The Wolf Of All Streets - Bitcoin Hits $72,000 | Crypto Bull Run | Macro Monday

Episode Date: March 11, 2024

Join Dave Weisberger, Mike McGlone, and James Lavish as we break down what's happening in macro and crypto! Dave Weisberger: https://twitter.com/daveweisberger1  James Lavish: https://twitter.com/jameslavish  Mike McGlone: https://twitter.com/mikemcglone11  ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEK DAY! 👉https://thewolfden.substack.com/   ►►OKX SIGN UP FOR AN OKX TRADING ACCOUNT THEN DEPOSIT & TRADE TO UNLOCK MYSTERY BOX REWARDS OF UP TO $60,000!  👉 https://www.okx.com/join/SCOTTMELKER  ►►TRADING ALPHA READY TO TRADE LIKE THE PROS? THE BEST TRADERS IN CRYPTO ARE RELYING ON THESE INDICATORS TO MAKE TRADES. USE CODE ‘25OFF’ FOR 25% OFF WHEN VISITING MY LINK.  👉 https://tradingalpha.io/?via=scottmelker     ►►NGRAVE This is the coldest hardware wallet in the world and the only one that I personally use. 👉https://www.ngrave.io/?sca_ref=4531319.pgXuTYJlYd  ►►NORD VPN  GET EXCLUSIVE NORDVPN DEAL - 40% DISCOUNT! IT’S RISK-FREE WITH NORD’S 30-DAY MONEY-BACK GUARANTEE. PROTECT YOUR PRIVACY! 👉 https://nordvpn.com/WolfOfAllStreets   Follow Scott Melker: Twitter: https://twitter.com/scottmelker   Web: https://www.thewolfofallstreets.io   Spotify: https://spoti.fi/30N5FDe   Apple podcast: https://apple.co/3FASB2c   #Bitcoin #Crypto #MacroMonday The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

It's been three weeks since we had the entire Macro Monday crew together and price of Bitcoin was around $50,000. And today it hit $72,000 American dollars. I think it's fair to say that Mike, James, Dave and I have a lot to talk about today. We're going to dive right into this crypto bull run and everything else happening in the macro for Macro Monday right now. What is up, everybody? I'm Scott Melker, also known as the Wolf of Wall Streets. Before we get started, please subscribe to the channel and hit that like button. You can hit that like button for $72,000 Bitcoin anytime you like, unless, of course, you are sidelined and depressed and waiting for the dip to $12,000 that never came. But I would imagine that there's very few of you out there that are doing that.

As you can see, I'm in the AirPods, slightly different sound today and slightly different background, slightly on vacation because I'm wearing a shirt that's made of a towel. So you can tell that things are maybe a little different today. And it's 8 a.m. where I am. Guys, we're going to dig in right now. First, we get James and Mike on because, as you know, Dave is in an elevator somewhere in this world, slowly approaching, waiting and watching for his chance to celebrate $72,000. Scott, you're ridiculing the world. Instead of throwing in the towel, you're actually wearing it.

That's right. You own it. I have a new beach policy where I only wear things made of exotic materials when I go to the beach. Full towel outfits. But yeah, guys, it's been a little while, obviously, since we've been able to all get together for Macro Monday. Last week, I had Dave and Matthew Siegel from VanEck. It was a really interesting conversation, but certainly not the same as having this crew together. Mike, before we dive into Bitcoin, I want to wait for Dave on

that. Obviously, you've got your morning call. And we're seeing quite a few news stories here that inflation might be coming in a little hotter. Once again, maybe things aren't coming down as fast as possible. And that maybe who could have ever thought that predictive markets have been wrong about rate cuts. What do you think? Well, there'll be one primary force to make inflation actually shift to deflation like it is in PPI in the top four horsemen of the global economy. That's actually US, Germany, Japan, and China. It's all negative in PPI. And that's when the US stock market goes down.

I didn't say if. It just needs a drawdown. But so the fact is right now, our chief economist, Ana, wanted to expect inflation to be a little hot this month. I think her point was she's looking around CPI, expect about four-tenths headline to the year-over-year to accelerate to about 3.2. I mean, remember a year ago that was pushing toward a little over a year ago, it was pushing towards 10%. We have Ira in Jersey, our chief strategist, interest rate strategist is pointing out 3.91 is the next key support in a 10-year note yield in terms of yield. And one thing I didn't point, I enjoy from our FX strategist, Audrey Shield-Friedman was pointing out that japan

officially entered that recession or didn't officially intended that last and fourth core a few core but canada's close australia's coast europe's close germany's there and and china's completely dependent on fiscal monetary stimulus for survival so the world is clearly in a recessionary problem and there's an inordinate burden for the US stock market not to have a normal drawdown. Just imagine where we are now. So at the key point, as we sit for this year on a total return basis, the S&P 500 is about 7.7% on the year. Gold's up almost 6%. That's not good if you're one of those people who've been running stocks for 10 years and been beaten the heck out of gold. Because right now, if you actually look at gold, I'm a commodity guy.

I want to talk about something bullish. Since the end of 2021, which is significant right before the tightening, it's up about 20 percent. Then total return S&P 500 is up about 10 percent. So that's starting to kick in. The key thing about that space is you cannot hold gold anymore without some Bitcoin in that space or you're naked. And that's what's kicking in. I think people are getting it. And one thing I did want to point out. So to me, that's the macro. I see gold continuing to break out and outperform almost everything. Not Bitcoin so far, but that's the risk. Man, if it does outperform Bitcoin this year,

that's a bad problem. But we need that drawdown in the stock market at some point. The key thing I want to point is, I listened to the Macro Mondays last week, and I really enjoyed listening to it coming back from the all-day ag outlook in Covington, Indiana. Most people don't know where that is, but it's just the salt of the earth. And I really enjoyed, first of all, Dave crushed it on the difference between gold and silver and Bitcoin. He crushed the history. I mean, that's stuff I'm supposed to know that I forget. And I was like, thanks for the reminder, Dave. That's how Bitcoin is demonetizing gold and silver.

Gold demonetized silver. It's somewhat happening. But I really appreciate some of Matthew's comments. The key thing, my takeaway is the one thing lesson you learn in trading is you got to own your mistakes. I got to own the mistake that I was really wobbling about what's going to happen with ETF flows in Bitcoin and Bitcoin making new highs. Stopped out wrong.

It's happening. I'm shocked. So here's the facts. Also, I heard someone point out, here's the facts. Right now, total ETF holdings in Bitcoin are around $60 billion. The total ETF holdings in gold is around $184 billion. Look what's going up fast and gold is just hovering there. It's just shocking how fast they're catching up in ETF holdings in Bitcoin.

So I point that out. And then also a key fact is that we all know the halving is coming up. So far as cryptos, not just Bitcoins, this is a pretty significant sweet spot, at least until we get to that halving. Stay back so I can transition. Before we

even dive into Bitcoin, James, we have, obviously, we have to mention that New York Community Bank seems to be failing. They got their bailout, obviously, from the man Mnuchin that everybody loves so much in the Bitcoin space, of course. But more wavering in the bank system and a lot of the bailout ending, right? We actually had conjecture on this show many times they would never end that program, BCFP. And it seems like that's done. Yeah. I mean, it ended up not being as big of a draw on that. It actually ended up being an arbitrage more than it was a safety net in the end. And so, like we talked about before, the

Fed and the Treasury, they're normalizing the overnight window. And so it's going to make it easier for banks to, uh, to borrow. So they're, they're not rushing into that window to get the, the, you know, the BTF, uh, P funds because they can, it's going to be normalized that you have to use that overnight window, uh, regularly in order to have access to it. So it's like keeping a credit card open that has a fee on it in order to make sure that you have liquidity in times of crisis. So that's one thing. The other thing is that the Fed has been working. They've said it. They've been working with individual regional banks on their exposure to this commercial real estate issue. And so they know what it is. They know where the problems are. They're looking at them. They're shining the light estate issue. And so they know what it is. They know where the problems are.

They're looking at them. They're shining the light on them and they're trying to figure it out along the way. So is that still a crisis? I mean, look, everybody likes to say that the commercial real estate market is an absolute disaster, but the reality is there are pockets that are still strong

and there are pockets that are disasters. and there are pockets that are disasters, you know? So if you're in office real estate, it's likely to be disastrous. If you're in medical facility, real estate, you know, medical parks, it's probably okay. Retail can be, it can be fine. So it really depends on what kind of commercial real estate that your exposure is. So you can't just say across the board that commercial real estate's a disaster. But that is effectively what sunk NYCB, right? It was this massive portfolio of rent-controlled buildings in New York City. Exactly. And so as Mike said, everybody's eyes are on the Fed. They're on these inflation numbers. And what's hard to get a gauge on is we're seeing in real time the fight between, there's an epic battle. It's like, you know, Godzilla versus King Kong here going on between the Fed and the

Treasury. And it's not really even the Treasury. It's just the it's just the government with fiscal versus monetary policy. And we're just seeing it happen in real time that the fiscal deficit that we're running in a so-called non-recessionary period is just incredible. part of the cycle for the government and the spending cycle they're in versus what the Fed is doing, which is nominal QT. They're letting bonds and mortgage backs just expire off their book, mature off their book. And they're keeping rates at five and a half percent, which hasn't really, it hasn't broken anything, but we're still seeing more liquidity from the fiscal side. And so that's pushing price pressures up. And so you just have that battle. And so we're trying to see where it plays out. We'll see. Before I jump to Dave, Dave, before I jump to you, I want to ask Mike one more question because I just happened to notice that NVIDIA right now down massively. So actually, it was and I'm getting it in Mexican, by the way, Mexican cases.

But when I searched, I didn't realize that. But it was down, you know, at one point, four or five percent. But is that I mean, could that be the canary in the coal mine if we do see a big dip from nvidia literally just hours ago it was much lower uh and if bitcoin's going up to 72 000 nvidia is dipping we definitely have the that's not a tech stock narrative right well it's it's definitely so we've had what's what have already tesla's already given up that was part of the super step. And I think Google's already having problems.

Are we down to magnificent five already? I mean, you guys track this more than I do. But to me, yeah, once that gives it up, you have a normal drawdown. What will happen is questions from what level? We all know this is trading. This is why I come in as an option guy. And I used to, for myself and for clients, you structure positions that have that positive gamma, but you don't want the negative gamma on the way down.

And that's, it's going to happen. But the key thing I like to point out is Bitcoin's showing the beef, that it's ticking higher and stock market's ticking down. And it's becoming, I look at it as a bit of a black hole of fund flows. And that's pretty significant. And if it's really going to, you know,

once we get that normal 10% correction S&P 500, which always happens, is Bitcoin going to only correct 10%, which should be wonderful because it's volatility is three times. Yeah. One more thing to say just on the general economy, Scott, before we really dig in further, I've heard this, I've seen this posted a number of times online. And I wrote about the whole thing in my newsletter. But there's something called the SOM rule. And for those who don't know what it is, it's basically that in any economic cycle, the SOM rule says that if unemployment ticks up half a percent higher than the lowest point of that cycle, then you're in a recession. And so we did trip that because we were at 3.4% on the lowest level of unemployment. And now we're up to 3.9%. Just for everybody to know,

there's a couple of things. Number one, that's a three month average. So that we're not there yet. If we if we see three point nine percent or higher for the next then next three months, then yes, then then we're in it. But that also means that we're in a recession. It doesn't mean that we're we're headed for one. That means we're in it. So that's a really key important piece that everybody should know is that the Fed is not ignoring that. They're looking at that and they know that that's on the radar. And so the whole thing about rate cuts is I was thinking that maybe we won't see any until June, but if we get another 3.9% or higher print, which I would be interested, Dave, you don't get a chance, but I would be interested to hear after Dave talks about what Mike thinks about the employment numbers, because to me, they're extraordinarily noisy. And so it's just something that people

ought to be thinking about. Zero Hedge has been beating the drum hard. And I just keep looking at their charts. I don't know how much of it is true, but that all the job numbers are primarily illegal immigrants and second and third jobs and government jobs. And literally no average American has gotten a job all year. It's pretty incredible. Go ahead, Dave. Well, first, I wanted to applaud the – I was trying to get this graph to come up. I wanted to applaud the analogy of King Kong versus Godzilla. Anyone who's seen the more recent movies realize that King Kong and Godzilla may sound like enemies from when we were kids. But in the more recent movies, they work together to defeat Mechazilla, which in this case is what's going on in the economy. And so the play act of the Treasury and the Fed working against one other is wonderful theater, but it's complete and total unadulterated bullshit.

The fact is Powell is sitting there at the whim of the administration with playing that he's independent. But the reality is the budget deficit that we are funding, and you chart it. I love your tweets, James. I like every one of them that points out how many billions or hundreds of billions every month we need to print. The fact is that's the only possible explanation for- A trillion dollars every 90 days. Right. It is an insane amount. At the end of the day, Powell is printing. When he comes out, and we're between 2.4% and 2.8% on their inflation metric, i.e. the PCE, which we all know isn't necessarily indicative of the cost that the average human being experiences. And he's like, well, you know, we got this 2% target. We've made a lot of progress.

When he started to say that, that is code for exactly what yours truly has been saying for over a year and a half now, which is in 2024, he is not going to be the guy who tips the election by either raising rates or holding rates high when there's a risk the economy is tipping into a recession. And then we've suddenly normalized a range of inflation rather than just that 2% target, which makes it even worse. Look, I want to be really clear. I feel like this is a George W. Bush read my lips emotion.

Read my lips. Any inflation that is structural is a George W. Bush read my lips emotion. Read my lips. Any inflation that is structural is a bad thing. I am sorry, but people who think that it's good for savers to be punished and for spenders to be rewarded in the long term in the economy, it is simply not true. It destroys and erodes your productive capacity. It has to do so because people are not incented to save. So with that said, the world has been normalized. That's exactly the word, anesthetized. I mean, you call it whatever you want. The idea that inflation, we need inflation, otherwise there'll be deflation. People will save too much. Well, that's only a problem if you have

no productive capacity. And we've hollowed out our middle class, yada, yada. I don't want to go there, but there's a really important chart that I wish I could make come up using Fred St. Louis Fed, which is to me was mind blowing. And basically what it shows is that the employment level for native born, you know, born in America and people has not recovered is still below where it was in the pandemic, where the employment level for foreign born is dramatically higher, which is why we've ticked up and have a higher employment than, than, than, than during the pandemic. Now, why does this matter? Well, this is the only thing that I've ever seen that explains conclusively the, the disconnect. You know, I can pull, I'm trying to pull them up together.

Yeah, I've got the native born here. You can clearly see it hasn't made a new high there. Right. And now look at the foreign born and you'll see what I mean. Now, why does this matter? Well, this is why you constantly see the administration whining, but look at the employment data. People should be happy when people aren't happy. Well, why? It's because it's not as good as they think it is. And that matters. So, you know, it's not necessarily, and by the way, I'm hardly xenophobic. I mean, I think frankly, you know, immigration policy should be to bring in people who are qualified or sponsored for jobs. And you can see that very clear. I mean, it's a stark difference.

And it is. And I can't remember who pointed it out on X. I wish I could give the right attribution, but it's an amazing chart. And it points out very viscerally why people think the economy is different. Now, why does this matter? Well, it matters a lot. Do you want to understand why in this employment environment, the Fed is trying to accommodate? Well, they're trying to accommodate because it's not as good for the people who actually vote as you think. And that matters. And so we're in an election year. We have to understand that. But at the same time- Someone argued us people get to vote, but hey. You know, I just want to complete the thought. But at that same time, it also explains the primary use case. And we've seen over the last two weeks since we haven't been together, Larry Fink, you know, basically go on another media tour and a bunch of other people saying

the reason to buy Bitcoin in these ETFs is it's essentially a hedge against things that you don't trust in the institutional world. And this is like the as clear proof as you can have as to why people shouldn't trust the institutional world. So I think that's why we are where we are. I got to piggyback on that a little bit. One of the books I enjoyed reading a few years ago was 21 Lessons of the 21st Century by Yuval Noah Harara, pointing out that you don't want to be bullish or any country that no one wants to immigrate to. Who wants to immigrate to China and Russia right now? In fact, the fact that we have this great issue with immigration is part of indicative of how bad things are going globally.

Everybody wants to go to the safe haven. So it's a sign of how wonderful this country is and how bad the rest of the world's coming. So obviously a lot of it's coming up from North, but a lot of those are even Chinese. Imagine what a kind of person, hopefully the lack of criminals, but kind of person it takes to go for that kind of journey to come to the U.S. Motivating. I mean, that's our ancestors. So a lot of that's good. We just have to do it right. But to me, this is part of what's happening globally. And I see in commodities every day.

Every day I see gold make new highs, and it would be much higher if it wasn't for Bitcoin. And everything else ticking down, or at least looking for, you know, people looking for stuff to sell because they're done shorting grains. I see a pretty significant deflationary tilt in a commodity world. And then, so here's what's the thing I want to rope in a little bit of the macro. We've all heard of that story in the 80s. I think it was late 70s where the state of Massachusetts banned most of the pension funds endowments from investing in Apple. Dave, I knew you would laugh on that one. And so that kind of happened to me a little bit recently at Bloomberg. They asked me to cover cryptos less.

I'm like, OK, that's what you want me to cover less. There's so much stuff I can cover. It's good. And right now and within a few months of that, Bitcoin makes an all-time new high. So here's a question I want to ask to the group. But all the media people, anytime it comes to Bitcoin, they always like to say, hey, let's talk to McGlenn with Z-Things. So after the show, New York Radio wants me to talk about bitcoin my thought

was to just point out key facts right now it's a sweet spot massive inflows i did not expect it and they're coming in strong and we have the halving in a month what stops that what's the change what what what should i say to the bloomberg radio audience guys what do you think what stops it some sort of economic fallout disaster, some sort of a black swan. Otherwise, you're just seeing, look, we all know we've worked in institutional investing for a long time. The three of us have. So we understand what that is. When you have this access to this new asset class and people want it, you're going to give it to them. You're going to just average in. You don't have a choice. You're going to leg into

the trade. You're going to buy a little bit here and see what happens. And then as more and more and more on-ramps come on and you have the ability to actually sell this to your investors, you have the pamphlet. Your compliance group has gone through their meetings. They've decided, okay, it looks like it's okay. It actually is staying. We're getting positive articles on it. The FUD about the environment and mining is kind of calmed down. And so, okay, we can offer this to our investors broadly now, but here's the pamphlet. Here's what you say. Here's the box they have to check and say, I understand the risks. And once they've done all of that, there's nothing to stop it. And you

literally have investors saying, hey, can I buy this yet? And if they're saying that, they're going to average in. So when the institution, so when you have your, and Dave, you understand the mechanics of this plumbing of it better than all of us, but on the ETF side, but when you have the approved participant who's out there buying the underlying Bitcoin for the ETF, they're not looking at the Bitcoin price and trading around. They're saying, well, I've got to get this much. That's it. And they don't care if it's 63, 69, 77.

It doesn't matter to them. Or 250. It doesn't matter. Right. Yeah. I think the bottom line is that the thing that's interesting, there are a couple of points, you know, when you're talking to people about it. The first thing is that when you look at the price of Bitcoin, it seems like it's, oh, my God, it's crazy. We're at an all-time high, et cetera.

I just point out something which is simple, which is at this price, we are about, if you look at Bitcoin relative to the network which maintains Bitcoin, which proves its integrity, it's about one less, it's somewhere between a third and a fourth of the all-time high. And yes, you heard those numbers correctly, people. And that's because the hash rate of the Bitcoin network is more than 4x where it was when Bitcoin was at 69,000 the last time. Now, you could argue that that was complete euphoria, and it was, and that was insanity. And, yeah, sure, it got ahead of itself, there's no doubt. But the question you have to ask yourself, are human beings going to human or are they not going to human? If we're going to human, then we're going to get just as euphoric, and just as euphoric puts you at around $250,000 of Bitcoin. OK, so that's the first simple, just absolute.

You know, you know, you want to understand where people's price targets are coming from. There's that. The second thing to understand is if Bitcoin is going to be digital gold, understand what that means. Gold used to be 100 percent of all monetary aggregates. It's now around eight or nine, give or take, maybe less, depending on how you measure monetary aggregates. So the question is, can Bitcoin grow into a market cap, the size of gold, with anybody in power actually caring? And the answer is, yeah, they don't give a crap. You know, Bitcoin goes to 500,000. Does that, do you think that Powell's losing sleep? No, he didn't care.

I mean, they don't care about gold going up. They don't care about that. They cared about gold at 5,000 maybe. Maybe they start caring because of what it implies, but they certainly don't care at 2,200 anymore because inflation adjusted. Once again, gold's not even close to its all time high, right? You know, inflation adjusts from when it hit 1,900 a decade ago and gold's not even close to its all-time high, right? You know, inflation adjusts from when it hit 1,900 a decade ago, and gold's not even close. So the truth is, is there's no macro reason other than from, you know, on high that people

like Elizabeth Warren's going to become Zeus and start throwing thunderbolts at it. I mean, she's tried. You know, she's tried. You know, and almost all the FUD that she's tried, it's gone. You know, like, you know. We're not going to hear very much more about the environment and the electricity use. You want to know why? Because pretty much every academic study that's come out saying that Bitcoin helps stabilize grids that use renewables, it's pretty clear that it's not raw electricity use anymore. And we people understand that.

I mean, and it's become that way's become that way. You know, various, very important governmental agencies around the world are admitting this nonsense. So a lot of the FUD is more or less collapsed. And so we have a situation where what's the right price? Well, look, humans are going to human and, you know, people are going to take profit. They're going to, they're going to get over leverage. You're going to see wicks down. It's going to be, it's not going to be, it's not going to be a straight line. It's never going to be a walk in the park. But the truth is there's no real resistance until you get ahead of the network, which is over $ Bitwise for sure, that's what they're telling people. The reason to invest is because it's a huge asymmetric upside. And they're telling people not to buy all in one chunk. They're telling people to DCA.

So Ryan Selkis published a thing this morning, which I thought was good. It basically shows that there was only one three-year period, if you dated it from today, that the S&P outperformed Bitcoin over the last n number of years. And I basically asked him, I don't know if he'll do it or not, but do the same exercise, but now DCA in over 12 months and then go three years out. And at the end of the day, we all know the answer. There is no period in time where if you dollar cost average into Bitcoin, even if you did it terribly, even if you paid the high of a month every single time, you're still outperforming every other asset class. And so, you know, it's really, really hard for asset managers and for investors not to look

at that. It's getting harder and harder and harder. And so to me, you know, we're sitting in a world where, you know where what happens when there's options? Yeah, you'll get even more volatility. What happens when you're allowed to solicit? When an FAA, right now, a financial advisor is not allowed to call their client and say, hey, you should buy this Bitcoin ETF. They have to take orders. If you're a financial advisor and you want to say, and you have a conversation with them,

you have to be exceedingly careful. The guidelines that they're given are extremely tough. This is all happening from a very high level. So people need to understand that asymmetric upsides don't last forever. Right. But what I find interesting here, Dave, yeah. What I find really interesting here, it kind of goes back to Mike's question, is that we've far exceeded, as everyone said, the actual AUM and flows into these Bitcoin spot ETFs at this point, right? We had conversations, if we got 5 billion by the end of the year, it would be a huge win. Right now, as you said, we're sitting at 60, even though, of course, Grayscale started at 27. And well, price has gone up, right? So that massively obviously helps. But this has happened with very slow trickle of unlocks to RIAs and access. So it actually turned out that the most

bullish thing we had was the approval, and then these slowly becoming accessible to different RIAs, right? Carson Group with 30 billion, we talked to Bitwise last week. They said they were on their roadshow. They had three different RAs. They spoke to a billion, a $2 billion, and a $750 million. All of them are allocating 1% moving forward for their clients. I mean, those are huge things that we didn't necessarily expect before. I mean, there's a few stories here, right? You got Bitcoin jumps over 71. This narrative is false. That's not why it's happening. But the UK's FCA is going to approve ETNs, exchange traded notes. You have iBit passing Saylor for how much Bitcoin they're costing. Of course, that's customer Bitcoin. BlackRock plans to acquire spot ETPs for its global allocation fund. People don't realize how massive this is. It's one thing to say, hey, it's one thing for people to call an unsolicited to

their IRA and say, I want access to a Bitcoin spot ETF. It's a complete other thing for BlackRock and these funds to start passively adding this without you even knowing to their funds because it benefits the Sharpe ratio or however they're calculating it, because that's where you start to get these massive flows that are completely passive. I mean, people love to say BlackRock owns 10% of MicroStrategy or whatever that number is, right? And it's hilarious because they're not actively buying that. They just have to do it to keep up with the allocation into their funds. I mean, James, I can see you're agreeing, but I think this is the story. People will own bitcoin without

even knowing they own it that's the bottom line and it'll be a percentage of their portfolio because it's it's in that fund that they own and that's exactly right the black rock and so when they add capital to that fund the black rock automatically just goes and buys some more ibit because it's part of that fund right it's like the, it's like the spider, you know, SPY ETF. You know, Apple will go up if people buy spiders. That's just what it is, you know? It's true. But look at the other hand, you know,

the fact of the matter is this weekend created once again, a situation where the funding rates and the perpetual swaps are dramatically higher than spot. And so, you know, the fact that, you know, it's running into trouble here on the chart, you know, for swing traders. Okay, that's true. I mean, the finance, the funding rate today, Scott, is insane. I don't know if you saw it. They're insane and they keep getting flushed and they just go to less insane. Right. But now it's actually more insane than it was. I mean, Binance is 0.15%.

That's in an eight-hour period. That is 15 basis points per eight hours. You analyze that and it makes your head hurt. is if you have to buy Bitcoin, you want to buy the spot and you want to be selling the basis trade. You want to be selling the perpetuals and flipping around. So it's not like the market makers can go out and find extra liquidity in the perpetuals market. They're not going to do that because it's way too expensive. So they're going to buy it in spot. And so it does mean there's less supply available when there's actual demand. But on the flip side, if the demand isn't

as big as the market is anticipating, this is going to cause an air pocket. And so, you know, I guess I don't know whether it'll be from 72 to 70 that gets Peter Schiff all excited about, oh, look, Bitcoin's crashing again. know i mean he of all the human beings that are on crypto twitter i understand the least and peter i feel for you because we're of a similar age and a similar level of experience but at some point you're like the rat in the maze who bang is banging their head you know in the cartoon against the wall until it's just crazy just understand that if you're for sound money, you can't ignore Bitcoin. And, you know, at this point, I just don't understand it. But there are

the dynamics of this market are fascinating because when you look at Bitcoin spot, you have a situation where, you know, at any instant in time, you see a steeper wall of offers, but a longer tail of bids. Let me show. Unfortunately, I can't show. Just meaning a deeper book of bids, which just, you know. So what that means is that eventually the bids capitulate and move higher. You know, if that wall... Unless it's a spoof.

You can see the thing over here is what I'm looking at. The green, which are the bids out to 200 levels, are much wider. And it's been like this through most of the run. But then every once in a while, you'll see the green overwhelming the red, in which case it's a bad. That's what you see right before it goes nuts.

On the same token, when I was talking about funding rates, if you look through it, these are the perpetual swaps. You can see 0.158%. It's nuts, right? Deribit, which is up in real time. Dave, what do you think is driving that?

Omo. I mean, I can't say it any other way. Nobody who's leveraged trading is willing to short it because they don't want to get their face ripped off. I've been saying, look, we all know three weeks ago

I said people who are shorting here around the 50s saying, oh, well, there's a technical level. It's like picking up pennies in front of a steamroller. I mean, I said it multiple times. I've been calling for it. Last week when Bitcoin dropped again off the all time high, I looked at it and wrote a piece that talked about on Twitter how constructive the price action was. All of this is is noise. Right. I mean, at the end of the day, economics 101, supply and demand. Supply is fixed.

Demand is increasing. The message, the narrative that we have been talking about, that Mike has been talking about for all the people who love to give him shit because, you know, he looks at the macro. Mike has been talking about the same narrative that I have, which is the narrative of distrust in institutions and an opt out. You know, look, I still have arguments with tech bros who go, oh, well, Bitcoin's technology is not as good as other technologies. And so something's going to come along and pass it. Maybe. But the truth of the matter is, even at some point, if we figure out who Satoshi is or was, if it's one person, a group of people, the NSA, whoever it is, Bitcoin is as close to

immaculate conception as you can have in financial markets. Because think about it, how do you get to a decentralized store of value without somebody being the one to sponsor it? Bitcoin's gone through that already. That is not trivial. The narrative is almost impossible to replicate. And that's why, and that's kind of a nicer way of saying the stuff that a lot of the laser eyed Maxis talk about. I mean, Max Kaiser will talk about it. I mean, he's not wrong. He's just crazy in the way he says it. The fact is, you're not replicating it. And so that's why that's been my narrative narrative but i want to get back to macro for a second james let me ask you this have you ever seen uh you know a bond situation where we are

today where the amount of of auctions uh it is is clearly up against demand pretty much every time. I can't remember in, in my career where it was kind of like, it was like this. I mean, there were, there were instances, obviously, like we've talked about before, like September, 2019, where we came close to an auction failing, you know? But look, the dealers are there to swallow these things whole. So the problem is you get these dealers that are that are saddled with the debt and it comes up against their their what they're comfortable with holding and dealing back out. So the issue is eventually here is we run out of the reverse repo, which is the easy cash to soak up the T-bills, once that's done, where does the treasury go? They're going to just have to move out and force the banks.

Not force, but the banks are going to have to take on more basis risk. That's what it is. Yeah, there it is. That is exactly what you said, moving to the discount. Yeah, so for people to understand what that means is that there's this negative stigma that is associated with using the discount window if you're a bank. It means that you have poor liquidity and it's kind of's kind of like um it's a bad mark on your on your credit file and so other banks look at that and they go oh you're using the you're using the discount window you must be in bad shape that's an emergency facility you know is the way it's

been seen and mike's kind of laughing but um and so but what they're doing is, what they're saying is that if you want to have the ability to use that discount window, now you're going to have to draw on it regularly, whether it's once a year, once a quarter, whatever it is. I don't know what the rule is going to be, but they're saying that you have to draw on it. What does that mean? That means that everybody has to use it. They're forcing people to use it, which takes away the negative stigma, which makes it not an emergency facility. It makes it a typical facility, which means that the banks are going to rely on that a little bit more, and it gives them this easy liquidity that doesn't have that negative

stigma. So they're not going to say, oh, we don't want to use that facility because it looks bad. It's going to be a negative hit on our credit file. They're going to say, oh, I guess we're going to have to use the facility. And so. Yeah, I got to comment. I'm sorry. Go ahead, Mike.

Yeah, let's talk a little bit. So when you look at let's just talk talk about US deficits and everything. And first thing you have to go to is things I've heard since I started, walked in that bond trading pit in the eighties was, oh, the deficit's going up, bond yields are going to go up. So let's look at, I just pulled up my WB screen, the world bonds. Right now, US tenure notes are 4.08. In Canada, 3.3. Who's under the umbrella of the US protection? I love how Jamie Dimon pointed out. France, Germany, and Italy running two and change, maybe Italy. Greece, 3.2, 100 basis points less than this. And then we have Japan is basically, you know, fractions of a percent, you know, 75 basis points.

And China, the second largest country in the world, 200 basis points less than the U.S. So I look at it as this is an unstoppable force for the dollar right now. And that's unfortunately that no king gets votes. We have an election coming. It's not only bashing China. Trump taught us that gets votes, but also fiscal irresponsibility gets votes. It's fortunate because people don't care anymore. Some Republicans are starting to push back in a little bit. So here's the trade I'm expecting. And what's the best way to mess things up is predict the future. But that's what we're here for. To me, the next big trade is... But hey, I got to do it. I still think that

one of the biggest positions is going to be TLT and US long bonds. I think our yields are going to go down, prices go up with gold going up. And just with a little normal... I mean, can I say draw down the S&P 500? Yeahcglone's been wrong but now look at what happened we're all-time record highs and yields are still kind of tickling down gold's tickling up you know what the market's looking forward to is what we all know what's going to happen so to me that's the trade and that's what happens is when and i didn't say i won't say if i think crude oil is going to 50 most other commodities have done equivalent and then you see the trickle down you hit the tape oh crude oil is going to 50. Most other commodities have done equivalent. And then you see the trickle down.

You hit the tape. Oh, crude oil is collapsing to $60. What does that mean for bond yields? I just see it all happening. I look at it. What makes it go the other way? Yes, we have a deficit problem in this country, 1.2% or 3% of GDP. What's it in?

I've heard up to 300% in China, depending on who you ask. I've heard about 300% in Japanapan yet their yields are 0.7 so um this is where we're going it's the next big trade after we get through this recession when it hasn't happened remember we all priced this price completely out of the system which means oh boy you gotta look the other side and to me that's the trade that's kicking in this year and it's still the bottom line is that u.s stock market has to go up. Once it goes down, the dominoes tumble. Yeah. Dave, go ahead.

And then I want to ask about Bill Ackman, but I want you to wrap that one up. Yeah, I think that it's very important to understand what Mike just said. What he basically said is that despite our rates being higher than the rest of the world because people want to invest in our stuff and because we are where we are there's a lot of there's still a ton of liquidity sloshing around and pretty much every government is printing and you know in the land of the blind the one-eyed man is king that the the us you know is what we we can see i mean maybe we're mr magoo but we're not blind and the fact of the matter is people want to invest and there's money out there. And this is a scheme, you know, it's not really all that unpredictable. The fact is, is the fiat scheme started in 1971.

We're 53 years in. This is not like thousands of years, guys. And you expect, I mean, Hayek would tell you that we're looking like a classic crack-up boom, right? You know, it looks fairly classic. And what's going to happen there is assets are going to all go higher. You've heard me yell about it on this place. Every one time people say, well, CPI was muted. It's like, yeah, you know, you print money, it creates inflation.

It just happens to be we've been lucky enough for it to go into asset inflation. And so none of that has changed. And that's what you're seeing. I mean, Greece being at 3.2%, what rational person would want to tie up their money by lending to the Greek government for 10 years, getting paid 2% less than the United States? We get 3.6% in Italy. I mean, it's just- Yeah, but you're- You're backstopped by Germany on all of that.

I hear you. I hear you, James. But the fact of the matter is it's not rational in the sense of, it's not irrational for the people who are trading it, because traders are traders, but it's irrational in the macro sense. And when faced with fundamental irrationality, you could do one of two things. You could say, this is dumb and lose all your money betting against it. Or you could say, OK, this is how the market's going. I want to be very careful here and I want to have a hedge. And guess what? What's the best hedge?

And it brings us back. And so, you know, it's there. But we can't have we can't have this this conversation not talk about the rest of crypto. And so, you know. Let's talk about Elizabeth Horan and Joe Bowden then. There you go. So, you know, whichever your favorite meme coin is, you know, I thought one of the most insightful posts I've seen in a long time is from Ari David Paul from BlockTower. I think all you guys know Ari. And he basically said, to paraphrase, that, you know, when you think about how irrational some of these meme coins are, there's nothing behind it. It's a community. People just want to put money in it. And you say, oh, my God, it's crazy.

It's like, is it really irrational or is it the same irrationality that we see in the stock market over Long Island ICT going to Long Island blockchain, or some tractor trailer company renaming themselves AI something or other. That's true, Dave. But I don't think Mike is covering the Elizabeth Horn coin in their morning meeting at Bloomberg. No, that's true. But my point is that meme coins are just an expression of of animal spirits in the crowds and i want to i want mike to bring it up in one of the meetings i just that would be funny but i mean you know it's a dead straight face i think this has like it runs for a while and then it precipitates a crash because people say well that's what crypto is and it's like but this time is different and i hate those. And it's like, but this time is different.

And I hate those words, but it is because the reason this time is different is most of the new money that's going in is going into Bitcoin ETFs and it's not going into this shit. This is the crypto degens aping. Elizabeth Horne and Joe Bowden and Pepe is the old washing machine of money from the last cycle. That's all of a sudden risen. And they're finding new and creative ways to pump and dump that money.

It's really, I mean, I have long said that Bitcoin is a separate market from the crypto market. And that they're separate assets. And we're doing Bitcoin a disservice by even comparing them. And that's why I think it's so dumb when maximalists call, you know, crypto or any of these an attack on Bitcoin. So I just view them as separate. Right. But that said, the meme coin craze is doing Solana, for example, which is a large part of this, is doing very well. Why? Well, because their network is growing, the use case is growing, et cetera. I mean, one has to ask yourself, at what point do people start

coming to the conclusion that, wait a minute, there really is something here in this market structure. And that's going to happen. I still think it's 10 years out, but it's going to happen. I mean, you know, we have, I'm friends with the, you know, the guys who run OTC markets, which is where a lot of this stuff trades in the traditional world. I mean, you know, Cromwell Coulson, you know, and Mike Badesky, et cetera. And those guys have done an amazing job in trying to clean that market up by creating tiers and better reporting. But there's still the underbelly of the stuff that everyone, you know, kind of talks about that you see in a lot of the, when you see boiler room movies and stuff.

The fact is, is Solana and the block and Jupiter and the things that are going on there, back, back, et cetera, are more transparent than the current market structure. So, you know, at some point these worlds are going to converge and then the base token, which powers it all of a sudden has a real use case. And people need to understand that because that that's not priced in. That just is not priced in. And a lot of crypto is like that. It's yes, it's extremely speculative and there are going to be lots more losers than winners, but the ultimate end goal it's extremely speculative, and there are going to be lots more losers than winners, but the ultimate end goal here isn't priced in, and investors are starting to wake up to that.

Teacher, I want to ask a question. I'm a novice. I pull up coinmarketcap.com, and I see, oh, man, Tether's got $102 billion. I click on volume. It's double the volume of Bitcoin. What's Bitcoin? This space is the dollar. I mean, it's all going for the dollar.

I just love pointing it out to people who don't know that. Like, why is that? Because it's just the best place to go. It's unstoppable. And the dollar is just the best place to trade against. But Mike, what you need to do, and you've been successful, you and a lot of others, is the tide is turning against the anti-crypto army. Because you all remember last summer, it's like 10 months ago, there was a marked up bill ready to come out of committee.

Maxine Waters was ready to pull the trigger and allow the stablecoin bill to get out of committee and go to the floor. And we all know who picked up the phone and killed it. Except for it's now becoming part of the zeitgeist, even in DC, that the fact that stable coins are north of $100 billion of treasury demand, that it's kind of important to let this ecosystem grow. So here's why I disagree with you, Dave. You said it's turning. I say it's turned. It's over. I mean, it's a classic case. If it doesn't kill us, it makes us stronger. What better antagonist than Elizabeth Warren and Gary Gensler and Peter Schiff?

I mean, they're just getting crushed. I mean, it's like, thank you. You made us stronger. And that's why I know you like to criticize her. I like to say, yes, raise her up, because thank you. You just make us look better. Yeah, thanks. I volunteered to be the Aaron Burr of history. I mean, thank you. I mean, Gary Gensler, if you look back a year, we were terrified of what the SEC was doing, right? The cases against Coinbase and Binance back to back, really, we thought that this market

was potentially dead. I remember talking to people even in the ETF space, who invested in thinking, oh, we're screwed, like we need to get out of here, it's over. And this sustained losses by the SEC, I think, have just bolstered the industry's sort of confidence and have made the anti crypto army just look stupid, right? And the more now that they push forward, the dumber they look. I want to bring up something, like I said, before we move on too far. Bill Ackman, you guys, obviously, have become a scenario. Bitcoin price leads to increased mining and greater energy use, driving up the cost of energy, causing inflation to rise and the dollar to decline. We're getting a lot of credit in Bitcoin by that way now. Driving demand for Bitcoin and increased mining, driving demand for energy and the cycle continues.

Bitcoin goes to infinity, energy prices skyrocket and the economy collapses. Maybe I should buy some Bitcoin. Now the industry pushed back, Saylor. They said, hey, your conclusion is right, but all your premises are wrong. I actually had a great podcast. Yeah, go ahead. Yeah. I thought that Bill was kind of kicking the piss here at first. Yeah, he was trolling. Then you realize, as you read the comments, this is a typical, extraordinarily successful institutional investor who has done their nominal research across the board, reading the typical. I did this back in 2018, 2019 on Bitcoin.

I did the same exact thing where you listen to your analysts and you, you know, and you read the mainstream media news and print and you think that there's this issue that's just not an issue. It's actually the opposite. And so what's incredible about, right, what's incredible about Twitter is that you can actually have conversations with people who are extraordinarily knowledgeable about this and who are educating him and are patient with him. And this is what, you know, I was out at Bitcoin Atlantis at Madeira last week and we could spend two hours in the show because we haven't been

together in a couple of weeks. But Michael Saylor was on stage who just bought another 12,000 Bitcoin. What incredible strategy he's been running. And he said, look, be patient. None of these people are enemies. And that's the right answer, is that none of the institutional investors are enemies. They just don't understand it. They're ignorant. And some of them are willfully ignorant. And I would put probably Jamie Dimon in that category. And some of them are just too busy fighting other battles and focusing on other spaces.

And I would put Bill Ackman in that camp. And that's just what it's just what it is, you know. He's tweeting about Bitcoin. What's interesting is the death rattle of him and what he agreed to, what he understood is he didn't understand that Bitcoin energy use is both controllable, i.e. it could be turned on and off, meaning that it can be used very quickly, which is really important. Incredibly important for stabilizing grids. And second, that Bitcoin can be used by intermittent renewables

because of that dramatically easier, thereby incentivizing and creating the ability to use renewables. One of our largest investments in the Bitcoin Opportunity Fund is Cormint, which is doing exactly that in West Texas. It's exactly what they're doing. They're stabilizing the grid out there. That's right. And so once you start understanding that and understand that Bitcoin will never be the

marginal buyer of expensive power, and that was literally where I saw the light, I didn't see the light bulb go on. But the comment that caused Bill Ackman to thank people saying, oh, I see, was because in economic terms, he realized that Bitcoin will never be the marginal payer of the high price electricity. They will always be buying intermittent, cheaper electricity because it makes much more sense to do so. And in a global market, you don't have to think about, well, the sun may not be shining here, but there's Bitcoin mining capacity everywhere in the world.

Yeah, it seeks out the weight of energy. Yeah, and Mooch made a good point. He's like, look, if you're worried about it, look at AI. That's what's going to drive up the price of energy, the AI computing, because it's going to have

absolutely endless appetite, a black hole of appetite for it. Yep. So I had a podcast with Fred Thiel that came out yesterday, the CEO of Marathon. It was only 30 minutes. You guys should listen to it. He pointed that out. He said that AI is going to be consuming much more electricity than Bitcoin. They can't go to the source.

So they're really on the grid, not using flared excess energy. And they also require a full-time high internet connection and can't be turned off. So that's going to be the new narrative is that AI is going to be sucking that up. He thinks that we're pretty much in the clear for the environmental flood on on bitcoin it's a really enlightening conversation from the guy who knows best it's it's really worth worth listening to and we're kind of uh coming up to the end here any final thoughts guys i mean one thing someone someone pushed it pointed out today you know and you hear this every once in a while as bitcoin rallies it's awesome well you can't buy one full bitcoin anymore so you know and you hear this every once in a while as bitcoin rallies it's us well you can't buy one full bitcoin anymore so you know we should price it in saps or we should do this or that and and you know look you can make an argument there people have to understand that for at least

half the world's investable assets that is no longer an issue and it and it matters because there's a reason why blackrock fidelity priced it at 50, you know, under $50 a share. Well, they're not there now, but, you know, they were. They priced these things so that the individual investor doesn't have to worry about buying a full Bitcoin. They buy a hundred shares and the price of these things is still well less than, you know, many of the large tech stocks, for example. So, you know, if you think about, you know, tick the chart, what kind of FUD, what have we heard? Oh, we heard, well, people will, retail won't buy Bitcoin because it's too expensive. They can't buy a full one.

So they don't want to feel like they're buying something fractional. That's gone now, at least in the ETF side. And I know it sounds dumb, but effectively it almost gave Bitcoin a stock split is the way to think about it. And by the way, the ETF issuers could do the same thing. A thousand and one stock split is the way to think about it. And by the way, the ETF issuers could do the same thing. A thousand and one stock split, exactly. Yeah. You know, these things sound stupid because we all know that a stock split doesn't matter, but except when they do and it turns to dry behavior.

Because as Scott, you're fond of saying humans are going to human. That's right. We know they do. Funny. I want to point out. Go ahead, Mike, please. I just want to thank you because I was just going to tell you and say about the podcast that got me commuted into work this morning, but you did with Fred Thiel. It was awesome. It was one of the first things that struck me about meeting some middle-aged energy producer managers at a Bitcoin

conference. We only got here because it helps manage our production when we you know bitcoin's a great way to to uh as a regulator so he only came to the conference i mean was in in miami a couple years ago because of the benefits of that mining and the intermittency which kathy wood says all the time with renewable sources it's happening the way a lot of people predicted. Guys, we hit it. 10 a.m. Eastern Standard Time, 9 a.m. here. James, 7 a.m. for you. Good job. I want to point out one thing that the way that the views are now counted on Twitter, I see people in the comments saying, oh my gosh, they went up so much. You must have bought followers. Funny, I had a conversation with Mario Nafal. He was like, I had 50,000 people

watching me at one time on Twitter. It was unbelievable. Twitter now doesn't show live viewers. It shows aggregate views in real time. So it looks like you have a million people watching, but it's literally just everyone who's scrolling past in your feed and the video triggers for one second. So yeah, we look like we have like 10,000 people watching live on Twitter. But I hate to say, unfortunately and sadly, not the case. Guys, we'll definitely be back, of course, next week. Tomorrow morning, I've got Joe Vizzani from Lunar Crush. And actually, he's launching a new show at 9 p.m. Eastern Standard Time on my channel. I told you guys I've done a deal with IBC at Mario.

We're going to be building out more content on the channel. So pretty awesome, guys. This was great. I hope that next time we're talking about Bitcoin at 80,000 and not at 50, but God knows what next Monday will bring us or if it even matters at this point. Thank you, gentlemen. Always a pleasure. See you next week. Let's go.