The Wolf Of All Streets - Bitcoin BOTTOM In As Rate-Cut Odds Soar? Here's What's Next...

Episode Date: November 24, 2025

Bitcoin may be forming a bottom as markets bet on a December Fed rate cut, even after a $1 trillion crypto wipeout and Bitcoin’s worst month since 2022. Whales are accumulating, stocks are rallying, and rate-cut odds are surging—but the market is still on edge as MicroStrategy faces delisting warnings, JPMorgan is accused of blocking Bitcoin transfers, and crypto treasury firms feel pressure from rising ETF competition. Here’s what today’s headlines mean for Bitcoin’s next move.

Bitcoin is forming a base above $80,000 as odds of Fed rate cuts soar once again. It was 88%, it was 35%, and now back to over 70% chance that the Fed cuts rates in December. Is that a good thing for markets or a bad thing? Is the bottom in or are we heading heading into a Great Depression? We're going to talk about all of it right now on Macro Monday with James, Dave, and Mike. Let's go. My mic just my mic just keeps muting itself. Happy Macro Monday if you didn't hear that.

We got Dave, Mike, and James here. Good morning, gentlemen. Mike, morning meeting. What's going on here? We had the Fed, they're not going to cut, they're going to cut, they're not going to cut, they're not going to cut, she loves me, she loves me not. Well, you said that probably 70%, it seems like most agree with that. I'll start with Anna Wong. First, she expects Vuteal sales and control group to be four-tenths and three-tenths percent, respectively, but adjusting for inflation, basically slightly above positive core PCC, she expects at 2.2%.

She mentioned the inventory to sales ratio, which is from the business inventories data, which is old, but it's one thing she pointed out, those inventories are pretty well stocked up for the holidays, so that's not an issue, more than 100% of last year. She pointed out Fed John Williams, you know, pointed out, you know, last week for he wants to decut, downsides risks in the labor market is what he cited, similar to Chris Waller. And she thinks, so there's now enough votes on the panel for 25 cut, notably if Powell supports. She did mention the page book says, if it says growth employment flat or declining in more than half the districts, it's as a go for cuts, a rate cut. The baseline is December cut. Michael Casper, our equity strategy is folks a lot, and is this or not a bubble? And obviously the point is it's not a bubble, which is kind of like.

like someone telling you they're honest, it's kind of scary. But he pointed out some of the many reasons. He said one thing, Mag 7s are growing into their multiples. The PE was 43.3 at the end of 2001. Now it's 36.8. So there's a lot of signs of it's not nearly as frothy as 2000, 1999. Year and seasonality, as he pointed out, usually we get Santa Claus rallies. Ira Jersey, our fixed income strategists, point out,

he's not expecting much from the tenure note in the next year. fair of the feds cuts if we do cut we'll get inflation thinks fair values around 4% but he did think his bias is the fed's going to be cutting more than the market expects closer to 2% rather than 3% and he does expect that to your note yield then he's still into believes in statement is going to fall closer to 3% and then I focus on my main outlook I'd focus out

well there is a bubble and I point out it is in cryptocurrencies and a lot of times you don't know until the tide goes out And the things I'm pointing out from commodities are just historic. They have gold up this much, 1979, and crude oil down this much, the most since more than the 2008 great recession is quite significant. And it's part of the reason I think the key lead indicator for everything is cryptos. I pointed out, I think they're still going to go lower. And it's part of the reason I think copper is more likely to head from five down to four. natural gas, which is, if it ends here, it'll be the high since 2009.

They head lower. It's also for other reasons. And even crude oil, you know, it's, if Bitcoin goes lower and a stock market goes lower, crude oil 58, it's more likely it dropped towards 40 than stable of 70. So all my stuff's kind of trickling off a little bit and what happens with cryptos. Back to you. All right. So I want to talk about one thing really quickly before Dave, you jump in because I have a specific.

So, Mike, there's been a consensus in the Bitcoin community that Bitcoin will follow gold. A lot of people believe that means that Bitcoin is going to follow gold up. Here you're saying that Bitcoin is going to lead gold down. And then, Dave, I want to talk about your take on the bull market priced in gold because I think that it's really, really interesting. But Mike, you think that Bitcoin right now dropping is actually a risk to gold in other metals. Is that correct? Yeah, 2008 scenario de-risking.

And as Dave knows points not many times when you got to sell stuff, you sell what you can, not what you, what you want to. And that's exactly what happened. The last time Bitcoin got similarly stretched as it is now versus most long-term moving average. Now, the last time was 2008, that put in a high around 1900 for about 10 years. But right before that was 2006 and 7. Most only 2007. It popped up to 1,000 and then dropped the 700 as a whole stock market kind of head and lower. Now, that's the kind of situation I'm worried about now. Just the key thing is I have to switch over from what really matters in markets. When you get markets this stretch versus all long-term moving averages, which are gold is right now, I back off and point out the

risks, and that was the key risk. Now, it looks very similar to me what kind of the signs I noticed in Bitcoin last year. Yeah, I was too early, but shown signs of peak bull marketness. And same in gold. The thing is gold is obviously I all know the fundamentals. Dave and anybody can pick into those. I just switch over to my spidey senses and my risk management hat is just too expensive. You want to be careful. And that's part of it. I've been to that mode that if the stock market volatility just picks up a little bit from these record levels, levels, everything goes down except for Bonne yields. I'm sorry, Bonials go down too.

Dave, you have a slightly different take on the Bitcoin gold relationship right here. I thought this was a great tweet, so I wanted to unpack it a bit. Unpopular opinion that this Bitcoin bull market has not started yet. Perhaps you can dig into that for us. Yeah. So, I mean, all the cycle bros thinking 2025 was, you know, that because we had, you know, that a bump from Trump, which was basically a one-time revaluation. upwards on the theory that and remember he declared bitcoin a strategic asset etc it's fascinating

because the miners clearly agree and the owners clearly did not and so if you look at gold as hard money and you see that if gold is hard money from the past and the current and you think bitcoin is going to be hard money in the future then it is clear that this cycle has seen zero. I mean, zero bullishness. So it's not a cycle. You know, basically this notion that we'll know soon whether the four-year cycle is dead is the is absolute absurdity. This four-year cycle died early in 2025. I think it actually died when the ETF caused Bitcoin to make an all-time high way ahead of the cycle. Right. So cycles are cycles. Look, it's funny. There was an article and here, let me, there's an article on, from BlackRock. And I think it's fascinating. BlackRock,

the title of the article is BlackRock, Bitcoin clients focus on digital gold, not payments. If you want, I can post it or you could find it. But what matters is the narrative of what Bitcoin can be. And that's the long-term narrative. And there's been nothing in 2025 to say it. Now, Mike is right in a sense that if, in fact, and everything else drops because we have a massive sucking out of liquidity in all markets. Right. There you go. Now, the payments use cases state is, what they're saying, you had it. There you go. What you have is a market where we are debasing the dollar.

We are printing, printing, printing. There's no end in sight. Doge was never going to get very much done because it threatens the pocketbooks of both sides of Congress. And so it was stopped. They don't exist anymore. There you go. Doge fought the swamp in the Swamp one, breaking the Department of Government Efficiency no longer exists. There you go. So, you know, DeSantis set up his own Doge in Florida. It's actually found a fair amount of savings, but, you know, because he thought it was a good idea, but it didn't really do anything. And so we have the only fight, this fight over the government shutdown, which did suck liquidity out of the

market for a while. And James did a really good job in this weekend talking. about it. And I think you should talk about your newsletter because it was really good this weekend on this topic. But we haven't had a bull market. And so that's the point. So the other big point, the other meta point here is what is the what is the most important chart in Bitcoin? And I keep coming back to this. There are two huge stories that are going around on crypto Twitter that I'm not sure which one is dumber, but they're both incredibly dumb. The first one, which we're going to about later is micro strategy. So a lot of the takes on micro strategy are just mind-bogglingly stupid. But it doesn't matter. You know, it just really people who literally can't do basic math.

But the one that I want to highlight is this notion of where are we? Let's do this. See if I can make it work. Share screen. I want, yeah, this is, I show this every week. But if you look at this, this is the hash rate versus price. Has rate is the blue line. Price. is the black line. I have seen tweets on crypto Twitter proclaiming Bitcoin hash price lowest in history. It means further downside. Okay, possibly. But if you look at this, going back since the beginning of time, this black line is now farther below the blue line. Blue line is what do the people investing in mining equipment, power, et cetera, think the price is going to do? The black line is what is the current price of the asset. This line is now the most extended it has ever been.

This creates one of two possibilities. The miners will all have to have a massive capitulation, including sovereigns, et cetera, which have free power. And people keep making this stupid idea that, well, the average price is, you know, to produce it is above it. It's exactly the same fud that you get in the first six months of the previous, you know, three having cycles, where it's like, oh, my God, the network can't survive this. And then when it obviously continues to survive it, at some point there's capitulation

and the price rocket's up to catch it and goes past it. So, you know, you saw it here. You can't see it because the chart massively passed it. Saw it here, massively passed it, started to drop, and then went rest so you passed it again, and then eventually converged after FTX, stayed below in the post-FTX hangover for a while, caught it, came down again, caught it,

went above it with the ETFs first going, went below it, caught it, went above it, below it. you look at this chart as a someone who who has traded statistical arbitrage this is like the the homer simpson pork chop slide this is this is the time to be buying this is not the time to be selling yet people keep just looking at it the other way so to me it's extremely obvious and you know i i don't even know how to articulate how people look at that and see that as bearish now in the short run momentum was a big deal and i think you let james should talk about it because you talked about it specifically the type and the fundamentals behind what went on in crypto.

It is one of two possibilities is true. Either Mike is right, in which case, Bitcoin signals a drop in liquidity that's going to become permanent that's going to take down all risk assets, or Bitcoin overreacted due to a confluence of events, including Athena depegging, ADLD leveraging, and funds having to do force selling at the exact same time. that we were in the middle of how many weeks was it of liquidity being drained out of the system James I mean a fair amount it's one of those two things is true I lean toward the latter but there's no doubt that there's risk one last note of what mike said the reason the mag seven is now

cheaper relative to earnings than it was and then the effective equivalent in 2000 is is because corporate profits are an all-time high versus GDP and sadly it doesn't look like there's any policies in place that are going to cause that to reverse anytime soon. In fact, the big beautiful bill will probably turbocharge that. I'm not saying that's a good thing, by the way, because at the end of the day, it's causing the K-shaped economy to get wider of a gap. But it is what it is, and as macro analysts, we're supposed to look at what's actually happening, not what we think should be happening. So that's an interesting case. Does that mean that there isn't risk and risk assets? Hell no. If they screw up, yeah, I mean, big time. I mean, if

If they lose control over and we get into a liquidity death spiral, yeah, that's a real problem, right? You know, there's still a lot of potential negative catalysts out there in terms of corporate real estate. You know, we all know what they are lurking beneath the surface, but it's a risk. Then you'd be crazy not to do it. But the point is, is if you look at this in macro, you're saying, okay, you know, why was price actions? I'll close with this to use a mic thing. To land the plane, I would say I tweeted something over the weekend, which I think is absolutely profound is too strong and too egotistical a word.

But basically, we understand it is incredibly ironic that we talk about narratives and how markets will always price the long run narrative eventually correctly. But in the short term, we make up narratives in order to justify what happened in the short-term price. So the price moves and people create narratives that don't exist. And we see that all the time. And so-

A lot of those this week. Yeah, exactly. And so we'll talk about micro-strategy later, but when you have multiple, literally multiple dumb, I mean, just, I don't like to use stupid words. I don't like to use ad hominems in tweets, but I keep seeing raging stupidity. I mean, you could say Bitcoin's overvalued him.

Nothing Mike said is stupid. it all has, you know, it's all reasoned, but there's so many takes out there that are just dumb. And when you see dumb takes and you see a consensus around stupidity, that's what I want to be on the other side. Yeah. James, you can run with any single part of that. I mean, Godspeed. All I can, where I come at this now is that, look, four-year cycle is absolutely dead. I just, I can't get to a spot where we have a four-year-old. year cycle still intact. And that had to do with one of two things. It was either that it was very tied to the mining reward over the course of the last number of cycles, or it was very tied to

the political party that was in power. Now, this last cycle, what we saw was the ending of the last kind of meaningful reward for miners, in my opinion. And, moving to a completely different administration, which that on top of the ETFs being introduced, I think that just blew the four-year cycle up completely, right? So like David said, we, we revalued Bitcoin under a new administration that was not antagonistic, but was actually supportive of Bitcoin and crypto. So that's a big deal. So what does that leave us? Well, it leaves this with liquidity cycles. And we keep talking about this. And I fully believe that we are experiencing a severe drawdown in short term for Bitcoin. I mean, Bitcoin 30% is nothing. But the last

couple of months are just showing that Bitcoin again is the best liquidity barometer, global liquidity barometer in the world. And so what we've been seeing is, is that you're having a tightening of liquidity from central banks. You've got tighter liquidity coming out of the Fed, the ECB, out of Japan. China's not stimulating as much as people had hoped. And so you're seeing a drawdown of liquidity, and Bitcoin is just, it's demonstrating that. So now it comes to the question, you know, the big question in the room, which is, does gold and do the other other risk assets because we all agree that Bitcoin as much as we believe it's not, it's a

risk off asset. The world believes it's a risk on asset and it's going to continue to be that until the world changes its mind. So are we going to have a drawdown in the other assets or is Bitcoin going to catch up? And my answer is unless the Fed and other central banks change their, how they're managing liquidity, then we're going to have a draw down in a other risk assets and gold. That's just the way it is. And we can hope and pray for something else, but I think Bitcoin made its move.

I think it's found its local bottom here for a moment. Whether or not that means that we're going to recover from here and go straight back up to 100 or more, it really depends on liquidity. And by the way, 25 basis points is it's not significant in the world of liquidity. It's more of just a nod towards which direction the Fed is going. It's a signal. Exactly. Because we all know that fiscal dominance is driving the trade right now. Which gets us to, yeah, which gets us to the position that we're in now, which is the Treasury is

now playing a game of they have to roll over half a trillion dollars of liquidity. weekly now in Treasury bills, which is just insane. So what is happening? They're going to continue to do this, and they're going to inject liquidity into the banking system. We heard Powell say it. Now, we've had this massive fight, again, talk about nuance and stupidity. Like, whether the bank, whether the central banks are injecting liquidity short term or long term is QE or it's QE, not QE. It doesn't matter. It's liquidity. If you're injecting liquidity into the system, that's what we're talking about. So you can call it QE, you can call it QE, not QE, whatever you want to call it. But the game they're playing right now is a game that benefits Main Street because we continue

to run deficits. We can continue to fund those deficits. We're going to, the Treasury is going to do what it needs to do with the Fed to shore up the bank balance sheets in order to continue to roll over these treasury bills week to week to week to week to week and that benefits main street but not wall street we're going to have to find a way to benefit wall street if risk assets are going to are going to stay at these levels which goes to mike's point which is are we going to have a draw down in risk assets or are we going to have a catch back up with bitcoin to everybody else and that really has to do with with central banks and i'm not talking about a 25 basis point cut however you can see like Scott said it's a signal that the Fed on Friday Williams came out who is the

president of the of the New York Fed pretty significant he came out saying that he sees a you know a 25 basis point cut as warranted in December. So did Waller. Yeah. Yeah. What's that? And so did Waller. And so did Waller.

Yeah. Waller, not surprising. He's a, he's a, you know, Trump pick. But Williams is, that, that is a pretty significant opinion because he's, he's usually aligned with Powell, right? If I'm, if I'm getting that wrong, Mike, please correct me. But he's usually aligned with Powell. And so that, that means that we have a better than 50% chance now. We get a six or 70% chance of a rate cut. Again, the significance of this is really, it's a signal to the markets of which way they're going. Now, if I'm Powell, you have Trump over the weekend or late last week saying, you know, this is a true that he's calling Powell a tremendously stupid man. He's made so many mistakes. You know,

we could be so much better in there. We have good people. Somebody commended him to me and I made a mistake and appointing him. You know, like, Powell, I'm going to be like, I'm going to do everything I can to not. do what trump tells me to do because meaning i mean just right however this is a position we're in

this is where we're at and you could see the liquidity has been draining down then one of the main drivers of this has been the government shut down well filling back up the tGA of half a trillion dollars number one so getting it back up to 850 billion dollars and number two having the government close for over a month, which means that that money is just sitting in there, that that checking account not being spent, which means that, you know, it slows down liquidity. And it's barely trickling out now. The government is reopened, but it's just barely starting to trickle out. And you're not going to see the effects of this right away. It's going to take a minute. The problem is the checking account, it's like if you have a budget and your budget goes from

$5,000 a month to $25,000 a month, You can't keep $5,000 a month in your checking account. You've got to keep $30, $40, $50,000 in there to make sure that you have enough in there for larger expenses and that you don't get out of line. We can't get to a situation where we're suddenly dumping half a trillion dollars of treasury bonds on the market because we need more liquidity in the treasury general account. So you've got to keep that treasury general account full. Well, that means that we're going to be keeping five, six hundred billion dollars in there at all times. So you're not going to see that drawdown be as significant as people hope. So what does that mean?

That means that that QE, not QE, has to be larger than anticipated or hoped, which is not just 20 billion or $25 billion a month. It's got to be more than that. Or we've got to have real QE. Now, when that happens, I have no idea. But make no mistake, it is coming. It is going to come. It's just a question of when. And the big question now is, is it going to go before the stock market draws down and meets Bitcoin?

Or is it going to, are we going to have a nod to that toward the end of this year before we have a drawdown and going into the next year, which is a major year for the political party and the Republicans for midterms? That's the question. And I'm going to make the bet that number one, you have no idea if there's going to be a black swan between now and the time that I'm, I'm saying this is going to happen, but I'm going to make the bet that this government's going to pull out all the stops to make sure that we don't have a massive drawdown in the stock markets going into next year because that is a major driver of the economy. And there's no way you can dispute that. We are so financialized.

That's reality. And whether it's case-shaped economy or not, that's the reality. And everybody knows this in the government. And they're going to try to avoid it best they can, at least on the Republican side. So I got a lot to ask you here, Mike, and I see you bringing up some charts. before you dive into whatever you have planned, what do you make of the absolute schizophrenia of predictions on Fed cuts and how much did they even matter? Well, exactly. I love it. Sometimes I put things in my DIY list called Deliberately Ignore

because I don't have to focus on because people talk about it so much. To me, it's, and I think James nails it, the key thing is, and Dave touched on this too, is we are at the point now and even our morning meeting, that the Fed's, Mr. Trump wants to stack the Fed, you know, counsel, the Fed with his like-mining people. But he did appoint Chairman Powell, was to remember what happens to a responsible human being and gets in that position and wants the whole world in history to remember him accordingly. And the key thing is by trying to get the Fed to ease, creates more inflation, which is a great way to get unelected.

We just started to learn it. Duh, I was like, dude, didn't you figure out, like, first Trump administration, I'd love writing about stable coins and crypto dollars because he didn't figure out this base layer went to the dollar. It's awesome. Now he figures out. He tilted it over. And he's got to finally figure out that I think he's getting it. Oh, by the way, Scott Besson might be telling Donald, the number one issue right now is inflation.

If we cut rates to where that's inflation, you're not going to get elected. You're going to crush an election in the midterms. And by time it comes up to your next election, if you don't control inflation, that's how you will remember. Sorry, that's just the way we are. That's where things right now. That's why I want to show in some charts. And Bitcoin's the leading thing about this. The key thing is that's all big picture macro.

I'm so concerned about the next 25 or so actual sessions in the market if I can show my screen that, to me, that's all that matters. And that is how we end this year. And James touched on it. I think we're more likely the end of the year following Bitcoin in the stock market rather than Bitcoin catching back up and stealing just the bonds. And here's part of the reason why. I love when people say, oh, look at the chart. Well, here's an annual candle chart of Bitcoin. $50,000, the last four years has been nothing.

Low, high, low, high since 2020. It's nothing. Going back to there means nothing. One thing that is different is this is a 120-day volatility on the S&B 500. It hasn't been this low on a closed basis since 2017. When it gets this low, we're going to go up. That means Bitcoin goes down. So it's a lose-lose right now.

Maybe we'll get lucky. And I just want to point on something that's never happened. When we have this Bitcoin-to-go ratio collapse like it did this year, we always get red bars in S&B-500. So far, we're green. We might tilt to red on this year. And if we do that, that's a major dominole effect. To me, that's what might be happening in the next 20 or 30 days. And here's a good reason why.

This is just versus 200-day moving average. Microstrategy led the way. We've seen this before in the past. Bitcoin's foul. We've seen this for, it's getting a little bit oversold. Gold even has a problem. This stretch above its 200-day moving average is the most since 2006. And here's the stock market, SMB 500.

By the end of the year, just go back to 200-day moving average. It means nothing, but good leading indicators to do that. And here's one key thing I want to end with that's completely changed from this time last year, this headline. The crypto crash is eroding wealth for Trump's family and follows. And that's the thing that's fundamentally different. When you expect pension funds, endowments, and teachers and things to get involved in this space, now they have to be at their discussions at their meeting and saying, oh, by the way, you know, if we're buying anything in cryptos or supporting the Trump administration,

checkmark, that's completely different from what was in the past when people got in the space to get away from the administration or any administration power. This world has changed, and now we're just purging. So I think the purging just started. So could I, there were three things I'd like to point out in that, in that tirade. first one is to agree completely with the last point, I think that our bifurcated world is such that supporting crypto in the minds of the P-Brain is relevant to whether you're protesting Trump or not. And, you know, honestly, we saw this with, we've seen this with ESG, we've seen this with all sorts of stuff. On the margin, when one invests based on political beliefs or

or social beliefs one loses money you basically you do better taking your pile of one dollar bills and making a bonfire out of it uh than you would by investing that way but people never learn and they do it and it is absolutely happening there's no doubt mike is a hundred percent right that it is 100 percent impacting the buying universe on the other hand it also entrenches the other side to people who pay stupid amounts for things that have no value like trump coin i mean trump coin milania coin these things should never have existed i don't think you could find anyone in the crypto world who's half serious or isn't doesn't have their their lips totally glued to Trump's ass that they they don't see it. In fact, one could argue that the

bull market was doomed. One could argue the bull market was doomed when, you know, those things came out early in the term because it was wrong on so many levels. And there are some of us who basically have been saying that since the beginning. It was undeniable grip. And I don't like grip. And I'll call it out on both sides. Now, that said, I'm very, supportive of most of the administration's policies but not of that not even slightly and i do think that was important so that's the last point you made which i agree with i mean i have my statistical brain when i see someone pointing to two and i repeat two data points on a chart two to try to consider that statistically significant i'm going to avoid using any pejorative terms but let's just say

that it's non-persuasive gold is up because the chinese government has been amassing gold and other central banks have been amassing gold more than treasuries full stop and that is something that had never happened before and to not take into account you're on your charts these two data points which occurred in the past it's different now why is it different now it's different because gold's rally is is indicative of the fact that central banks worth a lot of money, which have massive positive deficits, massive, you know, not structural surpluses of dollars that need to put it, they put it in gold instead of in treasuries. And so that completely invalidates the charts because that wasn't happening in those other two data points. And so understand,

you know, what's going on. Hell, I love the fact that I think I saw Kramer basically saying gold is going to stop, you know, stop here. I personally think that, you know, gold has been basing at 4,000 for a long time. It's going to do one of two things. It's either going to stay here for longer and Bitcoin's going to catch up or it's going to go on another rally back up over $5,000. I don't know which. There's no scenario I think where gold drops to $3,000, none because it's extended over the $208 million average. Yeah, that's true. But a huge amount of its supply and the marginal buyer, the marginal buyer is still running structural surpluses. The marginal buyers are still running structural surpluses. And they're not

going to sell any. There's no need to. I don't think there's anybody who thinks China is going to sell gold for Bitcoin or gold for US treasuries. I just don't see that happening. It doesn't make any sense that they would. And therefore, it was the opposite. We've actually seen the chart where foreign governments now hold more gold than U.S. Treasuries. Right, but that's that chart is going to continue. Yeah, it's a one way street. It's it's for structural reasons. It's not cyclical. It's secular. It's a structural change. And you have to adjust based off of that. All of the charts, every one of them assumes a static supply of dollars to measure. against it, assumes static supplies and demands for gold. They're not. And that macro trend is huge.

Now, that doesn't change the fact that Bitcoin is correlated to the stock market, that if there is a major correction, then Mike will be right. Bitcoin 50,000 is not at all impossible. Bitcoin 10,000's impossible without Bitcoin being broken, but Bitcoin 50,000 is not impossible. And I'm glad to see you changing the rhetoric, because that makes sense. I mean, in a accelerating sell offer, if we get a stock market that drops 15, 20%? Bitcoin from this level could easily drop another 30, 40% double that amount. It could happen. Is it likely? I don't think so, but it absolutely could happen for all the reasons. If we have a Black Swan and the market falls apart, of course it could. But I mean, that's what it would need. Right. So the third point is on the Federal

Reserve. Five months from now, five months from now, there will be a, a Powell will be quacking as a lame duck completely at a bare minimum he's gone in may by April he's not making any decisions that matters yeah right the question is does he want to take a parting shot at Trump if he for example holds rate steady at this and has a hawkish tone for January February not only won't there be a Christmas rally but you could see some really bad shit happening now there have been all sorts of of weird rumors. I don't know if any of them are true, right? But if he does, you will see a massive pullback. Is that something he wants in his legacy? Does he want to have the next Fed

share be the one who is the white knight robbing, you know, riding in to fix his mess? Or does he want a more extend and pretend and get the hell out? The latter is, if I'm him, I want to do the ladder. I actually don't think he's done a bad job at all. I have not been that critical. I think that the biggest problem I have with the way down on the way down on the biggest problem I have with the way the biggest problem I had with a rate cut whoops right there's a rate cut right before uh you know the election last summer that that didn't make any sense except for politics but now it's different you know this notion Mike that you you treat something we got to move on from the Fed in a second Dave so I just want to say the notion that you treat interest rates cutting

interest rates as inflationary to the consumer as axiom is wrong interest rates to the cutting interest rates to the consumer will create more aggregate demand it could easily cause consumer inflation if in fact supplies are are constrained but it's not at all clear because owner's equivalent rent will drop et cetera et cetera and the statistical correlation over the last 25 years has sucked And that's where Moran is coming from. You know, you could agree with them or disagree with them, but he academically believes that cutting interest rates will lower inflation because it will spur business investment and cause more supply.

Now, is that necessarily true? I'm not saying that either, but I'm saying it's at least in dispute. And so it shouldn't be treated. That would definitely take time. Of course it would. Of course it would. I think that in general, you will have a, it's a question of running it hot. And that's why he wants, and there's no question.

That's why the notion of stimulus, direct stimulus, is being talked about because, I mean, all you have to do is look at the Mamdami, you know, Trump meeting where they both talked about how important it is to make the world life more affordable to understand. What a political party that would be? What? What's a political party that would be, the two of them? Just just one key thing about rining it hot. It's a license to lose election. It means inflation. Maybe.

Full stop, as you say. Yeah, but again, Mike, it's not like. To start lowering rates and issue QE this next year before the midterms, that's not going to cause inflation before the midterms. And they may after the midterms, if it rages out of control like it did back in 2021, 2021, but that might have come because they printed $5 trillion fucking dollars. Thank you. So it's a big difference.

inflation is always a monetary phenomenon right i mean here's a thing though let's go just just the last thing about the fed and and uh injections of liquidity just think through that for a moment the banks are nowhere near the same levels of reserves they were in 2021 2021 they're they're way down okay and gdp is up the bank assets are up that means the reserve capital is low enough that they can inject a lot here and it would it would just shore up the market from having a sharp drawdown. It's not, we're sitting at a spot now

where they could inject a lot more than people realize next year. And, but I don't think they're going to. I think they're going to wait until they have to. I do think they're going to start adding, but I don't think it's going to, it's going to come with a fire hose unless there's a reason, unless there's some sort of credit event,

that they need to and that's it i mean so we we have to we're watching carefully and we're waiting for a possible drawdown but i do think that bitcoin has led the way and so now the question is are they going to come in sooner or later and we're going to find out a lot in the next couple weeks yeah so one good way for the fed to get the trump what he wants to fed the ease inflation go down as a stock market go down and no i haven't changed my narrative for bitcoin i'm using the same one i use in 2018, it's going to lose a zero. My target still get to 10,000. Initially, right now, it's 50,000. But again, it's this next couple months and a half that are going to matter completely for markets. And if we just have a little pickup in stock market volatility, 120 volatility right now is

11%. That's the lowest. If we end here since 2017, just a little pickup there, everything starts tumble. You'll get all the QE, you get the Fed to cut up, and we begin the cat and mouse game. I think we're going to expect for a while. Well, markets go down, following cryptos, most of them go to zero. Let's get that over with sooner. And the Fed cuts rates and we get to a situation like following Japan, which is what China is right now. And here's the other side of that is that with the stable coin legislation and stable coins now allowing to continue to run fiscal deficits, add infinitum, we're, you know, this is, this is a big structural change. And that will help this issue that Dave pointed out of central banks buying gold

instead of treasuries. They're going to find pockets of liquidity everywhere for treasuries with stable coins. That is the entire point. That's why they pass this legislation. That's why they're pushing it. And they understand that. So we're going to have that this is going to allow this to just continue. And to Lynn Alden's point that literally nothing stops this train of fiscal dominance and spending from the government. Nothing's going to stop it. We just saw Doge commission got shut down. Why? It's not because it was unsuccessful.

It's not because, you know, they don't want to cut anymore. It's that they can't. Where else are you going to cut? They found the fraud in Social Security system. They found the fraud in the health care system. And now they're trying to just focus on that with legislation rather than just firing people and cutting programs. Now they've got to focus on legislation to somehow fix that. God help you fixing Obamacare, you know, that doesn't seem like it's going to, it's

going to happen if it does it's going to be almost a total scrap of the program but we'll we'll see what that looks like but you can't cut enough out of the government to get to you know you can't cut the government to offset a balanced budget and get to a surplus is almost impossible day before you jump in i want to move on to micro strategy and jp more yeah we need to talk about that everyone's talking about and we're just going to run out of time so first of all a lot of it i don't even know where to start but there is this article, Trump's Gambit, the quiet war between the White House and J.P. Morgan. James, this speaks to exactly what you were just talking about,

which is effectively that there's a war between the Fed and the Treasury and that stable coins are going to effectively render the Fed useless, and that J.B. Morgan is the actor that's basically the arm of the Fed that controls central banks and policy. Okay, we don't need to dive so deeply into that, but you did just basically allude to it without alluding to this, which is that if they have stable coins, those can help them manage the debt much better

than perhaps the Fed now has a power to now. We have, I don't even know where to start, literally. Like JP Morgan then debanks some strike customers and Jack Mahler's himself, leading many to say what the hell is going on with Operation Shift.2.0. And then, of course, we dive into the very long controversy over whether J.P. Morgan is actually manipulating the price

of micro strategy because micro strategy is part of the tools of the Fed. But basically that they change the margin requirements for J.P. Morgan customers on micro strategy, which has caused a structural massive sell-off. And then, of course, this is so far over the edge, it blows my mind. Unconfirmed, J.P. Morgan appears to have an existentially threatening short micro strategy position that could potentially bankrupt J.P. Morgan. I would put the odds of that at negative 97.9%. I love Max.

But like, okay, but the idea here is that there's massive manipulation in micro strategy. Yeah, let's talk quickly about how the bank works with custody. And Dave, you can get pretty deep into this too. But at a very high level, prime brokers, J.P. Morgan as a prime broker, for people who don't know what that is, That's your main broker if you are a financial institution. Mainly hedge funds are the ones who are super active with prime brokers. And the reason for that is because he used a lot of margin and leverage. Okay.

And so they love hedge funds. Back in 1993, we were a hedge fund and we couldn't get coverage from Smith Barney. And we were a traveler's group fund and we couldn't get attention from them. But they started realizing in the early 90s. 90s, mid-90s, that, wow, you know, these hedge funds use a lot of leverage. So you've got these prime brokers that operate and they give margin capacity, derivative capacity to hedge funds. They also allow them to borrow shares.

So they do something called rehypification where they get everybody's shares that they cover all these hedge funds and all the institutions, the endowments, the, you know, very large investment funds, the pension funds. They get their shares, they sit on them, and then they lend them out. So, for instance, if Texas teachers owns a million shares of micro strategy, they can loan those out to a hedge fund to short them in some sort of long, short strategy that they're running. So does that mean that they're manipulating it? No, it doesn't mean they're manipulating. What it means is that they are, maybe they're running a very high margin on, micro strategy now and i haven't heard this yet i haven't seen it my but we don't get margin on our

accounts from from um rbc but they do run margin at other places typically the margin on these bitcoin related companies is very high meaning the haircut on on some of these these stocks that you see like apple Microsoft the mag sevens it could be like five six seven percent meaning you could borrow 95 to 97% or 96% of what you're you're putting up as collateral, okay? But when you put up a micro strategy, you put up a meta planet, you put up a, you know, a cipher or an iron, they're not giving you a sick. Could I tell you how it works? Because, you know, it's very simple.

And I don't know whether they deviated from this here. That's what's interesting. The haircut. that you're talking about and this is a hugely important thing for people in crypto to understand because it's coming to perp-dexes near you it's coming to everyone because this is the right way to do it is you you vet you give collateral value on the basis of liquidity and volatility so a stock that trades a lot of liquidity that has a volatility of say 30 is going to trade with a much lower haircut than a stock with a lot less liquidity that is a volatility of 60. And so when you have huge

spikes in a stock during a year, the volatility by definition is going to be high. If you have a lot of movement or you drop in a stock, you're going to have a lot of volatility. And therefore, the haircut's going to go up. Now, mechanistically speaking, there's no need to tamper with that. I have zero idea. I have not dug into the map. But they will, look, they have been taking high haircuts. on these things, meaning at best, you're going to get, at best, you're going to get New York margin, right? So, New York's auction, which is Greg Pee. And this is an open question. Yeah. Micro strategies, volatility, micro strategies, you know, it's been going down. Yeah, undeniably,

Mike showed the chart. It's very clear. But as volatility, I don't think, has moved a whole lot. Its liquidity has been excellent. And its MNAV is now dramatically lower. Yeah, it's fine. If you're going, if, if instead, if basically the volatility and, liquidity meant that naturally it requires a higher haircut, that's perfectly legit. If on the other hand, you're making an assessment that there's more risk in micro strategy now, an MNAV of one than when it was trading as an MNAV of 1.8, then at that point, you're making a, just a human decision to do something because you think it's vulnerable. But let's just, now let's back out.

It's entirely possible. It's based on that. And I don't know. These are, but you're talking about, you're talking about the prime broker desks and the risk desk that are, that are, that are making these evaluations. They may or may not understand the underlying business of micro strategy. All they see is that it's basically a Bitcoin proxy. Okay. So that, that may be part of the situation.

Yeah, but that's been that way for years. It has been. It hasn't changed. So, but here's the other side of that coin. Okay. This is where it's really important is that, okay, you've got the margin requirement, all that. that's one thing they may just have decided that the risk desk made an assessment decide you need a higher margin on on micro strategy now i don't know i'm not a prime i'm not a prime broker client of jp morgan

however this is the other side of the coin they have micro strategy shares in their house they're they're sitting on them in custody are they lending them out are they lending them out at a high price or at a comparable or like a competitive price likely they're they're lending about a competitive price. Here's the question, and this is what it gets you. I don't have an answer for this, but sometimes they will call shares and cause a short squeeze where you're getting bought in because you borrowed these shares and a client wants them back to sell. Sometimes they'll do that. Other times, they'll slow foot settlements, meaning they'll let settlements you know, perhaps not settle on time for a day or two and fail for a day or two,

they know they're going to, they're going to settle at some point. And that eases that short pressure and it allows the settlement without a short squeeze. Whether they're doing any of that, I have no idea. I've seen other prime brokers do this. I'm not accusing them of doing it, but I have seen this happen a lot in my career over 30, years. Now, are there anything like this going on right now? I can't speak to that. But that's the question. It's a pretty. It's very straightforward. But there's one mistake that you made. The prime brokers in general don't have, I mean, some do. Certainly, you know, the ones that have

big retail arms have boxes, you know. But the prime brokers are middlemen that have because of the nature of the cartel take around 90% of the benefit of the financing business. But they are generally have their, it's their clients that are the providers of the, you know, of the shorts, you know, of the shorts. And hard to borrowers are obviously significantly more lucrative for them. It's their clients. I'm not saying it's a profit. It's agent lending. It's their, the, they're the custody of the shares that they've got for the, on behalf of the client. Which they re-hypothecate into one big bucket and lend out. Okay, so but here's the thing.

You know, there are lots of people, I won't name them, who believe that it's a criminal enterprise and it's evil, blah, blah, blah, I don't go there. But it is a factual matter that J.P. Morgan was accused and settled for billions of dollars from manipulating the gold market when they got themselves short. That is a factual matter. It is not in dispute. We have zero idea what they are in the Bitcoin market.

I do not believe Max Kaiser is necessarily right, but if he is, it would not be the first time. And what are the levers they can use to play? What are the two pieces of fud that have been touted to be driving this market down? And one is quantum, which I think at this point people understand what the real risk is and it's overblown, at least in the short term, you know, and we can. you dive into that in a different macro Monday. But the other is micro strategy. And so if you were, you game theory it out, if they were short, what would they do? They would deviate from their normal liquidity volatility rules to create, to make it harder, you know, harder to be long,

micro strategy and let the people who are short micro strategy have it easier. And so you would give less margin. You would do that. That's what you would do. Now, a monothea, saying that it happened. What I'm saying is mechanistically, if it were true, and I don't know whether this is true, if it were true that they deviated from their normal rules of volatility and liquidity, then there's smoke and may even be fire. If they did not, and it's just simply an adjustment based upon the way the damn thing is trading, then it's overblown. One last point on that, though, Dave, is it may not, so people get this confused, is whether it's for their prop desk, which I don't think it, I think their prop desk is, it's long micro strategy,

but whether it's for their prop desk or their, or their client base, or is it for a major hedge fund that they would be doing this? That if that hedge fund blew up, it would be a massive problem. That's possible, but is a problem? I mean, like, I don't, I haven't heard anything. As I said, it's mechanistic. I don't want to talk about the reasons because that's the point. The point is there would be on behalf of a massive client that's pushing them.

Maybe. That's what it would be. Maybe. I mean, we don't know is the short answer. But the fact is that a lot of the dialogue around micro strategy has been ridiculous, like the index thing. MSCI announced this months ago. And that was a shot against all crypto digital asset treasuries, that MSCI is going to exclude them. And that's, by the way, foreign money.

That's not U.S. money. There's no U.S. money indexed using MSCI indices in the United States. IFA is what the U.S. clients use. But MSCI U.S. is used by foreign investors. So let's understand that. MSCI and S&P are totally different, totally different people. I have basically said from the beginning, I thought micro-strategy's inclusion in the S&P until Basel rules change, almost impossible.

Can I ask the question? One of you might know the mechanics of. So obviously there's this large controversy that they could be removed from MSCI. If they're removed, does that mean forced liquidation of those index funds of micro-strategy? Like, what are the mechanics? So that because I read that that's about $9 billion. worth of micro strategy sitting in those funds that would all be sold off correct correct yeah that's exactly right at nine billion given its market cap of like it's like 10 percent of

its market cap in mscii index in the u.s so it doesn't strike me as even remotely possible it seems way high but you know it's it's just different i mean just because msci i used to trade indices i did that for i ran program desks right mscii is what is used by it is the biggest index for American funds investing overseas in the IFA index, you know, Europe and Far East, Europe, Africa, Faris, et cetera. But it is not the biggest, it's for U.S. investors. It's the S&P that matters the most, the NASDAQ that matters the second, the Russell 1,000 that matters the third, blah, blah, blah, blah, blah. The FT, you know, their old S&P indexes, it's all there. So, you know, there's a whole game on indices. So I don't see how MSCI for a U.S.

company is that big of a deal, it just strikes me as odd. But I'm sure it's real. I'm sure there's some and there's force selling. NASDAQ would be a bigger deal, but I'm not sure on what basis NASDAQ would do that and why they would do it. The real question with micro strategy, and it's a very straightforward is, if you view it as a Bitcoin proxy, and it isn't, but if you did, you would, it's a proxy in actuality. If you view it as a Bitcoin proxy as opposed to building a capital stack on top of Bitcoin, then you're going to have a very different approach. That narrative really depends upon accounting rules and it's nuanced and that's why the story of the last week, I was important when the head of the Basel committee admitted that they

needed to change their rules for crypto. That is the key. And understand index committees aren't stupid. The last thing they want to do is what was the worst thing you could do if you're running an index? You remove something that a year later you have to put back in at a higher price. it makes you look stupid. And index committees aren't generally risk takers.

At this point, adding it to the S&P would be a risk. That's why they're not going to do it. But at this point, subtracting it from an index is a risk, and they're going to look stupid if they do it and the rules change. And so you have to take all of this. We don't know what's going to actually happen. But I think that understanding that these things are not how it's being portrayed, it's not a political thing.

Index companies, their goal, is to follow a methodology and be a firm hand on the tiller. They don't drive it like a race car. They don't even drive it like a boat. These are aircraft carriers, right? You know, you get moving in a direction, you keep moving in that direction. So we'll see what actually happens.

But MSCI did telegraph this. Nobody else did. And that does matter. But the other big piece of fud is this notion. There's all these stories that micro strategy is, even though they're actually in profit right now on their Bitcoin position. that they're going to have to sell. Yeah, there's people saying that they're at a discount.

There's people saying that they've missed, that the amount of money they raise is not enough to their leverage is so much. It's, yeah. It's, I think Taylor said he was like, Bitcoin just has to go up like 1.5% for the next hundred years for us to continue to pay out the dividends. It's like, it's a 70 year problem if it doesn't. So, yeah. That's right.

So all that fudge is worth the actual numbers. It's very, very fascinating. And to me, at the end of the day, right now, it's, you know, being, if I'm not going to do this trade because I'm not trading it, but I think there are a lot of people that are looking at this as, hmm, you know, buying micro strategy and maybe hedging with Bitcoin, you know, with, you know, Bitcoin option strategies or, you know, or hedging it by Delta shorting less Bitcoin against it might be a very smart trade. There are people who are actually flipping the other side now because it's starting to get cheap. And if there is a big index event, that's exactly what will happen. I mean, well, Sailor doesn't give a crap. He's going to continue to do what he's doing. And, you know, until forced otherwise. And I don't see why it isn't. But look, if Mike is right, you chop a zero off of Bitcoin, yep, they're going to be in big trouble.

There's no two ways about it. Mike, you get the last word here as we're coming in until 10. When you hear about all this micro strategy chatter, you get your flowers, by the way, for saying that micro strategy chart looked awful. It was breaking down and then it was going to lead Bitcoin because that absolutely did happen. Yeah.

And then so the key question is, to me, it's all about the end of this year. And again, I think the risks are, dominals tumble and follow Michael's strategy. But I completely agree with Dave as a trader. I look at it like, yeah, it's just how you manage the Delta. Now I had a discount and MNAM. You're supposed to look at buying that micro strategy.

It's how you hedge and how much you hedge your delta with Bitcoin. Obviously, Delta neutral is a bullish position. So it's kind of, you know, it's just the argument. It's a key thing you remember about this space. It's about trading. It's a great environment to trade. Just don't get married to longs anymore. Just look at Ethereum.

It's been trading unchanged between 2000 and 4,000 for almost. five years now. Look at the trade. I think we're probably heading to lower in the range. But bottom line for me, everything is about come next Monday. I hope you can tell me, Mike, we're wrong. The stock market's doing fine. We're doing great. To me, the risks are, this thing is just starting to tilt the lower. So I will say this. I just listened to this conversation. And as I was listening to this conversation, I was reading through these articles again. And I think that micro strategy is screaming by right now. This reminds me of the of the Elon Musk is on Joe Rogan smoking weed

and he's not a serious person which means Tesla is going to zero nonsense. If we're going to have the... Really well. Right, but I did. I did very publicly actually. But right now, I mean, people are literally, like, we are at the,

it's going to zero point in the narrative. Yeah. That's a buy. I'm going to buy micro strategy right after we get done with this on my way to the studio where I'm going to do a recording with James Lavich.

oh james james you're in tampa no i'm going in there we're going to do something longer for him since it's been a really really long time so yeah we're doing that uh for uh in a few in 20 30 minutes yeah so guys there's a great show is there anything else that uh we missed i mean i feel like the jp morgan micro strategy stuff are you going to be you're going to log in you're going to be here uh next next monday you're back or are you going to be in surgery i will be i have some minor surgery next week. So I think either Noel Atchison will be joining you guys or we'll find you a fourth. And Dave, you can, you can run with the hosting. God help us.

I love it. Dave's going to cover for me. Hopefully, I don't like it. I'm going to cover for me next week. When I'm hosting, I bend over backwards to be fair. No, you don't want. We know, we can't have fair. We appreciate that. No, well, is awesome. So it would be great. Yeah, that that's the, that's the loose plan. But that's all we got for today, guys. Thank you very much. Thank you, everybody, for listening to Macromonday. I will have shows tomorrow and Wednesday,

and then we'll be off for the rest of the holiday. And then, you know, coming back. That's all we got for you today. Apparently, you need to go close your JPMorgan account and buy Microstrategy. Everybody have a good one. Thank you, gentlemen. Bye.

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