The Wolf Of All Streets - Bitcoin Is The Best Asset, XRP Skyrockets, Is Ethereum Next To Rally? | Macro Monday

Episode Date: December 2, 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 WEEKDAY! 👉https://thewolfden.substack.com/   ►► Arch Public Unleash algorithmic trading. Discover how algorithms used by hedge-funds are now accessible to traders looking for unparalleled insights and opportunities!  👉https://archpublic.com/  ►►TRADING ALPHA READY TO TRADE LIKE THE PROS? THE BEST TRADERS IN CRYPTO ARE RELYING ON THESE INDICATORS TO MAKE TRADES. Use code '10OFF' for a 10% discount. 👉https://tradingalpha.io/?via=scottmelker  Follow Scott Melker: Twitter: https://x.com/scottmelker Web: https://www.thewolfofallstreets.com/ 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.

Michael Saylor tells Microsoft that Bitcoin is the best asset to own. XRP absolutely flying $2.42. Who saw that coming? And Ethereum ETFs actually had more inflows than Bitcoin ETFs at the end of last week. What is going on here? All coins are flying. Bitcoin consolidating under $ 100,000 while we have everything else in macro to discuss. It's Macro Monday. Let's go. missed Monday and then the rest of the week was obviously the holiday but Noel did a better job than I ever could and I heard that you guys love the show maybe James and myself should just not

show up anymore because James isn't even here yet today guys he's coming he's coming but it seems like you know he's become Larry I've become Noel or not needed it seemed like you guys had a great show last week and a lot has happened since then notably i mean xrp is at two dollars and 42 cents dave i see you uh shaking your head there i mean i guess a little regulatory clarity goes a long way but i didn't expect this chart well i mean the interesting thing is i've asked this question and uh you know i know mickle and others who are XRP bulls, I've asked a question, legitimately a question, right? You know, not, you know, this isn't me trolling, although a lot of people think I'm trolling, but is what is the actual demand required for XRP and the token economics that would drive this i.e so there's this new stable coin that is nipping at tether's heels but the truth is is tether is way bigger and will be for the foreseeable future and tron has that locked up so why is if that is the use case it's going to drive ripple why is ripple

at the time i asked the question one-fifth of Tron, now it's what, seven times Tron's market cap, I think, give or take. I mean, I'm literally trying to understand where would the demand be when half of XRP supply is sitting in Ripple's vault, basically. So a non-distributed thing that is funding a company that developed it. And what's the use case? What's the demand for it? And I can't get an answer. Now, if I knew the answer, the answer might be, oh, well, you're going to need this much. And you can say, well, this much activity will be based on it. If, for example, it was the token that was going to be used to replace Swift, which is what all the Ripple lunatics think, then what does that matter?

Well, if the answer is that you need one Ripple for every billion dollars of transfers, well, yeah, it starts to get big because we're talking hundreds of trillions, right? But if the answer, or one million or whatever the number is, but if the answer is that the demand goes up a small amount, so then why do we care? And this is the sort of token economics that people, investors, will ultimately care about. Right now, the only thing that matters is people look and say,

well, it hasn't moved in five or six years, and now it is because it's regulatory clarity. So it's all kind of like $4. We're back to the top top three of uh dinosaurs past bitcoin ethereum xrp it passed heather and solana now at a market cap of 138 billion to your point i mean a stable coin is a stable coin and a stable quote on ripple is no faster than a stable coin on tron or solana right maybe i'm wrong i mean that that's that's why I'm not invested. I mean, am I wrong? I don't know if I've asked the question. I think the answer is just really fun for crypto people who move

markets to move XRP in a quick, you know, few week 5X and it's a good laugh. This isn't even hate on XRP, but clearly just because Gary Gensler resigned is not a reason for XRP now to fundamentally go up 5X or 6X or whatever, especially when that didn not a reason for XRP now to fundamentally go up 5x or 6x or whatever, especially when that didn't even happen when XRP did get regulatory clarity the first time. Yeah. Well, look, if regulatory clarity matters a lot, I mean, the real question that we have for the entire crypto sphere is what is the long-term use of all crypto assets? I wrote a reply to Gasparino this morning because he legitimately asked the question,

so I legitimately answered it. And we know there's two separate answers. There's one for Bitcoin and one for everything else. Everything else is an enormously large thing, which is effectively the ability to incentivize at global scale the development of open source networks and P2P transfers of all sorts, right? It's a very big thing. It's also representation of assets. There's so many things. The question that we always have to get to is how do you analyze it? What's the value proposition?

Why will there be more demand than supply? Supply and demand is what drives price, et cetera, et cetera. And, you know, it would be interesting to hear this. I think that, you know, if you did a show with people who, you know, on XRP, part of the XRP army to say, okay, now that we don't have to worry about being outlawed by the SEC, what's the use case and what, and why do we need it and where should it go? I would personally find that fascinating because I don't know the answer. And I'm not, as I said,

not trolling Scott, really. I'm not, I just want to. I mean, it just seems like this is the cycle kicking in. It feels like it's a meme is what it feels like. That that's,

that's, that's, that's what you're saying, you know, for lack of anything better. It's as we were doing this, I went to the way back machine and I clicked in, I don't know, we're somewhere in March of 2017. And here you have Bitcoin, Ethereum, Ripple.

Right. I mean, does that mean that Litecoin's next? I hope not, but who knows? OK, well, let's let's pivot away from XRP and talk about Bitcoin because we obviously have Bitcoin is the best asset here. That is a quote, of course, from Mr. Michael Saylor himself, who got his three-minute presentation with the Microsoft board. He basically told them, here's a couple of quotes, Microsoft can't afford to miss the next technology wave and Bitcoin is that wave. So he didn't just talk about being a balance sheet asset. He did talk about the technological side of it.

Makes sense for Microsoft to buy and hold Bitcoin. You've surrendered hundreds of billions of dollars of capital over the past five years. And you've just amplified the risks that your own shareholders face. If you want to escape that vicious cycle, you're going to need an asset without counterparty risk. I mean, James, is there any chance that we're seeing Microsoft add Bitcoin to the balance sheet anytime soon? Do you think that three minutes from Saylor is persuasive enough? proxy companies. And so they'll take the recommendation of the board, typically, unless there's some sort of proxy fight, unless there's some sort of merger or something that would be going on that the board is recommending against in its own interest, and it would be violating fiduciary duty, they're recommending against it. And so these proxy voters are going

to vote on behalf of most of the institutional investors. They're just going to say, this is the way we recommend you vote. And then you have to literally, as a company, as an investment firm, you have to literally call them and say, no, we're going to vote against what you're recommending against what the board is recommending. So it's just too much trouble. Most investors just won't even get to that point. They're not even going to see it. It's just going to get voted on their behalf. So that's just the start of it. The second thing is what I think is significant about what Michael did is he jammed 44 slides in three minutes to

say, here you go. Here's your information. If you're not going to give me the platform to explain it to you, then here's the information you need. Go figure it out yourself. And if you don't, then you are violating your fiduciary duty. So now he's actually put it in their court that you can go back, and I actually tweeted about this late last night, that in three years from now, Microsoft's going to have to go back and say, we had a moment.

We could have bought this. We could have recommended for it, and we didn't. And all these board members will be on that chopping block and have to answer to that. They'll have to say, well, we gave them three minutes. Come on, three minutes. Three minutes is all you're taking for this very important vote that they're considering is either not important, they're dismissing it, or they've already made the decision. They're not going to be informed. They refuse to hear the information. And that's the significance of it, in my mind. That will come back to bite them.

It'll haunt them, in my opinion. You're right. I didn't think about the aspect that he basically forced them to take a hell of a lot more than three minutes to look at this. Makes me wonder why we have four hour podcasts with Michael Saylor, if he can just hit 40 slides in three minutes and call it a day. Great. I mean, I've been in these board meetings, Scott, like the amount of time they waste on nonsense on talking about whether they should get donuts or, you know, bagels for the next meeting is far more than the three minutes they'll go around and have a freaking vote about it but you know um i mean it's incredible they're just

not going to even allocate 30 minutes to it i mean these board meetings go on for hours and hours and hours and hours and hours and go around in circles and circles and circles and circles and circles and often don't get a lot done to get not give you three minutes is, I mean, it's offensive. It's basically, they're basically saying that we don't think that Michael Saylor is worth our time. You know? Yeah, I think that was pretty clear. And I think he reached out to Satya directly and didn't get really the meeting with the CEO that people anticipated. So this was kind of like the activists got thrown a bone,

but Michael, I think, did his best with it. I mean, Mike, I saw that Dave retweeted you in disbelief about Bitcoin demonetizing gold. Yeah, I guess that was before. I mean, I wrote about that six years ago. Sorry, I haven't reiterated that, but I appreciate the retweet, Dave. It was piggybacking what you've been saying about silver. Kudos to you.

But it's something I just, yeah, okay, I fell off the horse a little bit. But to put Bitcoin and fiduciary duty in the same sentence is a bit obnoxious. I mean, it's a bit loud. And to expect anything other than Michael Saylor to tell you to buy Bitcoin is like, I get it, buy Bitcoin. Two words is all you need to hear from him. As far as anything else, I get it. It's like listening to the World's Gold Council. I get it. They're never going to say anything bearish about gold. It's like going to church, do on others. What else do you need to know? It's not that complicated. So let them make the due decision.

But sometimes you get to these periods in markets where things get a little extreme. And we could say that potentially is now like 2017. But I needed to reiterate that because I haven't written about it in a while. And maybe I need to point that out. I just look on the screens and tether right now, daily volumes almost four times out of Bitcoin. Dollars dominant. When they talk about de-dollarization, I'm like, yeah, that's kind of silly. Cryptos have gone for the dollar. Bitcoin's not the most widely traded one. So to me, in the macro, the big picture macro, let's talk about macro Mondays, is going to be about unemployment number and what's happening in China. The 1.99 is its Chinese government bond yield.

That's the lowest ever. Our database was owned back 20 years. And from my standpoint, I see pretty severe deflationary forces in commodities. And Bitcoin is a major competitor to gold. It should be. It's demonetizing gold, but it's there's going to be bumps in that road. And we've got a pretty good jump lately. Can I say a question of, has gold been slowly demonetized

itself because of financialization in our system? So lots and lots of money printing. Gold used to be 100% of monetary assets. It's now around 7%, 6%, something like that. And so that's where the World Gold Council is saying, well, but it should be 100. And that's why gold should be 10,000. And or whatever the number is, it's probably, you know, something insane. But, you know, it really is that question. As far as, you know, fiduciary duty is concerned. I mean, it's an interesting question, right? None of these companies have gold in their balance sheet either. So it's and so the idea of Bitcoin, it really becomes a very simple question, which is, is it financially responsible for a company with a large cash hoard to hold it in a currency that you know is being depreciated and devalued by the government that prints it? That's a simple

question. In the United States, as the global reserve currency, honestly, no company has been forced to ask that question of itself. If you are in Zimbabwean company, I guarantee you, you did not hold your any cash reserves in Zimbabwe dollars. If you're a Venezuelan company, you didn't hold it in bolivars, yada, yada, yada. Now, am I saying the dollar is going to become the boulevard? Of course not. That's hyperinflation. And while that would make for a much higher Bitcoin price, that's not a world I really want to live in. And so I'm quite hopeful that that will not be the case. But a slower downfall or accelerating monetary inflation is something that at some point companies will have to care about.

And what Saylor is effectively saying is, listen, guys, this is happening before your very eyes. Since 1913, the dollar has lost 98% of its value. He uses the melting ice cube. It's a hard sell. What is not a hard sell to companies other than Microsoft is look how much of what good this is going to do for your stock price. And this is likely to do for your overall balance sheet. And that's the, that's an interesting question. So fiduciary duty really implies that you're hedging against a meltdown. It's two things. Fiduciary duty is not just doing it. It's considering it like, and honestly considering like, like sincerely, not, not just dismissing it and refusing to hear an argument about it. That's the violation of fiduciary duty. It's not that they don't do it.

I don't think that it would be a violation for them not to do it right now. It's not there yet. And I agree with Mike, it's not there yet. But to not even consider it, that's the problem, in my opinion. Yeah. But let's go back to Chinese bond yields, because this is Macro Monday. And that is an incredibly important point. I read over the weekend that this is the first time in history that Japanese yields are now higher than Chinese yields. And so when I asked the question, Mike, do you think China is, as you would like to call it, turning Japanese? I mean, you know, what is the issue? What is the thing here?

In Japan, they have this elderly population with enormous savings. And so they're able to kind of rely on that as a piggy bank, as a government to maintain huge deficits. You know, what's the analog in China? And what does that mean for commodity use and or consumption at global scale? So I appreciate that question, Dave, because I know and we all know, you know the answer. And that's why you're so astute about that. The Japanese 30-year yield is 2.27. The Chinese 30-year yield is 2.16. Japan's an open market, and they never really accelerated a cold war against their best customer. And China has. It's silly, but we're going to look back at this in the future.

And things like, you know, that I looked at a decade ago when I, I mean, I went to China the first time, I think, 15 years ago. I've seen this before. It was just Japan and it's happening now. And, you know, nothing like gradually and suddenly. And it's just seriously silly. What's, we are looking at an autocratic, increasingly autocratic communist-led government that was completely lifted out of poverty by cozying up the U.S. and now it's pushed back in the U.S.

All lessons of history, particularly from economists, say, well, that's not a good thing. And it's happening in slow motion. Now we're seeing severe deflationary forces from that country. And it's just a question at some point is trickling down. We're seeing the tilt in Europe towards recession. Just the latest data from India was a big disappointment. Declining demand from diesel across the continent.

So I'm a commodities guy. I see this as really getting started. And it's also normally what happens in massive big cycles. We're going to have big pumps in liquidity and pumps in assets for things like pandemics that might kill everybody. And then you start tilting downward. So everything is doing that in the rest of the world. They're all going to face tariffs, things that some of us were worried about decades ago. Finally, we're going to put a little kibosh on the free ability for the rest of the world to have massive surpluses with the U.S. without reciprocity. And that's changed, and it's going to change really quick.

It's already changing. And everything is completely dependent on this most expensive stock market ever. So I like to point out back in the Cold War, in those days, we had a pretty much lower valued equity market. Now we have the highest ever, certainly versus the rest of the world. That's the key thing that really I'm fearful of, just a little reverse and just a normal 10% correction. There'll be some great adjustments in the U.S. I like to point out now on a year-to-date basis, gold's up 28%. The total return on S&P 500 is 28%.

That is not good. I hate to think that gold's going to continue to outperform the stock market, but I don't see what stops it. Then the thing I also have to say is you can't have gold without some Bitcoin in that space. I think there's just times to underweight and overweight. But in the macro standpoint, the key thing is, I'll mention a few things from our meeting this morning. We have the unemployment number coming up. The last unemployment number is 4.14%. So it was tilted down. This time on Ana Wong thinks it's going to be 4.25%, which means it'll be rounded up to 4.3%. If that happens, right now, Fed funds are priced about 50-50 for a cut in December.

She thinks it's almost guaranteed the Fed's going to cut. Certainly, if we have that uptick in unemployment, it'll be the last number before. And when you just look at claims, claims are heading upwards. Initial claims before the COVID pandemic, they were heading downward. Everything's tilting that way. And of course, we have the savior of a new president's going to save everything. And just from a commodity standpoint, for me, I see nothing but global recession tilting that way. And I want to see something change it. And the key one I'm watching is copper. Copper's starting to break down. It's falling. Crude oil is falling, the other things.

And gold's outperforming everything. But again, in that space, you have to have some Bitcoin. But I do think the key thing about fiduciary duty and everything on a world basis, everybody gets it. You have to get off zero now of Bitcoin. Right. And I agree with Ana that the Fed, their attention is all on the unemployment now because the, the, the PC, the CPI has gotten to a point where they say that it's the, the,

you know, it's contracting enough that it's going to get to that 2% level that they should cut before it gets down below 2%. And that's, that's their, they've been saying that. And so now they're looking at a few of the, you know,

of the levers that they've got to pull. Fed's still doing $25 billion a month in QT, right? So it's not a ton, but it's a signal. What they could do is they'll cut and then pause and maybe pull back on that down from 25 to 10, or just cut it altogether by the end of the year or beginning of next year. It's just another lever that people aren't talking about. It's not a big one, but it is something they can do. But yeah, I think that they're going to be really focused on that 4.2, 4.3 number. And that's what they're concerned about. We are seeing job losses. The last job number was terrible. And if you strip out government jobs that were created, the private economy looks abysmal. Those are going away.

Yeah, and those are going away. That's right. So now you can expect probably a loss of jobs, if you believe them, or if they're going to try to make some cuts here. And it's going to be those jobs. Isn't that going to just affect the way that everything is reported for the coming 18 months? Because even Doge, I think, said that they're done in 2026. They only have an 18-month window or something. Yeah, by the 200th anniversary of the 17th century.

And they also were very, very clear that expect short-term pain for long-term gain. And I don't think markets have taken them seriously, but that's besides the point. And honestly, given Elon's history, I think they really should be taking them seriously. What does short-term pain mean for human wear? It means when we publish job losses, we'll be losses. There will be massive resistance in D.C. There will be. But, you know, if, like Dave said, I agree.

Look, Elon, how much did he cut? He cut 80% of the workforce at Twitter or something crazy. Right, but, you know, in a private company, you can go in and those people can't fight back. You know, when it's the government, obviously, these people are being lobbied for they're represented yeah so they obviously have power but yeah but it's it's you start with what he did is oh okay five day work week you got to be back in office start there and those that create some attrition that's the statistic i heard in the last four years this country has created about 40 000 um government jobs per month. Okay. So that's going to be purchased. That's all. Exactly. And how many are working from home? There are a mass amount of administrative

that's working from home that he's like, well, you probably aren't very efficient. You probably collapse five people into one is what he's saying. Or four people into one. That's what he's saying. It's very efficient's very efficient too then you don't have to pay severance if you said got to be back in the office five days a week maybe six days a week they quit yeah it's easy yeah you're seeing it from the big big tech companies are doing that they're saying come back to the office and it's an easy now they don't have to pay um you know severance but i gotta tell you if you're if you're quitting your job right now it's, it's probably not wise. It's probably not wise. I want to kind of talk about China a bit more from a different angle.

Mike, maybe a good place to start, obviously, with you. Trump threatens 100% tariff on BRICS nations if they try to replace the dollar. He went on social media for anyone who missed it. He said the idea that the BRICS countries are trying to move away from the dollar while we stand by watches. Over. We require a commitment from these countries that they will neither create a new BRICS currency nor back any other currency to replace the mighty U.S. dollar or they will face 100 percent tariffs and should expect to say goodbye to selling into the wonderful U.S. economy.

I mean, some news I've saw has kind of pointed that he's maybe bullying the new Mexican president and Trudeau, that Trudeau kind of came down and bent the knee. I don't know what the actual meetings were like, but that's what it sort of appeared to be. Was he actually crying after that meeting? It seemed that way. It seemed like he did. I'm not joking. It was like the whole pitching scene with bring out the gimp.

I think Polo Bar is going to make him cry worse, but that's what you know. But this is a wholesale change in the way the United States approaches the world. Mike, come on. You know this, and Dave knows it. The BRICS is not coming up with a currency. That's not going to work. Yeah, exactly. But it's silly.

The key thing that's not silly about it is things that have been bothering me and people I've spoken to in markets for decades is it's like when you have adult children, at some point you have to pull the plug. And that's what's happening. It's about that okay you all that all that bravado Mr China great sorry when you're not gonna export to us anymore good luck we'll find out it'll take a little while we'll find alternatives um India we'll find alternatives if you really want to play the bravado in the world which cut the medical cord of just being this freest best market in the world that cannot function on a free market basis without higher tariffs than the rest of the world. It has nowhere near the market access we provide for our people who want to sell into our country.

And this is something that's resonated. And it's like what Trump did with China and Iran. He got both sides of the aisle to agree. They completely agree on tariffs because they're seeing it and they see that it's sold. It's the constituents. And he saw all these things we've heard about about for last decades about nafta and you know and everything's free trade robert lighthizer nailed it no trade is free it's true it hasn't worked let's go back to those days when we have sorry but you know you france yeah i know we love your wine but you charge us a 26 a tariff on

our wine maybe it should be the same as ours. Actually, the tariffs that we charge should be more than what you charge us. It's just because their market is, what, 60 million people? It's nowhere near as open and free to sell our products there. It's just impossible. And it's what tariffs have to fix that.

And it's going to. This is going to be pain in the short term. 100% tariffs is a whole other... That's negotiation, but it's what robert white has appointed they came all these countries come these meetings think they have the upper hand and finally trump's starting out anytime you walk in the meeting tariffs are going to happen here's what are you going to do that to prevent it it's the way they're already starting right

heiser pointed out in the book he's already starting out here's what's going to happen fix it and it's your problem mexico has already said that they're they're going to help with the border. They've already said it. It's like, he's not even, you know, yeah. Yeah. I mean, but it's, it's all,

it's way overdue. Right. I pointed it out. I think Lynn Alton was the one. I can't remember who did it, but there was a tweet. There was a, a,

a, a thread about, you know, go back and read the art, original art of the deal and understand that Trump's belief in negotiation is under make people understand what they're facing if the talks break down as a major point. And, you know, it's like, okay, that you have more to lose than I do. So let's negotiate in good faith here. And, you know, that makes sense. And frankly, it's one of many reasons that I'm very happy.

I mean, I've never been this happy about an election outcome in my entire lifetime. And I know, Mike, you're upset. But honestly, you know, after this past weekend, you know, I don't want to hear more. Mike doesn't sound upset. No, I know I'm upset about Trump as a human being and maybe very well. But, you know, I don't want to talk about pardons, but there were because that story is just not just sickening, but predictably sickening. But, you know, in terms of morality. But the real story that we have to talk about this week was what was was from Andreessen Horowitz and the full revelations of the scope of Operation Chokepoint.

I did not expect that to go so viral, by the way. You, who have been subjected to it more than anybody else, really should talk about it. Because from a macro point of view, understanding how much has been built in the United States, despite the full force and power of the federal government trying to stamp out our industry, is a very big deal. Can I just ask you guys before James goes, I was traveling, obviously, so I saw the clip and then I saw within sort of our echo chamber, I only obviously can judge by my X feed that this went massively viral, obviously. It felt like Operation Chokepoint 2.0 was the biggest story in the world. Was that the case outside of our echo chamber

or was it just crypto Twitter screaming, see, we told you so? Mostly just crypto Twitter, but other people are recognizing it, especially business people. But yeah, I mean, like it was big. There are a lot of businesses who were affected by Chokepoint 1.0. And so that echoed to them. And that's what I'm talking about, right? So you had, it was payment processing for, you know, X-rated videos. And then it was also for,

what was the other industry that they were cramping down on Dave? Well, cannabis. Yeah, cannabis. So it was, you know, choke point 1.0 was that's where it kind of started. And then you and that was where the federal government couldn't, you know, they couldn't tell the banks that they can't do business with these people. They just said that if you do, you're, you know, we are going to tighten the reins on you. And so the same thing happened with Chokepoint 2.0. And I've said it before on the show that because my hedge fund has Bitcoin Opportunity Fund is the name of it, right? Because it has Bitcoin in the name, I'm talking about major banks, Wells Fargo, Bank of America, Chase, they refused to send wires to us. They canceled them. They would just hold them. They would refuse to send wires to them. Even though it was being sent to Delaware, it's in the United States. It's not an offshore fund. We're registered. You could see all of our

back. Everything is on the up and up. It's a traditional hedge fund structure. It's no different than Citadel or any of the big hedge funds. They refused to send it because Bitcoin was in the name. And then they told some of our customers that they would have to leave and go to different banks in order to actually send wires. Or they threatened that they would shut down their bank account because they don't want to do business with people who are doing things that are under the table, even though everything was obviously above the table. So it was tremendous pressure on, and it took us, it actually delayed our open by

almost three months because of all the problems we had with just getting wires confirmed, get them in, have them released or have them resent. It was a disaster. I mean, you could sit and play in view for years. I mean, even given after FTX and all those things, like I know OKCoin, which was OKEx at the time, was cut from all banking relationships. So customers there just had no way except for sending crypto out to get off that exchange. They're rebranding to OKXUS, but it's been years now since effectively they had a US presence. Binance US before their problem, same thing. All banking completely cut off. You could only withdraw using Tether.

And then some of the revelations that came after Andreessen, one of my favorites was David Marcus, obviously of PayPal and Facebook fame. He said that that's what killed Libra. He said, I've never said this story. Marc Andreessen came out, so it feels like it's time. But the Fed, I don't want to misquote it, but effectively, he said, the Fed sent to all the banks, we can't stop you from banking this project, but we wouldn't recommend it, you know, or something to that effect. And they all magically disappeared and Libra was dead, right? Which was effectively a stable coin that was going to be started by MetaFace. The Libra story, that thread was amazing. Not remotely surprising. In fact, at the time, I actually said there's no way that it'll be allowed to do this. The US government is going to shut them down. And the reason that I attributed it at the time the US government was

going to shut them down is because Facebook was going to determine the weightings of dollar versus yen versus euro versus yuan, whatever, in Libra as a stable coin. And if you know the story of the SDR, special drawing rights, and how much political power is thrown at the weightings inside the SDR, despite the fact that almost nobody uses it. It was obvious to me at the time that Facebook was going to have the full force of the U.S. government against them. And which, of course, is exactly what Mr. Marcus talked about. But think about what all this means. I mean, we like CoinRoute. So, you know, I co-founded the company. We went to our local branch of Bank of America. We told them it was software and they bought it because it is software. Coinbrowse doesn't touch customer funds. That may change

in Dubai and Abu Dhabi if we get regulatory clarity. But as of now, we touch no customer funds. We don't do anything. We don't need wires. Anyone who pays us anything, it's based on software usage, pure and simple. But we had our account rep, because we're a platinum customer of a large bank, our account rep actually said to us right after the election, the following quote, he said, well, I saw CoinRoute's in your name, and I don't even think we should be banking you, but given the election, I guess that's probably going to change. That was a quote. Now, understand what that means. Think about how many entrepreneurs literally couldn't get off the ground because you have no way to charge your customers. Think of the amount

of effort that it takes. Think of what happens if, in fact, you did have it set up and you weren't smart enough to diversify and find four or five banks like us, like a company like we did. The number of companies that were frozen out of this market is insane. So now what happens when you reverse that process? That's the thing about crypto and the bull market cycle that people do not understand. It is massively bullish for unleashing a wave of entrepreneurial activity in the United States. And nobody understands that unless you've actually been in the trenches banging your heads against. I mean, we've been fighting a government, literally entire industry fighting a government,

and now they're not. And this is a very, very big deal. It also, by the way, to anybody who thinks it doesn't understand why they should be afraid of a CBDC, now they understand because this was soft power. This was, hey, you know, you know, nice business you got over there. It would be a shame if nothing happened to it, kind of spoken by some bureaucrats. Now imagine those same bureaucrats don't have to speak to anybody. All they have to do is say, you know what? I don't like you. You mentioned Bitcoin and they flip a switch and all of a sudden you're financially. That was the thing here, right? One essential point. This is what I said. One essential point after that. There's that quote. One essential point is worth making here. There was no legal or regulatory angle left for the government and regulators to kill the project. It was 100 percent a political kill. That's the thing that's so disconcerting about Operation Chokepoint 2.0 is you don't even know where it's coming from.

Right. Where does the regulator get the mandate? What regulator? You can literally just say, we're not comfortable with that, and it does it without them actually having to push any levers or twist any screws. I think those days are hopefully over, but this has been a massive issue not just just for crypto, but for tech in general.

Right. And they also were talking about the same thing with AI. And if you remember that summit that the autocratic Biden administration had with the AI firms, where they all agreed to a basically creation of a cartel. If you read it, there are a whole bunch of tweet storms about this as well, that they were going to use banking to enforce that cartel and not allow competition, which, by the way, from everyone in crypto who believe that the most important reason for one of the most important things that will make AI actually be OK is open sourcing information so that you can't control what goes in and what the LLMs learn from, they were going to put a stop to that. And so, you know, there's a lot of implications here, you know, and they're very important, right? You know, they're very important from an economic activity point of view. Now, this doesn't show up in markets for a while. This is a, we're talking

about a, not a leading indicator, we're talking about something that is a long time before it starts showing up in statistics that we look at, but it is important. And that's really why I wanted to go down that route. Yeah. I want to talk about Ethereum as well here because there was a whole lot of stats and kind of helps us to dig into what's next for the market, right? Because if this is similar to previous cycles, as we all know, you get these big Bitcoin moves, you get to a key level like 100,000, you hang out underneath it for quite a while, and then all coins start to go crazy. We've seen obviously what happened with XRP.

But interestingly, now we have Ethereum ETFs break record with 332 million inflows. That was on Friday alone. And that was the first day that they had actually been larger than Bitcoin, which was 320 million. And then you get on top of that some signs of the froth here, Mike. We've got spot crypto exchange volume hitting 2.7 trillion, highest since May 2021. Bernstein believes that Ethereum ETF staking yield is likely to be approved under crypto-friendly Trump 2.0. I guess I'm asking you guys, is this the time that some of the focus starts to divert from Bitcoin solely and we start to see the real retail push and come back? I mean, 330 million into Ethereum spot ETFs in one day is worth taking note of, I think.

It's amazing how gradually then suddenly happens so fast in this space. And as you nailed it, James nailed it. And I think, Dave, it was Bitcoin 2024 in Nashville when Mr. Trump came out and the zealot had converted. Now he's a zealot. It's like the world's changed. And we do enjoy how this has worked out where when people raise their hand, they want to be the Aaron Burr of history. And Gary Gensler and Elizabeth Warren were tops to do that. You let them. And they did. And now look what's happened. It's just wonderful to see this switch over.

But, again, now I just depend on you and what you think. And I look at, for me, in the big picture macro, it is pretty significantly a massive greedy frenzy right now which is great i mean i'm in markets and that's why i look at the macro is we still haven't had that test we step just give me a 10 correction has to be 500 see how this pans on i think we're going to see most of those other than the top 10 cryptos get flushed at some point real people are going to look back from the future and say, yeah, Shiba Inu at how many billion and Doge at how many billions is kind of silly, but Bitcoin, Ethereum, sure. So I'm still waiting for that. And then that's my, yeah, obviously it's difficult.

You got that for the last three years. I mean, most of those things did go down 99.9999 with a line on top percent. Yeah. it was a colleague in my office who was very young, pointed out two years ago, she lost $20,000 in cryptos. I'm sorry, what did you invest in? I didn't want to know, but all this stuff that was just kind of silly. But that's the way all new technologies do. But now the point is, I'd just like to point out, like we pointed out earlier, I still don't understand some things when you have the most widely traded crypto on the planet is the tether token triple the volume of bitcoin at the moment why even have things like swift and things we just go to this technology thank you it's done why even think in a country like us we don't need a cbdc we need this just regulated like a

market properly and boom we have an instant settlement of dollars on a global basis. It's already happened. Dave, before you jump in, isn't it worth noting that Lutnick, you know, is going to be effectively in charge of trade and tariffs and is now a partial owner of Tether? Yeah, I mean, I think Mike's point is incredibly important and you can always see it. Alt season used to be back in the day. I remember having arguments with people who were talking about how big Bitcoin's volumes were. And most of Bitcoin's volume was to buy altcoins. That's right. Pre-stable coins. Bitcoin and it's very, very rarely used for altcoins. Tether is, which is why Tether has been persistently for the last month at a premium to the US dollar. Right now it's point, what is it? One, two, three. Yeah. So three bips, three basis points premium to the US dollar. And the reason for that is people buying Tether to buy altcoins or to buy Bitcoin, if in fact that's what they need to do it.

And as a result, people claim the stupid idiocy of the Coinbase premium, which isn't. It's the US dollar premium to Tether because of the three basis point, you know, whatever. All markets equalize and we could go down that route, but let's ignore that. The point that matters and what Mike is saying is that alt season is really people wanting to invest in going out, go out on the risk curve. And so the answer to your question, Scott, is yes. When Bitcoin hangs out under a level in the absence of new buyers, the people in the crypto sphere say, OK, now it's the same reason we stayed in a trading range for so long. Right. It is. But for the true alt season, it was new people that came to trade Doge. So it wasn't just the crypto natives that got bored of Bitcoin that truly sparked the last rally.

It was Elon Musk tweeting and NBA Top Shot and Bored Apes being bought by Justin Bieber. Well, today we have a 10% rally as we've been talking in XRP. So, you know, it's clearly, by the way, for those who want to understand what's going to happen with Bitcoin, what you're going, this is what's called price discovery. And coming soon to a, you know, to a screen near you will be a chart that looks like this in Bitcoin. And the size of Bitcoin being what it is, it will be front page news. Whereas I'm not sure we're going to read about in the journal about XRP. In fact, today, last I checked, yeah, the top story on markets and finance on their website is Bitcoin euphoria threatens to break these ETFs. And which is, you know, look, the Wall Street Journal, this is the final stages of we're dumb old media. And I am fairly confident that if I go through this story, I could find five or six things that the author said that it is factually untrue. I may do that just for shits and giggles because, you know, I'm getting tired of a badly written commentary when they don't really understand it.

But the XRP chart is exceedingly important to understand because, as I said, I am not poo-pooing XRP. My gut tells me it's overpriced, but I'm not shorting it. I wouldn't touch it because I don't understand the token economics. I do understand the token economics of Bitcoin, and I do understand the supply-dem demand curve. And I do think that Bitcoin is inevitably going to demonetize gold, or at the very least, get pari passu with gold, in which case it's the best asymmetric positive return you're going to have in a major financial asset. We don't have that in other places. I also believe that crypto writ large is going to be many, many multiples of its total market cap as we get to true unlocking of open source of what it can mean. But it's not at all clear to me which coins are going to be the ones that are going to win, et cetera, in the long run.

So in the short run, you're going to have a ton of volatility and a lot of really interesting things. So Dave, here's crypto total market cap, right? It peaked in 2021 at 3.01 trillion. We're at 3.38 trillion, and it doesn't seem like the FOMO has even kicked in. Well, but understand in 2021, we had a hostile government essentially saying, you can't innovate in this sector for half of the world's investable assets. And so if we got to anything close to FOMO, you have to figure it's going to be triple.

Yeah. Minimum. I mean, that's not hyperbolic. That's just, you know, if in fact people really, the innovation starts moving into the sector because now the water's clear come January 20th, all of a sudden, you sudden, it could look very, very different. But who knows where it will be? I, for one, hope it's not in dog or cat memes.

I, for one, hope that it's actual real innovation and that we don't do things stupid. But as you like to say, Scott, humans are going to human. Just for context here, from the lows of 2020 if we're looking at past cycles the total crypto crypto market cap was 107 ish billion i don't know if you guys can hear me it looks like i froze yeah it went from 100 billion basically to 3 trillion in 87 bars 6099 days. In 609 days, the total crypto market cap from trough to peak went from 100 billion to 3 trillion. I mean, that is absolute insanity. I'm not saying that's going to repeat, by the way, but looking at that, you got to wonder if we're just getting started here. So the trough of this one was 700 billion. Yeah, I'd like to see the global, I'd like to see global M2

chart against that. Yeah. And maybe even on a lag. Oh yeah, that's another question for either of you guys. Could someone explain to me, given what's going on in China,

how global M2, and we know every government is printing, how is global M2, how did it have such a big fall? What is that measuring? Well, it depends on what measure you're using. You can use a measure that includes credit.

And if you're having credit contraction, then it was falling. But it's complicated stuff. I mean, Michael Howell does an incredible job putting out his estimates. And I kind of go by what he's using because it year yields rising. You've got, you know, at the same time, you've got, like you said, China printing. You know, it's a hard number to get a hold on. But China's expansion of my supply has been the driver for a while. I mean, it's a massive amount of M2. Yeah, I didn't know the answer to that question, actually. So but M2 has been on the increase once again, correct?

Yes, I think it has begun to tick back up again. So one other thing that I think is really interesting over the last couple of days and last week is people should always go look at CoinGlass and look at liquidations. Why is it interesting? So Bitcoin's down less than a percent over the last 24 hours. And in the last 24 hours, because of the volatility, 371 million of crypto liquidations on the long side, less under 200 million on the short side. You know, it's like these are big, relatively large numbers. It feels, Scott, like every single time crypto starts to move up, people pile in irresponsibly on the long side, which is basically a wealth transfer from the punters to the market makers, if you really want to get straight about it.

But it just tells you that every time people think there's going to be some FOMO, they jump in, get their knuckles smacked and back. You know, whereas the short side, no matter what the rally has been, has been smaller. We've had almost no days. There were a few. There were a few in early November when their short liquidations were bigger than long, but it really is interesting how this market has been playing out. That's one of the reasons why we haven't seen that kind of FOMO because pretty much every time, even the little squiggles seem to wipe people out. Yeah, I mean, people get absolutely destroyed by leverage, which there's been less of, I think, on this move, but it still begs the question, if we're seeing the XRPs of

the world move, is it finally Ethereum's time to do something? Well, I mean, it certainly feels like it could be. I mean, the reason I'm hemming and hawing about Ethereum is so many people out there are looking at Ethereum and saying, well, it's going to lose to Solana. It's going to lose to newbies like Sui, Cardano, and this and that. And then XRP does this. And then XRP does this. And XRP is this thing. I think the Ethereum staking ETFs will be a very big deal. And I do think that's inevitable.

That is certainly a driver for it. But when you look through all the altcoins that will compete other than XRP, you know, over 260, you know, you see SUI being a little bit soft. You see Solana being a little bit soft. I mean, obviously, these are after strong rallies. You see, you know, Tron, the same thing. Ton, you know, well, Cardano is doing well. You know, Phantom is still, you know, it's had a nice little rally. But I mean, you see a lot of the same things that you might look at as this is an interesting market. And Ethereum had that big jump over 3700. We're down below, you know, a little bit lower than that now.

But it feels like brownie in motion in the crypto verse, not new money coming in. Right. You know, new money, I think we know. I mean, you said it's Litecoin's been moving. XRP has been moving. Ethereum has relatively been moving. I mean, these are Cardano. These are the dinosaur coins.

But like I said, that's a cyclical thing. We've seen this in past cycles where the things that were going to never move again sort of spark the rally. I mean, it's pretty crazy. Xp is just blowing my mind i think that's the real uh i think yeah xrp and ethereum they put those aside but um this cycle i expect to be a little bit different in that uh i think people are just they're these they know it's a casino and they're going to accept it it a casino. There's no pretense

that some of these things have some great value or great underlying use case. It's just which one's going to moon and they all know it's a casino. It feels like that's the way that this alt market is going to go in this cycle. Whether or not that's true, don't know and again i know there's use case for ethereum solana uh xrp i know their use case for i'm not talking about those i'm

talking about you know um whatever the yeah that wi-fi dog wi-fi hat yeah exactly i mean come on right so uh but that that i expect is going to be a theme in this cycle. Personally, I just think that people are going to know it's a casino and they're going to be on Reddit. They're going to see which ones they can pump and which ones they can they can, you know, make a bunch of money and quickly. And even in even in my Twitter feed, I'm already seeing that stuff. You know, I'm seeing so much of it. So, Mike, but Mike, like if it's just, you know the casino, and I think that's going to be an element of it. I think that's where the crypto native degens go, right? And they're there already. But what brings

the big wave, I guess, of new retail money, which we've seen? I mean, I think Bitcoin ETFs are one huge answer to that. I think that's very clear, but Bitcoin ETFs themselves don't really trickle down into the rest of the market. But you nailed it. We've seen it. We're having it. Does it last? One key way to keep it last is we have to keep pumping the system with money. We mentioned money supply is running this country 3%. The biggest problem was it pumped up to 26% in 2021, and that just distorted everything. So right now, everything is expanding on a U.S. basis because U.S. stock market's strong, but that's the key thing. As I pointed out, it was the inordinate burden for commodities

to go up at the beginning of the year, and it's part of the reason they still went down despite the stock market increasing a third. When you get some normalization, I didn't say if, that's going to be the big test. It always happens. It's a question of when, and these things can take a long time. Markets can remain very rational, but right now we're at that stage where everything looks rosy and we know that's when you have to be careful. Yeah. Yeah. I mean, we're getting some counter indicators, but those are the ones that can last a very, very long time. I don't think we still have the same level of froth as last time where it was like mainstream television with celebrities buying Bored Apes and Elon Musk on Saturday Night Live

and literally every Uber driver. And Dave, it's your favorite indicator, the taxi driver, the Uber driver. The guy cutting my hair has kind of asked about bitcoin again let's talk about let's talk about the like thanksgiving i mean i didn't have about it i didn't have one person reach out to me about bitcoin price it is it was bumping up against a hundred thousand dollars i have told a lot of people to buy it when it was down in the 20s and i didn't have one person reach out and say, hey, this Bitcoin thing is working out or should I buy more of this thing? Nobody. So that's interesting to me. I don't know about you guys, but that was my experience.

I haven't really had similar experience. I'm going to say it again. None of the drivers that we've been talking about are priced in. Sovereign adoption, state adoption, corporate adoption, and large pools of money being and wire houses being freed. I mean, how long do you think it is? When are we going to wake up one morning and we're going to hear that there's ETFs on Solana or broad-based index ETFs on crypto? And these are fundamental structural changes. Right. And soon. ETFs on Solana or broad-based index ETFs on crypto. And these are fundamental structural changes.

Right. And soon. When are we going to wake up and Vanguard is going to say, you know what? We've had too many complaints. You know, if you want to buy it unsolicited, we don't recommend it, but you're okay. When are we going to wake up and hear that Merrill Lynch is going to allow, you know, trading in the options. When are we going to wake up and hear about these things?

All of this news, these are all tailwinds that are yet to be white swan events, and none of them are priced in. That's the way I look at it. The only thing you're hearing right now is people railing against the U.S. adding Bitcoin as a strategic reserve asset. That's the only thing we're hearing from mainstream media and big economists. I heard it last week. I was out in New Orleans and on a stage literally battling with Peter Schiff. And I mean, it's mind numbing.

It's just it's but that's that's where that's where people are still that's just where people are i mean it's really funny we use the word luddite as an insult and it refers to an entire group of people who ignored the impact of technology and it's no different than krugman saying the internet is no more valuable than a fax machine. It's the same thing. And so people like Schiff, I think he's a troll. It disturbs me because I've been for decades. I actually know. I spoke with him in the green room afterwards for a while. And what I saw when I was talking to him about it is I saw pain in his eyes because he said he could have bought bitcoin at a dollar he sure is and so you know it's the top it will be the greatest top single in history yeah it's it's impossible it's impossible for him to admit that he's wrong because then then

you know then he when when you're when your entire identity is wrapped up in in in money and wealth and and the ability to make money and you miss the like the biggest opportunity to dismiss it in your history in your entire career not just miss it just dismiss dismiss dismiss that's i mean anyway so i i have a bunch of people that i that i feel fall into that category you know that's the significance of our next president he flipped it was shocking he did but he did and dave says we got to go with that so he's going to be present we got to go with what's going to happen the thing that really is is fascinating about shift is that his entire identity is based on sound money literally if you if he read the bitcoin standard

he'd be sitting there nodding nodding nod, nodding, nodding until, you know, safety starts talking about Bitcoin. Literally, every single thing in there. We agree on 99% of everything until we get to the gold Bitcoin split, you know? Well, I mean, the funniest part about that, however, and it really is funny, is he just, it all all boils down to i called this two years ago he just in his head refuses to believe that something virtual can have value not understanding that like 80 of bitcoin's value based on reasonable data right monetary it has nothing to do with its use in in in stereo equipment and or jewelry but the significance of it is that he it's used in, in, in, in stereo equipment. But the significance of it is that he is sorry, Mike, the significance of it is that I think he represents a great many people that

that's the significance of, of, of talking about shift is that that's the, that is a general sentiment of a lot of people that are standing outside this industry and looking in. Sorry, Mike, go ahead. No, no. It's a question we asked years ago. What's a fully charged battery in your electric car? That's virtual, but it's fully charged. It's interesting that the shift point, I obviously know him pretty well. I've sat down for drinks one-on-one with him in Puerto Rico for hours and we didn't argue about Bitcoin. We agree on 99.9% of what we think about the government. The solution is the one place where he stumbles, I guess, at the finish line, in our opinion. But it is worth

noting that I think the smartest people and the biggest bulls in Bitcoin, at least the most notable billionaires, were all equally dismissive of Bitcoin at some point in their career. The idea of strong opinions loosely held. Peter's just not going to flip because of all the reasons that you said, James, because it was so outspoken about it. But Saylor himself was dismissive. I dismissed it. Everyone, everyone was. Yep, absolutely.

So ask yourself the question, what's the price of Bitcoin on the day when it is considered a fringe or lunatic opinion that Bitcoin is magic internet money? Right. A lot. And that, and now all of a sudden you say that to people and you get an aha. It's like, I would say it's not the price.

I would say, what's the, what's the, what's the volatility? That's volatility be way lower, obviously, but what's the volatility when that, when that finally happens, right? And this entire conversation, by the way, is exactly why I think Bitcoin this cycle will delink from equities in the sense of equities are still beholden to their revenue potential as opposed to representing monetaries. And by the way, I don't see the rest of crypto delinking from equity markets and assets. I do see Bitcoin delinking. I just don't see them delinking from Bitcoin, which will continue to drive the entire cycle, whatever happens. Yeah.

I mean, if Bitcoin 10Xs, though, I think maybe at that point, then you might see it. But, you know, it's theoretical, right? Certainly, if that happens, a rising tide is going to lift up everything, including, you know, whatever or whatever the hell smoking chicken i don't know xrp what forexed overnight something i mean i'm i'm so deep in this total chart we're gonna go but if you look so that like we said that was 100 billion to 3 trillion in 609 days if you made the same relative move from lows to top here you would go to 20 trillion in total crypto market cap and it's already been more in 609 days. If you made the same relative move from lows to top here, you would go to $20 trillion in total crypto market cap. And it's already been more than 609 days. But maybe more interestingly, the top of that,

from breaking the previous high, was at $700 billion and went to $3 trillion. So if we consider breaking this previous high now from the last cycle at $3 trillion, Dave, that brings us to basically a 3x, right? $700-ish to $3 trillion. We'd go $3 trillion to $9 or $10, which is the number that you just threw out there.

Yeah. Well, there you go. Right, which maybe that's a more accurate measure than trough to peak considering COVID and all of the money that was pumped into the system during that time. All right, guys, it's 10.04. Glad to be back. I feel like Noelle did a better job. I'm going to have to bring her back in. It's sad for me.

James, you and I have been replaced. Sorry. We're going to be AI by next week. Larry and Noel AI. Was Larry swearing? Was Larry swearing, guys? Yes, a bit. He was Larry-ing, but he's more polite with Noel

than he would have been with us. That accent and pleasant demeanor keep everybody in check. All right, guys, that's all we got. 10.05 a.m. We got to go. See you next Monday for Macro Monday. Great to be back. Great conversation.

See you guys. Bye. Let's go.