The Wolf Of All Streets - Bitcoin DUMPS To $83K As Bond Yields Break 24 - Year Highs

Episode Date: October 7, 2026

Bitcoin falls below $84K as renewed tensions around the Strait of Hormuz push oil and Treasury yields higher, with the 30-year yield hitting a 24-year high. We also cover Robinhood adding Bitcoin to its balance sheet, another Ethereum L2 shutting down, and BitMine preparing to stop buying ETH once it reaches its 5% supply cap. Learn more about your ad choices. Visit megaphone.fm/adchoices

Bitcoin dropped to $83,000 as 30-year bond yields break 24-year highs. Of course, oil has also broken back above $100, and the geopolitical situation is a complete mess. Now, I would argue that Bitcoin's actually performing quite well in context of all of that, but I'll discuss that today with our amazing guest, Noel Acheson. Let's go. Let's go. Good morning, everybody, and happy Wednesday. We have a lot to talk about, and I am very fortunate that Noel is here to discuss it all with us.

Good morning. It's been way, way, way, way too long. Too long, Scott. How are you doing? I'm great. So we need to get you back on a Monday, too, by the way. To the chaos? To the chaos. Are you kidding? I need to just take over again, you know? It's much easier that way. Okay, so listen, we've got the sort of headline here. I find these funny when we talk about Bitcoin underperforming when it's actually, in my opinion, doing so well, as I said.

But Bitcoin dips below 84,000 as oil jumps on Iranian tanker attacks. Of course, we have also 30-year bonds hitting fresh 24-year highs. The 10-year is skyrocketing. Seemingly no intervention is working, dollars hitting new highs. These are actually all the things that you would think would have Bitcoin in the 50s or the 40s, not moving from the mid to the lower mid-80s. Yeah, no, totally. There are signs of a tightening environment,

and so it is surprising it hasn't been down. We have the higher yields. We have higher rate-height expectations. We have higher oil. We have higher dollar. All of those things in theory is supposed to be dampening the monetary liquidity that we know Bitcoin is very sensitive to. And so it is actually very interesting.

I think very, very interesting on many levels that it isn't. And, you know, yes, it's dropped to 83. But this is 83. This is actually nothing. Bitcoin is still doing very well. It's, I think, up again, up, you know, it's easily outperforming stocks, easily outperforming goals. And so, again, we're in a good situation right now.

Yeah, I think the past two months, there's been a massive regime change for Bitcoin. And, you know, I know that it's hard to look at short term to draw any massive conclusions. but when you break out at that level, on a candle as big as we had that one week where it was up 24%, and then you actually start, if you're looking at the chart, breaking above every single M.A.

and making a new higher high when you haven't seen it, especially when all other markets seem to be doing the opposite, I do think it's valid to start paying attention. Obviously, you know, we have McLean and a lot of other people who will say Bitcoin's underperform for a year or two years or whatever the time frame is,

but at some point things change. And it feels like things have changed. Yeah, I mean, you look in the rearview, It's like it's over. It's so over, right? But as we all know, you don't drive along the highway by looking in the rearview mur. And the fact that we had that candle back in August, that says a lot about why we are where we are today. That that that candle happened on the day that U.S. Treasury Secretary Scott Besant announced the surprise buybacks of longer term debt. It zoomed up and it didn't come down, which is quite common after you get that kind of a slope. It went along under 80,000 for a while.

Then it zoomed up again, and it's continued to edge up since then, today's slight fallback notwithstanding. That says a lot about why the liquidity indicators are not bringing Bitcoin lower. We're looking beyond the squeeze. We're looking beyond the potential tightening of the market, the potential break, should we say, of the current equilibrium. We're looking beyond that. we saw that in the reaction to what was the first sign of official intervention.

It was tiny, certainly compared to what's coming, but it was the first sign. Yeah, let's talk about that specifically. So obviously there was some level at which the Treasury decided to signal that they would intervene, right? As you've said, I mean, they went from $3 billion to $6 billion when you have $40 trillion debt. It's not even a drop in the bucket. It's a drop in a drop in the bucket. But the signal was what was most important. So I think a lot of people falsely called it yield curve control, which I don't think it really is because they didn't set a number and say, we're doing everything we can to defend this number. It's also not really QE if it's coming from the Treasury General account.

So, you know, in your estimation, what is it and what else can they do knowing that the signal did not work? Again, we're driving on the highway looking in the rear of your mirror by trying to apply previous patterns onto what is coming. I mean, this was a fairly, if not an uncommon intervention has happened before, but it was a new tool in the box. And we have to remember that both the Treasury and the Fed have a range of tools in the box. We may not get Kiwi. It may look like Kiwi, but it may not be Kiwi. We may get a whole different environment of intervention coming forward. Who knows?

But why this happened, you may have noticed. It was a month ago, I'm not joking. It was a month ago that Scott Bissent says very arrogantly, I am the house now. less than a month later, he's like, I can't control the bond market, not my fault. He literally said the house can't win every hand or some comment. You know, the headlines were that he, yeah, but, you know, that's not what I am the house now means, is it? Whatever, cover, you know, CYA as much as you possibly can. But it is, you also do remember the 333?

And he did also say, judge me by the 10-year yield. Well, he's probably not feeling too comfortable at the moment, and according to reports in the Wall Street Journal, and neither are his stuff. but this is a sign that the Trump administration policies are not delivering the economic results that had been hoped just two years ago. And the market is still, the stock market is powering ahead anyways because there are different narratives pulling it in many directions. And also because what really matters, Scott, is not so much the absolute level of the tenure. We adapt.

I mean, I think we're going to go up to 6% personally. It's the rate of the change that really makes. matters. When it starts to move fast, that's when things start to break. So the metric to keep an eye on, seriously, it's not so much the 10-year yield. It's the move index, which measures treasury volatility. That's spiking at the moment, not up to where it has been, but that's the one to watch. Can you unpack that a bit further? Because I think most people just stare at the 30-year or the 10-year and say up bad. Yeah, and I get it. It's kind of thrilling to watch it break records like this. I've fall victim to that every morning as well, hands to the head, like, oh my God.

But no, the move index measures the implied volatility in the options market of long-term U.S. Treasuries mainly. And that is supposed to be stable. Treasuries are not supposed to be volatile. We're not supposed to have a spike in move index. And every single time it has spiked, that generally means that liquidity in the market is drying up. Why does liquidity in the treasury market dry up when the move index spikes? Again, because they're not supposed to be spiked.

It's supposed to be so true. We're going to just sit on the sidelines. Like, okay, I'm out. I'm going to wait for this to pass. And when traders sit on the sidelines, there is less liquidity. More traders sit on the sidelines, less liquidity. And the treasury market is supposed to be the most liquid market in the world. So that's when things are going to start breaking, watch the move index.

So when you talk about things starting to break, what do you think breaks first? I know we're not talking about the end of the world level of breaking here. Yes. One would hope. dollar credit, you know, what thing is, you know, most likely to break in context of what we're seeing right now in the bond market? Yeah, what would that actually look like? How would this film play out? Well, truthfully, we don't know. And in previous instances, and probably this is a pattern that could repeat, there's just not enough liquidity to settle bond trades. Not only are there no demand for the auctions, but there's just not enough liquidity to settle them. So we would see intervention. Like we saw in September 9, was it 2019, I think it was 2019, the repo spike. Again, not enough liquidity intervene. And this could come from the Fed. It could come from the Treasury. We don't know. But we do know that the Treasury market is not allowed to be illiquid. It's just not allowed to. And Besant sort of started to prepare, not for this scenario precisely, but he could see liquidity issues brewing in the announcement that

they were going to be buying longer term bonds. This was taking some liquid issues off the market, replacing them with what? With very liquid issues on the very short term. This has a liquidity impact on two fronts. One, you're placing less liquid issuances with more liquid issuances that boosts liquidity. Also, you're bringing forward the maturity, the duration of the bun market, the average weight of maturity. You're bringing that forward, which increases the liquidity, even all else equal, bringing it forward, increases liquidity, becomes more money-like. So that's another ploy that they are using. And we could see adjustments. They have hinted that this might be coming. We could see adjustments to the Treasury issuance schedule, which would be a radical departure

from previous quarterly refunding announcements. Less long bonds, more short bonds. Again, it's going to help the market, to be honest, but it is manipulation, not so much of the yield curve, but of liquidity in the market. Yeah, it should help the market, but all the things they've tried and haven't. Exactly.

This goes back, you know, it's not picking on Bessent. It's not even picking on worse. I don't even think it's picking on Trump because Powell cut rates and interest rates went up. Right? Given that's the Fed and not the Treasury, but we are in a long-standing pattern now of attempted moves by the government to manipulate interest rates or yields and the bond market calling their bluff. Yes, and it's hilarious.

I think you and I probably talked about this before in the past. The Fed still thinks that the federal funds rate actually matters. And, okay, it does matter big picture, but 25 basis points isn't going to change anything at all. As we saw after we got the 25 basis point hike, what happened? yields continued to go up. That's the bond market saying, nah, don't care. What matters now and what has mattered for years, and we're still trying to get used to this, is fiscal dominance. It's the issuance. The Fed funds rate may influence some bank activity, but also banks are not even responsible for the majority of lending out there these days. It's not really going to matter that much. What matters

much more for funding, for portfolios, for pensions, for insurance, for international best of what matters much more of the treasury market. Yeah, so speaking of driving on the highway, looking in the rear view mirror. So you mentioned that the Fed hiked rates, and then I will say magically, we get soft PCE and we get soft job numbers, which would indicate that they'll no longer be able to hike rates

or no longer will have an appetite to hike rates, which makes me think either they're willfully ignorant and didn't look at the data before they hiked because it's not like that data was going to be a grand mystery. to them, or those numbers aren't real. And I can't really parse. And listen, okay, or let's be gracious, or they're very bad at data. Well, we know the data is bad. I mean, Warsh knows the data is bad. He has a task force looking at the data. We know it's bad. But it's what we've got. I mean, when it's all you've got, it's what you focus on. Same reason why we focus on consumer service

and everything. We know it's all, we know CPI doesn't measure price. We know all of this, but we haven't got anything else to go on at the moment. And again, one of the things, I'm fairly optimistic, actually, given the people he's got on the data, on the Data Task Force, I'm really optimistic we will get better data. You would think, Scott, in this age of digital information everywhere and AI, you would think we'd be able to come up with better indices. True, we're trying to measure a very big and immovable target,

but surely we're capable of that. Now, anyways, that aside, we also know that the monthly reports are noisy. They go up, they go down. Again, I don't think they, matter. I obsess over them along with everyone else, but because it's fun, not because it actually is relevant. We get a soft PC, we could get a harsh one next month, or a soft one. Again, it doesn't really matter. What matters is Warsh has promised again and again and again to bring inflation to target, and even a soft PECC relative to expectations is nowhere near target.

I, yeah, it's not like a 2%. That's, see, that's the funniest part to me is that it's adverse expectations, and those are also somewhat arbitrarily set. Yes. Yes, exactly. How close are we to 2% and call it a day, right? Why is it like, oh, yeah, 3.4 is good because we thought 3.5, those are still bad. No, I've got to wonder, what's the new normal? Is the new normal 3%?

I mean, yes, obviously. Can we be okay as an economy with 3%? Well, many, probably, yes, but the consumers that are, you know, start struggling with their grocery basket. probably not so much. And what matters with the percent target, Scott, is not the actual level itself, but the credibility behind it. And that's why the target has not been moved because of the Fed were to say, yeah, we think three percent. Well, that scuttles there, what little credibility they have left. It's the target that sets the credibility. And so that's what, it's crazy.

It's crazy. Like when you look at where it came from, it's a reporter in New Zealand asked a question to a central banker or something, and they made this flippant comment about 2% and it sort of became adopted across the world, which is fine. But once again, to your point, it's all about signals. So if you say we're floating two to three, everybody's rational brain will say,

well, what's preventing it from floating three to four next time? They can't get it between two and three, right? So it's almost just having some goalposts that you can't move. Yeah, exactly. It is entirely messaging. And this is especially interesting, given this Federal Reserve, of when you have a new chair saying,

I don't really want to do a lot of messaging. I hope that's okay with all of you. But, but, but, but, and to be honest, I think it's a good thing that they reduce the messaging. I mean, just the flood of FedSpeak and the FOMC conferences have gotten so boring. I don't know if I'm not the only, I'm probably not the only one to think that they are now so boring.

Yeah, less would be better. I mean, after the last one, I vowed I'm not going to listen to it anymore because he is, he has the politician's talent of saying, absolutely nothing while calling everyone by their first name and joking and making it everyone feel good. And then you walk and we think, did we learn anything at all? No, we didn't. So yeah, I do think we're going to get a lot less communication, which does leave you to wonder, so where's the credibility part going to come from? You know, something interesting is everybody keeps touting stock market strength.

I actually had a conversation with Peter Schiff yesterday that'll come out this weekend. And surprisingly, we only talked about Bitcoin for about five minutes. And his only It's held up surprisingly well. So I don't know what he was drinking or something, but I'll have some. That's the signal. Yesterday, right? But he pointed out that the stock market is basically index strength, maxing substantial weakness in individual names. And I hadn't really gone so deep down that rabbit hole.

But as you look, I mean, this is, I literally just chat GPT it while we were talking about. SMP 500, 36.2 percent of stocks are in bare market territory. $1.45%, small cap of Russell, 2053%, Russell, 3,054%. So you take it writ large, like half of individual stocks are down over 20% and like technically in a bare market, while obviously all of the focus is on this hotball of money in AI and the massive spending and valuations there. But if you're a stock picker right now and you haven't focused on those few big names, you're probably actually not feeling like you're participating. in a wildly strong stock market right now.

Absolutely. And this is an inherent vulnerability. I've been banging the drum about this for years, that passive investing is going to kill the U.S. capital market eventually because the big funds are doing very well. The index is doing very well, so everyone's feeling very good. So we're going to put more money into an index fund. And so that just funnels money up to the big, or the top performers as it is,

sort of not the purpose of capital markets to just pick the top. performers. You're supposed to pick ones that align with what you think is coming, et cetera, et cetera. So the funneling up does, by its very nature, concentrate returns. And that itself, that lack of breadth could lead to some very nasty drops. It could also, again, taking the other side here, it could also end some resilience. I've been expecting a correction based on lack of breadth for a while. And I've been wrong because what I didn't see coming was the swift rotation from the Mac 7 into the chips, into those others that I'm not going to benefit from AI into logistics,

etc. There's a swift rotation, which is not necessarily the index funds, that is the stock figures. So you have sub-sectors picking up the baton. There isn't a widespread panic just yet much because of the potential that is still being digested from the new technologies. I agree with all of that. I think it's just interesting how much faster the hotball of money moves than it used to, at least in my, you know, I've only been around a couple decades, so I don't think I have context from 70s and 80s like some people do. But it really rotates very fast. And being a crypto guy, it kind of starts to remind me of how crypto used to rotate in, you know,

allquid cycles. Something goes up for a little while, and then all that goes all the way down, but something else goes up and you just keep throwing darts. And that doesn't feel like a sign of a market that's particularly healthy or that's, you know, continuing on its way up with, you know, that brain. of success. Yeah, there's nothing healthy about the market at the moment other than the optimism. We also know that sentiment can turn on a dime.

It is. You're so right. It is reminiscent of crypto. I was actually writing about this the other day about how one of the reasons Bitcoin, for instance, to pick the flagship asset, Bitcoin is so volatile is because, well, yes, it's youth, but also it has no fundamentals. It's based on narratives. And that lends it a certain amount of volatility.

And on the shares that are leading the stock market today, yes, everyone's going to point to EPS forecasts, but their forecasts, there's no actual fundamentals behind that forecast. And what is behind this forecast? We all know the lofty expectations that are being filtered through how much you are that. Yeah, it reminds me of the late 90s, early 2000s, reminds me of crypto where it's more based on ideas than it is on fundamentals. I mean, you remember when all that mattered in the internet boom was, you know, eyeballs and traffic. Didn't matter for me. And a dot com in your name. Otherwise, you didn't want to make money, right? There's that great scene in Silicon Valley where he said revenue.

We don't want revenue. God no. Reminiscent to narrative economics. And that does sound of it. Yeah, right now it's how much can they spend? Yes. And how much can they spin? I mean, how is it usual, even back in the dot com?

America is we didn't get this much communication from the leaders of the industry that is leading the market upwards. This is pure spin. So how do you frame what's happening in AI right now? Obviously, you know, we have sort of the attempt, I think, to form a regulatory moat around some of the larger companies. Certainly, we have this massive CAPEX spending and money raising, which is somewhat point to as some form of stimulus in and of itself. I mean, have you ever seen anything like this? and how do you, you know, just sort of frame it? Because I have no, you know, I've heard some great takes. I don't have enough information to really support any of them.

I'm actually in your camp on that. I'm listening to the experts rather than pretending to be one myself. I use AI, much like everyone else does, I'm never when you're an expert. I'd like to learn more. But my concern has been for a long time now about the expectations. And not the expectations that AI will transform how we work. how we interact, how we shop, etc. That I am confident of obviously my concerns about the expectations of the business models.

We're starting with closed business models that are going to earn a ton of revenue. And that is not necessarily how new technologies evolve. We have China that is going for a more open approach. We have some open approaches in Western economies as well that are much more likely to be the business model of the future because they are faster and cheaper. And yes, closed models will probably have the more powerful offerings, but not everybody needs that, right? Defense industry perhaps, but you and I don't.

So the open models are going to be much more dominant going forward. That's not priced into the market. And what is not priced into the market is this is actually relevant for the funding to the data centers is mobile AI. We know that eventually mobile is going to win over fixed because what's wrong with having an AI in your watch, right? So again, that's not priced into the current. expectations of the data centers, which are just off the charts, unrealistic. So all of that in mind, do you believe in the notion that the United States government can grow its way out of its debt, which is well?

Because it would have to be AI, right? That's the only narrative, I think, where that can happen right now. There's no, I mean, do you think that's even possible when you look at the data? Well, short term, no. And I'm going to push back on that would have to be AI. I mean, AI is going to be very important, but again, it's a question of how much will that be commoditized and how much is there going to be little growth. I wouldn't be surprised to see manufacturing come back to the US. Obviously, this is one of the platforms on which Trump ran, and manufacturing actually has been doing pretty well recently.

This is before the defense build up. And that, I think, is going to be a big driver of some actual hardware being made. And that is a fundamental kind of economy that is easier to value, easier perhaps to raise funds, in the bond market, when the AI bubble does eventually pop. And it is a question of when. Again, this is not about the potential of AI, it is about the priced in business models that needs a reset. But I do think that the United States is in a good place in terms of its innovation,

its protection under the law, yes, even after everything that we've seen recently. What I think we have to keep an eye on is growing state involvement in industry and in listed companies. This is probably going to be inevitable, especially as more and more businesses are deemed systemically important for national security. This obviously for now applies to AI. It's going to apply to an increasing number of hardware companies as well. It's going to apply to biotech. It's going to apply to agriculture. We're going to see the state get more involved. This is fascinating evolution of capitalism. If you can even call it capitalism, it's also a fascinating evolution of democracy because did we vote for this? I'm not sure where this is going to go,

but it's something that I'm trying to study much more closely. because this is the geopolitical, macroeconomic, financial shifts, of which crypto is one substrate, AI is another, and a lot of other physical technologies as well fit in there. Yeah, going back to sort of Bitcoin before we move on, I just, you know, we obviously discussed that it's sort of made this move while other things are dropping, and while there's macroeconomic uncertainty, I was a huge proponent of the four-year cycle is dead.

you know, and because of various reasons when it was going up that looked so different to me from previous cycles. Like Bitcoin preempted its all-time high with the ETFs. All coins never moved, right, which to me were always part of the cycle. But then we topped within like a week of when Reddit said it was supposed to, you know, and spent all this prolonged time in a bare market and now seemed to be coming out of it basically a year later. So at this point, can we just say that Bitcoin is an uncorrelated asset?

It's doing a terrible thing for whatever reason on its own cycle. And then we can... Yeah, that four-year cycle. I actually was kind of hovering on that one. There were logical arguments for it to be dead because the halving is really no longer a thing and maybe less of a thing going forward. So it makes no sense whatsoever.

But I guess sometimes when you're driving along looking in the rearview mirror, you do get a good indicator of where things are, patterns may be hold. It could be total coincidence. There's also that because let's face it, October was a special month on many different angles. I think also, I'm still not convinced. I'm still leaning at that the four-year cycle is immutable and forever. October, as I said,

last October was a special month, not just because there was some major geopolitical shenanigans going on, that disconcerted the market as a whole, and that triggered the long sell-off and the, what do you call it, the liquidations that we saw. We also had had a huge run, it was time for a sell-off. And that is also the time that the AI investment narrative started to pick up. So why are you going to be in Bitcoin, which doesn't yield anything, when you could be in the technology of tomorrow. Bitcoin, so last year, let's go to the technology of tomorrow. So there was that in it as well. All of that made crypto just simply less interesting. The shenanigans of October the 10th and the fact that AI presented itself as a more appealing alternative to technology.

So you think you and I spoke about us before. When Bitcoin becomes an asset held in macro portfolios, it has a lot more competition. And there was a strong competitor. I don't know if you saw this. It doesn't quite count, but it's still a good segue. Robin Hood adds Bitcoin worth $25 million to its balance sheet. We haven't gotten to tell her this at $25 billion. That's small change.

Small change. Come on, Robin Hood. You can do better. Yeah, that was my initial reaction, obviously. You know, with that I have a billion dollars. But, I mean, we haven't seen this in a very, very long time. Right? So, yeah, this isn't a sovereign well.

fund or, you know, an endowment or any of those. But we really haven't seen a Bitcoin on the balance sheet narrative in a long time. Maybe this could spark something. Frankly, I doubt it. But maybe the bigger question is when do we start to see that as we've projected for so long, which you just mentioned. It becomes an asset that's in everybody's portfolio. Yeah. When's Tesla going to announce it's a reaccumulation? I remember back in the day, it has a big announcement of its balance sheet. Yeah, probably. And also, again, we're focusing mainly on US-based companies, but here in Europe, it's a very different environment. Here in Europe, there are companies with Bitcoin on their balance sheet.

Here in Europe, the crypto ecosystem, I'll go up and live and say it actually has a more institutional flavor now than it used to, and I would say a more institutional flavor even than the US. So again, we also have to remember Bitcoin is a global asset. Exactly the same in Mumbai as in Washington, D.C. as in Paris, it's exactly the same. So you can't say that about gold. The gold is actually in different shapes, even if you're holding it physically, depending on where you are. And it's certainly a lot harder to move.

So at a time when we're seeing treasuries, I'm not just talking about central bank treasuries, I'm talking about treasuries, re-evaluate their holdings. We saw this week, was it this week, last week? I don't know what day of the week we're on today. I think it was late last week. Yeah, it was Monday. We saw a central banker, ECB official, recommend that banks accumulate more gold. And this is a central banker actually publicly talking about the strategy of accumulatial gold. That's got to make non-central bankers also take notice.

And there's gold. Everyone knows gold. Central banks love gold. But for corporates, especially corporates that are active in the digital ecosystem, Bitcoin is a much more appealing alternative. Yeah, I don't really see how a company would hold gold. Yes, exactly. I mean, first of all, how do you hold it?

And it doesn't make sense to be. Bitcoin seems like the superior for all the things, arguments between them, Bitcoin seems very arguable and clearly the superior treasury. And this is where the cycle question gets really interesting. I mean, last time we were at the beginning of a cycle was as, you know, inflation was picking up, yields were holding higher, etc. And so again, we have a lot of the froth fair. But we did also have the, you know, the holding it for the debasement play. And back then, the crypto-cult. custody was not quite as advanced as it is today. It was advanced, and it has been evolving rapidly since, you know, since you and I got into this. But it has evolved a lot over the past few years. And so any corporation now that wants to hold Bitcoin has very many compliant choices from which to pick its service right. And then skip the custody conversation entirely. I don't know if you saw last week, obviously we've had this kind of just deluge of announcements from the United States regulators. So I think it was yesterday, the CFDC finally made their announcement about how they're going to likely approach derivatives and leverage, which was interesting for crypto. But one of the announcements the SEC made last week that seemingly nobody noticed because the innovation exemption read crypto were so big was that they're analyzing how RIAs can directly custody crypto for themselves and for their clients, which I think is arguably the biggest announcement there is.

And if you dug into the announcement, it wasn't only Bitcoin and Ethereum or holding an ETF wrappers or anything. of these, there's actually language in there that will allow RIAs if they wanted to to self-custody smaller assets on behalf of their clients where no legacy custodian is available. Now, listen, I don't think there's many RAs who want to offer. That would be brave. That would be brave. But even the fact that we have a SEC that's thinking that far ahead about crypto custody and the long tail of assets and the way that these RIAs would like to approach their clients, to me it was a massive signal that went entirely just sort of missed in the news cycle. Yeah, no, that is interesting.

I do honestly, it's kind of hard to keep up with the flurry of announcements coming up. But that is an interesting one because custody is complicated. I remember once, this is years ago, I was speaking at an event and a lawyer came up to me afterwards and she said, listen, my wealthy client wants me to custody the Bitcoin for him for inheritance purposes. And I really don't want to do that. Even though she has a safe, she got the pen drive, she got a safe. She doesn't want that responsibility.

And so this is, again, RIA has a lot of responsibility there. Again, hopefully rules will emerge around that. Everybody wants custody to be something you don't even have to worry about. That's very, very important for institutions. Can I throw in my favorite announcement from the SEC of the batch that we've seen? And, again, very overlooked. And I need to date. Actually, you haven't read the text.

I just saw this, the summary. And it's reviewing the rules for accredited investors. I think this is a very big deal. Red crypto. I talked about that a lot. lot because, first of all, crypto's always sort of been behind the curve and what you're allowed to do versus other assets in the United States. And it just like went from last place to first place in a streaming pass. You can raise up to five million from non-accredited investors

just on a white paper with a four or five-year horizon to do anything without any reporting after the white paper. Yes. That's even more like the aggressive than I would have imagined or asked for, to be quite honest. Because I can't, both on the credit investors can't invest in their friends coffee shop. This is the issue. This is the issue. The problem is with what even is an accredited investor? I happen to be a chartered financial analyst, and yet I am not an accredited investor,

but someone who's born into wealth and has never studied accounting or even economics can be. It's absolutely insane. And it has limited access to new technologies, to those who are already wealthy. And arguably, it is behind a lot of the growing inequality when it comes to capital. accumulation and yet in crypto presented itself from day one as a way around that. Anyone around the world could buy a stake in an emerging new technology by holding a few sats or even holding a couple of ETH. That was the big breakthrough, the way around the accredited investor rules. But the SEC is now

looking into relaxing the accredited investor requirements by simply an exam or something like that, which, let's face it, many of us would be very happy to take. I mean, how hard can it be, right? But being able to invest in new technologies, absolutely anyone who wants to, who's done their homework, who knows the risks and is willing to accept them, that should not be a barrier. No, it's insane. Are there laws to say, what are the laws in Europe? I literally have never even asked. I don't, maybe you don't even know, but I know they're quite tough. They're quite, and they're absolutely crazy. I was explaining to my bank recently that the reason I hold Bitcoin, They wanted to speak to me, and so I go and terrify it close me down because I do hold Bitcoin.

I said, the reason I hold Bitcoin is because you would not let me buy a gold fund. I tried to buy exposure to gold. Wasn't smart enough. That's absurd. It's absurd. It's gold. How hard can that be? I was not allowed.

And so, I mean, I would have bought Bitcoin anyways. That actually wasn't my decision, but I did make that point to them. Next time you just go to the jewelry store and buy a bunch of necklaces and bring them in. Yeah. safety deposit box or if you're allowed to do that or not. You can't buy a gold fund, but you can go into a store and buy as much gold as you, I mean, it's insane. So again, I'm not an expert on Spanish, on European law, obviously, but I do remember that

personal experience and I have heard it's quite, it's quite strict. It's insane. When it comes to crypto though, it actually feels like Europe's a bit ahead, which I would never have been expected, but obviously, you know, they had Mika go finally, Mika was passed ages ago, but it's actually fully implemented in June. And last week, they announced that they're already doing comment on Mika, 2.0. Yeah.

United States is a clarity failing. Yeah, but at least there is a legislative regime. We don't have that here. It's funny. We get,

here's, this was one of the announcements today that sort of alludes that. Coinbase completes Deribit integration says Coinbase Pro returns by year end. So obviously every exchange

is integrating everything. But I find the most interesting about this announcement when you read into it. Deribit obviously is the largest, was the largest options exchange by many multiples in the world for crypto and not available to Americans. and Coinbase an American company will fully do this integration, but still all the functionality won't be available for Americans.

Yeah, and again, totally insane. In Europe, they are much more open to that as long as it is regulated. We were the first big block to get full comprehensive crypto regulation, not specific crypto, but comprehensive. Yes, indeed. That's very Europe style, though. Let's just big overreaching regulation. Let's just over-regulate to start with.

And the review that they're doing now is necessary, very necessary for stable coins, particularly, but won't probably enter into law for a couple of years, if that, I mean, it's slow. And Switzerland, I've been looking at Switzerland this morning because I'm recording an episode on Stable Coins in Switzerland later. Switzerland was one of the earliest collective crypto startup ecosystems back in the day. 2013, you started to have, you had the Crypto Valley Association. In 2014, you started to have some rulings from the securities regulator on what Bitcoin even is and so on and so forth. So, yes, Europe is a very bank-heavy economy.

I think that has a lot to do with it. The banks didn't see crypto as a threat. They saw it as an opportunity. VBVA here in Spain has been offering crypto-linked funds for years, long before any of the Americans got their head around it. And also, they're not afraid of stable coins either. Yeah, they're not afraid of stable coins, but there's a lot of stable coins, but there's lot of stable coin limits to your point, which they're fixing. Let's talk about stable coins because it's such a crazy environment right now. I mean, it seems like everybody's suing everybody

or trying to get their piece of the pie. You have, obviously, the big banks have their own consortium that's going to launch a stable coin. You have the privates of USDC and USDT that are, you know, have their own businesses. But then you have a consortium of fintechs led by Stripe that's launching OpenUSD or has launched OpenUSD, their own stable coin. And then you have the regional banks and community banks in the United States suing the OCC over crypto people getting bank charters, but also launching their own stable coin. This seems to be the new battleground right now. And that's probably because Genius passed. Everybody knows what they can do in stable coins, so they're going to just run. But there's a massive competition here for what stable coins will

look like. Yeah, there really is. And Genius passed, but Genius was just the framework. This still has a lot of detail to be filled in. So we still don't really know what companies are going to be able to do. and by January, obviously we will. That's the deadline for having it all implemented. And even if it's not, we're going ahead anyhow. So that's exciting on the one hand. On the other hand, it feels, Scott, like we're still, you know, rushing to get our shoes on without really knowing what the racetrack looks like.

Again, why do we need stable coins? Payments? Well, actually, not really. Payment systems work pretty well. Well, tokenized settlement. Yeah, okay, maybe, but then you need to change the rules a bit about, supplement. And so on, again, this is sort of, again, get the right shoes and you'll figure it out, but we don't know what the end of the race looks like. Yeah, Caitlin Long, she has a vested interest

in saying so, but she thinks, you know, her belief was that tokenized deposits will actually be bigger than stable coins, you know, the kind of bank-to-bank side of it and just tokenizing the entire thing to make it. And then, of course, you go into tokenize stocks and tokenize everything and what that will be. Well, she has a, again, it depends on how you define big. I mean, She has a point and that there just is a lot of bank money out there. And banks, let's face it, are more likely to go for tokenized deposits than they are stable coins. They make more money from them.

They keep the client relationships. There's more control, KIC, et cetera, et cetera. If you assume all deposits will eventually be tokenized, then, yeah, probably. And stable coins are going to be big, but what's the target here? Do we want just mass or do we want utility? If we want utility, then it's velocity that matters. It's not the amount out there. It's how much it moves.

And this is why the yield debate is so interesting. Stable coins are created to move. They're not really created to earn. For that, you have tokenized money market funds. I've never really understood the fuss. You don't really want stable coins to earn, in my opinion, because that's just a race to the bottom in terms of profitability for the issuers. So, yeah, tokenized money market funds,

especially when you have them both in the same wallet. Because you can. Why not? And you can just sweep idle balances automatically. A smart contract will do this for you. vital balances into the tokenized money market funds, sweep them up when you need to make payment 24-7, no fees. What really is the problem? The problem is the security's definition of money market funds not accessible to retail investors yet without going through certain hoops. But again,

when that gets changed, which it should, and Atkins to his credit is talking about that, then that just makes wallets become your new bank. I can't remember if it was someone from Goldman or BlackRock last week, because it's one of those. quickly in the news cycle, but pointed exactly that out. He said the big threat to banks or to deposit flight and those things would be AI agents sweeping. And it was more about fintechs than about stable coins. You know, like your sweep from whatever, you know, passive account that's earning less than 1% into some fintech overnight that's giving you three or four percent. And they weren't even talking about stable coins. And that would really be the risk to deposit

flight. Yes, exactly. And you don't hear any banks complain about tokenized money market funds. Just like they lost the battle against money market funds, they obviously can't complain about tokenized money market funds because it's an entirely different bucket. That's securities. You can't have banks complain about securities markets, but they are a much greater threat to bank deposits than stable coins ever were. Yeah, what's interesting is they make that argument that, you know, stable coin yields would kill bank deposits. But I would bet that if they were smart, they would just use stable coins, earn the yield themselves, and pass on sub 1% to their customers, and the customers would never even notice.

Yes. There's not like a coin of customers out there who know stable coins can offer a yield and how to go get that. They would be probably thrilled if their bank raised them 20 bips, and the bank was still making the 4% or 5%. I think that's probably the more likely future. Or how about this? How about bank wallets in which nestling together, you've got stable coins and tokenized money market fans, even if the stable coins don't anything, it's like your demand deposit versus your savings deposit, but switching automatically between two other than you actually having to place an order.

And in that wallet, again, let's think China here, you've got your ride-hailing app, you've got your shopping app. What bank doesn't want that kind of detailed information on their customers? Well, crypto gives it the possibility to do that. But right now they're thinking defensive. That always happens when you're the top of the heap, and American banks are, let's face it. when you think they're thinking defensive rather than thinking proactive. And there's a lot of competition coming for their lunch.

Okay. So before I let you go, back to just the macro in general. I mean, what do you think is coming in your mind? I mean, none of this seems to make any sense to me. I've said that, I think, for the beginning. So I have no way to handicap the future. It seems that they have a lot of buttons and levers to push and pull to keep the party going. We've kind of joked that bear markets and recessions are illegal now.

Yeah. What's coming? Higher inflation, higher yields, higher interest rates, and eventually something breaks and there's intervention. Again, the intervention is not optional at this stage. So a lot of money printing. Yes. That's one of the reasons I do believe Bitcoin is holding up as well as it is as well as it is given the signals the market is throwing off. Another is that liquidity is actually not contracting. I mean, you'd think it would with all of the signals, but then again, everything takes quite a while to filter through to the actual authority. figure, actual liquidity figures. Expectations matter, though. Expectations are for tightening. Expectations are now looking through that to what the fix will be. Yeah, I'm taking a look as we're talking. I just pulled this up because it's one of my favorites is the TLT chart,

which is obviously the 20-plus year Treasury bond ETF. So just kind of generally looking at long bonds, right? A lot of people think that I agree with you, the interest rates are going higher and that inflation is going to continue to rise. Okay. And there's a lot of people who say, you know, the interest rates have topped and bonds have bottom. But if you're just clearly looking at a chart, this just made, just last month, made an all-time low from, you know, when it was offered in 2002.

You don't usually bottom like that. This is usually when things accelerate. You're looking at a chart of the world's safe asset. Yeah. It's crazy times. Crazy times. Yeah. I don't look at that and think, interest rates have topped, you know, but bonds of bonds of bottoms.

And, yeah, listen, I held that. for quite a long time, you know, eventually in the 80s into the 90s, but I wouldn't want to touch it if nobody wants to touch it. You've got to imagine that that leads to a bunch of uglier scenario. Anything else I would have missed? What have you been writing about in crypto's macro now? Oh, gosh, there's so much going on. It was very hard to keep up. It's been a while since I actually got into the weeds on stable coins. I've been focusing on some of the geopolitical shifts in which crypto does play and will play an increasing role. I should be kind of. of the weaponization of access to finance.

And this is not just on a personal level about accounts. It's on a country level now. So that's a fascinating area that I've been keeping an eye on and the demand for stable coins. I'm doing a series now on stable coins around the world in which I'm talking to experts on stable coins outside the US because all we know, the US is the largest market and its currency underpins 98% of stable coins. There's a lot going on everywhere.

Stable coins are a global phenomenon. And they are going to impact plumbing. They're going to impact financial systems. They're going to impact trade relationships. It's like an impact a lot going forward that we only just now getting a glimpse of. Well, I think everybody should subscribe. You know, it's the conversations that we're having here every day. You're writing very deeply about on a very regular basis.

So I encourage everybody. It's crypto is macro.com, right? Yeah, crypto's macro. What a good URL. I'm jealous. That's a good one. Noel. And it's been four years as well.

It's like four years ago this week that I bought that URL and started writing the newsletter. And little did I even realize back then that it would become so relevant so fast. Yeah, well, you nailed it. So thank you, as always, for your incredible perspective. It's great to have you back. I am going to make you come on a Monday and argue with Mike. Okay, all right. Ressel them into submission, sure.

Everybody's got to do it. We've been unable. Well, that's incredible everybody else. Give Noel a follow, obviously. Crypto is macro.com, and otherwise I'll see you on the Daily Wolf at noon. Thank you, Noel. So good talking to you, Scott. Thanks so much.

Let's go.