The Wolf Of All Streets - Bitcoin Could Soar To $90K If Trump Wins, But Harris Might Crash It To $30K | Macro Monday

Episode Date: September 9, 2024

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Politics are back on center stage for markets, specifically Bitcoin and crypto, because the debate is this week and the elections are soon, leaving many wondering what will happen to the price of Bitcoin and other crypto assets, depending on who wins the election. Of course, we have pundits saying to 90,000 in one article here if Trump wins, but as low as 30,000 if Harris wins. We're going to discuss that, everything else that's happening with Macro here on Macro Monday with James Lavish, Mike McGlone, and Dave Weisberger. It's the best hour of the week, guys. Let's go. What is up, everybody? I'm Scott Melker, also known as the Wolf of All Streets.

Before we get started, please subscribe to the channel and hit that like button. Going to bring on the gentleman now, Dave James. Mike, happy Monday morning. Interestingly, I took a look at the news this morning and nothing happened seemingly for three days. It was one of those weird things. I was like the crypto news. There was one story about the SEC and Coinbase, Coinbase getting a small win in discovery. Everything else was just these articles about what's going to happen with price here in September. Right. I mean, Mike, if you had the morning meeting, maybe give us the highlights.

Yeah, I'll review Anna Wong. Our chief economist is still quite bearish. She has been early on this recession, but her quote was that Beige Book was terrible. It says the economy is basically in a recession already. I'm pointing out that nonfarm payrolls has significant downward revisions. The birth-death model is overstating. She thinks that last three months should have really been only 22K. Expects 25 basis point cut and economy heading towards recession.

Our equity strategy remains the same. Gina Martin-Adam, she says the equity market has been relatively stable. She's been spot on for a number of years. But Ira Jersey, our chief interest rate strategist, he made a significant statement that he thinks the Fed's going to come to about 2% handles at some point. He did point out earlier that he expects a hard landing. And I just like to reiterate, well, that's basically where China is now. So that seems like where things are heading. And Audrey Chill, Freedom pointed out the dollar was

bouncing in the short term, but expects the Dow was bouncing in the short term, but expects it to be weaker in the longer term, which fits into my premise for gold outperforming most risk assets. Back to you. Yeah, as I was looking through the news this morning, of course, I was on Bloomberg. I hit this one and it screamed, absolutely screamed, Mike McGlone. So I had to bring it up here. China's deflationary spiral

is now entering dangerous new stage. I have not heard anybody but you talking about deflation in China until I actually saw this article. And now we're at deflationary spiral. I think this is a little bit of anecdotal experience that helps. I worked for Japanese firms decades ago and saw what happened there.. I went to China first times probably 15 years ago, and I remember thinking it's the same thing, but worse after what President Xi did with the unlimited friendship. So it's kind of a delight to see that because I was pricing, predicting it two years ago and call an idiot. And that's one thing you know as a strategist. You're never right. Remember, he thinks you agree with you. When they call you an idiot, you know you got something.

So I feel comfortable with that. Well, it's true. With that against consensus view that's now trickling down. But it's overwhelming now. It's just all the lessons of history and cycles are that China is due for pretty severe depression. And it's happening fast. All indications are there. Just look at automobile sales in Germany

and the need for virtually every major country in the planet to impose significant tariffs on anything coming out of China, most notably anything to do with renewables, energy, EVs, batteries, solar panels, or face severe deflationary forces. So that's one thing I like to point out in commodities. You look at iron ore and crude oil and natural gas and corn.

They're all down about 20% on a year-over-year basis. And gold's up 30%. I think that's going to accelerate. Gold up and all commodities down. So from a commodity standpoint, I'll let Dave and James tilt. And I see nothing but severe global recessionary trajectories, which I think favors gold to continue to do that. And I'll just end with this. One thing that's kind of the outlier right now from a trader standpoint is copper. Copper made a new high this year, and it shows it's kind of tilt. But just like Bitcoin's

new high, which was on massive speculative excesses and a lot of hype, it's still really long in terms of futures positions and copper. So I think the next shoe to drop in commodities is, yeah, crude oil is already broken down. It probably should head lower. It's copper to break down to like three. Right now it's still four, so 415 a pound. The high was 520. And from a macro, macro global standpoint, that's not profound to say that. It's what copper usually does.

It's very auto correlated. The question is, is Bitcoin different? Yeah, I just I'm kind of read through this article here. You know, we are definitely in deflation and probably going through the second stage of deflation. This is specific to China. Experience from Japan suggests that the longer deflation drags on, the more stimulus China will eventually need to break the debt deflation challenge. And you can see here that their prices, and I'm assuming this is consumer prices in China, correct, Mike? So, I mean, is there a situation where lower prices in China actually help boost markets elsewhere? Or is this for consumers at the grocery store? It's bad for your typical Chinese consumer who got accustomed to, in the last two decades really, the major migration away from the countryside into the cities and got used to exporting the exporting machine most normally to their two best customers, U.S. and Europe.

They just completely pissed them off with a war, a substantial enabler, according to NATO, in the backyard. So every time you hear about a missile strike in Kiev from Russia, any businessman in the world knows, well, that's somewhat supported by China. And it's showing up everywhere, the amount of direct investment, even from Japanese firms into China, which used to be negative. There was a great article this week on how they're pulling out exponentially. And they kind of have to. It's geopolitically just very incorrect now to do anything with China. And it's not just China. it's one person, President Xi.

So this is a paradigm shift that's happening, but it's overdue. And that's why I see all the indications are there in the commodities. But what you pointed out, I think, is PPI has been the most negative indicator in China. But sometimes you have to be careful with their data. I mean, it's really one person. You can't trust them. So in my firm, we had a person who was based in Hong Kong who was, I'm sorry, technically, well, she was actually in prison for a year. So I have to be careful of everything. We have to be careful what we write. So when you can't tell the truth, you know something's wrong. So that's why I tilt over something you can't mess with is a bond yield. It's math. 2.13% in that 10, you know, that to me says where that that's

a CGB. That to me says where the U S is probably going. What, what stops that? And then one thing that stops is the U S stock market has to stay up yet. It's very elevated two times GDP, the most in a hundred years. And you have to have some kind of, that's where I think it was. Bitcoin's kind of leading us where. So let was Bitcoin's kind of leading us. So let's talk about that two times GDP. I hear you on that, but also look at where our debt is versus GDP and look at where the M2, if you look at the money supply and where M2 is, historically, the stock market is not really that much overpriced. You can look at it. It's actually on the same trend line. And so this is what's really confusing and difficult for all of us to kind of,

you know, sort out here because we all have our histories and we've all seen this play out during two, three, four cycles. And this cycle, is it different? It is a little bit different just because of the sheer amount of debt that we have now versus the last cycle and the sheer amount of money printing we've had since since the last cycle. And so we do have to recognize that now global recessionary fears. I agree that we you know, if China goes into into deflation, that's not good for the globe. I mean, clearly. But if you look at the United unemployment and job numbers last week we had

completely conflicting reports out of the the jolts number and then the unemployment number goes down just a few days later now this is all lagging data this is not data that the Fed ought to be you know making decisions off of uh on on a um you know a lagged basis. If they see something, they have to be acting because they're already behind. But if you look at that data, most of the hiring is out of the government. You know, if you look through the hiring and the infrastructure data, it's not from private infrastructure deals, it's from public infrastructure deals. So this all plays into this dual economy that we have. Part of the economy is being driven by massive fiscal deficits, and that's going to continue with either candidate that's not going to stop.

That's number one. The programs that they do run will be different, but the spending will not be different. The second thing is we've had this run up in rates. And normally you think that the rate run up in rates. And normally, you'd think that the rate run up the Fed funds going from point to 5%, or basically Zerp for many years, up to over 5%. That's a massive on a percentage basis, move on interest rates. However, we were

in an interest rate environment for so long that enabled people to lock in and companies to lock in rates that are seriously low. So this rise in interest rate, as we found out the last few years, has not been as impactful as it would be and it has been in prior cycles. So we literally have two economies going on here where you've got the super wealthy and certain um industries who are interest rate um they're not interest rate sensitive that are actually they're they're benefiting from the higher interest rates versus some of the lower demographics who are now clearly

hurting so let's talk about that mike because i think that anna wong would look at this and say look the lower demographic consumer is now struggling. You've got credit card delinquencies are up over 11%, right? And that's across the board. The lower demographic is even much higher than that. That's number one. The second thing is that you're seeing the student loan, they've been rebooted. So now people are starting to pay off their

student loans again. Um, whatever the legislation is going on in the background, one thing that the legislation did, did accomplish though, from the Biden administration was to, um, to delay reporting of delinquencies to credit agencies. And I was reading this in a Bloomberg article just a few minutes ago. And what's interesting about this is that Bloomberg was stating that, I think it was either a Morgan Stanley or a JP Morgan report, and I can't remember, but I can't recall and I can't pull it up on my iPad. But either way, they're saying that as much as 25% of student loans are delinquent right now. Just think about that. It's fewer than 40 million loans. Over 10 million of them are delinquent. Now, if you know that that's not going to be reported and you've got this 30 to 60 day grace period, and they're going to start

being reported next month, then you're probably going to get your act together if you have good credit. But I would say a significant portion of those are not being paid. And if you look through even further, the lower credit, the less than prime credit, only 10% of them are paying on time right now. So there is a problem with the lower demographic. So you literally have two economies going on here. The question is, can we ride this through? The market is not the economy. Can we ride this through with just a 10% drop? Is it going to be a 20% or 30% drop? And if it is, if you look at M2, that's overdone. And it would be a buying

opportunity, in my opinion. So there's a lot of information. One statement, and we got to hear, because Dave, I know is just ready to fire up on our asses, but I love what he does. But so here's one thing I like to state, because I disagree with one main thing you said is the market is the economy. Here's one example, because at two times GDP, let's just do an example. At the end of 2009, we already had a pretty good recovery. When the S&P 500 dropped, I'm sorry, the stock market dropped 10%, that was 10% of GDP. Now, just simple math. If the S&P 500 stock market drops 10%, that's 20% of GDP, just dollar amount.

How can that not be the only thing that matters? Yeah. No, it does matter, but the market is not real time on the economy is my point on that. It's not real time. I think this is like 1929, unfortunately. I mean, it could be, Mike, the problem is that you dollars are not constant for most of, of your professional career. And in fact, before your professional career, the dollar more or less M2, it would grow a little bit, whatever. So bring up that chart again. Which one? M2? The M2 chart. So you look at this and I mean, if you look at the rate, I mean, basically, and that's M2. And by the way, that is massively

undercounting because that ignores a lot of the fiscal stimulus. It ignores much of, of what they're using in terms of policy tools, because they're not stupid. They don't want this chart to look like it does. The fact is it's the denominator. So when you look at a price of a commodity, whatever it is, and you say current dollars, are you taking it into account and you're using CPI to say current dollars? This is dramatically outperforming CPI. And so the denominator is what you need to look at. So I always ask about the stock market, the GDP, and I'm wondering, are we talking about nominal GDP? Are we talking about inflation adjusted GDP? And if so, what's the deflator? Well, we know the PCE, which is

what they use to deflate the gross product, is dramatically lower than the rate of monetary stimulus that's going into the academy and into the economy. Which is over 7%. It's not 2%, 3%. It's over 7%. But that's a big difference. So if you grossed up the gross national product by 7% over the last N years, as opposed to 3%, what would the stock market ratio to that be? And that's where I struggle. I'm not saying you're wrong, because it does feel expensive. Now, it's expensive, but it's not crazy. If you look at it versus projected earnings or even trailing earnings, it doesn't look, it looks expensive, but it doesn't look like the roller coaster of the sky that the market cap to GDP

looks like. So it is interesting. I do think there's a lot of overvalued companies out there. I think that we are living in an Amway scheme, right? It's like a mass marketing model where people are taking their stock market wealth and spending it slowly. And if you, in fact, lose that, God knows what happens to the economy. And so, yeah, there is a bit of a Ponzi going on. And listen, any Bitcoiner, they'll tell you the fiat market creates Ponzi scheme. At the same time, when you keep talking about commodities, it's like, well, who's the smart money? Who's the dumb money? Every time in its history, when Bitcoin has seen hash rate diverging from price at the level that it has over the last few weeks to months, you've seen a massive rally after that.

The fact is, is unless miners are unbelievably stupid, they know something. And the fact is the network is getting stronger. And so you have that scenario. I mean, we, you know, it was when, when, when we were predicting it, we've been talking about the fact that we'd be sideways and look, by the way, we stayed sideways for a year in one of the cycles. So, I mean, it can stay sideways for a while. The fact is I laugh. I mean, my favorite, my favorite, you know, Twitter follow is Mike Alred, because he's funny about this stuff. But the reality is, every time people say, oh, the sky is falling, it's going to fall below,

we're still $10,000 more or less of $60 have been since March. We got more than a doubling from the ETFs, and we've been sitting there. And now people are saying, oh, my God, the sky is falling. People are selling. There's outflows. Well, guess what? You know what happens in September? People start adjusting their portfolios, right? It's like, okay, cool. And the price is still where the price is. I will continue to say that I just don't buy this Bitcoin narrative the way that you're framing it for the simple reason that I think Bitcoin has reached escape velocity on being accepted. And when it is fully accepted, its price will be 10 to 15x from here because that will be where it creates some sort of

parry-pursue with gold. And I do believe that that risk reward is unchanged. So I'm unworried about the squiggles. But that said, there's a lot of stuff that's going on in the economy. Now, the most interesting thing was the title of this is the election. So I want to be really clear about what do I think. I think a Harris administration would be devastating to the United States crypto industry and ultimately will spell trillions in lost GDP due to the U.S. losing its financial supremacy. I think that that is a very real outcome. At the same time, I think a Harris administration is probably maybe not as bullish for Bitcoin as Trump, but I think it's more or less orthogonal or unrelated to Bitcoin because Bitcoin has been more or less accepted by the Harris administration. It's simply everything else in crypto is being driven offshore from the US to Dubai, to London, to Singapore, to Hong Kong, etc. And on layer twos, people working on all that, that are going to get pushed offshore.

And if you ask why am I so certain about this, watch the John Deaton, Elizabeth Warren rhetoric that's going on in Massachusetts. Warren has consistently lied about John over the last couple of weeks already, you know, since he, in last week or so in particular, by the way, the second he announced a candidacy when he wasn't even the candidate yet, she called him a MAGA Republican. Right. But the two lies that she's made one is just, honestly,

I don't know how it's not liable, which is, uh, he's, he's been unabashedly pro-choice his entire life and talks about it constantly. And yet she says that need to vote, that basically accuses him of wanting to ban abortion nationally.

That to me is, I don't understand how you can get away with that. I literally just don't understand it. This isn't community note stuff. This is a sitting U.S. senator balls- ass lying to the point where it's obvious and we know it's true. But the other lie that's really interesting from Bitcoin is she's been going after the whole regurgitating the entire crypto use for terrorists narrative, despite it being not just debunked, but actually proven that crypto is easier to catch, particularly terrorists and human traffickers than when they use the banks.

But she's been regurgitating that. Now, why does this matter? Well, it matters because if you think the Democratic National Committee is going to let Elizabeth Warren say that at the same time in an election cycle and it hasn't been signed off on by the, by, well, I'm not saying Harris is running it, but whoever is running the democratic party that has installed Harris as the candidate, if you think they haven't signed off on it, then you are literally, you know, doing some, some serious drugs because, you know, their messaging has been so well controlled. I mean, this is, this is like Politburo style message control, you know, across the board. So if that message is being used in campaigns, then be very, very well aware of the fact that this

administration is going to continue with choke point 2.0 if we get another one. We just had another bank, another crypto bank under fire in Texas, effectively the last one. I understand that. But my point, Scott, is that there are people who are delusional. And I mean, there's no other word for it. Absolutely delusional if they think that Kamala Harris is a change candidate. In fact, the only change might be, will ultimately be to shift leftward. Did you see Bernie Sanders came out this weekend and said, oh, he doesn't have a problem with Kamala flip-flopping on issues in order to get elected because he knows where her values are. I mean, they're saying the quiet part out loud.

And the real question is who could be dumb enough to believe it? If you look, if you believe that we should have a state run economy, by all means vote for her. If you believe that we should have a state-run economy, by all means, vote for her. If you believe that crypto should be driven offshore, by all means, vote for her. If you believe all of that fracking should be banned, even though she says she's not, we know that's what she wants to do, then vote for her. And that is literally what they're saying. Bernie Sanders literally said it out loud. So if you're in the crypto industry and you're talking about pricing, and this show is about macro, let's understand what does that mean. So let's bring it to a head. Number one, the Harris administration is not going to care about Bitcoin. People may not have noticed this, but I find it amazing. I don't know when it happened. I'd be curious when. If you go on

the market data page of the Wall Street Journal and you click on currencies, Bitcoin dollar is there in addition to being under crypto. It is becoming normalized. And that normalization is relevant because it means that regardless of who wins the election, the inexorable force of Bitcoin becoming a monetary asset, at which it is very undervalued, has already been set in motion. So I'm not terribly worried about the price of Bitcoin either way. And that's thing number one. Thing number two, the other battle lines that are being drawn, which is really interesting because it's smart, even though people don't want to look at it, is Trump is laying out lines for, and he's doing it in a ridiculous way with his family,

but laying out lines for promoting the dollar via crypto, i.e. Mike McGlone's first person I've ever heard use or crypto dollars. And it'll be really interesting to see what the Harris campaign responds with for her sake or for whatever, for all of our sakes, because she could easily win. Hopefully she'll embrace that as well. You know, why not? Youakes, because she could easily win. Hopefully, she'll embrace that as well. Why not? She embraced tax for tips. She's embracing other stuff, no tax on tips, excuse me. Maybe she'll embrace crypto dollars, in which case, then maybe that will be an indication she's going to kick Elizabeth Warren to the curb. But it's important to understand that these are the forces that we're dealing with. And so when you ask about the election, I think you have to look at it. Bitcoin is on the one side.

The notion that a Harris administration means Bitcoin is getting driven down to 30,000 is silly. The rest of crypto, all coins might get destroyed in the U.S., although it'll just move overseas. I mean, I'm not sure that you can destroy it that much more than it's already been destroyed in mass but the fact is that the one big difference between uh trump and harris is trump is almost certainly never going to sell any u.s government bitcoin and establish some sort of bitcoin reserve and if you got a republican uh senate house and president you have a real shot at getting the lemmas bill passed and that's not at all priced into the market the limits bill for those who don't know, is to establish a Bitcoin strategic reserve of serious size. And we can talk about why that's not a bad idea.

But so that is the one major unpriced event that could happen. But most people say, eh, probably can't. I got to follow up on some of those. It's our focus certainly as investors is to always focus on the next big trade versus the last big trade. Elizabeth Warren is quickly becoming a last big significant person. Gary Gensler's toast. I mean, he's no one's going to re-nominate him for anything. So all those things that push back on crypto for the last five, 10 years, that people like to complain about all the time, are really becoming backwards. I mean, Mr. Trump, which I think is at this election is going to become the last big trade. I think

rational electors are going to overall win and say, we need the rule of law and get away from the risk of Mr. Trump and vote for Kamala. So I make a statement there. I think that's going to happen. I think she's going to win the election and Trump will kind of fade because we've had enough of his extremism. So to me, that's what's happening. It's the next big trade that matters. And that's what's the problem with Bitcoin. It's the last big trade. I mean, I'd love writing about it five years ago. We complained about all those things. They're gone now. ETFs, everything, futures, they're all, it's in the mainstream. So I like to point out the facts. Since Bitcoin first traded this price of $55,000, it was February 2021.

It's unchanged. Gold's up 40%. S&P 500's up 50%. I mean, at some point, I'm not cherry picking. You have to point, there's a good reason why it got to that level. That was the biggest money pump in history, and now it's starting to lower. So I just point out simple facts of normal rotations in markets. You look at Bitcoin to gold, it's 22, basically 22 ounces of gold to Bitcoin. It can easily get back to 15. That's a normal rotation and it's putting in lower highs. It's tilting lower. You look Bitcoin versus S&P 500.

Right now it takes 10 S&P 500s for one Bitcoin. I mean, the high was almost 15 back in 20. It's easy to get back down to seven S&P 500s and one Bitcoin. It's just the way things are working. And everything's semi-tilting that way. And I think what people are not getting now, we've had the launch on ETS. We've had, what, $17 billion inflows. That put in a peak. Now we're in the hangover. I think it continues. And the number one thing I think people are underestimating is we're not certain we're going to have a decisive election. I mean, just the headline from Trump this morning was on CNN, Trump threatens to prosecute election officials if he wins.

He's still not accepting the last election, even though he said he was. So I think what's happening is we're going to have a contentious election. We might not have a definitive winner. And even if we do, it might be contested, particularly from what happened last time. And we might have more violence, unfortunately. And markets are starting to look at, OK, did I make a lot of money in stock market this year? Did I make a lot of money in Bitcoin this year? Sure.

Hit the bid, take profits. I think that's going to continue for a while. Sure, well, it bounces. That's what I think was going on. And that's why I think the next big trade, the next two big trades are gold and US treasury long bonds. And just tilt over to China, that's what's happening there. We've had the precedent in turning Japanese. So the next two big trades, and that's a really important word that you're using here,

in my opinion, because I do fully expect a lot of what you said, which is volatility this month, uncertainty going into the election, possibly uncertainty right through the election, possibly us heading into a recessionary period for the United States. But the one thing that I personally have to note on this, Mike, is that Bitcoin will benefit from the massive money printing that will come on the other side of this. And to time that will be very difficult. So the problem with Bitcoin is that you literally get 90% of your returns in 10 days every single year. And so for people who have your are uh that you have your core position you want to trade around it great you know that's that you have you can do that and but

just be aware that on the other side of this and I do agree with gold sniffing it out first when we have if we do have some sort of uh credit event, again, that has a drawdown of all the markets, gold will get hit along with everything else, but gold will sniff out the money printing, probably first, and then Bitcoin along with it. Bitcoin may lag a little bit because it's been lagging for about three months here, if you look at a chart, but am I still going or am I frozen? Yeah, you're good. No, you're good.

Okay. I can hear this. So it may lag, but on the other side of this, I believe Bitcoin is not done. It is not over exuberant. over a long period of time from the inception, it's actually below expected trend right now, which means that it's been overdone and now it's come down. It's sniffing out this uncertainty and the problems in the market first. And so the question is, how does that happen? We don't know. We don't know if we have a credit event, we have a drawdown, we have a long, we have a recessionary period, we have a deep recessionary period, but we do know one thing. The one thing that we know, Mike, is that they're going to print money. And there's just no way around it.

We need inflation. We absolutely must have inflation to keep the charade going. Period. Full stop. There's no way around it. And it's time to revisit the point that I've made constantly on this show, but it's been a few weeks. The government needs monetary or asset inflation and wants to keep consumer inflation, at least the published reports, as muted as possible. And the best way to do that unfortunately creates wealth inequality. It has lots of bad effects. But the best way to do that is to have interest rates below trend and to support asset prices. And gold is sniffing that out. And the reality is that Bitcoin has been in an accumulation phase. And the history of Bitcoin is extremely consistent with this. I just want to continue to point this out. Bitcoin, if you ask me, when do I want to be buying something? Why

am I bullish when everybody is getting depressed? Actually, the more depressed people get, the more hysterical the reactions are on Scott shows. And the more people get mad about it, the more I'm thinking, wow, this is great. Now, this weekend, I sat in the Borgata playing poker for, you know, basically for three days. I played in the seniors event, which was amusing. Caffed in it for those who care. Got knocked out with Kings preflop. You know, I shoved preflop against Ace Jack and Big Pot got knocked off.

Then played in another event and had, it was whatever, I was a four to one favorite when all the money went in and it was down the last three tables. And so I'm still reeling from that. But the important reason I'm mentioning it is not, well, first time, and I wear my Bitcoin ring when I play, first time I have ever sat at a poker table, even for a day, without someone striking up a conversation with me about crypto or Bitcoin. First time. And it went for three days. I sat for three days with a bunch of degenerate gamblers and not one of them mentioned Bitcoin. I couldn't be more bullish because of that. Yeah, but how many of them brought up Solana meme coins? No, nothing. I'm telling you. In fact, people ask, in the general

course of action, everyone says what they do. And there were multiple cases. It has never happened before. And that's supported by what you can see in the market, not just at the table, right? I mean, I would make the argument that looking at the crypto fear and greed index here, which is just one metric. We were at extreme fear last week, 22. We're at fear. $55,000 Bitcoin does not align with fear to me. Maybe it should be in the middle because we're chopping sideways and we've been in a range, but to be extremely fearful when we're still in that sideways part of the market shows that we're having the time-based capitulation and just utter lack of interest. Let's explain what that means. So what happens in markets?

In markets, you get euphoria where the late entrants are buying in and the smart people are selling and getting ready to go out. And then bottoms are formed when people who give up and the smarter people are accumulating. And you accumulate low and you buy high. Now, the interesting thing is, is this is not, well, I got that reversed. But in any case, the interesting part is a bottom is formed over time when people start, you know, give up. And there are patient players out there who are accumulating an asset. Now, why is this so obvious to me? Well, so obvious to me is because of all the assets in the world of crypto, there is literally only one that I am willing to be a patient accumulator of.

And I know some people will say Ethereum is there too, but there's one. It's Bitcoin because it has achieved escape velocity, in my opinion, in terms of becoming normalized to the point where it will eventually take its place as a digital store of value. Every single other asset in the world of crypto is based upon people's belief in what will happen in the future in terms of technology. And, you know, the fact that Solana is doing well, relatively speaking to ether or whatnot is sort of consistent with that. But most of the, of the, the desperation is outside of pure Bitcoin. The Bitcoiners are like, okay, fine. Yeah. You know, every once in a while you see these hyperbolic things that Harris wins, it'll drop to 30,000. Okay, fine, whatever.

But the fear, if you do extreme fear, the reason that that fear is there, it is extreme fear. The farther out the risk curve, you go in crypto. And that all makes sense. And that is logical. And when that gets- Yeah, it's not the Bitcoin fear and greed index. That's right. And so to me, it's all extremely consistent with what you're

seeing. It just feels that way. Just like right around this time last year when we were trading it in the 20s and Mike and I made our bet, which you still owe me the steak dinner for, and I'm going to hold you to it, that it would get to 40. And by the way, it would get to 40. It felt exactly that obvious. I feel literally the same way today. I don't know what the timing is. I don't know. I'm not using leverage. I don't care. I mean, it doesn't matter. But I do know that there's a lot of interest here. And one thing that James points out every time and every one of his investors here and at every investor presentation is if you're not in Bitcoin,

when it does move, you could lose 10. If you're out of the market for 10 days during a rally, you literally could miss the entire rally. When it has moved. We have to remember, we have a baby that's matured rapidly. This is not like looking at gold back 5,000 years and S&P 500 years. This thing's only been around since 2009. It's changed a lot. I'm just pointing out. I'm trying to look what's changing now. I just point out when I type things now in the Bloomberg Journal,

there's no one internally that says, Mike, you're an idiot anymore about Bitcoin. That's a problem. I want to be called an idiot because that's when you know you got something. You want to be called an idiot? Say the stuff that I say and you can get called an idiot. I say that Bitcoin in this cycle, I think when we get to the next time we see Bitcoin euphoria, I think we can hit 240,000. And when I say that, people in traditional finance think I'm an idiot. It's like, okay, if you didn't think I was an idiot, by the way, if I didn't hear that, I would think, okay, I must be wrong.

If everybody was expecting that or thought that was possible, then I would think I must be wrong. So let me put it more in the micro. All my indications are that I, in the macro, would completely agree. I mean, I can't be saying for you, you can't hold gold amount without some Bitcoin in that space. But I look at everything I see right now from beta potentially collapsing, not collapsing, just reverting from extremely existential levels versus 100-week moving averages, extremely low volatility, very high interest rates, everything tilting that ways. I think the average investor is more likely to be able to buy Bitcoin in a 30 handle and then a 100 handle. That's just the way all things are tilting at the moment. Maybe it'll shift, but also it's just acknowledging how things have changed. We have seen outflows the last few months now from all those ETFs that have had inflows.

And the average price since ETFs were launched is lower. Bitcoin's rolling over versus 100-week moving average. Everything's rolling over, yet you've got to keep beta higher. And if we just get a normal correction in the stock market and Bitcoin outperforms, there's your indication to FOMO in. But right now, it's showing everything to me. It's showing that Bitcoin's leading the way lower with volatility increasing and interest rates potentially just starting to roll. Point of factual order. I think Bitcoin's been below its moving average. Volatility has not increased.

Volatility in Bitcoin is way down. Volatility is lower, and I believe it's been well below. We're almost to you know i mean where we are where are we close yeah versus the moving averages i think we're well below depends on the time frame it depends on which moving average is yeah and i i've been watching to say the 100 week has rolled over the 200 i'm sorry 100 day the 200 day has i mean that's all technical it's not as significant to me it's within the macro and the bottom line Macro is the VIX volatility index Y and it's a

T bill right that 100 200 day moving average 52 week moving average is giving me the same signal I got in 2007. it's different this time because Bitcoin does exist it's been up so much and it's global but again I remember you say I talk about commodities. That's what I know. I know commodities well and all indications are from commodities. We agree with gold. This is a global recession. Your trajectory is one major force holding everything up.

Can I ask a question, Mike? Let's say you're right. Let's say you're right. And no, seriously, because China goes into basically exports and the world goes into a severe recession. What are the central banks of the G20 going to do? Well, we already know the answer to that. And I agree with you, but gold's already anticipating that. Treasury bonds are already anticipating that.

Gold is barely anticipating. Have you talked to a gold bug recently? Do you know what they think the price of gold? Do you know what the average gold bug is? Scott had a guy in the show. They always point out U.S. things and forget it's a global market. Yeah, Larry's great, but he reminds me of John Dillinger's brain. I'll tell you that story in a little bit. It's just a story my grandfather had about someone who wrote a book that Dillinger wasn't dead.

I'm like, no, I saw him dead because I was a journalist and i saw it at the morgue but this is what happens sometimes the only people people i i try to avoid gold bikes because they they forget the fact that if like larry said he why would you you'd be bullish something that the government doesn't support and he says the government doesn't support well that's not good so i agree with the bitcoin and the thing is gold is global particularly in this main economies like India and China and Turkey. It's global and it just can't mess with the price that much, except maybe in the US in the short term. But the bottom line is gold's up 30% on a one-year basis. It's beating beta. It's beating beta at one, two, and three-year basis, beating just

about everything. It looks like it's going to continue going. All commodities are down. That's global recession. It just hasn't kicked in yet in terms of U.S. standpoint. And that's my point is, if you want the next big trade, that's probably it. And it's starting bonds. I mean, the Fed's starting to ease. And I think it's just getting, like I said,

200 base points to catch up to U.S. bonds to catch up to Chinese. So let's unpack that a couple of things. First of all, just so you know, the average gold bug would tell you that gold is, if you compare gold to the money supply, they would tell you that it should probably be priced somewhere between six and 8,000, not 2,500. That's what these guys would say. Now, what if, just go with me for a second, what if half, half of that goes into Bitcoin and gold rises from $2,500, which is well within where you're saying, to $4,000? And at the same time, what would Bitcoin have to be to take up the slack of the rest of that? Now, all of a sudden, you start hearing, you start getting numbers in Bitcoin, which I don't want to talk about because I start sounding like, like banana zone, real Paul. And I ended up getting, you know, you know,

spoofed on, on Tucker Carlson. But the truth is, if you do that, if you, if you do that math, then you're predicting or saying that, you know, in a world where gold is 4,000 and Bitcoin becomes parry pursue with gold, you're talking about a Bitcoin price of somewhere in the neighborhood of a million. And, you know, these numbers. And these numbers sound ridiculous at where we are now. And who knows, 10 years from now, if we'll look back, Saylor would agree with me. But the fact is, is you see that. So that's thing number one. Thing number two, which is really interesting.

If you're right and the place to, and bond yields do what bond yields are going to be, the wall of money that is comfortably getting 5% that will say, well, screw this crap. I can't only accept two and a half percent that will go into risk assets is enormous. And where is it going to go? It's going to end up going into risk assets or it's going to end up going. It could be the spark that causes what I was talking about. Yeah, you're right. In that scenario, Bitcoin will lead beta. That is a scenario where it makes sense for Bitcoin to lead beta because it's monetary issues. It's not economic issues. And we always kind of conflate the two. The problem with beta and Bitcoin is Bitcoin is still an option. And we talk about

that all the time, so I don't want to go into it. but to me, that's the issue. If you're right, and we go into a global recession, then yes, the initial markdown might very well be just like in the global financial crisis, gold literally fell for three months before it ultimately went in a massive rally. Yeah, maybe, but people tend to learn. And I don't think that gold goes down for three months in the case of the next recession. Maybe it goes down for a week, but I don't think it goes down for that much longer for the exact same reason. And so that to me is something to think about. People are only trying to do the next thing. I'm talking about bodies in motion.

This is not a prediction that I actually started a few years ago. This is happening in commodities. It's happening globally in China. It's already trends in place. It's happening in Europe. Why are they cutting rates? There's a problem. This is already the trend. It's just globally in China. It's already trends in place. It's happening in Europe. Why? They're cutting rates. There's a problem.

This is already the trend. It's just getting started. We even started cutting rates in this country. We all know what happens to unemployment when it starts going up and rates when they start going down. There's a long way to go. It's just getting started. And I plan on doing what I normally do.

Sometimes I'm missing. Sometimes I'm way ahead. I plan on being ahead of the game when I see Bitcoin starting to show that divergent strength. And I'm pointing out body in motion. It's still showing divergent weakness and telling me that risk assets have much more room to go down, which means Bitcoin now, which means people who are, the quote that I remember hearing for decades, I'm in it for the long haul. I never sign. Remember, I come from leverage environments and then you see them get stopped out and get divorced and things. That's going to happen. I think there's too many people, too many people I say that I'm never going to sell. I'm like, yeah, I've heard that before in

my life. It just doesn't usually happen. It only happens with assets like Bezos holding Amazon. It's got to happen with assets that are way out of favor. Bitcoin's too in favor now. That happened with people holding Amazon from the IPO as well though, right? I mean, you had a 96% drawdown on Amazon in the late 90s, early 2000s that Mark Yusko always loves to point out. There's four people who are still holding Amazon stock from the IPO. Bezos' wife and their parents, right? Everybody else capitulated at some point who said they would hold it forever. So your point is well made. And I think that's a classic thing you see across markets. Before I say, James, you get to talk about whatever you want for the next 13 minutes. I just want to point out one thing really, really quickly, which is just talking about Bitcoin and the fear and greed index and this part of the cycle and the bottoming. We're seeing a lot of articles right now that are showing legitimate sort of bottoming signals here. Bitcoin grossly undervalued at current prices. Of course, we have CPI, PPI debates this week. We have a potential short squeeze because we've had sustained negative funding rates. You don't

see that very often in Bitcoin. It really is worth looking at. Order book liquidity says that the bottom was just in. As bad as this drop to $52,500 was, if you're a technical analyst and you believe you're chopping sideways, you don't have to. It could be a higher low after that 49,000 drop a month ago. It's always a mixed bag, I think, at this point. And then you get the articles about what's going to happen with the election. Of course, I think, James, I would love you to unpack anything you felt like unpacking from that great debate. But I do think that there are a lot of signals right here that people have just given up or boredom has set in or they just can't take it anymore and they're gone.

There are two things that Mike said, and you guys can get back into your debate. But there are two things that Mike said, and you guys can get back into your debate, but there are two things that Mike said I just want to point out. One thing was, in his experience and my experience too, that when you are super contrarian and everybody thinks that understand it and are invested in it for the long haul as you as you point out rightly are feeling a lot of negative sentiment from anybody who doesn't understand it they're looking at us like we are absolutely insane and so okay so that's good that's important I like that that means that we're in the right spot that's number number one. Number two is you said Bitcoin's a baby. It was launched in 2009. And that is a very good point for a stable store of value versus something like gold that's been around for 5,000 years.

It's a big difference. However, remember, our world is moving extraordinarily fast right now. Number one, the iPhone was launched in 2006. It's three years older than Bitcoin. Think about that for a second, because this has changed the world. And I believe that Bitcoin value level. It just needs a little bit more time. And once it does get up to about half of the size of gold, I believe it really becomes a store of value and starts drawing investments and long-term store of value investments out of long bonds. Because why would you want to own a long bond when you know you're getting a real negative interest rate on a real negative return on that yield on that over the long haul? You wouldn't. You're going to start allocating to something you know you can trust. Right. Isn't that the hedge fund approach, James? You just say, listen, I'm going to lose less while things are bad. Well, I mean, you had a different story, Scott, partly. I'm just saying like mentally, you know, like you can know that you're going to quote unquote lose against inflation,

but you can still protect your assets and accept that it's going to be ugly for a little while. And you're not going to lose 30 or 40% of the stocks that you're holding. Right. Yeah. Yeah. I was going to say, you know, you're looking, you're looking, you're looking for, you're looking for areas where you can arbitrage your, your return and you can take leverage on that. So, so for, for people who, who like patterns and pattern recognition and Mike and I talk about pattern recognition a lot, we are seeing an inverse pattern to what happened the first time Bitcoin made its all-time highs into the 60s, right, in 21. In 21, what you saw was euphoria. And you saw this euphoria where we had a period of it was the first crash came after three weeks, and then it repeated again for two weeks. But over

three weeks of funding rates where you're looking at this saying, so wait a minute, people are leveraged buying Bitcoin and they're paying 15% per year, 20% per year. It got up as high as 30 or 40% per year to borrow on leverage because of those funding rates. And it lasted for three weeks. And the whole time I'm like scratching my head saying, man, this has got to be a top signal. Of course, did I trade it? No, you know, whatever. But the fact is it felt like it. The fact that we've been in negative funding rates now for two and a half weeks, we're still in September, things are, or whatever to me is, are people going to be scratching their head saying, well, wait a minute, you know, it's very similar. And oh, by the way, the price is very

similar. The difference is there, it had to parabolically run up. And now we've basically been in this range, you know, kind of, you know, where, you know, once established, it's a very different thing. So relative there, it was way above the moving average, right? So if you believe in moving average crossover divergence or the MACD, and a lot of people love to trade on that, you tend to focus more on RSI divergences, Scott. But I know a lot of people love to trade on that. You tend to focus more on RSI divergences, Scott. But I know a lot of people who love the moving averages and Bollinger Bands. In the case where the last time we saw anything close to this, where there was a convergence, where the moving averages said that we were way overbought and the funding rates were way high, ultimately we saw a fairly serious correction.

Right. And yes, you know, it then rallied back again and then corrected again and then FTX and everything went boom, boom, boom, boom, boom. We know what happened. Okay. So what is the situation today? Well, today it's exactly the opposite, literally the opposite. You know, if you compare the, you know, if you look at it, we the opposite, literally the opposite. You know, if you compare the, the art, you know, if you look at it, we are well below all the moving averages are very close to it. And at the same time, funding and interest and has been at, at, at lows. And it's been on the bottom side of that. So to me, it feels like the, the, the kindling, like it's a very, very dry forest. Okay. And they haven't cleared any of the,

the, any of the, the dried twigs and stuff at the base of the trees. I'm not saying that there's going to be, that someone's going to do a gender reveal and start a fire, or they're going to have a, there's going to be a lightning strike. But the fact is the, the kindling is there for a pretty monstrous rally in Bitcoin. I'm not talking about anything else right now. And that's just worth understanding. Now, that is against a backdrop that Mike accurately states, which is the world is teetering. Things look ugly out there. They look ugly from an economic point of view. We all three of us believe unemployment is accelerating. And the only reason, and this last employee report

was awful. I mean, let's understand what it showed. It showed two facts matter. Fact number one, it was government replacing private jobs. Full stop. Private jobs lost money, government increased. That is not good. No bueno, as they say down in South Florida. And then the second thing is continuation of the trend of foreign-born workers gaining all the jobs and native-born workers losing them. Now, what is that actually saying? I don't know. I can't dig into those numbers. I'm curious if other people do. Does that mean that the service economy, that builders, or does that mean it's skilled foreign-born workers? Does it mean people who immigrated as children to the country because their parents brought them here? I don't know

what that is. Just to put some meat on that bone, it was like $1.3 million lost versus $1.3 million jobs gained for foreign-born versus $1.4 million lost for native born this past report. And that is a very, very big deal. That is why Mike may end up being wrong. I know there's a lot of people. I mean, look, if this was an election about policies, it would be a landslide, but it isn't. It's an election because there's a human being who is so divisive, who says so many things that are ridiculous, who scares the bejesus out of people, that the election is close. But make no mistake, my problem with this election, and we all know, I didn't declare for Trump until after RFK and Nicole Shanahan endorsed him. I did not.

Because I actually wanted, I was still holding out hope that RFK would get a wave and we'd be able to support him because I like what he has to say in many respects. The fact is, is I'm not a big fan of anybody in this race, of either of the people in this race now. But the real question is, are we going to get a government controlled economy or are we going to unleash Elon Musk on the departments that are getting efficiency? Don't laugh. That is one of the smartest ideas I have heard any candidate ever suggest. It's not terribly dissimilar to what Vivek has said. And hopefully he still has Trump's ear in terms of cutting stuff. But why is all this matter to us? Well, it matters to us because if we're going down

this form of more government, more spending, and more printing, both are going to print. There's no question about that. But one is going to print more. I could easily see a world where the price of Bitcoin under Harris does just as well as under Trump for different reasons, mostly because the government spirals out of control. In the same token, I think the rest of crypto is going to be in serious trouble, at least in the United States. So what helps stop printing is divided government. Say we have a Democratic executive branch and

Republican legislators. We need divided government, probably help. I just want to show one chart about pattern recognition. This is what's been tweaking me for a while. Just take Bitcoin versus its 100-week moving average, it's rolling over. And you see that maturity, lower highs. It makes sense. You look at S&P 500 versus 100-week moving average. As we say in the grain market, thou shall not hold grains from last year after June. It's probably not supposed to be overweight, long-risk assets when S&P 500 is 20% above its 100-week moving average. Yeah, it worked a little bit in 1999. It looked a little bit when we had the biggest money pump in history just a few years ago. But this is what I'm just looking for, a little reversion.

And the election is probably a good reason. For now, that's my outlook. And at some point when Bitcoin becomes its great savior, I'd love to see it. But right now, it just looks like it's a highly speculative risk asset that's rolling over. And thank the Lord that you believe that. And lots of people do because that's where the fuel for the fire is yeah great that's that if that's true sure no i mean i'm not saying that in a bad way because i know you understand you understand i mean i it's i just

i remember what i was thinking when those funding rates were really high and i was wildly bullish uh i wasn't trading it but I was probably bullish anyway. I was like, yeah, well, it'll catch up. And it's like, okay. I just love the, you know, we have the really quick, we have the title here. Oh my, I'll let you say that. Sorry, I brought up the wrong screen,

but just to talk about the title, I literally think you could have, as we talk, just had this say, Bitcoin could hit 90K by end of year. Bitcoin could hit 30K by end of year and saved us the names for this debate. I just think that that's how people view it at this point. Nobody knows. Go ahead, Mike. No, no. I think you nailed it. Yeah. I mean, my feeling, I agree with Dave and I kind of laid it out last week. I mean, before we sort of jump here, that if you

believe in Bitcoin as a flight to safety and hardcore Bitcoiners do, that Bitcoin itself could actually, there's an argument for Bitcoin to do well under either administration. Because there's those who buy it because they're scared of Harris and there's those who buy it because they think it'll be a global reserve asset. I've just never seen something called a flight to safety that trades about three times the volatility of bait unless it has a negative delta. Well, I'll tell you what, look at an option on a flight to safety, and maybe you'd have a different story, a different choice. Because that's what it is. The option is going to, the volatility would be much higher with a much higher, you know, much more risk. Exactly right. Exactly right. It's just a simple measure. It's a highly volatile

speculative risk asset. It's had a great run. It's rolling over. Maybe it picks up again. Yeah. As long as beta goes up. But beta going down and Bitcoin up, good luck with that one. Well, James has enjoyed this conversation so much. The light has come and the halo and he's ascending to heaven, which I know means that it's going to be very, very, he's having a great day. And it's going to be a wonderful one for James. James and I are going to be together for three days next weekend at a

Florida Gator game. It's going to be amazing. I just want to remind you guys, if you haven't checked out the wolf of all streets.com, do that because it's brand new and it's awesome. And we're updating it every day. Otherwise I'll be back tomorrow at 9. AM.

Eastern standard time guys. Thank you so much. That was a great debate. Always appreciate James showing up from some other time zone. No matter what, he's in another time zone. Alright, guys. Thank you so much. I will see you all tomorrow. Bye. Let's go.