The Wolf Of All Streets - Bitcoin Crashes Hard | Crypto Bloodbath After Historic Rally

Starting point is 00:00:00 Bitcoin crashes hard from 108,000 just a few days ago, all the way to a low of 92,000 before settling in as we're talking at around $95,000. Of course, this has a lot to do with the Fed meeting, what's happening in the stock market, the transfer of power from Biden administration to Trump, and of course, just classic bull market retracement. But, of course, altcoins also really taking it on the chin, suffering much worse than Bitcoin. Some calling for a new bear market, saying the top is in and it's all over. I doubt that's the case. And LW and I are going to unpack all of this and the major news that rocked crypto markets this week on the Friday Five.

Starting point is 00:00:41 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, hit the like button. Going to bring on NLw right now checks price bad price yeah 93 94 now is awful yeah now it's it's horrible i mean i was just recording a far out predictions show the growths of bitcoin future about how we're never going to see five figure bitcoin again and here we are i mean it's like that yeah i mean didn't say it wasn't that always ryan selkis you know i can't Bitcoin's future about how we're never going to see five figure Bitcoin again. And here we are. It's like, yeah, I mean, didn't say it wasn't that always Ryan Selkis, you know, I can't believe this is the last time we're going to see Bitcoin below. I don't know where he got it, but I just, that was one of my favorite Selkis memes. He really, he really leaned into that one.

Starting point is 00:01:36 Yeah. And I'm sure he did it again and I just missed it, but here we are $95,000 to your point. It's kind of like the squid grow meme or any of the memes where it shows like an ugly girl and a hot girl. 95 on the way up looked really attractive. 95 on the way down, we're going to 5,000 or zero or maybe it's over. Yeah. Well, you know, it's interesting. Are you seeing any of that sort of discussion or is it just generally sort of like the vibes are, you know, we wanted a little bit more Santa Claus and, you know, Powell stomped on our fun. I mean, I have seen people saying that they think that this could be the top of this bull market, the cycle's over, but I have not seen people, to be fair, calling for $12,000 Bitcoin or anything crazy. I think the craziest ones I've seen, which are not crazy technically, are people saying, you know, mid-70s, maybe it goes into, you know, the low 80s, something like that. And

Starting point is 00:02:25 to be frank, that would be just the classic 30% bull market drawdown that we've seen countless times on the way up. Yeah, I think one of the really interesting questions, I was just discussing this in that same show, is, I think it's going to take this cycle, like a full cycle, you know, full four years, basically, of having institutions present the whole time to really understand what the new cycle dynamics are. Because you now have the competition between Bitcoin secular dynamics on the one hand and all those sort of forces that contribute to that. And on the other hand, the sort of normalization that comes from participation in the traditional financial markets. And those two forces are at some points going to be running at cross purposes with one another. And it's not going to be exactly clear which is sort of winning and exerting more influence. But it seems likely to me that Bitcoin still is more

Starting point is 00:03:13 cyclical than, and crypto generally is more cyclical than other traditional assets, but it probably has a lot of the hard edges shaved off. And so we don't know yet how to recalibrate our expectations of a down market. Is it down market 50% now instead of 80%? Is it 30%? That'll be one of the big questions I think to learn over the next few years. And we don't learn that until we see how much volatility might be dampened to the upside as well, right? Do we get a two-time cycle instead of a three and a half time cycle, which used to be a 15 time cycle, which used to be hundreds, right? Obviously. And I think a lot of the reason for some of the downtroddenness, if that's a word, is that altcoins have just suffered so badly, right? Yet another thing that happens in bull

Starting point is 00:03:53 markets. But if Bitcoin goes down 13, 14%, you see the big name altcoins going down 30, 40. I've seen some that are obviously going down 50%. But even Bloomberg saying, pullback deepens as US ETFs suffer record daily outflow, but this is a classic sort of bull market. And let's just dive in why. Said exactly what he was supposed to say, said exactly what we anticipated that he would say, said exactly what everybody on the planet thought he would say, and the pain is real. So what's going on? When they cut the 25 basis points, said inflation's a little bit sticky and we'll probably cut a little less next year. I think everyone was anticipating that. And here we go. Yeah. I mean, I think that people were anticipating it,

Starting point is 00:04:35 but it was starker, I think, than they thought. So in September, the dot plot showed something like four rate cuts next year. Markets were kind of predicting something on that order, three or four. And it looks like after this meeting that it's maybe two, but not even guaranteed to get that, and certainly not early in the year. And so it is, look, I think that this should have been more expected. I think a lot of the smart commentary after was we should have anticipated this more. To me, what clearly came through in this was, so people tried to, the reporters in the press conference after tried to pin Powell down about whether this is an anticipation of Trump policies being inflationary, right? If that was the

Starting point is 00:05:21 specific reason that they're concerned. And he said, no, it's about a new administration just means more unknowns, right? It just means that there's less known. And so the fact that there are less knowns means that it's, we have less clarity on what we're going to need. We're in a pretty good spot right now. And effectively they're, you know, they feel like they're in a fine place in terms of how restrictive things are, in terms of where the labor market is. And so steady state holding for them looks fine. And so until they have more information around what future policies are actually going to look like, the default is to do nothing. And unfortunately, markets just don't want them to do nothing. So we've talked about

Starting point is 00:06:01 this before. Anytime Powell gets to do less, he's the happiest in the world. Yeah, it all makes perfect sense. And I think that that probably tells institutions and others, maybe there's a good time to book some profit going into the end of the year. Totally. You're up so massively this year. I mean, Bitcoin's sitting over $100,000. You can't tell me there's not a lot of people sitting out there saying,

Starting point is 00:06:24 maybe there's some uncertainty coming. I bought this at 20. It's a good time to just take a little off the top. S&P is at 24% or something for the year. NASDAQ's at 31%. Like, it was a good year. People aren't stressing when they take a step back. And certainly, I think you see a lot of that profit-taking behavior happening.

Starting point is 00:06:39 I think what will be interesting is to see what inflation does, obviously, over the coming months, because if inflation continues to rise as it slightly has of late, it's going to be very hard for them to continue cutting. Yeah. Yeah, it's going to be a it's going to be a I think that the just the story of this, I mean, they moved also their their projection for when we actually get back to 2% from the end of 2026 to the end of 2027. So they are very clearly like, we're in a long sideways for now. And nothing is more frustrating for markets than a long sideways in either direction. Yeah. I think most people have just remained so incredibly bullish that even reducing your bullishness slightly meant that a sell was likely here. But there are a few mega bears out there. Well, actually, mega bulls that have temporary

Starting point is 00:07:30 mega bearishness. Arthur Hayes predicts crypto will see harrowing dump around Trump's inauguration. So you don't have to read the entire thing. He's effectively saying, man, we've priced in the highest of expectations for Trump and what he'll do for crypto. And if those things don't start to happen really quickly when he's inaugurated, we could see a harrowing dump. But we're sort of harrowing dumping as we speak. So maybe we're preempting that idea. Yeah, I do think that there's a little bit of a recalibration. And we had seen something like 11 relentless weeks following the election. I mean, 11 weeks in a row of inflows that were sort of creating new records basically every week to the ETFs. So I do think that there's a chance that this

Starting point is 00:08:12 actually looks like a little bit of a recalibration that does take the edge off of some of that. I don't think Arthur is wrong that we have very high expectations. Specifically, the chatter around a Bitcoin strategic reserve has increased so massively over the course of December. That's the thing that has the biggest potential to, I think, let people down, depending on how it does or doesn't come to fruition. So listen, a little bit of a reset now isn't the worst thing in the world. Okay. So does any of this, do you think, dampen the 2025 expectations for a continued bull market for Bitcoin and a massive alt season to come? I don't know, man.

Starting point is 00:08:54 I think it's going to be much more driven by larger factors than we think, how much room to run Bitcoin has. I do think that given how much of the sort of price action is related now to institutional inflows, the way that larger markets play out, I think really matters. However, to the extent that there is any sort of reasonable continued support on that, I do think that people are now, they're officially just deciding which of the not that interesting narratives are going to be the alt season narrative because they're so desperate for one that it doesn't, it's not going to have to be all that compelling. Right. And, you know, it's like at some point people will be like, screw it agents. That sounds good. Agents is enough. Like, let's go. Uh, and, uh, and so you, you definitely feel that hunger to,

Starting point is 00:09:42 to let her rip, you know, at least for some amount of time. But, you know, nothing's a foregone conclusion. Yeah, it never is in markets. I think that it's just funny to see how quickly people turn and change their bias. And I think everything's going to be just fine. And if you've been here before, even if your odds do go down 50%, which they have, they can go right back up 50% in the next week. Yeah. I mean, there are still a lot of people who are sitting on a lot of profit right now too. So the ingredients for an alt season are certainly there.

Starting point is 00:10:15 Yeah. So the next story we have is tailwinds. And one of the biggest ones has obviously been BlackRock, right? So as much as we can talk about price action and what the charts look like and what's going to happen, it's hard to dispute the fact that we're in the best position we could have ever imagined at this point coming into January 2025. We have the government wholesale supporting Bitcoin with the Trump administration coming in. We have BlackRock, the largest institution, financial institution on the planet, basically getting orange pilled and becoming Satoshi Nakamoto in the flesh. And to that end, I'm not going to show the entire thing, but we'll show a clip. They put out a three minute educational video on what Bitcoin is. And man, they really, really get it. Actually, it seems

Starting point is 00:11:03 to have just disappeared from the stream. So I will hear where it was uploaded, but I will show you that it exists. Here it is. We don't have the sound, but it's a cute video basically showing all the reasons that we have said for very long that you should own Bitcoin. It's really sounds like a Bitcoiner put it out. They totally get it. They talk about the evolution of money. It ends with them saying, humans used to use seashells and coins and all these things. And it's natural that we would move in another direction forward. I mean, how big is it that BlackRock is doing these things? It's huge, huge. I mean, listen, we saw this. This is a top-down transformation of this organization. When Fink started talking about this, there was so much

Starting point is 00:11:45 going on that it's easy to forget that in addition to just supporting Bitcoin, he obliterated the sort of the contrast narrative of whether Bitcoin was the only thing that was interesting or whether the blockchain was interesting. I remember when BlackRock first started talking about the Bitcoin ETF and he started doing the kind of roadshow to build support for it. People kept trying to pin him down with sort of the old conventional institutional narratives like, you know, is it about Bitcoin or is it about blockchain and this sort of things? And Fink just voraciously said it's all of it, right? And he articulated a thesis for Bitcoin as a hedge against debasement, but also why blockchain was a powerful system for,

Starting point is 00:12:40 you know, whatever. And so he clearly kind of had this conversion experience and it's followed all the way through to BlackRock. And they are speaking about it in the same ways that we speak about it. And that's part of what's made it such an interesting and I think exciting moment for people. Look, there are a lot of scenarios in which BlackRock comes in and Bitcoiners are nervous or hostile because of the way that they're looking at it, viewing it, trying to co-opt it. But that's just not how it's played out. You're going to have a lot of people asking you why Bitcoin over the coming months and years and into the future. I would say that of all the resources I've seen, if they've got three minutes, this is a video worth sending.

Starting point is 00:13:21 Yep. Yeah. It's very hard for people to go straight to Saylor. Let's put it that way. MicroStrategy is not doing great in the face of all of this, but I think that's exactly what everyone would expect. I'll tell you who has been doing great, and that's our next story. Coinbase ranks fifth globally in exchange revenue, surpassing Nasdaq and CBOE. Great tweet about this. Just how much crypto is eating TradFi's lunch. I don't

Starting point is 00:13:46 think we need to dig into the nuance and the numbers. I think it's just fair to say that people are trading the hell out of crypto. The volumes are relatively insane, only growing. And this makes crypto exchanges potentially some of the largest, best performing companies moving forward on the planet. I mean, this is why all of us FTXers were very upset that Sam wasn't happy with the billion dollars of trading fees that were being made a year and had to go steal people's money on top of that. Crypto exchanges make an ungodly amount of money. This is an industry that is an unfettered 24-7 free market bonanza with people who are

Starting point is 00:14:22 extraordinarily engaged in a way that even other market participants aren't. And it shows up in Coinbase's numbers, right? It shows up in exchange volume. And I think that it's still though hard to remember. I think why this story was interesting is that fifth in the world ahead of NASDAQ in terms of revenue is just so insane. As a company that's been around a decade or so, it's pretty phenomenal and I think shows just what a force this industry is. Yeah. You have to believe that moving forward, Coinbase, if we have continued interest in crypto, which we will, custodying all of the ETFs effectively, that they're just going to become one of the most powerful companies on the planet.

Starting point is 00:15:06 And listen, just one more thing. I had Raoul Pal the other day. It'll come out on Sunday. But he basically said Coinbase, Brian Armstrong won this election. He was like, if you look where all the money came from, it was the technologists and the crypto guys who won this election and will make sure that the policy is friendly moving forward. Yeah, I mean, Coinbase has been an incredibly well-run organization throughout.

Starting point is 00:15:29 It has sort of been through all the cycles. It has been the exchange du jour, but it's also been the one that's out of favor relative to others. And it has just persisted and continued to be strong. And it's just an incredibly strong company. Yeah, incredibly strong, but it doesn't stop a little pettiness when it comes to arguments in the public sphere.

Starting point is 00:15:56 I don't have the tweet, but I'll pull it up at some point. Brian Armstrong and Justin Sun were going at it on X. And it's because of this. Federal judge says Coinbase can delist WBTC, denying Justin Sun affiliated BitGlobal's bid for a temporary restraining order. The two of them going back and forth like school kids, which you love to see because this still is crypto Twitter at the end of the day. But effectively, Coinbase launching their own wrapped Bitcoin product, CBBTC, and taking some issue with their custodians and WBTC and Justin Sun. And wow, man, watching the billionaires go at it, always entertaining.

Starting point is 00:16:35 One of the big questions for this cycle is whether crypto is going to finally tell Justin Sun to fuck right off, period. Like this is a legacy end of the last cycle type of person. I mean, this is a guy who got an article removed. Coindesk is in it now because they've had editors quit because they apparently killed an article about Justin Sun eating the banana at his request because Tron is a big sponsor. Look, strongman politics is a way that crypto has run, but we're moving into a different world. And the reason I think this story is interesting is that I think that it's much less about this sort of bickering back and forth and much more around whether this industry is newly emboldened to just say, I'm done with this sort of ridiculousness. And everyone knows that everything that touches Justin's son ladders on up into Justin's son's wallets.

Starting point is 00:17:29 And it's preposterous to believe anything else. So I'm all for it. I'm glad. I'm glad they delisted. I'm glad they're being loud about why. It has nothing to do with anti-competitive behavior. They were very clear. It has to do it because anything that touches Justin

Starting point is 00:17:41 goes to Justin. So whatever, man. Full team Coinbase here, as you can tell. But interestingly, to give credit where it is due, until very recently, most USDT transactions were still happening on Tron. And so in places not called the United States, that is the chain that people were adopting to send stablecoins fast and cheap back and forth. But since the election, Matt Hogan showed a chart. Ethereum actually has surpassed USDT on-chain over Tron again.

Starting point is 00:18:12 I mean, listen, people are completely welcome to still choose Tron because of the dynamics of the chain. I don't have any problem with that at all. I don't have any problem with the free market deciding. I just think that there's been sort of this desire to pretend that assets owned by the sort of Justin Sun extended corporation weren't just all part of one big soupy pie. And it obviously is. So yeah, Mike Dudas tweeted this interesting oof. Justin Sun gave world Justin Sun gave world liberty a ton of money. That, of course, is the Trump family's DeFi project. Coinbase and Justin Sun earned an intense lawsuit

Starting point is 00:18:41 that escalated today about WBTC safety credibility. So World Liberty swaps 10 million out of Coinbase's BTC product into Justin Sun's in response. Horrible luck. This is more of the same. It's just kind of the pettiness, right? But pretty crazy. It is what it is. Do you think that he's going to eat any more bananas? At first i i was

Starting point is 00:19:05 thinking man that's a really old banana but then i found out it's performance art and they just keep switching the banana to keep it fresh uh that makes more sense yeah so he bought a 6.2 million dollar banana that he wasn't even the banana looks for 20 cents like that week but the idea that they taped it to the wall made it worth 6.2 million dollars i don't know the last story that we have here is trying to parse what the hell is happening at the sec and i guess what the hell is going to happen to the sec moving forward an fd collection cyberkong said it has received a wells notice from the sec i mean this may just be gary and friends screaming on the way out the door because it seems like this

Starting point is 00:19:41 is futile and useless and the action is unlikely to be taken by the time Paul Atkins gets into the SEC. Hester Perse actually out there right now saying we're going to get more ETFs. They're going to have staking, all these things in recent interviews. And then while this is happening and NFT collections are getting Wells notices, on the flip side,

Starting point is 00:20:00 Carolyn Crenshaw, who people were fearing would be reconfirmed, she's one of the most anti-crypto of the anti-crypto army, even more so probably than Gensler. They didn't even bring her up to re-nominate her after people thought she was going to get reconfirmed. So we have these sort of bipolar actions by the SEC or regarding the SEC. Yeah, it's a going to go anywhere, but they sort of flicking it over the finish line. I mean, or whether it's, you know, are we going to see a dozen of these things in the last, you know, couple weeks before things leave? Who knows?

Starting point is 00:20:44 I put I put nothing past this group. I would say that our best hope is that they seem tired now for all the losing they've been doing. So maybe we won't have to deal with all that much optimistically. The Crenshaw thing is fascinating. I mean, it is clear with the SEC rules that they have to have three commissioners. It's not clear what you have to do and that only three can be from one party. It's not clear on anything else. And so there's a potential that we roll into next year with three Republican commissioners and no one else. Now, I don't think that would be a good situation.

Starting point is 00:21:18 Or they could put independents on the other side or cherry pick a couple very pro crypto or market Democrats. I think that I think that for, you know, it's better for everyone if the SEC starts actually building back its reputation as a strong institution that's above this stupid pettiness. And so I would hope that you find, you know, sort of open, thoughtful Democrat commissioners and continue to have that sort of more partisan balance. But, you know, it's a sort of a, you know, they're lying in the bed that they made a little bit. So, you know, I would be lying if I said I wasn't glad

Starting point is 00:21:57 that Crenshaw wasn't, you know, her reappointment wasn't being voted on. Yeah, I also hope that we have a thoughtful SEC that actually discusses these matters in an intelligent manner and debates them and comes out with a rational conclusion, but she's the worst. Yeah. She was the only one but her. She was the dissent. She was the dissent during the Bitcoin spot ETF decision. And literally her dissent was the judge got it wrong. And I'm right. So that tells you everything you need to know. Classic. Well, listen, it's next week.

Starting point is 00:22:29 We're going to go into Christmas week. I'll be here on Friday. I don't know if you will, but I'll be here on Friday. But going into Christmas week, hopefully we'll be able to have equally positive conversations with our families and friends as we did on Thanksgiving. Maybe things will go up before then. I would hate to see Bitcoin at like $85,000 and everybody to have to have a reckoning at Christmas after recommending everything at Thanksgiving.

Starting point is 00:22:48 It would be the most crypto thing ever though. I think we'll be okay. Yeah. I think we're going to be just fine. I think this is just a normal retracement sitting already back $3,000 up from when I woke up this morning. Could be worse guys. I say, just chill, enjoy the holidays and, uh, better things to come in 2025.

Starting point is 00:23:04 You can follow NLW at NLW on X, and of course, check out The Breakdown, his YouTube channel, everything he's got going on. Until next week, thank you, man. Appreciate you. Later, guys. Everybody have a great weekend. Bye. Let's go.

The Wolf Of All Streets - Bitcoin Crashes Hard | Crypto Bloodbath After Historic Rally

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