The Wolf Of All Streets - Bitcoin CRASHES Below $72K As Saylor Sells For The First Time

Episode Date: June 1, 2026

Bitcoin is teetering near $72,000 as the Iran war heats back up, with Trump claiming Tehran "really wants" a deal while air strikes resumed over the weekend near the Strait of Hormuz, sending Brent crude up 3.7% to $94.48 and WTI surging 4.3% to $91.07. A tentative 60 day memorandum of understanding would reopen the Hormuz chokepoint with unrestricted shipping and require Iran to clear all mines within 30 days, but the deal still awaits Trump's final approval and Iran's response. Meanwhile Coinbase is launching direct rupee rails in India on June 1 to attack the $3 billion local crypto market, Fed Governor Christopher Waller declared dollar stablecoins could expand the reach of U.S. monetary policy globally, and Jamie Dimon just vowed JPMorgan and the banking lobby will fight the CLARITY Act over stablecoin yield. Plus Michael Burry dropped a bombshell calling the Nvidia, xAI, Apollo, Athene structure "Fugazi", alleging $5.4 billion in GPUs are hidden off balance sheets while American retirees unknowingly hold $103 billion in Level 3 assets at 16x leverage inside a Bermuda insurance shell. We are breaking down whether Bitcoin can survive another Hormuz spike, what Waller's stablecoin endorsement means for the dollar, and why Burry's warning could be the most dangerous story nobody is talking about. Learn more about your ad choices. Visit megaphone.fm/adchoices

Bitcoin dropped below $72,000 today on, of course, macro news, but also probably on the fact that Saylor broke his never-sell doctrine and finally sold a little bit of Bitcoin stating that it was to pay STRC dividends. We're going to unpack that and everything happening in the macro today. What a time to be alive. Let's go. Good morning, everybody. And welcome to macro Monday. The whole crew is here slash I'll waste no time bringing up we got Mike James and of course Dave oh wow what did I do everybody's gone and they're back morning morning morning Dave's got the Knicks I see that I see that and I respect that the Knicks the Knicks shirt on what a run I've uh you a long suffering fan I have a feeling you might be longer suffering in a in a week or two

But we'll see, but getting to the NBA finals is definitely not suffering. I'm kidding. That was amazing. All right. So let's dive into it. Mike, you're going to give us the morning meeting and then we're obviously going to talk about sailor, among other things. But go ahead.

So Anna Wong came on and said, pointed out that the ISM manufacturers expected to pick up. Regional Fed show nothing but a pickup. Price index has spiked to the highest level since 2022. she thinks it's mostly mimicking metals, aluminum, steel tariffs, copper, but she expects that price index to peak in a month or so. Jolts and non-farm payrolls expect improvement. And strong labor market expecting $95,000 in non-farm payrolls in May, higher than the consensus of $85,000. So she thinks that we're basically above true break even now around $50,000.

Economy is solid and probably in the first, it's the first part of a, a, of the first one third part of a business cycle that's just starting to kick in. The birth-death model has improved and all things have picked up. ISMs are showing roughly nine months into a business cycle. So all positive on the U.S. economic standpoint for Hanna. I did my commodity outlook, but we can save that for later. Let's go to Chris Kane in equities. He pointed out, we've had 22 new highs this year in the S&B 500 record highs in 2021,

set the record at 70. The market's been overbought on most ours eyes since April 15th, which shows the underlying strength. And it's just been an absolutely earnings blowout season, almost 29% year-of-year growth in Nassum v. 5-Runter versus 12.4% was expected preseason. So that's just a shockery. He pointed out, Google, year-over-year growth was, earnings growth was 80% on the top. Only health care did not grow. And mostly, it's incredible earnings per share growth. And he pointed out beyond the market cap indices, the picture is much more moderate.

He pointed out there's still a record spread between equal weight and market cap valuations on a 25-year basis. Audrey Freeman pointed out that she's what was quite bear to dollar at the beginning of the year, has turned over to quite the compelling cyclical bias for the dollar, as we point out, the strength from Anna. and the fact that the ECB might be hiking rates into a bit of a stagflation period might not be so good for the euro. She says stuck between 115 to 120. It had made a few comments on Sterling, but maybe because she's based there, most of us don't care about Sterling. But it's just a fact. I mean, getting up in the morning and listening to Bloomberg News, and like, yeah, sorry, your London politics just don't matter.

I mean, English politics just don't matter for commodities more, so I always switched to something else. So Ira Jersey pointed out the two five and seven year auctions were very boring. He think that was last week that was quite significant. He thinks markets showing decent demand and primary auctions as we move past the day-to-day nuances of what's happening with the Gulf and crude oil. Settling the ranges, but most curves are still flatter since the Iran war. Fed's on hold. Two, you know the 4% means it's a signal that fed's going to be hiking. And he doesn't really bias into that.

And my commodity outlook is for crude oil. We're stuck between 80 and 100. It's very political. What is Mr. Trump need for midterms? I think that December contract around 79 is going to be closer to 50. I pointed that out. It's not a loan. We had major pumps in prices in corn and soybeans at the wrong time of year to buy, yet hedge funds are way long.

So unless we get a drought, those prices are going down. And then I pointed out for metals, a broad Bloomberg, all metals index, it's up 11% on the year. And so is the S&P 500. So metals are completely dependent on SNB, 500. And then I reiterated my various views on Bitcoin, and I don't want to piss Dave off. So keep those quiet. Back to you.

What a segue. Dave, are you pissed off? I mean, you know, do you get pissed off at the wind when it blows? I mean, do you get pissed off at the sun for rising when you're tired? The answer is no. I mean, some things are the way they are. I mean, I look at Bitcoin dropping and crypto-difes, dropping because Sailor sold the 32 Bitcoin that we saw move to those wallets last week as

effectively sure. I mean, we sat here on Friday and it was trading around, around, oh, a whopping $240 higher than it is now, which is rounding error. And everyone on Crypto Town Hall was bearish. We're going to get a chance to buy, you know, well below 72, probably around 70 this weekend and et cetera. And so here we are Sunday night, you know, Monday morning before the market's open. And we are not even as far down as the average person thought on crypto town hall last Friday because of news we already knew about.

What else are you going to say? We are going to be printing to infinity. I mean, Larry Lepard is looking more and more right by the day. And it really, it really is going to matter, right? You know, I don't think the market understands what a question. coordinated Fed Treasury policy is going to be. And, you know, I'm queuing up my friend James here because obviously this is your biggest gig, but I think the market totally underappreciates it.

I posted a chart this weekend, which is literally it shows you just how the market does things. So you might remember a few months ago we were talking about software stocks, and we were saying AI is a kill SaaS model. And so the software stocks in a ripping market dropped 30 plus percent on the index. And obviously the winners have done dramatically better. Meanwhile, last week, we had days, literal days where multiple software stocks had double-digit percentage rallies, 20, 30, 40 percent. Because people realize, well, wait a minute, it's not really going to hurt them. Look at the earnings.

And once that became obvious to people, I mean, it wasn't just on earnings, it was, you know, whatever. And you look at that chart, the fact is, oh, wow, someone else picked it up. Yeah, I posted it on Saturday from the general. Yeah, I happened to have seen it. I literally happened to just sort of see it in my scrolling this morning. And as you were talking about it, I searched it. Yeah. So I tweeted it out.

The chart looks exactly like I expect the Bitcoin chart to look, which is this, this catastrophic bad underperformance. And then guess what? A few months later, people wake up and say, what the hell are we doing? And that's exactly, I think, what's happening. There's literally the reason for selling Bitcoin here is either you believe it's going to fail like Mike, or you think you're going to be able to buy it back lower like a lot of people who aren't going to be able to because there's a lot of fundamental demand drivers. I mean, when you talk to the retail platforms, I saw three different interviews with retail platforms this weekend. Every one of them said the same thing.

They said volumes are way down. The people who own aren't selling. You get some speculators on the edges, but this is the strongest. hands kind of, you know, situation we've seen in a long time. And look, retail left the building. But the truth is, is that the demand drivers for Bitcoin are intact and are likely to accelerate. So I personally think that a macro backdrop where we know, we know with absolute certainty that the head of the Fed, the head of the Treasury, and they've been talking about it, obviously the president needs it, need to try to run things hot. How do they do that? They need to, you saw a

dissent set. He talks specifically about, reshoring manufacturing and re bringing up supply chains things i've been talking about in this show for six months they're they're starting the narrative train they're doing everything they can to justify lower cost of capital for business i'm not going to say lower interest rates because that doesn't matter it's lower cost of capital for business and a deregulatory another deregulatory push at the same time that's what's going to happen if that's the backdrop that you're going to sell an asset where most of its buyers believe its goal is to to hedge against the potential fallout of that situation, go for it.

You know, all I can say is go for it. You're literally, you know, spitting into the wind. But that's okay. You know, you could be right in the short run and maybe very well. And so we may very well stay like this for a while. We could stay like this. It wouldn't stun me, Scott, if we stayed in this sort of rangebound low, shitty trading environment through the summer like it did a couple of years ago.

It might be already there. I mean, it's that not always, but I mean, you know. I would say that's seven out. That's my rent. Now, as far as oil is concerned, look, I think Mike has that one nailed in a sense. I don't think it goes below the cost of production, but 55 is a magnet. It's going to draw it there at some point when there's people aren't worried about how they're going to get it through the Persian Gulf, you know, from the Persian Gulf and everywhere else around the world. And that is going to be a tailwind to a lot of stocks.

That's going to give the Fed the opportunity to do what they really want. to do because that's the component reversing that part of inflation is the only transitory inflation we have inflation is a monetary phenomenon in the long run mostly on asset prices but never never forget oil shocks are transitory because technology and the ability to pull it out of the ground and move it around the world is improving every day and so there I think that's true but that kind of aligns with my macro outlook anyway that's that's enough of a rant James I'm sure you have some opinions on what I just said. No.

I agree on quite a bit of it. You know, going back to the sailor narrative, you know, I was on that call. We asked him questions about selling Bitcoin and what his philosophy was about that. And, you know, he made it clear that there's, as an individual, if you buy Bitcoin and you put it in cold storage, you want to hold on to it and not sell it. As a company, you have to maximize your ability in corporate finance to create more Bitcoin for underlying shareholders. And so that sounds counterintuitive when you hear that, you know, you wake up Monday morning, you see that Michael Saylor, with the company that owns the most Bitcoin, turned around and sold

some after telling you, never sell your Bitcoin. It sounds like, It sounds pretty negative on the surface. But if you stop and you pull back and you actually think, you know, and you don't just react emotionally to it, you heard him say he wants to inoculate what he wants to inoculate Wall Street and retail from him having the ability to sell Bitcoin. And just he might just do it to kind of set people straight. and show people, don't panic. The Bitcoin's not going to drop to $10,000 if I sell some.

And why would he do that, though? Well, you know, he does need cash to pay dividends. He can sell some higher cost Bitcoin at a loss and then turn around and buy it. And it strengthens the balance sheet on a tax basis. Number one, number two, he's showing ratings agencies if he's willing to sell Bitcoin in order to pay dividends on these securities. And why is that matter? It matters because they need a rating.

Well, they don't need it, but it would be nice for them to have a rating in order to be included in the S&P 500 index. Why does that matter? Because we're seeing what we have to probably talk about Tesla and SpaceX here at some point because it's going to matter when you get included in a,

in an index, so much of just all, every day movement in the market is, is dependent on ETS moving in and out. And ETS are being bought by retail. They're being bought by IRAs, you know, and some 401Ks. And so these, these indices are extraordinarily important. And it's not, and 401Ks are buying, still buying mutual funds, which are essentially indexes in most of them. And so, you know, it really does matter. And I take it as a positive that he's willing to do that, show that he understands corporate finance and that it ultimately will be

better for the underlying shareholders. Now, this morning, you see that Bitcoin's reacting pretty negatively to it. And I think that that's a lot of what you're seeing in the price action of Bitcoin this morning has to do with it. And look, you've got holders of Bitcoin that've been around for a decade. And they're getting a little bit fatigued with the whole situation. And there's definitely a faction, as you know, as all you guys know. But Scott, you really understand this from talking to these guys every single day. that there's a faction of Bitcoiners that believe it's freedom money only and they don't want

Wall Street involved in it and they, you know, which I understand where they're coming from. Sovereignty, self-sovereignty and all of that, but, and I agree with it, but there's just no way that you're ever going to have Bitcoin grow to a certain size without having institutional involvement. It's just the reality of the situation. And it's because of the way our money systems are set up. It's just what it is. So I take it as ultimately as a positive net net. And, you know, again, my hedge fund, we own micro strategy.

We're not selling any. And it's not upsetting me. It's just what it is. Yeah. I think he had to do it. I don't think he has a choice, to be quite honest. I think that he launched a SEC registered security in STRC, and you can't go tell retirees that their 11.5% yield is guaranteed by an asset

that you're also screaming you'll never sell. And that's just it, right? I mean, he sold 32 Bitcoin. We're talking about $2.5 million for a guy that owns $800 plus,000 Bitcoin. This is exactly the inoculate the market kind of sell that he would do to follow through with that promise. But you also have to be, I think, sympathetic to the people who believed he would say never sell and don't understand the semantics, right? I mean, there's plenty of people out there who have listened to Michael Sayler say never sell, never sell, never sell forever, sell a kidney, right?

But never sell your Bitcoin. And so, you know, if you're not sophisticated and understand the mechanics that you just described, I can see why it would cause some ripples for some people. I mean, like, just put it in perspective. If he was to sell 10% of his holdings, it would be, you know, we're talking about 80,000 Bitcoin. Like, this is, like, selling a few Bitcoin is just exactly what you just said. It's just a little bit of a pinprick to say, you know, look, we'll do it. And we'll show you that it's okay. And, you know, if he's buying it so well on the way up, you'd be able to sell it similarly on the way down.

And it, you know, it shouldn't impact the market. except psychologically people get there just bent around this concept that while he lied, he said he'd never sell it. And there's two different communications there. And as the CEO of, or I'm sorry, he's not the CEO. He's a chairman of the company he founded. And he's running this strategy. He's got to show the market that he's willing to do exactly what you just said.

That's right. So, and it's just a reality of the situation. He's got STRC is backed by the Bitcoin as balance sheet, and he's showing that he's really backing it. And so that's what it is. Yeah, I mean, just like inside baseball, as I've said, and I've maybe mentioned on this show, but, you know, I woke up that Wednesday morning with, you know, Dave and I were meeting up at consensus. And my headline was, Saylor, you know, says he'll sell some Bitcoin and inoculate the market. and I had Saylor on the docket at 8.30 a.m. for an interview. And I'll tell you something. I've interviewed Sayler a lot of times.

I've never had his team say, please submit the transcript for clearance from the SEC before you release it. And that happened this time. So now when he does an interview, the SEC needs to see the transcript before we're allowed to release those interviews. All that means is he doesn't want to do, he doesn't have the money Elon Musk has to fight the SEC because he's gotten in trouble for his interview statements. But look, I just did a post, which I think is important for people to understand. I made the statement that if I worked for Fongli and Sailor and Strategy as they're a trading advisor, 100% it is true that selling small tactical amounts when I have tax losses would be a major part of the strategy to help me buy algorithmically cheaper. It is undeniable.

I actually in my book, which I have now submitted to the publisher, it's not going to be evidently I'm 80% through it. I'm 80% through the book. I don't know if you got to the part where I fought with compliance literally over this, the following. And I got a no, which was can in a buy algorithm you sell in order to push the price down so you could buy it cheaper if you detect such actions would be helpful. And compliance said, no, as a part of a brooky. broker-dealer because you're holding orders and you have to do what the order say. But that is absolutely not true if you are the end buyer, if you're a hedge fund, if you're whatever.

And so a lot of people know that there are liquidity times and signaling times in the market when you zig, obviously doing the opposite of what people expect in a loud way allows you to acquire cheaper or sell at a higher price. It is well understood in market circles. I actually tell a story in the book about how when I first went to talk to our first NASDAQ trading meeting, and I was watching them train a NASDAQ trader. And they had just gotten a buy order for Microsoft for 250,000 shares. And so, you know, Tom was doing the training and Dan was the trainee.

And Tom says, Dan, okay, the first thing you do when you get an order to buy a large block of stock is put a sell offer out in the market. That was back in the day when it was their own quote. So it was quote legal. It actually, that would be called spoofing today. But back then, that was deregore. It is completely normal. And so this notion that people think they know what's going on when Sailor said in the SEC

approved transcript or not the compliance approved transcript that we may be selling, but during that same period of time, we're more likely to be a net buyer. Understand what that means. That means market you no longer can look at these moves. and trade off them reliably. So which explains partially why, you know, a sell of a few thousand or a few Bitcoin, you know, basically has had, I mean, it's rounding error. It's a couple percent in Bitcoin.

That means nothing. It's not anything close to what people would expect because smart traders know, hmm, you know, we could be getting faked out here. And so looking at this objectively, and I'm not saying they're doing it smarter. Honestly, I've been a huge critic of sailors' trading strategy. from the beginning. I think that they've left a lot of money on the table, and as a shareholder, it annoys me. But, you know, that's a different story. And I'd be happy to have that conversation with any of them to explain why in detail. Yeah. But it is, if you're trying to trade based upon

public news about at the same time, by the way, Stride bought a lot more Bitcoin than Sailor sold. And who knows what, you know, what STRC. If he hadn't bought converts and retire... Taylor's probably going to buy this week. I mean, let's be honest, right? It's entirely not out. He's like, I'm going to be a net buyer, right? Right. But the point is, is that trying to, all you need to understand is the capital inflows via STRC and via and on Strives product, the SATA, to understand that there's net more buying than there is mining selling. And so the sole question is, are there holders who are selling more that is the price elastic at this price to supply, etc? and to quote Mike, because he's right, in a solid, strong market environment on other risk assets, are you really going to see Bitcoin underperform from here?

And probably not. It's probably going to end up with beta. And I think it's going to be catch up like the software stocks. Yeah, I want to know. Mike, I want to know your take on Sailor. And I just want to add very quickly that Sailor is not the only seller in the market. His is obviously tiny, but we had the story last week. And Dave, I think we unpacked it.

at the $1.3 billion iBit seller that basically sold in one tranche. We've now found out they sold actually at a discount and basically sold it a discount. So they were trying to get out of the market pretty fast. And we have the longest outflow streak ever in Bitcoin ETF spot history now almost $3 billion in 10 straight days. I just want to add that as context that, you know, there's a lot of panic about sellers in the market and sailors kind of coming in at the tail end of that. But Mike, you know, you've been critical of Sailor, obviously, tempting the market gods, taunting Warren Buffett. Now he's telling.

Well, it was a flip for me because it was very lonely in 2020 calling for Bitcoin to go to 100,000 when it was 10,000. And when he jumped on board, it was like, oh, thank you. And I just remember doing yard work and listened to a podcast who was quoting Roman Bridge from 2000 years ago, pointed that example. So the thing is, a lesson I learned with, and like to point out to Mr. Saylor, and James, you mentioned, yeah, he's getting corporate finance, but he did not get markets. It's the number one thing. And I think some of us here are two in the weeds understand. You're in the middle of a really significant bear market that's just getting started. That's what he did.

He helped put in the peak thinking he's still not understanding. This might be just getting started. So I'm going to show a few screens and show you all few screens. I think you need to see this, particularly after what some things are sent on. So here's just a simple chart of the Bloomberg Galaxy Crypto Index. It's broken down below 2000. I don't see what stops it going to 1,000. It was 4,000.

at the same time, you know, Bitcoin's breaking down, but the bottom line, the same time, stock market's breaking up. This is a classic sell signal. I mean, you're just supposed to say, okay, thank you. Give me any rally I can sell in this failing asset, put my stop above and prove me wrong. Classic sales signal. So I want to tilt over to also what I think simple thing, same thing, crocodile jaws. Here's Bitcoin's 200-day mover and average.

It's holding resistance. It's simple stuff. It almost never does it that easily. I just think that's the problem. It's been too easy. At the same time, 200-day. It used to be the same as the S&B 500-2-200-day movement average. Now, it's a crocodile job.

That's a significant bear market that says, sell me. Obviously, you don't get it yet, but markets people, I think Dave doesn't get it yet. I'll point out a key thing that you said about Larry is, Larry has been some, you've got some great literature. The point is I point out, he should have published this in 2019. And this is the point I want to point out in this chart is, if you are buying gold now and selling treasuries, you're doing it at the worst level in 44 years. Sorry, good luck with that one.

But I just want to point, this is a chart of the Bloomberg total return bond index divided by gold. This is about, you know, back in 20, 21, 22, 23, when McClone said it was going to go above 2000, I was wrong forever. And then finally it breaks out. And now it's just so expensive versus treasuries. I just say this is any chance you get. That's a problem with the long bond at 5%. Why would you hold a rock when you can get guaranteed returns and the Fed potentially tighten? That's what's changed.

Trump has pivoted a little. of them. He's kind of supporting wars. The same thing I want to point on in this chart, though, is we have gold versus its 60-month moving average. It got to the highest in about 40 years. And gold versus the Bloomberg Commoddy Index is potentially peaking from the highest in about 40 years. And just another key theme I want to point out is this one I was early on. I've been waiting for it. Hasn't happened yet. TLT versus U.S.O. The last time it dropped like this, the velocity of this was right before. It was right 1H-2008. I was in top of that trade. I remember jumping on board when I could short things.

Now at Bloom where I can't. But the key thing that people need to understand is the U.S. stock market cap has jumped to two times total debt. People talk about how bad the debt is. Well, we're back to two times stock market cap total U.S. Treasury debt. And I point out, it looks like crude oil looks like it's going to go down to this December level, about it's 80 now. I think it's going to go to 50. Managed money net positions, hedge positions looks like they just peaked in crude oil. Same thing in grains.

Look, they just peaked. The thing in crude oil is. They only peaked from a year's high. Markets really got it. The hedge funds were like, yeah, sorry, we know what happens. Crude oil goes down because it went up. But the grains, this is a key theme. If we kick into a little bit of normalization, grains will plunge.

That means corn, soybeans, and wheat, why are they important? Because that's all biofuels. And then I want to point out one key theme in all cryptos. Heather's on its way to be number two. Right now it's number three. All you need is therium to drop to near 1600. Heather's going to be number two. So the most enduring trend in cryptos, I fully expect to continue, and that's tether flipping and everything.

So there's my macro outlook. And I think, be careful of getting into the weeds. This is a bare market respected. Okay. Can I just make two quick points? Point one, if you do the gold chart and you normalize for the amount of money that's been created, it looks very different. And I think that that's extraordinarily important because that is literally the reason people buy gold. Because in economics, you know, when you have a supply of something goes.

up, price goes down. And when you flip that, when the supply is money itself, price goes up. And I think that matters. So your treasury bonds, to use sailors melting ice cube analogy, you're being paid back with dollars that are likely to be at the current rate, somewhere around 40% less valuable at the time that your 10 years is up. And so, yeah, you're getting 5%, but it's more than eaten away by the amount of money supply growth. The long as money supply growth is six to eight percent and bond yields are under that, you are literally getting paid back with less valuable. Your interest rate is not covering you. And that economic understanding doesn't show up in a chart, but that is a very big difference. And I think investors around the world outside of the

U.S., which is where the gold buyers have been, understand this. And so that's the gold point, right? You know, right there. And that's why I hate using charts. I think of them as voodoo in many cases. Sometimes they work because traders follow said voodoo, and that's true, but you need to normalize them. So that's point one. And point two, when it comes to tethering crypto, I totally agree with you. Look, I am not an Ethereum bull. I have shit on Ethereum so many times on crypto Town Hall. Sometimes I do it to troll people to get them to talk.

But the truth is, I don't see the value. I don't. I think, you know, I did the analysis. DTCC is depending on who you believe, because it's a private, company and its owned processes quadrillions of value. You know, they process a lot more than Ethereum does. It is less than a tenth of the market cap of Ethereum, the token, right? I don't see Ethereum's path with fees to get to a valuation that is tremendously bigger than it is today. It doesn't mean it's going to fail. I don't think it's going to fail. I think it's going to grow,

and I think it's going to be important. And yes, it's not a pure utility, so it'll probably be worth more than a DTCC, which is a utility, more people have to own it, et cetera. But do I expect explosive growth from these levels that Tom Lee does? No, I think Tom Lee is literally wrong. I think that he's had a lot of great calls in his life, but I think Ethereum's, you know, use Ethereum's investment case isn't there. Now, does that mean, does that change the fact that if we get a bull run in Bitcoin, that Ethereum might go back towards 5,000 again?

Of course not. Of course it could happen. I mean, I'm not shorting it. I just am not a believer in it. And so if I'm right about that, that Bitcoin dominance will increase except for one thing, that hyperliquid will become trend, not the opposite. I mean, hyperliquid is up because hyperliquid has real revenues, but it's still kind of expensive. But it's basically kind of expensive the way most tech stocks are kind of expensive.

Will there be more crypto tokens that actually generate real revenues? Will they be able to pass that through to token holders? Well, maybe, and that's going to be a trend too. So the total crypto, what the index will look like 10 years out is very different than the index today. So when you start looking at the Galaxy Crypto Index, which is mostly Bitcoin and Ethereum, you know, understand that there's a lot going on underneath the surface. But generally speaking, you and I agree on one thing that a lot of crypto needs to be shaken out. and the winners will ultimately, well, where we don't agree is I think the winners will be ultimately worth a lot more than they are today.

That's a long-term outlook. Now, short-term, your guess is as good as mine. I think sideways then up. You think roll over, then down. Look, if the stock market doesn't crash, then I'm going to be right. If the stock market crashes, you're going to be right. I think it really boils down to that. That's my general opinion.

And I hope we do get to talk about Jamie Diamond at some point today. We can choose that one next. If you want, Jamie Diamond, obviously, said all the quiet parts out loud and went on national TV and said shit. And the woman's reaction when he said it was pretty astounding. But he said clarity act is dead on arrival. Banks will do everything they can to fight it. Called Brian Armstrong once again full of shit, said the world will not bow down to this one man and his company who's spending hundreds of millions of dollars to lobby. for the Clarity Act. The nuance I don't really understand is that the banks are trying to now

kill the Clarity Act because they don't like the Stable Coin Provision. But if they kill the Clarity Act, they're stuck with the Genius Act, which is much worse for them because it allows Coinbase to offer straight up yield. I mean, I'd like James has a chance to respond and talk before I talk, but I definitely have some thoughts here. And I think they're kind of using. I mean, it's obvious. You've got, I think, who, if you're, if you're, if you're James, Amy Diamond, you don't want to turn over your free deposits, you know, basically where you're paying no, you're paying no interest on them. Then you're getting, you're taking that cash, you turn around, you can lend it out numerous times, you know, in the fractional banking system. Why would you want to be in a market now that, that is, you know, allows you to.

pass on that the yield from your stable coin, which is ultimately for people who are listening and don't know what we're talking about, stable coins are pegged to U.S. dollars. Tether is pegged to US dollar, U.S.D.C. is pegged to U.S. dollar, which means that they have to have fungible securities that can turn into dollars on a dime, right? So if they need dollars, they can just turn around and turn them into dollars. They act like, so they use money market fund tactics. They can use the repo market if they want to. They can buy short-term treasuries, T-bills, and that just provides liquidity to the U.S. government. So there's a push and pull here the government is saying, and they understand. They're like, we need stable coins. We need tether.

It's one of the largest buyers of treasuries. And that is why, Mike, it's becoming one of the largest cryptocurrencies, obvious. You know that. We all know that. And so the Treasury is pushing hard for these provisions to get done so they can find pockets of liquidity all around the world. And, you know, Jamie Diamond and the other bankers don't want a provision that says that they can pass on yield to the customers because that will just cannibalize their massive margin product of deposits turning into literally just turning into cash cows from them. They don't want to cannibalize that. I get it.

I understand it. But the reality is, you know, there are agreements that USDC has with, I think they have an agreement. I don't know if it's still going on with Coinbase. I saw it a while ago where they were offering part. And they just make more money on USC than Circle does, I believe. Or at least there was a point where they did. Yeah.

So, of course, that's what they're fighting. And are the bankers going to win? Probably. You know, they'll probably win and get some sort of, you know, ruling that says that they are not allowed to. They're restricted against passing on yield to their customers. And that way, they ring fence their deposits. They just move them into this and they turn around a fractionalize this instead.

And so that's kind of where I, I think that that sits. Now, the more important question is timing of it, because we can't get this done in the Senate by July 4th, apparently it's going to get kicked to the curb until 2027 at the earliest. And so, you know, that is a challenge. With Democrats having at least one house, most likely, right? So it's a different environment also for trying to do it. It's a completely different environment because then you have the Democrats who have, you know, historically. been anti-cryptocurrency.

And it's become a political thing. It shouldn't be. But it is for whatever reason. So that is a challenge for sure. Is there a devil's advocate approach here where Jamie Diamond can be wrong and right at the same time? I mean, he's obviously protectionist. So that's wrong, right?

Because as you said, he wants to protect the yields and the bank deposits. And we all know that stable coins are better, faster, cheaper and can offer those yields to customers. So there's that side. But like money market funds have blown up in the past, right? And so his, he does make the point, hey, stable coins are, you know, if a stable coin issuer blows up or if coin, what if FTCs in this environment went bankrupt and was holding $10 billion in USDC or something, I guess, right? And does I respond to that? Because that's not insurance.

There's no backstop. So I'm just trying to play devil's advocate. Like, no, no, it's a good devil's advocate because it points out the absolute absurdity. of his argument. And Cynthia Lumas said this. So this is not me inventing it. One of the multiple things that are very important about the Clarity Act is that in the event of another FTX or a bankruptcy, investors offer any regulated entity under the Clarity Act

will have their assets ring fenced and therefore they won't be subject as a general creditor in a bankruptcy. That is a massively important investor protection. Which the only way you get is from clarity, which means in the world of debate, we used to have an expression. This is called a turn or a turnaround. It means that Jamie Diamond's own argument absolutely eviscerates his position. Think about that. And that's very important because I just explained it in seconds, right?

Understand, without clarity, investors are literally subject to FTX, 2, 3, 4, 5. with clarity, they are not because the only way that that investors could lose money is for a company that commits absolute fraud and does so at scale. And even then the investors would get first dibs on the assets and not what happened in the case of FTX, which is massive fees to the lawyers or happen in the case of Celsius. Massive fees. All we're doing it. So that's the platform. And what if, and I'm not saying this would ever happen. What if Circle blows up? Same thing.

As a retail holder of USDC, I don't have a relationship with Circle where I was issued the stable coin directly. USDC would be holders of you. USDC would be remonitized in any bankruptcy. And the corporation, the stock, the equity would be wiped out completely first. That does not happen without, you know, without, well, actually the Genius Act may actually do that in the case of Circle. But it certainly doesn't do that in the case of any crypto firm.

That's the important thing. And the circle one, the other big part of this is why I know his heads up his ass. I mean, I did a post about my father. His father used to have a lot of pithy sayings. One of them is mad as bad. He obviously was pissed off and he let the world see it. He's pissed off because he doesn't like the tone of the negotiations because he realizes is people act mad when they're cornered.

And Jamie Diamond feels cornered because he knows that genius, which he let get through, which of course they let get through. I mean, you know, the banks don't control the political process. They just spend a lot of money to buy the political process. And they fucked up and they let it get through. And so it got through and it became law.

So now his only because Warren wasn't in control of the narrative anymore. Right. You know? So politically, the only way they can, they can derail clarity really is ethics provisions and claims about the Trump family. That's it. The bank stuff, they're going to push the money at it. But he's pissed off because he knows that if he doesn't get a clarity act, that everything he's saying is true already. Just think about that.

And at the same time, everything he's complaining about is made far worse than if you have that act. So he's pissed. And so he's trying to get concessions on other stuff because that's how you do it when you negotiate. But when you let the mask slip like he did, that was a fuck up. That was a what the hell did I just say live on TV that I can't take back moment? Because he let the world see that sometimes he's pissed and why he's pissed. And it doesn't take a rocket scientist to figure it out. But let's go back to what you said, Scott.

I mean, one of the main provisions of the Genius Act, as I understand it, is that there will be required audits for all these stable coin issuers. You know, it's a different thing because back in the day of FTX, I mean, Tether was like, yeah, you know, we're doing it. We'll just tell you that we're doing it, but there's no proof, right, that we're buying stable U.S. dollar-based assets. But now if they want to operate here in the U.S., they have to. You know, you already have what's considered the gold standard of auditing

for its stable coins, which is USDC and circle. I mean, it's a private equity group led company, basically. And they understand it's based here in the United States. They get it. And so that is an important thing that, you know, they're going to have to demonstrate that they have what they say on their balance sheet that is pegging this stable coin to a US dollar base security, basically,

or basket of money. them. And so that that brings down that risk of what you just described incredibly, you know, like that that brings it down not to zero, but it brings it down, you know, quite significantly. And so it becomes more of a non-zero probability that you have something blow up because they don't have the right assets. Okay, I don't know, Mike, if you have a take on that, but we just had something breaking that I do definitely want your take on, which is breaking Iran announces, it's ending all negotiations with the U.S. and Dallas completely block the straits of our moves.

Iran said it's ending negotiations due to repeated cease fire violations, including Israeli strikes and Lebanon. Iran also threatens to block the Babel Mondeb straight. Good time. Yeah, that's what I was, I was watching that as crude oil popped who was 6%. There you go. And the comments in that we have this B.I. Energy chat. It's very sarcastic. It was just so funny, the things that people are writing about. All right, well, I guess that's it for the day next. I mean, stock market's down, so you got to buy it. It went down. Now it's back up. But I think what's pilt over to the macro, we're going to be fighting this battle in what in Trump's war. We need to point out in the Gulf for a while. And he'll figure it out he's just going to have to

cave because he needs to get elected. He doesn't want the next president to be Democratic. If he doesn't figure out, it's almost guaranteed. Even stock market goes up as bad now because that's inflationary. But that's a cool thing I really enjoy from this conversation about stable coins. It's the macro I think people are missing. It's one thing that really kept me bullish cryptos for quite a while is we could look forward to, yeah, they're going to figure it out. We should be able to track this place in ETFs. And he had the traditional trad-fi pushback. And finally they figured out, boom, that was great.

And then we finally all knew what Trump 1.0 didn't get was, okay, so the whole space is migrating into the dollar. They're investing in treasuries. What do you not get about that Trump 1.0? I just so love writing about it then. What's happened now is that is what was becoming for, We will figure out how we can track the dollar like a money market through stable guns. How do they do it? I'll let you guys hash it out.

But what that means is 90% of these silly tokens that are worth billions and track nothing, we'll go to zero. It's just a question. We already expect that. That's not, that's not a new. And that's already started. That's my point. That's my point is, this is just a matter of time that the number one crypto on the planet

will flip in Bitcoin. It's just a question of when. And that will be tethered. And people just need to like itself. That's the trend. It's not surprising, though. That's not surprising if that's the direction of the U.S. Treasury wants this.

And if they want it, it's going to happen. They want it because they need pockets of liquidity, period. That's happening. It doesn't matter. What's more interesting, that that's kind of that path. But what's more interesting now is turning to the markets. And this is really important part of the macroeconomic backdrop right now, which is this we have a company that's coming to IPO in the next few weeks the next two weeks two weeks

two and a half weeks in SpaceX that is literally changing rules for the SEC to bring this thing to market and this is this is something for me this is a little bit of a canary and you know you're talking about this wildly wildly popular IPO and That's the first step. You've got SpaceX. You've got Anthropic and you've got Open AI. You're all coming soon. And I mean, yeah, buckle in because this stuff is, this is something that is, this is a dangerous moment for us.

And why is that? I mean, they're popping it into index funds like violating all the previous rules that they had, basically. So everybody, you get SpaceX. It's like Oprah. You get SpaceX. You get SpaceX. And removing the lockup of IPO shares. like the, you know, pre-IPO shares, pre-IPO shares.

I mean, this literally allows the dumping of shares for retail to become exit liquidity for the founders. Like that is a, it's an important thing to notice here. And why is it important? It's because I think how much is coming, $75 billion, Mike, Dave, like we're talking about just a tiny fraction of the $2 trillion value. we're looking at here. Now, why is this important? It's important because I am literally getting phone calls from friends and family members on how do I get into this thing? I need to get into this IPO. I want some shares. I need some shares. And you're like, hold on. Do you understand what the valuation is here? We're talking about, you know, something that it, we're talking about 90 to 95x

sales, IPO. Like, that's what the multiple is. The 100, James, buy it, buy it, but sorry, sorry, sorry. I mean, right, like, this is the point. It's like, but retail doesn't they don't understand that, they don't care, they just want it because they think it's going up.

And so, and they're probably right for the short term, but the problem here is, does this kick off, this ridiculous blow off top that turns into the bubble of, you know, the, the, this AI just frenzy, feeding frenzy.

Why is everything AI related up, you know, up in the market? Because you can't buy the actual thing yet. You can't buy the Anthropic or the Open AI. So people are buying everything around it that they can. The picks and the shovels and, you know, it's anything they can get that is related to it. And they're buying it up. And so that means that this gives you an indication,

these are going to be wild IPOs. and it could cause a cascade on the other side. That's what worries me about the market. That right there. And the SpaceX IPO and the way these rules are changing around it, and it's going to force S&P indices, you know, that trackers, whether the ETS or mutual funds or whatever, to buy this thing. Because it's going to be, it's wild.

And so this is something that's going to be important in the next two weeks. like buckle in people because I'm not so sure it's going to turn out the way that you, you know, you want it. And really quickly, you did not perfect, Mike. Chat CPC is not perfect.

But the image is really impressive and it very quickly came up with this. You're against SpaceX. I wasn't thinking you should be handing out the actual rockets. But, you know, okay, go ahead. Mike. Well,

no, yeah, James, you just echoed exactly my sentiment. the questions I was getting years ago from, you know, institutional investments about Bitcoin and crypto's so like, yeah, I got to be bullish space. And then the questions I got after the launch of the ETFs were exactly what you described. Yeah, what really tripped me up was when Trump got elected and put in that big peak. But what happens in markets like this with unlimited supply, the cryptos have unlimited supply, is the higher plateau makes a lower low. And we're nowhere near that.

My point is that cycle started and cryptos are warning you that, yeah, you probably shouldn't be buying into it, but the last thing I'm going to do is express bears things about stock market because I've been wrong forever. I just look for alternatives. The alternative forever was Bitcoin and Cryptos. That died last year. And then for most of that time, it was gold and precious metals and that died, particularly Larry's book might have helped put in a peak.

No, there's only one game left. And when that game's over, watch out. That's when I think long bonds will drop from 5% to 3%. Just like you done in the past. I don't think it's, you know, there's a little bit of zero sum here because you're moving this hop all of money from one. asset class to another and it's moving around moving around so it's going to move somewhere and so something is out of favor and something else is in favor and then it moves something's out of favor

something is in favor it moves around it's like it just disappears you know now you when you do a cascading liquidity event it can all disappear that's the scary part is when everything washes out we've seen that happen 1987 1998 1990 2000 2001 2001, 2008. We've seen all this movie play like a number of times. This is not something new. But, you know,

the ball of money is always around. It's just where is it headed? And so, you know, this is what scares me or scares me, concerns me, about these IPOs that are coming to market right now. And so we are going to see, you know, how much appetite investors have for insane amount of risk on the back end of these valuations because what is the what was the next closest

highest valuation of a stock that came to market i mean there was like six times sales right not 90 like this is just it's ludicrous level so so i back you up on that that's my point is there's only one game left in town right now it's a stock market it's certainly not crypto's everybody's getting out because they made the mistake. And now they're fine. What's left? They got into precious metals. That one they're getting it.

I mean, there's only one game. When that game ends, that's your big trade. And this is it. We're in the end game. The question could last for well. Well, I mean. So your trade is to buy the long bond because you think that people are going to go into riskless assets, the treasuries, on the backside of the market

collapse. Wealth reversion. That's all. It's just what you point. It's what's happening in crypto. You just take wealth and puff, it disappears when prices go down. We haven't had that in most of the people who trade in on this environment and lifetimes. Now, we've seen this before. Just a little wealth really. Just little. Okay. Here's one simple thing. One little fact. Right now, gold volatility is 2.3 times S&P 500. Crude oil volatility is like three or four times S&P 500. That's the most in almost 20 years. I just fully expect volatility in stock market to migrate toward normalization. And I've been wrong.

And but it's only May. Actually, first of June. So let's, you know, see how things look by October. Well, I think it's going to be an interesting summer to say the least. And I don't expect the market to crash between now and the end of the summer. But, you know, you never know when a black swan rears it. That's a point. Nothing can make the stock market go down now.

Can I ask some questions because we don't know the answer. I don't know the answer to the. Do we have any idea how much of SpaceX private stock was bought by index funds and are held by index funds in anticipation of going into the index? I ask this question because if you don't know the answer, then you can't speculate. I'm not talking about you guys. I'm just saying anybody can't speculate without knowing it. Index funds have gotten very smart about anticipating index inclusion events. My guess is half.

I would be surprised if the large indexes didn't hold half of what they'll need at least. And if they didn't understand that. Now, they will, of course, not raise cash because they can't afford to be ever out of the market. But I think that plans are very... Yeah, I don't know. It's like $10 billion or something they need to buy. Oh, there's no doubt. There's no doubt.

You know, the question is float weighting versus non-float weighting. I mean, years ago, S&P, adopted in their global indices and a lot of indexes are float weighted. The float weighted index means you don't buy as much as you think, you know, until the shares are unlocked. But once they are unlocked, that creates that buying. Now, why is this important? Well, what you're going to get is the insiders selling to index funds. So it's less of a... Right. I think the NASDAQ is a 3-X. Right. So the index fund will have to buy what the insiders want. And so it's a straight transfer. It doesn't, it's, I'm not saying there's no impact.

I'm not saying that at all. I've been one of the first people. I said it months ago that this is going to be a movement inside markets unless money market funds are at high levels because people are, you know, raising cash to be able to buy this thing. The 30% retail is a big deal. And it means retail will be selling retail high flyers. That that is true. But, yeah, yeah. You have to the retail is the demand from retailers with strivings. That's the reality. Well, yeah, for lots of good reasons because retail loves a narrative. I mean, we just saw one of the most important narrative in stock market history over the last week when Micron hit a trillion dollars.

I told everyone, I told, I can't remember it was on this show or one other show, but I made the point that Micron was overvalued for decades. I mean, literally in the 90s people were chasing it because it was a big retail story, way in excess on every metric because, well, this is going to happen and this is going to happen. And at the time, they couldn't get anywhere. Well, 30 years later, it got to exactly where its narrative had originally said. And history is showing a lot of these things. And retail can hold. So, you know, we'll see. I personally think Mike is there is a very real risk.

that we get into rebalancing season in the fall, that we could have, that there could be a serious problem this year, particularly if the geopolitics aren't sorted out. I think before that, any crash in markets or weakness, real serious weakness in risk assets needs to be bought, because I think we'll recover. And if you look at at 2000, you get your clue. Everyone remembers March of 2000 and NASDAQ dropped 15% in a day. We don't see a lot of days like that, but I remember that day, it had fully recovered by July, right? If we get a major sell-off on the back of SpaceX and other IPOs in June, July, it's going to fully recover by September. Now, it doesn't mean that it can't do what it did in 2000, which is have a massive sell-off as we get the midterms looking like it's

going to be a wipeout, blah, blah, blah, blah. There's any one of a number of reasons that could cause that. I actually don't think it's going to happen. I do think it's possible, though. And I think the markets have trained, Dave, I think the markets have been trained to expect the, you know, the Fed to step in and the Treasury to step in and stabilize the markets. And the drawdowns are going to be sharper and less, you know, they're going to be lower, like, they're going to be shorter lived, you know, and that's, and that's, it's going to be really difficult. Well, it's better because as Mike would point out, volatility in the, and implied vols are really low, right? You know, there, there's not a lot of field.

and risk in the markets. I mean, you know, it's, when you look at volatility, that is not trivial. It's actually actual volatility. Realized. Right. No, I just never have. Well, I realize volatility is very low, too, but implies are also low. Yeah. Well, the VIX, what are we doing the VIX now? 16. I mean, look, I've seen it as low as in my professional career. So, I mean, you know, it, it can get lower, but, you know, look, volatility is to be sold right now until proven otherwise. And the more that that happens, the more people lean on it, the worse it gets when volatility

regime breaks. Just remember that. The more volatility that's sold, the more puts calls are sold. The sharper the actual move. And so, you know, it could go from 16 to 8. And in that case, you know, people are sold volatility. People will tend to sell more and more and more. I mean, we've all seen this movie before.

But the fact, the fact is, you know, you look at it. this Iran move and literally the impact on markets, it's, yeah, oil is up seven percent or eight depending on which one you're looking at. But, you know, the stock market, yawn, flat. I mean, down less than a quarter of a percent. Bitcoin, I mean, what are we now, $300 or $200 from where it was when they announced it? I mean, markets are underpricing risk because they just, they're, they've been inoculated to it. Now, that doesn't. doesn't mean risk isn't real. It means markets don't give up, you know, they don't give a shit. They just don't care. And so understand in that environment, when the selling doesn't materialize,

the first people who sell look like John Snow in that scene in Game of Thrones, we ran ahead of the cavalry and would have gotten destroyed if more cavalry didn't come in. And that cavalry that coming in is Kevin Warsh and Scott Besant at the top of the hill saying, oh, damn, there they go again and and that's what people are expecting i mean we literally have that that that that scenario that's what you're saying right james that's exactly right that's that's the scenario that everybody's expecting right there and god help of it if they don't come in because it'll get pretty ugly pretty quickly but that's true they know they have to i mean it's just it's just math they just know they have to it's not it's not anything new it's the this is the you know this is a a mature face

of the fiat experiment. The mature phase. Well, it is what it is. But anyway. Yeah, I see the Iran news and I'm like, who believes anybody on any headline on any? I'm talking about it's like that Bob. I know I was just kind of like, you know,

when we talk about like the market pricing this in or reacting to headlines and no, there's no reaction. I just don't think anyone believes anything anymore. So like, why would you react? It's all true. Well, I look out to do. I'll report back next week. I'm about to use Tesla full self-driving to do pretty much the entire trip from Miami up to New Jersey.

You won't have to touch the wheel. It's not. I'm with James in Vegas one time. It's crazy. My wife's got the full self-driving in her Tesla. Does it still ban you if you look away? Like, did it lock you out? Yeah, he got in trouble for eating fries.

All I know. She got put in the penalty box for like a week, I think. That has been a long time ago, though. That was a long time ago. Yeah. To summarize, Jamie Diamond, full of shit, angry, acting like a spoiled child, and letting the entire world know that he wants his hundreds of millions of dollars

in subsidies, and he's pissed that he gave them up last summer. And now he wants to get them back, but doesn't know what to do about it. And is willing to sacrifice investors for it. And it's unfortunate because, you know, I used to have a pretty high opinion of him in general, but I think in this particular case, this was, this was bad.

He's doing the thing he's got to do. No, no, by no, no, no. The thing he's got to do is recognize reality and not wish that that reality were different and get mad about it. And he was literally the best at that in the global financial crisis of all the executives in the banking industry, which is why JP Morgan emerged so strong. Once again, I just don't understand the angle, if they talk this out of being

passed, they're in worse shape with just the Genius Act. That's right. I get it. Which is why he used the, that's why he lost his school. Because he knows that's true. He's trapped. People who are trapped do stupid things. What is that? And look, I'm happy to say it. I'd say it to his face.

I mean, it's like, you're in your career, this was the single dumbest moment publicly that he's ever had. Because he let the mask slip because he was frustrated. Yep. All right, guys. Well, we'd, we to 1003. So we got to run. Thank you, everybody. That was a great macro Monday. Really amazing stuff. There was a lot more I wanted to actually talk about with the stock market at, you know,

all-time highs relative. Well, next week's another week. It's going to be around the same time. We'll get there. All right. Thanks, everybody. We'll see you. See you tomorrow. Bye.