uh the german uh mark uh before but this is before the euro so um the solution to hyperinflation was to use a more stable currency argentina has been very aggressive with shutting down the black market on cash uh my friend when he first moved there he used to go to you know the back of a store with his pile of cash and buy pesos and cash back and forth. I had a guest on once, actually. It always sticks with me, this story. He said that this was even years ago, that it was so bad and people were so thirsty for dollars in Argentina that you would get a dollar transfer into your bank account, you would take the dollars out, go to the black market,

convert to cash or whatever, get US dollars in cash, however you did that, and go back to the bank and put it in a safety deposit box. So people were using the bank literally just for the security of the safety deposit box, but taking the money out of their accounts to do that. I mean, Flat Smacks has it right here, Bitcoin fixes it. This is the entire point. Right? But you would think, and we are seeing those numbers, you made the point, obviously,

that Bitcoin is at a tise in Argentina, but so is stablecoin adoption because people want dollars. I'm just going to go back to Millet for a minute because I think this is kind of interesting. Let me show my screen. He's got some interesting views here uh present share screen who is javier mile all right right-wing political candidate um vow to he believes country's central bank should be abolished like you said he wants to

de-dollarize or dollarize the economy okay so this we talked about where i briefly mentioned i've interviewed several people who believe that dollarizing an economy is probably the quickest way to fix hyperinflation steve hanky for once for one he uh professor of applied economics johns hopkins you should talk to him by the way um scott great great guy yeah he's amazing yeah but anyway anyway, you should get him on the show. Ask him about dollarization. But he has implemented actually currency bores and helped some countries stabilize their currencies by or inflation rather by dollarizing. So he's a big proponent of dollarizing an economy to fix hyperinflation, at least for the short term. I don't understand how abolishing a central bank would be the immediate path to fixing inflation or hyperinflation. I just don't see that connection right away.

I agree. I think that that's playing to the fears and anger of the population to get elected. I think that to me, and I'm not saying this is a positive or negative, that's the equivalent of Trump screaming that he's going to build a big, beautiful wall and Mexico is going to pay for it. Something that will trigger your base and get them excited and show that you're quote unquote draining the swamp and that you're against the establishment. And so I can't see him actually abolishing the bank. But dollarizing is, as you said, makes a lot of sense. I've talked about this here over and over again, but El Salvador is a great example. El Salvador is a dollar as their currency. When you think about it, if you dollarize a country's currency,

you don't really need monetary policy anymore. You don't really need a central bank. That's right. You're married to the Fed's monetary policy. So that is true. You don't need an independent central bank. So maybe that's what he's getting at. Although if you're doing that, the path to fixing inflation is still dollarization. It's not because you abolished the central bank that the price of ice cream is going to double every month or so. So that's not a direct relationship there. But yeah, I see your point. He's pointing his finger at somebody, putting the blame on some government authority to perhaps rally the crew or the

population. He's also called climate change a socialist lie. I mean, some people believe it's a lie. I've never heard socialist lie. I don't know. He's got all the good catchphrases. I mean, there's a playbook here for candidates like this to get elected. I think that's pretty clear. But the dollarization really, as I said, with El Salvador, it's interesting because once you dollarize, and he probably realizes this, not only do you alleviate the pressure of running your own central bank, you marry yourself to the strongest economy in the world, whether it remains that way is up for debate. And to their monetary policy, whether good or bad is much better than your own, right?

I think we can all agree that the United States Central Bank, for all its faults, is doing a hell of a lot better than the Argentinian Central Bank. But more importantly, you relieve yourself of the threat of currency war. Once you dollarize, you no longer have to worry about the United States, IMF, World Bank attacking your currency, working to devalue your currency. And I've said this over and over again, I'll say it again. That's the only reason that El Salvador of all countries in Central and South America was able to adopt Bitcoin as global tender. Because if you did that in Argentina, the IMF immediately came in and said, if you touch Bitcoin, you get no loans, right? And you need those predatory loans from the IMF. So they knew

that they would be attacked by the United States and the IMF if they adopted Bitcoin. Once you have the dollar, you eliminate that attack vector, which is the biggest one that every single one of these countries with any threat of hyperinflation faces. Okay. I'm going to just jump around for one second here. We can come back to this. But we were talking about news that could move Bitcoin Now, the main thing is probably the discussion of other countries potentially joining the BRICS. It wouldn't be called the BRICS anymore. I guess it's called something else. Not all countries are actually in favor of this. But anyway, as early as 2019, Cointelegraph has reported that three years ago, they were discussing a possibility of developing its own cryptocurrency.

I think they were talking – I think they were looking into a lot of different solutions. The BRICS Business Council discussed creating a common cryptocurrency as a potential solution to – they're talking about U.S. sanctions. So they want to de-dollarize. So we're just talking about u.s sanctions so they want to they want to they want to de-dollarize so we're just talking about dollarization these countries want to de-dollarize which is to say they want to depend less on the dollar for their trade settlements um but uh people the gold bug crowd was talking about oh yes they're going to do a gold back currency i think what's not reported as much as the possibility of a common cryptocurrency. There's this very, very slim chance that's going to happen by next week. But if it does, that would be astronomically more

important than a Bitcoin ETF. I agree with that. Yeah. And I mean, to your point, just you show the 2019 article, BRICS nations to meet in South Africa seeking to blunt Western dominance, right? I mean, this is very, very clearly their exact mandate. Now, my knee-jerk reaction is good luck with that, right? But whether they're going to be successful or not, there is a concerted effort to effectively reduce dollar dominance as the global reserve currency, because that's what you're talking about here, to your point.

This isn't just Western dominance. this is getting off the dollar right would you characterize it as such or do you think it's deeper than that i i think it's it's uh it's the getting off the dollar is a symptom again of getting off the west overall i think um i think they're trying to build their own alliance and the geopolitical experts probably have a better answer than me. But from what it appears, they're trying to build their own alliance if they haven't already and trying to stay away from dollar and American hegemony and influence altogether. And they, of course, need a non-dollar currency to, I guess, execute the grand plan. They're already settling their own cross-border trades with each

other's currencies. I think the point here is that they have a common currency to settle in. That's not the dollar. Somebody was commenting that 90% in the comments, 90% of global trading USD, good luck to dollarizing. Yeah, you had various figures from various reports.

It's actually about 60 now it was 80 of global trade used to be denominating u.s dollars and now according to most reports it's about 60 it's still high right so the the point is that it's been trending down but the u.s is still by far predominantly the dominant currency the de facto reserve currency of the world um again reserve currency not the same thing as medium of exchange for trade but it happens to be both so good luck de-dollarizing uh and i think some people let me just look this up india doesn't want to de-dollarize right um it was mentioning leaving bricks by the way, as of like a month ago. I don't know if that was a false article, but that was widely reported.

But yes, they don't want to do dollar rise. India accelerates. Yeah. Well, yeah, they they want to start. India is sorry. My mistake. India is pushing to do dollar rise, but they don't want they're not in agreement with with everything that the BRICS are proposing. So I think including including the fact that more nations want to join bricks so yeah um by the way the the discussion of a common currency is not on the agenda it's not officially on the agenda next week and of course you've got a whole bunch of um pundits speculating that it could they could be discussing it in the ether well it doesn't really matter if they're discussing it offline it doesn't um so i think this is going to be um a non-issue i think that the markets are not pricing in either a gold-backed currency or a bitcoin or some sort of crypto-backed currency um it's not happening next week but i'm just saying

that if we're talking about tail-end probabilities of what could really drive up or down the price, in this case, I think up, it would be a BRICS currency denominated on some sort of digital currency. Yeah, my other thing about BRICS is you did quote the number where it was 80% went down to 60%.

I don't know how much is settled in yuan, but the yuan is backed by the dollar. So I always laugh if they de-pegged the Yuan from the dollar, good luck with trying to do global trade in something that would be as volatile as a shit coin at that point, probably. And also, I sort of laugh at the notion, especially when you bring in Russia and China. I mean, you're talking about trying to gather a bunch of self-interested dictators for the common good. And I just think that falls apart eventually. I think that that last part is something that should be discussed more.

The fact that people talk about the Chinese yuan becoming the dominant currency of the world. Yeah, it's a peg to the USD, guys. If China really believed that the US dollar, because you hear no hate on the gold bucks, okay? But it's mostly from that crowd that are saying the dollar is going to collapse. China is going to become the world's number one economy, which is going to be true at some point. It doesn't mean the dollar is collapsing.

They're mutually exclusive things. And they're saying that the dollar is going to collapse. China is going to dump the dollar. The. China is going to dump the dollar. The whole world is going to dump the dollar. And the yuan could be the next global reserve currency. First of all, if the dollar were really that unstable, the Chinese would have de-pegged a long time ago. Correct.

But it's still a managed float. It's not a hard peg. It's a managed float, which means that they're trading with the demand. But the Chinese do not want their currency to be afloat. Otherwise, it would be harder to implement capital controls. I totally agree with all that. We have two fundamentally important, I think, things to look at still here with the market. US jobless claims decline in sign of resilient labor market. Labor just refuses to budge. The Fed has to be so frustrated here, which leads me to believe that they're

going to still continue to tighten. But on the flip side, global stocks, as we talked about at the beginning, heading for worst week since March, which by the way, not that big of a story, but it does look like stocks could be topping here. And that could be because jobs are so strong that people are starting to believe the Fed is going to just continue tightening, which is what I believe. I keep hearing people say pivot, pivot, pivot. Fed will stop. But the Fed has said nothing but inflation is too high. Right. Why doesn't anybody believe them?

It's been like a year and a half of this. Yeah. like a year and a half of this yeah i you know what interests me more is not so much who believes the fed but who believes uh the wall street analysts and traders and uh people actually moving the market so let me just show you this story here um share my screen here bank of america okay so their their chief economist has changed their stance this year from their forecast from before to a soft landing for this year. So this was their – Morgan Stanley recently raised. So Bank of America, Morgan Stanley, they all kind of raised their forecast. Bank of America previously had expected a mild recession by this year, and now they are saying that they are revising their outlook.

I'm paraphrasing here, but their chief economist has recently put out a note saying he is revising his outlook based on new incoming data. A year ago in July 2022, he expected a mild recession by now already. Now, he's not alone in flip-flopping. So let me just stop sharing my screen. This is, for me, more important than the Fed because the Fed doesn't directly – well, they kind of do, but they don't directly buy stock futures. But the Wall Street analysts are – especially the banks and the economists, their view – the fact that they've changed their outlook is more telling to me. I'm not saying they're right or wrong. It could be that they're wrong a second time, but bullishness has not been stronger since like before last year this is i i talked to a lot of bears and they've made excellent points as to why the economy could do

worse on my own show i've they've made good points as to why the stock markets could go down because valuations are overstretched but we can't ignore the fact that the overwhelming sentiment overall is bullish on Wall Street. Let me show you something else. Net speculative positions on the S&P 500, still overwhelmingly negative. Let me just share my screen here. Really? I'm using an app blocker. I can't see.

Okay. Okay. Well, this is... Anyway, if you can kind of see this chart here, it's still negative. Still over... Yeah, I'm going to take that down. Yeah.

Negative. So it's... It looks like positioning is still on the short side. So you've got Wall Street economists forecasting no recession, but the traders themselves, at least for the future, are still positioned on the short side, although slightly less short than a few months ago. Yeah, which indicates that even if we are going to see a crash, you could see yet another short squeeze and another blow off top before that happens, right? The market is not going to probably go down significantly if there's heavy shorting. It's not the way that it generally works with traders liquidating people. But I mean, I do agree with you as well, that even now, after we've seen sort of this potential top, at least temporarily, I can't recall a time when pund day, much more than me, but I can find people who have cases for the bottom was in long ago, all new all time highs, raging bull market,

all the way to great depression incoming. And the like bipolarity of that to me at this point is shocking because usually you get, uh, I'm pretty passionate that it's going to go up or pretty passionate. It's going to go down. or pretty passionate it's going to go down. But now we literally have the spectrum from Great Depression to greatest bull market of all time incoming. So I don't know how to parse that really. And it has me even, as someone who looks at this pretty deeply, pretty confused.

I bring up this story because you were bringing up the labor market. You were talking about the bringing up the labor market. You were talking about the strength in the labor market. And a lot of people are looking at this data, among other things, strong retail sales being one of them, as a sign that the economy is not going into recession anytime soon. And again, like you said, pretty evenly split even on my own show about whether or not we're going to get a recession by this year. By the way, Bank of America isn't saying we're not going to get a recession at all. They're just pushing the goalposts to next year. Pushing the goalposts and saying that it could be shallow and brief and the soft landing narrative, which I mean, listen, that's like the no confidence bet. That's threading the needle and hedging uh it'll be a recession it'll be soft

and what i find ironic and i always bring up is we've already talked about how many places in the world are already in recession what do we mean no recession there's already a recession in places all over the world is it just the united states that matters i guess uh it, well, it's – to the extent that it matters to equity markets, yes, because clearly other countries going into recession has not stopped the S&P 500 and the NASDAQ from rising. I just think the Fed is going to keep tightening. I think the Fed just sees that rising. They see labor low and they just tighten and tighten and tighten until it breaks. By the way, the tech sector, for example, was the first to lay people off. I remember people were talking about tech sector layoffs last year or early this year. That's over. They're now making ridiculous offers again.

It's crazy because they're the ones whose stocks went up. Maybe they were just smart enough to do the layoffs at the right time so that they could increase cash flow. I think it's just, yeah. I think they were just leading the other sectors because they're more cyclical. And we're probably going to get more layoffs after this because the other sectors are probably more lagging if you look at the non uh this is small business surveys the nfib small business surveys employers are actually expecting layoffs so the people doing the layoffs are expecting more layoffs ahead so that's pretty telling labor market is still strong on paper but sentiment is going down sentiment from from the small business side is going way down. So that's a pretty telling sign that things are probably going to get worse. But if you just look at incoming data that's already happened, not predictions from people,

everything looks good so far, from the labor side, at least. I agree. I just don't see how we avoid a recession. Maybe I listen to Mike McGlone on Mondays too much, and we call himcclume because he's kind of so negative on things but he always makes the point and it's kind of echoes what you just said if labor is historically low which way does it go to revert to the mean can't go lower you know like labor can't really get better from here it can remain strong but eventually you're going to see those cracks and i think that we are already you know then, then we'll get a Fed pivot eventually. But they, you know, the Fed wants, wants people to lose jobs and wants to start market go down

and to go down. And neither of those things have happened. Historically, when the, when the unemployment rate goes up by 1%, it will go up even more. It doesn't stop going up after a 1% move. So I think that's what we need to look at. A few basis points of increasing unemployment does not signal a recession. It has to be a sharp move upwards. Agreed. So I guess we'll see what happens. So listen, before we go, any final thoughts or news we missed? I mean, I still think the focus for the coming days is going to be, unless we see a major crash in stocks, which I don't think is coming yet, I think the focus is going to be what's happening in Bitcoin.

I'm really going to be pretty glued to the charts here to see if we can kind of hold these levels. You follow this story probably more than me, but the BlackRock ETF thing, was there some sort of deadline that they have to observe? We saw the ARK deadline, which just passed a few days ago. That was kicked. They kicked the can down the road.

I think now we're looking at sort of mid-October as a likely time. I think Bitwise comes up then. And then Mark Yusko, who believes BlackRock will get approved, said, listen, then ARK's out of the way, Bitwise is out of the way. They can basically approve BlackRock first, you know, after answering to those first two as soon as I think it was like October 13th or 15th, something like that. A lot of people thinking it'll happen in 2024. We don't really have a date is the answer. And even when you look at the ETF experts, there's so many ways that the SEC can do this. They're allowed to answer at any point.

And at whatever point they give an answer, that triggers the next 90-day window. So it's really impossible to gauge, but unlikely we would get a firm decision before October. I think Grayscale, I'm just seeing that we're supposed to get a I think Grayscale, I just seeing that we're supposed to get a decision on Grayscale in the next two and a half hours, that could move the market in either direction for sure. I mean, if Grayscale beats the SEC, it certainly does not

mean we get a Bitcoin ETF spot approval, but it does mean that the SEC's grounds for rejecting one are no longer considered legally viable. So yeah, out there. Yeah, we didn't mention this, but apparently Donald Trump is a Bitcoin whale or crypto whale. Maybe he dumped and maybe that moved the markets. I kid. And I love it because the guy hates crypto, but man, he loves a good grift and NFT sales getting paid in Ethereum. It's hilarious. They say he could have up to $5 million in Ethereum as either just, he obviously wasn't doing the NFTs himself. It's either a royalty or a payment for being able to do it. Someone paid into his wallet, but has millions and millions of dollars of Ethereum.

Okay. So that's, yeah. So that's for the NFTs, right? I had the Trump NFTs and whoever paid him, paid him as a percentage of sales and there you go. Ethereum to his wallet. Yeah. I wonder whatever the next administration is going to be,

I wonder what their attitude towards Bitcoin and crypto will have to be, because it seems to me like winning popular support these days is to be more pro-Bitcoin. Whether they care or not, I think that an or somewhat pro-crypto. And I would say that the 80% of Democrats are either dismissive or somewhat pro-crypto, but the very, very vocal haters are the 20% kind of further left side led by the Elizabeth Warren camp that are extremely aggressive against it. And they are unfortunately right now, the most powerful financial body politically in the United States because she heads the finance committee and effectively she's the one who installed very publicly Gary Gensler at the SEC. So I think that any regime change, even if it's to a different Democrat, which it seems like Biden would run regardless, we'll see, would probably not be worse, would be the way I would express it.

Yeah, because when you think about it, the people who haven't adopted Bitcoin or crypto of any kind, either they're doing it because they just don't want to be exposed to the risk, but they're not ideologically opposed to the concept of crypto. I don't know anyone personally who thinks that I'm not going to touch Bitcoin because it's only for terrorists. It's only for criminals. I think maybe 10 years ago, that may have been the thought process, but I don't think that's prevalent anymore. And so the people who have adopted Bitcoin, they're obviously not going to be pro-Warren

in this particular camp. And so the people who haven't, they're more apathetic. So it doesn't make sense from a popularity standpoint to be anti-crypto. Yeah, you're right. I 100% agree. I think that that side of the political spectrum is being marginalized, even if not by popularity, then just by age, right? I mean, the people who are aggressively anti-crypto across the board are the oldest people in Congress and the Senate and the presidency. I had Richie Torres, the Democrat, young, gay Democrat from the South Bronx, right? Who's on the congressional committee that helped pass the market bill, bipartisan market bill. And I said, listen, why are Democrats seemingly so

aggressive against crypto? And he said, that's a false narrative. It's the old people. And we have a lot of old people. He said, it's the gerontocracy that's truly the issue. So I think that that eventually sorts itself out. But this election could swing everything. If this election goes in some way, Republican, especially if a non-Trump Republican, although the odds are, I think, against that, every young Republican, well, we have RFK, I think, against that. Every young Republican, well, we have RFK, who's very pro-Bitcoin, if he somehow gets the Democratic nod. But you have Suarez, Vivek Ramaswamy on the other side. Basically, all of the young, even DeSantis, I think it's a political talking point for him. But all of them have come out with pro-Bitcoin

statements. So basically, if you have anyone but the two old guys, you're going to get a very, very pro-Bitcoin president. What does Biden think? I think we'll get one of the old guys. Oh, Biden hates it. I mean, he's the anti-crypto army. First of all, I don't think Biden knows what crypto is, but I think his press secretary or whoever is doing his tweeting and handles his messaging is very aggressively against crypto. I mean, I remember he had a tweet where it was like, which one of these would you choose? Republicans want to starve your homeless kids and, you know, but we want to close loopholes on wealthy tax crypto millionaires. They're literally like two graphics next to each other as if you were like choosing homeless children over our tax benefits, right? I mean, it's pretty absurd.

Okay. I know we have like two minutes left. I want to bring up like one last macro step because home building sales or start home building, the home building stats came out this week. So I'm going to share my screen here. This is not often talked about by the market bears the people are talking about how real estate is overvalued and by most metrics it is but uh a persistent lack of listing for the sale of existing of existing homes has pushed more home buyers to consider newly built homes construction rose by 3.9 in j. Housing starts this year have actually been phenomenal. Rose to 1.5 million annual pays from 1.4 in June. Down from a peak in April 2022, but not by a significant amount.

The Case-Shiller Home Price Index, I don't know if you can see it. Let me just – it doesn't change tabs. So if I go to this tab here, residential housing has actually gone up this year relative to the start of the year. So there is no housing crash. It doesn't look like there's going to be a housing crash anytime soon. One can debate that commercial real estate is in trouble, but the residential side, at least for the big cities, which is what this index is, is not doing poorly at all. Yeah, and I think there's a very clear answer for that. And we talk about it here all the time. Who in their right mind is going to sell a house with a 3% mortgage to buy one with an 8% mortgage?

It just makes no sense. So I think that the market is frozen more than anything, and you have a better shot at building a house than buying one if there's no supply and prices are still high. If prices were crashing, you would be motivated to sell like in 2008, despite that. Well, back then mortgage rates were much lower, but... I think the economy is pretty strong. Yeah, I think people are looking at this. They're like, well, I don't need to foreclose or buy back on the cheap. I don't need to sell right now.

So I'm just going to, like you said, I'm just going to leave it. I don't want to – there's no – because, yeah, it's an evaluation because actually most people, if they bought before the pandemic, they're up. So then it's like, well, do I need the extra cash right now? I mean, you could make a profit and then use that profit to pay off your higher mortgage rate. That's where you're going to live. You got to go rent and then hope that rates come down, right? And rents are high. So the formula just doesn't work for many people. I'm sure there are some, but your average person is saying, I have a 3% mortgage. Even if I hate my house, I'm not moving. Was it with you that we

discussed this, that when interest rates go up, sorry, when interest rates go down, mortgage rates go down, we're actually going to see more selling? Of course. Yeah. That's when we're going to get a crash because everyone's going to say, I can go buy that house I wanted. And they're going to start selling. I think that's exactly right. So anyway, things are looking good for now, except Bitcoin, it's down to 26,000. I hear you, man. We got to go. David, thank you as always. Really appreciate it. Really fun to do this on Fridays. And I know that we're going to only get better here. I'm really looking forward to seeing what we can build together. I hope you guys are enjoying it.

Guys, that's all we got for you today. I'm headed off to Twitter spaces to once again talk about the Bitcoin bloodbath. David, I hope you have a great weekend, man. Thank you. You too. Thank you. Thank you for having me. Take care. Let's go.