The Wolf Of All Streets - Bitcoin: Is The Bottom In? $250,000 By The End Of 2025?

Episode Date: January 14, 2025

Joining me today are Jeff Park, Head of Alpha Strategies at Bitwise, and my friends from Arch Public, Andrew Parish, and Tillman Holloway, who will provide an update on the $10K algorithmic portfolio.  Unleash algorithmic trading with Arch Public: https://archpublic.com/  Jeff Park : https://x.com/dgt10011 Andrew Parish: https://x.com/AP_Abacus  Tillman Holloway: https://x.com/texasol61  ►► 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 #Investments 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.

Bitcoin opened the day yesterday at almost $95,000, dipped below $90,000 while we were recording Macro Monday, which I bought live on Macro Monday, and then ended up closing the day right back where it started. Leading traders, investors, enthusiasts wondering, is the Bitcoin bottom in? Are we heading back up? Was that the moment? We're going to discuss that today with the boys from Archpublic, of course, Tillman and Andrew, and Jeff Park from Bitwise.

We're also going to talk about targets for the end of the year and everything happening surrounding the Bitcoin market. Let's go. What is up, everybody? I'm Scott Malker, also known as the Wolf of Wall Street. Before we get started, please subscribe to the channel and hit that like button. Going to just go ahead and bring everybody on now. Andrew, Jeff, and Tillman. Jeff was supposed to be here at 9.15 because apparently he has children that are more important than the program and was going to drop them off at school, but he showed up.

And then Tillman was waiting in a room by himself, apparently thinking that he needed to be let in, showing you the deep complexity behind producing a YouTube show. Every day, every day. We all made it. 9.06 a.m. Bitcoin trading at $96,000. Tears. People are distraught.

It's all over. Going to $75,000. people are distraught it's all over going to 75 000 we survived the bear market of of 9 30 a.m january 13th i mean we all survived the bear market at 89 000 yeah so happy to be here and we and uh moving forward yeah i mean you just take a look at this candle here yesterday this is what i was kind of talking about the beginning it's absurd beautiful right you had price trading as high as basically 96 dropped all the way down and right back to where it closed for those who are technical traders that's a reversal signal generally as long as you get some confirmation with the green candle today you can see though the 50ma here still acting as resistance hey who cares right

let's talk about fundamentally why this is all happening. Jeff, I'd love your take first, because I know that you're deep in the weeds of watching everything behind the scenes, all the metrics, the options flow. What happened here? I'm not surprised, by the way, we got a huge bounce, at least on the first test under 90,000, because there had to be a lot of liquidity sitting there waiting to buy. Yeah, that's right. I think there's always going to be people who are going to buy Bitcoin every time it dips anything with bandwidth below 100K, because they're going to assume it's going to go back to 100K at some point. So it almost becomes a self-fulfilling mean reversion trade. And that magnet actually gets stronger as Bitcoin goes even lower. So

there's a wall of money. I call them kind of the folks that have always like a limit order, if you will, on the Bitcoin trade and their brokerage accounts that i bits of the world now allow that presumably those types of ri investors didn't exist before um look i think the reality is there are a lot of concerns nonetheless as to what the next three months is going to look like 2025 is you know off to a pretty difficult start all things considered global bond yields are in a pretty unusually uh challenged place and at the crux of the issue is really the strength of the dollar i think many people have already been focusing on how much of a universal chaos agent a strong dollar can be, but it really underpins a lot of the

global carry trade in the ways that we know how cross-border flows work. So a strong dollar is the biggest chaos agent. And the thing that I often wonder about is the cost of opportunity, the opportunity cost of capital for Bitcoin when other things become very volatile. So what I mean by this is Bitcoin, one of the best features about it is volatility. People are attracted to the possibility of those types of returns. And if you take a step back and tell, hey, actually, now you're going to have other things that are super volatile, including long duration bonds, equities, of course, other FX markets. But that means, relatively speaking, the competition for that attention for volatility

is worse for Bitcoin. And I think there are ways in which we have to acknowledge capital still is finite and capital will flow into other opportunities. And so cutting it. Finite, he says. Tell that to Jerome Powell. No, I'm kidding. Oh, let's, let's, let's, let's, yeah, let's see until Besson comes in and starts issuing long, long, long duration coupon bonds again, which we need. This is all part of the issue that I think Janet Yellen has put us through by changing the issuance calendar. But what I mean to say is

Trump is a volatile president. We know he's going to introduce volatility. And at some level, volatility is competitive to Bitcoin. So that's something that I always think about in the backdrop. There are many reasons to still believe Bitcoin will continue to go up.

But in the short term, the strength of the dollar, rising 10-year yields, resetting people's expectations on what that terminal 10-year rate can be is, I think, a moving target. If you actually look at the agency mortgage bonds implied 10-year targets, which removes some of the technical distortions of the supply-demand curves related to the actual native bonds, it's a lot higher. I think it's about 5.5%. So we're already kind of over the true 10-year yield as implied by perfect market to be beyond 5, which means we can really imagine it could go a little bit higher. And those things I don't know if has been totally

priced in for people coming into 2025 since the end of last year. What I find interesting, obviously, is that we have a historical inverse correlation between the DXY, obviously, or dollar strength generally, right, and risk markets. But since September, when the dollar actually bottomed, I mean, you can take a look at the chart.

I won't pull up all of them, but I've mentioned this before. You know, you had the bottom right around 100. We've done nothing but rage on the dollar versus basket of currency. In that time, stocks have raged and Bitcoin went from like 50 to 108. So there's a clear disconnect here into what happened. So why now are we getting back to that point where this dollar strength is so competitive, I guess, to risk assets? And is it because the yields are also

doing what they're doing? I mean, I just tried to figure out why there's been this disconnect in this sort of September to January period. Yeah, my instinct is that we had a bit of a pivotal wake up call through December and really even early January, which is that the Fed is actually losing control. There is the term premia that has now been rising perpetually in a way that I don't think people anticipated. If you ask people what they expected for most of the long-term yields to affect and the ways that it flows down to consumers, right? Whether it's your credit card financing or your personal loans or mortgages, you probably did not anticipate those things to be a higher

cost of capital as we were cutting rates. And those types of things, I think, Scott, you alluded to some of this as well, is just super counterintuitive and shows you that there's a little bit of that loss of control in which the Fed can't actually exert the long end of the curve. People know this. Fed can only do what they can on the short end. And the long end is actually challenged by true supply-demand dynamics between those buyers and sellers, especially as it relates to our foreign investors. And there's less leeway for the Fed to control that. And what you're seeing actually is that there's a loss of confidence in that power vacuum almost of the central bank of the United States being able to exert some ability to control these

yield dynamics. And anytime there's an absence of a power dynamic, it introduces volatility because people can't anticipate how other central banks will then behave. And those types of characteristics, I think, just introduce uncertainty in the way that it can be a little bit more self-fulfilling than not. So we really have to imagine it can go a lot higher. Yeah. And Andrew, we were told not to fade the Fed. Right. But it seems like markets are fading the Fed. Yeah. I mean, the numbers, the numbers bear themselves out. You know, don't fade the Fed. And then it goes the opposite direction. It's a really it's an interesting dynamic

in a moment in time, right, because we've got dramatic regime change in a large subsection of our quote unquote Bitcoin and crypto world. And then we've got all these macro things that are happening that Jeff just did a great job of explaining and where will those meet? What will be the outcome of those things happening, right? So we have significant adjustments and changes on the regulatory side. We've got the SEC losing time after time after time in court. We've got adjustments to federal regulatory agencies associated with guardrails for crypto that are widening by amounts that we couldn't have imagined while at the same time we've got the dxy nearly at 110 and when when that happens and you know what are the previous cycles where it's even approached that you have also and to

jeff's point um how does it trickle down to retail? You know, you now have some, you know, information and podcasts that are that are, quote unquote, nearly as popular as this one. Starting to talk about what's going on with rates, where are rates headed? Why has there been this big difference in what the Fed is doing versus actual real rates? And who is it affecting? And so, you know, starting 2025, there's some real crosswinds, right? We'd love to have only tailwinds, but there are some crosswinds that exist here. I do think, though, in the medium and long term, you know, Bitwise's study that they just put out associated with financial advisors and their thoughts on crypto and digital assets and all that stuff. That's where the real

tailwinds are. And that's where the real momentum is. That stuff is really compelling stuff. I think that they put out a good portion over the last few days or the last week or so. Yeah, that's where I default to the signal versus noise. I mean, we do a show every day. We're forced to talk about it. You know, obviously, we had this dip yesterday when DXY hit 110 and yields hit 4.8. But does any of that shit matter when you have these fundamental tailwinds for this market, which, let's be honest, is still exceptionally small? I mean, look, today, we're going to be talking all day on shows everywhere, on CNBC and such. Stock market today, Dow S&P 500, Nasdaq set to open higher after subdued PPI reading.

So today, it's all about the fact that PPI did not come in hot, but we got CPI tomorrow. We had job numbers last week. We got the CIA, the DOJ, the FBI. I don't know. And they all conflict. And it all conflicts, right? Jobs are strong. Unemployment's down.

As we always say, we live in the upside down from stranger things. I don't know anymore when good news is bad news. Bad news is good news. I mean, Tillman, like, does any of this shit matter when you're just going to have extra billions and billions and billions of dollars of buying pressure into a scarce asset? I look at it as a distraction, personally. I mean, I'm a technical trader at heart. And so when I see the V recoveries that we've seen the last two price steps, I think there's, like Jeff was mentioning, a pocket of money that needs exposure to Bitcoin. I mean, Jeff, excellent description of the macro environment.

My question always goes back to how many participants do we have now versus how many will we have? And I saw an article this morning talking about two potential executive orders being issued on day one of Trump's presidency, specifically relating to crypto. I don't think we have market saturation in Bitcoin anywhere close to what we have in any of the other markets. So the exposure push is still going to be, in my opinion, the major push from all the big money players. And then if you talk about the retail side of it, I just, the conviction I have in my heart is that Bitcoin will be held by banks at a retail level in Trump's presidency. I see Bitcoin desiring everyone that's really in the driver's seat, wanting to provide yield to average holders. And I think that's coming. I think it's coming to your corner bank.

I think that will be part of the legislation that he pushes through. And I think that's going to be, you know, rising tide floats all ships. I think we're going to get a larger and larger portion of the automatic buys that are associated typically with your 401k IRA accounts. And I think you're going to see that level continue to rise over time. So, you know, when I see all of the headwinds facing one direction, but in a very short period of time, winds are swirling. That looks like, to me, a shakeout. That seems like large players need positions. And when you drop the price as drastically as they did, as quickly as they did, look at the last three or four drops. been single bars down i mean just like god candles to the downside and then these recoveries that are just systematic buys essentially uh that that bodes in my opinion uh well for for positive price action i'm not saying that it'll be immediate but i am saying that when everyone in the administration is talking about executive orders and putting crypto front and center of kind of the campaign for the next four years,

it's hard for me to believe that that's not going to have an overwhelming effect on people's participation. Yeah, just for a little bit of clarity, this is something we've talked to death on this show, obviously, SAB 121, which was the, it's not even a law, right? It was a counting bulletin from the SEC. But back then, before Chevron was overturned, you were allowed to just say something at a regulator and pretend it was a law. But SAB 121 effectively was the memo that said that anyone custodying Bitcoin had to have it listed as a liability rather than an asset on their balance sheet, meaning that if a big bank wanted to custody Bitcoin, they had to have an equal amount of cash to offset the Bitcoin. So what custodian in the world is going to take $10 billion or $20 billion or $30 billion from an ETF and then try to raise $30 billion to put on the other side of the balance sheet impossible. So we know that that actually passed. The repeal of it passed with bipartisan support. And then Biden famously vetoed it. Right. Which left a lot of people wondering why the hell would you veto something? And then the more curious part of that story is that Bank of New York Mellon then got

basically an exemption. Didn't apply to them. So not features winners in the United States or anything. But giving a wholesale reversal of this in an executive order would mean, that was a very long-winded way of saying, the big banks are going to be able to custody Bitcoin or participate in this. And to me, that is

exceptionally important. We also know he could have an executive order on a strategic reserve quite quite a few other things i mean jeff that's what i'm saying it's like yeah you know hi but tailwinds man no this is this is true uh you know i we're also excited to have our i guess america's first crypto president and yet when i look at these uh news flows the thing that i worry a little bit the the dynamic here is like the Sat121 repeal is almost not even a crypto issue. Scott, you kind of hinted at it, but it was actually just a bad due process with tons of things that hinge on illegality that should not have ever happened. So that's like a very low hanging fruit. Like that shouldn't even be

applauded as like a win for crypto, in my opinion. In fact, I would say for me, at least personally, the moment I lost kind of faith in the leadership of the direction of the Democratic Party for last year would have been when Joe Biden overturned it. Like that conversation there is unspeakably unnecessary. And so there are some low hanging fruits like this that I think we want to celebrate. But we really need to see more crypto friendly agendas come through to like SAP one to one is basic accounting change with FASB is basic. Like those things are table stakes. What we really need is actually more clarity on whether people will be interested in stable coin adoption bills. I actually think there are still lots of conflicting arguments as to whether that is pro or negative to dollar reserve systems. And so there's more important things that I'd love to see substantial conversations on. Also,

the other dynamic I worry a little bit about is, you know, as much as we want there to be a crypto agenda in the White House, I think we should all accept that it's probably not going to be their first priority if the world implodes in ways that there are other things that are really, really serious. Like you can't imagine if there is a global financial meltdown that Trump is still going to talk about crypto. No way. Like this is a, it's a bull market kind of correlation policy that's path dependent. So in some sense, I think that's why when yields blow out or dollars strengthens beyond means with a true shortage

that creates financing issues, it's a worrying thing for crypto, not just because it's unrelated to crypto but it just means there's going to be less prioritization for those things uh so i think there is a little bit of that path dependency that's always being priced in with crypto as well yeah i've been saying that over and over again is that we're sort of bitcoin at 108 certainly i don't know about at 96 but it was priced to perfection for all the news that's been happening. Right. It was like, right. Besant and Atkins and RFK and Musk and Rems.

I mean, literally like Bitcoin or after Bitcoin or after Bitcoin are being appointed. Now you need to see them do something in the first hundred days or it's going to be a massive letdown. Not saying that that matters long term because we know that they will eventually do something. But to your point, like if Los Angeles is burning and we start to get a threat of nuclear war somewhere, then stablecoin legislation might not be the number one priority. Short term, you know, Jeff is right on many fronts. But long term, four years is an absolute eternity in crypto. All right?

An absolute eternity. So if you have a massive paradigm shift as it relates to leaders, to the different cabinet positions, the economic positions, and then a president that is pro-Bitcoin, pro-crypto, again, just a reminder, the guy showed up at the Bitcoin conference. I mean, that still blows my mind.

Still blows my mind. He left with about 50 million bucks. Yeah, true. Not being cynical, I'm just saying. But to me, over the next 12 to 36 months, the difference between the last 12 to 36 months couldn't be more stark, right? It couldn't be more stark.

While at the same time, there are short-term concerns over the next 90 to, let's call it, 120 days associated with a little bit of micro macro stuff moving around that Jeff's done a good job of of uh of discussing here so um yeah it's it's an interesting time uh while at the same time you know putting yourself in position when there are again to tillman's point when a dip like yesterday happens down to 89 and it's hilarious if you're looking at the 15 minute how skinny and long that can that candle you know wick is down to 89 how quickly it was eaten up. I mean, just gobbled up like crazy.

And then I wake up this morning and I turn on TradingView and we're popping to 97, right? Just a remarkable- I was literally on the show and people were like, Scott looks really distracted. At the end, I was like, yeah, I had to literally like open up my screen. Love it. I had to. Like I bought a lot of Bitcoin right there. Can I add one more comment to that, Andrew?

And I want to just riff a little bit on what Tillman was saying too, which is you guys are both absolutely right. There's idiosyncratic drivers for Bitcoin, regardless of the global macro backdrop. This is 100% true. One thing I think that represents that investment for Bitwise in the product lineup

is that we are going to launch the Bitcoin standard ETF, which will start trading in March. I don't know if you guys have seen the prospectus there, but essentially it is an ETF that is buying public equities that have Bitcoin as part of the treasury reserve in the treasury. So it's like micro strategy plus a long tale of global companies that are involved in wanting Bitcoin on their balance sheet. I think even yesterday I saw maybe Bumble had bought Bitcoin on their balance sheet. And there are more companies like this that are coming through that is growing that pipeline of candidates. So these are flows. These are flows the same way that corporates can create flows, the way retail can create flows, the way institutional investors can create flows. And one big bet I think that we as a firm have made is that the corporates are next and that they have opened their eyes to seeing the possibility to be another idiosyncratic actor bringing flows into the system this year more strongly than ever before well so to me to manage the volatility and you know the the macro uh

environment there's the way i look at it is is there's a dashboard right on on the car or the spaceship whatever reference and up until this point there has not been a bitcoin lever on that dashboard it's been all the same financial instruments that have been around for 50 years. There hasn't been an alternative that provides companies and nation states this disproportionate risk reward ratio that doesn't really exist in any of those other asset classes. And so to me, it's about will they pull the lever and how meaningful of a percentage does that account for in the Bitcoin universe? And you're talking about so much money on the other side that's attached to every other lever. Every other lever on the dashboard is getting pulled with extraordinary liquidity behind it. And so if you just take a fraction of that, even if they

just try the lever and they see the benefit of the lever, the question in my mind is, is how much money is going to flow from those other levers to Bitcoin specifically? And how aggressively are they going to follow in the steps of like Michael Saylor and try to make their destiny really attached to that one lever? And, you know, I think the more desperate you are, the more you will apply to that lever. And I think even Michael Saylor has said that Bitcoin saved him. He did it out of desperation at the beginning, but it worked. And now he's, you know, in a different place than he was then. And he's kind of paved through the jungle of noise and congestion and shown everyone we can

build an eight lane highway here, guys, let's let's do it. So, you know, to Jeff's point, I do think corporations have seen the light and is even if they put two percent of all of their cash reserves into bitcoin there i don't believe that that there is a strong enough macro wind to fight that i i think the uh the amount of uh liquidity that will flow into bitcoin uh compared to what's already there is going to be substantial i do not think we're going to get another Michael Saylor, though. Right. I think that Michael Saylor has shown us the most aggressive possible path. There can only be one.

I think even the miners that are trying this, their notes are somewhat popular. Well, let me paint that. But I think he's showing exactly what can happen if you take the dampened version of this strategy, like you said and just do the two percent right but what what about a failing company or a dinosaur company a legacy company like facebook look at what mark's done zuckerberg's done over the last two weeks dressed up like eli musk and became desperate times call for desperate measures scott you gotta save you gotta save your reputation who does his PR and how can we hire them?

Because he literally did all the shit and then he's like, I can't believe they made me do this as if there's no responsibility on his end for allowing it to be done. That's unbelievable. Let's go back a decade and look at some companies

that could have dramatically benefited from implementing a bitcoin standard a company like eastman kodak a company like blackberry okay i mean honestly like these companies died because they didn't adjust from a technology standpoint in a meaningful way and tech overtook their brands and killed them right? Well, there's certainly a financial component. I think the financial component can be two ways. One is, of course, the growth of the asset will help you recapitalize if you believe in Bitcoin. The other part I think that people speak about a little bit less is actually it makes your stock much more difficult to short if you have Bitcoin

in your balance sheet as some component, which is actually just a positive EV thing that you should do as a CFO. Actually, if you look at Tesla, which was one of the most heavily shorted stocks in history, the moment they adopted Bitcoin, you can see over time from then on short interest would collapse. And it's because people don't want to be short things they don't understand. And so that removes some aspects of that type of trading behavior. That's a great thing for a public company. The other thing I would mention is not financial. It's actually social. There are certain companies that are young and millennial leaning,

Gen Z leaning, that would benefit heavily from having the free publicity that comes from embracing Bitcoin. I think I saw yesterday there was like a distillery roll-up conglomerate type that embracing Bitcoin. I think I saw yesterday there was like a distillery, a roll up conglomerate type that adopted Bitcoin. Think about how much more booze they're gonna sell to now people who love Bitcoin, just because this company distinguished itself versus other, you know, embeds of the world

that they're not participating in the story. That kind of consumer loyalty, that fandom, that comes from free branding by attaching yourself to the future is a financial one, but it's also a cultural one. And I think more companies have opened their eyes to that possibility that we're going to see, not just failing companies, but also growing companies that are trying to find some arbitrage. You know, Jeff's Bitwise Thunder yesterday, his colleague matt put a you know put out a paper yesterday that that corporates find bitcoin is not just a trend it's a mega trend right now you know i don't

know what the difference between trend and mega trend actually is it means bigger it's the difference to what level i'm not sure but you know you know, that sounds good. I like Megatrend. It just means more Bitcoin on balance sheet. That sounds good to me. It's the difference between huge and huge, okay? Jeff, that was brilliant insight, by the way. I don't hear much people talking about it. But what you're saying is absolutely true. And it's something, think about that dynamic that you just mentioned.

Grows your top line while protects your downside at the same time one swing of the sword and you're getting benefit on top side and protection on bottom side that there again i don't think there's another lever on the board that has that type of action and I think a lot of people are going to be interested in pulling the new lever. 100%. It's the golden sword and the golden armor. Exactly. Exactly. Dude, Bitcoin's awesome. You guys describe it. I just want to like smash the buy button again on Bitcoin while we're here, which you can do every single day with ArchPublic, but we'll get to that later. Hey, but I want to get to the topic at hand here, right? Is the bottom in, I guess, because I think, you know, we're still in the middle of a range. As I showed this article, I mean, seems that traders are betting on the fact that that was it, right?

That maybe the trip to 75K was overblown. And then the backside of that, if the bottom is in, when can we make a new all-time high? And are we going to go full Tom Lee and see 250K by the end of the year? Andrew, I think you actually were debating somebody on, you posted, I guess, everyone's Bitcoin predictions. And then somebody, I don't remember, jumped in and was like, none of these people matter. You were like, literally everybody on Wall Street Yeah. People listen to Tom Lee. People listen

to Bernstein. People listen to Bitwise. People listen to VanEck. Those are all people that I listed in some way, shape, or form in that list. By the way, Tom Lee set off some alarm bells yesterday by saying, well, maybe we go into the 70s that's another great opportunity to buy in 2025 maybe when we go to the 50s a huge opportunity because i still think we go higher so um yeah you know is the bottom in

you know that's an esoteric question that i can't answer uh But at the same time, you know, we've seen every time that we've had these moves down, there's aggressive vibe pressure that immediately comes in. I don't know. I mean, is there a world where we get into the 70s? Sure, there's a world where we get into the 70s. It's hard to see what that looks like and make that case right now, for me at least. But at the same time, you know, if some of these macro issues that Jeff is talking about get a little bit more difficult, maybe there's some negative type of news associated with global geopolitical stuff going on. Sure, we could we could push lower um but at the same time um again we have all of these larger macro things happening in the background um where corporates are buying bitcoin nation states evaluating bitcoin bitcoin strategy yada yada all the stuff

we've talked about here it's you bottom in? I don't know. We'll find out soon enough. Well, I think that question, honestly, is loaded to begin with. I don't think... What do you mean? Are you accusing me of having a clickbait YouTube title? No, no. That's ridiculous. Most people use that terminology,

but the bottom is always associated to a time frame. Unless Bitcoin ends tomorrow, what time frame are we judging on the bottom? To me, I see that volatility is good. Good for Bitcoin, good for accumulators. It's weak hands going to strong hands. And the strong hands now are corporations and larger buyers. So the question is, is when do they satisfy their fill in owning a X number of Bitcoin? And I don't think we even understand how much buying pressure is pent up underneath Bitcoin's price compared to other cycles that we've gone through. And, you know, if it crashes

to 70, my prediction will be it'll be a V recovery right back to 95. And there'll be a lot of weekends flushed out and a lot of new buyers that now have a larger percentage of their net worth associated with Bitcoin are stored in Bitcoin. So, you know, again, it's just like, what's the bottom today? What's the bottom tomorrow? In my opinion, it just doesn't work looking at Bitcoin like that. The rising tide floats all ships. More and more liquidity is going to come into this lever. Why?

Because it offers advantages and differences than any other levers on the board. And we're just starting that. And so I just find it really, really hard to believe that Trump isn't. I know, you know, he's got bigger fish to fry, but he has to incorporate this. This has to be a part of it. It's tough to get Mexico to pay for a wall. I mean, we haven't even started the thing. Like, what are we going to even do when we own Greenland and canada i it's like it's hard to even keep up it's how can crypto fall into the

we're going to take canada over agenda no but listen we talk about uh this sort of uh bid you know that this constant institutional bid i don't know if you guys saw this news italy's largest largest bank in test that buys bitcoin for one million as a test. Bro, send your test my way. You guys can test with my account if you'd like. But, you know, this is just another example. It's not huge, but they're saying, hey, we own 11 Bitcoin. We want to see what happens. We have an intention of growing this stack. These are just little, little stories. But eventually it's just going to kind of be everyone to your point. But, Jeff, what I what I want to talk about.

So, A, I remember Hunter, the CEO, obviously, a bit wise, tweeted something yesterday, the other day. He said, listen, like, all right, ETF buyers are diamond handed. Right. And we've seen that. We generally just keep having positive flows even on bad days and weeks. So people are buying. Those people don't generally sell depending on who they are. If you're an institution and you're just buying Bitcoin, you're not panicked to get a 10 percent drop because you just did the years of due diligence to even approve this. Right. And it's just that you're adding it because of the actually if it goes down and other things go up, that's good for your portfolio. Right. Because it's got this idiosyncratic behavior. So I think it's a different kind of bid that we've had in the past because

they're going to be diamond handed to one degree. But then there's something you said earlier, which is really interesting about the volatility. I would imagine as these institutions, if diamond handed buyers come in, it has to dampen volatility because it becomes an asset for everybody and people are just holding it. I actually had a conversation yesterday with Luke Stryers, the CEO of Deribit. We have 85% of the options volume. We haven't even talked about what happens when we actually get a mature options market on all of this and what that does to volatility, because it's just not even a thing. And that, like, if you look at any asset in the United States, Tesla stock, all the actions and options, not on the underlying spot buying and selling of Tesla, right? That doesn't exist even in the United States with Bitcoin yet.

He was saying right now, he's like, they were working on creating a button on Deribit for the carry trade. He said, we literally just press buy and there's your 10 or 11% annualized. Done, zero risk, period. You don't participate in the upside of Bitcoin if it goes to a million bucks, but whatever Bitcoin you locked up, you're making 11 or 12% this year. I mean, that doesn't exist for most assets still. Yeah, no. And it's precisely because of the volatility within Bitcoin that can provide those types of yields that other assets cannot. That's the link between rates and volatility that Bitcoin is bridging. There are two developments there. I think since the last time we chat, one, we saw SIBO actually come out with options products

that you can actually trade with customization that creates OTC-like features that is still centrally cleared. Those are huge because it allows structured products to come to market. The other thing is that Nasdaq and BlackRock actually filed with the SEC to increase the position limit to a much larger number that actually I think is still conservative at $250,000 relative to what it could afford to start. And those are all necessary ingredients to create, as you described, that vibrant financialization of Bitcoin products. The product that actually I think I'm really intrigued and excited by is the type that you

just mentioned, Scott, where can you take Bitcoin risk and actually not participate in the downside and only get the upside? And that class of category does exist. They're called principally protected buffered notes. And those products actually kind of only really work when you have a high interest rate environment because you're essentially using the premium that you're giving up to then go ahead and buy call spreads on the underlying. So if you price out those notes, you can tell investors, Bitwise clients, for example, that you can now be long Bitcoin, but you don't have to ever lose money.

You only get upside. You might not be up 100%, but maybe you'll be up 12. And if you're OK with being up 12 in a year, but zero downside, is that an interesting product? And for those folks, they might actually say, look, I can put my money in the money market fund and earn four and a half, or I think Bitcoin is going to go up anyway. And so maybe I can double my money market fund type returns by taking a little bit of incremental risk, which is to then get to 12. So you introduce a whole new set of buyers that are then going to come out. And what are they doing? Actually, they're actually selling

calls on the upper end, right? It's a call spread. So those kinds of things introduce new risk profiles for options trading and market making that create different types of trading behavior. So I think that's the story of 2025. If 2024 was the year of the Bitcoin spot ETF, 2025 for Bitwise and our issuers in the crypto community will be the year of financializing it beyond that to more products that are useful to the broader wealth and management community. I couldn't agree more. And I would go one step further and say that if you even look at the disconnect between spot BTC and the products that we are creating around BTC,

I think there's a lot there's a story to be told there. These single candle dips that we're experiencing is the last four have been on Saturday and Sunday. And I think that that's not by accident. I think that the heavier the flow of liquidity into the products that you're mentioning, and I've said this multiple times, I think the most important part

of the Bitcoin community right now are folks like Jeff who are creating products, they're productizing Bitcoin in a way so you can buy covered calls and you can do all of this sophisticated, it's the same old, same old game that we play on all the other asset classes. It's just same old, same old game that we play on all the other asset classes. It's just coming to Bitcoin.

But, you know, if I look at the volatility going forward, I think the volatility is going to mainly be focused on the weekends when those products aren't for sale. And it's easier to move the price because you don't have Wall Street's money flowing into the asset class. Yeah, all the dudes who have been moving Bitcoin price since it existed are going to have to operate on Saturday and Sunday instead of Wednesday and Thursday because right. But I think you're missing the real point, Tillman, which is that all the volatility that's dampening in Bitcoin is going to accrue to Farc coin. But by the way, you know, just a reminder that your typical PWM, private wealth management client, Morgan Stanley, is not the same guy that bought NVIDIA in 82 and has just been riding the

lightning up to whatever the number is now. That type of client is looking for products just like Jeff described. Well, I can get 4 plus percent on my money market or I can get 12 percent on this product with a little extra risk. Those are the types of plays that a guy with $25, $50, $75, $100 million that has got their money custodied at Morgan Stanley or J. or JP Morgan Private Bank. Those are the types of strategies that they employ to just add a little more juice on an annualized basis to their portfolio. They're not launching 30% of their portfolio into spot Bitcoin or into spot anything, frankly. These are the moments that they play a new asset and they play it in a very strategic careful way and so um you know these types of products are going to be

in 2025 um there's going to be you know an undergrowth you know amongst the forest of these types of products that over time will end up having more and more sway over, quote unquote, spot Bitcoin. Well, and I think it goes back to the single thing. If I said, what's the word for 2025? It's yield. All of those products have one thing in common. They provide yield on top of carry value. And so if you look at, you know, even the banks implementing a we will let you deposit Bitcoin, what is that about?

It's about producing yield on the back of Bitcoin. I just think 2025 is going to be all yield driven. It's like, yes, it's great that this asset's performed like it has 40 plus percent year after year for the last 16 years. But where's my cash value? Where's my yield for owning this asset? I think that's coming now. Trivia question for you guys. Do you guys know what the best performing ETF was last year? No. Was it not iBit? So most of us would guess iBit. And actually, I would agree partially it's true. As a passive spot tracker, iBit was, in fact, the best crypto ETFs, sorry, ETF. But as a category, actually, the best performing ETF was

the NVIDIA covered call strategy. So going back to what you were saying, Tillman, the ability to capture yield on high volatility assets on top of maybe the boost that comes from the underlying, if you actively manage it well. Now, if you calls then you won't participate the upside so you're counting on a human there yeah yeah exactly you're counting on a professional who knows what they're doing to do it for you you can actually outperform the spot too and so that's actually why bitwise we also filed for three cover call etfs that will come live in march there's a coin based cover call strategy there's a micro strategy cover call strategy uh and potentially one in the mining space as well. So those are products. Oh, sorry. So did NVIDIA covered call ETF outperform NVIDIA?

No. Okay. So the best ETF, but didn't outperform the underlying stock. So it's the same thing. You're allowing yourself to have sort of a guaranteed yield and earning without participating necessarily in the parabolic. Right. Right. Which is why, you know, partially you guys are all correct in saying crypto Bitcoin ETFs were still the best performing ETF from a passive tracker basis. That's really interesting. I didn't know that you guys were launching those. So can you launch can you launch those on spot? You said Coinbase, MicroStrategy, and what else?

And we have one tentative file for a mining company as well. Okay, so they're still on publicly traded equities rather than on Bitcoin or Bitcoin ETFs themselves. Yeah. Interesting. So the moral of the story, as I listen to everybody talk here, is that whether it's yield that's 2025 or nation state adoption, corporate adoption options, we're literally just at the point where or S getting the same, basically getting the same products and ideas and credit that any other market has.

To me, that's the story is like, you can still front run Bitcoin getting obvious things that exist in every other market. Yep. That's correct. Speaking of yield, by the way. Everywhere. Are you about to start talking about arch publics? I can let you live your life for the next 10 minutes. While we while we talk about arch publics do stuff bad. Guys, Jeff is amazing. As you can tell, you should be following him. Your your name is down there in the description. But I'm going to go. What's your I want to say it's DGT 10011, right? That's right.

Always fun to be here, guys. What's 10011? Well, DGT is an acronym for Delta Gamma Trading. I think those who trade derivatives might see those in their P&L attribution tool. It's an homage to that. And then 10011 was actually my zip code in Chelsea, but I thought it was clever enough that it looked kind of like, it was that, or if like you were like, it was like a homage to like the future of quantum computing and no

longer being ones and zeros. I don't know. It could morph into that in the future. All those ones and zeros. It could be anything you want. Give Jeff a follow, check out everything. You bitwise is doing

jeff thank you so much man thank you so much for having me see you guys again soon oh look where our faces got huge whoa we're gonna go small fit big face guys i am you guys don't know this yeah i have a producer but i'm in control i can do anything i want at any moment i can do that you didn't did that. So listen, let's talk about this. Obviously, I actually wrote about it in the newsletter today. Something that I would talk about anything you want with Archpublic. But obviously, we have the Bitcoin algorithm we've talked about with Gemini many, many times. I know you have Solana and Ethereum coming with that, but that just basically dollar cost averages into Bitcoin and finds you the best price in any time period, which of course can mean 1%, 2%, 3% benefit to buying at slightly better prices over time. We all understand what Michael Saylor is doing.

This is just doing it more efficiently. But now you have a Bitcoin algorithm arbitrage strategy, some eye-opening numbers, 234% annualized returns, 11% annual cash flow. Maybe I'll just leave this up. Tell me, just break this down for me. How? Yeah, this is a case study about a new algo that we've created that allows you to determine what percentage move is required for you to either enter or exit a position. So you can not only dial the percentage move, but then you can dial the exact capital allocation that you'd like on both the buys and the sells.

So it creates this opportunity where you can be buying twice as frequently. But when the right percentage happens, you can, it will automatically sell a certain amount of capital. And so there can fine tune this in the exact same way that Jeff was talking about, where you can dial in exactly how risk adverse you are. So if I want to be very, very risk adverse, I'm going to focus on strategies or I'm going to focus on specific variables that allow more cash return and less accumulation of Bitcoin. Whereas if I want to dial it up and really focus on accumulating Bitcoin, then I can dial the cash benefit down or the arbitrage or the trading activity down

and focus more on the buys. But this is a tool that is as flexible as any human being would ever want it to be. You can literally dial it to your preferences, put in the allocation that you want, put in the accumulation values that you want, set it and forget it, and let the automation do its job, which is monitoring the markets for movement without you sitting in front of your computer. I figured this was just like buying those sweet premium, selling those sweet premium Korean kimchi, you know, premium Bitcoins like SVF used to apparently do every day to make that MCX fortune. It's not doing that? No, no, it's a completely customizable solution to essentially focus on producing yield off your Bitcoin stack, but also accumulating more Bitcoin. It's funny, by the way, when we had that conversation as a side note, like about

volatility and perhaps the volatility on Bitcoin coming down. Anyone who is here, like, you know, I kind of started in 16, 17. There was that moment when Bitcoin hit the all time high of 20,000, which, by the way, it's such an arbitrary if you actually look at my exchange. But like there was a moment I remember. And if you had had money in all those accounts, when Bitcoin was like 15 grand in some countries and 20 grand in others. Yeah. Talking about insane, because they were going nuts in South Korea. They were buying it up.

I think it was probably 23, 24 at some point, if you were looking at prices in South Korea. I mean, it was really an insane time. in south korea that premium i mean it was really an insane time i used to take litecoin i think it was binance bittrex and coinbase and there was roughly a four percent four to five percent difference today time unfortunately i didn't have much money to do it and i had the uh the to wait you know the 30 40 40 minutes for it to go but i would just circle them around with cash on one and be buying on one and selling on the other and just making three four percent on every single trade indefinitely for like a period of 10 days yeah if you've been around long enough there were there

were uh there were serious moments where there were um big differences in price just on exchanges forget about the actual you know countries but there were major differences in exchanges. Imagine buying Bitcoin at 10% discount on Kraken to Coinbase for 25 minutes. Those moments existed. That was a real thing. If you had size, man. Just look at how mature we are as a market versus back then. I still think the same dynamic exists. I just think

it's now between overnight and after hours and during the day. And the larger the product line, like Jeff is talking about, that is created, the more liquidity flows into those products. And at a very, very quick pace, the spot market price will actually become the tail and the dog will be the derivatives and or the product market or the Wall Street productization of Bitcoin. And I think this is the year for that. That's really where we're seeing the most inflows. if you look at etfs why why would you want to own spot bitcoin as a corporation with all of the headache and the liability that comes with it when you can buy an etf just like you do any other day of the week and it doesn't

change your modus of operandum at all like you can literally um implement it with the same um you know prudence that you do with everything else without any of the scrutiny that comes along with holding it you know in a cold storage wallet so i think as those those that desire grows for those product lines we're going to see a shift between you know the overnight exchanges um all of the crypto exchanges really being the driving force behind the price of Bitcoin to really what Wall Street says the price of Bitcoin is, which will be a narrowing of the spread. We're going to see a shrinking of the spread, which is good. Market makers are efficient. They want tight spreads. But it also will leave great opportunity for massive moves in the overnight when Wall Street's asleep.

And, you know, that to me is where people will find the accumulation. And that's what looks different to me than the last couple cycles. It's a different, you know, Monday morning wakes up. What does Bitcoin's price do? And we saw it this morning. What did it do? It's climbing. It's not climbing because they bought at the dip.

It's back over where the dip started. They're buying because there's a constant inflow is the bottom line. Shebug would like you to know that all men want tight spreads. Sometimes it just hits and I couldn't help it every part of me said don't click that but the 22 year old version of your brain says I love click

I don't know I think our audience probably skews generally towards our age so they know but for those of you who uh are young and by young i mean anything basically younger than me 48 like you don't change yeah yeah when i remember being like 22 and i was a senior at at penn and like there was these two guys who had been in our fraternity who are like 24 and would come around. And I was like, get these old men out of here. Like, what the hell are these 24 year olds who aren't married yet with kids doing hangout with college people? And then at

40, you're like, man, I would, I'm going to go back and check in, in my reunion and see what's happening. Yeah. Getting old isn't for the faint of heart, is it? No, yeah. You're sick like 97% of the time. So I know that that's true. Lucky Lob says, so yesterday it was 80K next, and today it's 250K. I don't know if you guys have ever seen Fast Times at Ridgemont.

Is it Fast Times at Ridgemont? Yeah. Life comes at you fast. Yeah. Life comes at you fast. Yeah. You never know. Any different day.

But, yes, I will admit that less than other YouTubers, I do try to get you to watch by saying dumb shit in the titles. Let's look at that comment real quick and say, okay, what's the downside risk to a move to 80? What's the upside risk? Or what's the upside potential to a move to 250? Sounds pretty good to me still. I mean, if we drop to 80, say 50 in that equation still pretty good to me still i mean if we drop to 80 say 50 in that equation

still still sounds good to me you know barris bueller's day off god i'm so dumb paris life comes at you fast i mean i knew it was god see it was one of the classics i botched that one i botched that abe froman sausage king of chicago i know that so listen we are we already made it to 10 o'clock but any i'm going to bring up arch public here you guys should be checking this out obviously so wait when is that launching and what else can people do give us the three minute like what else should people be doing we we updated that at the end of the year the portfolio that we had the 10 000 portfolio closed at 13 500 35 gain basically two downside trades at the end. It happens. But so, I mean, we've got a lot

going on here and I don't want them to miss it. Yeah. We'd love to demo the software. We're all about teaching people how to use it and understanding it. And the more you put into it, the more you will get out of it in terms of value, because there's a lot of features that, you know, you can spend a long time learning. So we love educating. We love talking to people about what their overall strategies look like. It helps us in our endeavors and in what we're trying to accomplish, which is to create, again, the best products that help both retail and institutions accumulate and buy Bitcoin and get in at the best price, but also provide them some flexibility as it pertains to creating yield. So we'd love to demo the product. We've

actually got, if you want to go to the Bitcoin algorithm button right there and click it, you can download it for free. I think it technically costs one cent because that's what PayPal requires. But download it, try it, call us, let us walk you through a demo. You know, we can share screens and go through settings and show you how to pull historical reports. And then once you get the hang of that, you're going to play with it like a toy, like a new toy,

and you're going to find the settings that really speak to you and see the historical performance behind those settings and draw a lot of confidence from that. But then the benefit is really not having to monitor and not having to go through the emotional swings of monitoring a position and having essentially set the rules before the emotion becomes a factor. And I can't tell you how valuable that has been in my life. If you can remove emotion

from trading, it's a significant value, not only in the potential gains that can be made from, you know, avoiding making bad decisions, trading when you shouldn't trade, but also just the quality of life. Like who wants to sit at a computer all day and wait for the dip to buy? You know, this is like having a fishing line with a bobber in the lake and you just come back when the bobber's underwater and start reeling in. So it's a different type of technology than most people have ever seen before. Trading automation is here to stay. It's here to stay for both institutional and retail. And we're trying to create the most cutting edge products that help people achieve what they want to achieve with

those tools. Andrew, any final thoughts? Yeah, I mean, I would just say in the previous slide, you know, it's very difficult to find the upside associated with Bitcoin and, you know, buys and sells on our arbitrage play and also have um you know yield associated with cash uh the arbitrage strategy as it relates to our bitcoin algorithm does both of those things for you and that's something that we'll talk about if you you know come to us and create a meeting we'll show how and why it does that but you'll be hard pressed to go looking for a product out there in the market that is going to capture the returns associated with uh you know Bitcoin just as an

asset but also contribute on an annualized basis you know cash returns and yield on behalf of Bitcoin as well very very hard to find that if you're a retailed individual with 50 or 100k that you want to deploy with bitcoin um as we just talked about with jeff that's very difficult to find even if you're a high net worth institutional type investor out there right now that they get to create it so you know we have tools that allow you to do that and that's why i showed that we'll we'll show you more of it we did it we all showed up we had a show it was great i enjoyed it jeff is like the smartest guy ever by the way oh man is he ever i would not want to get into a debate with him i hate i hate i love really smart guests but i hate feeling stupid publicly get these people yeah like when he's talking it's like uh you know it's like a beautiful mind where like you

can just see the the formulas in the background appearing on windows and stuff but guys smart well i have more of a you know instead of beautiful mind i'm like the guy coming down the staircase and uh what's that what's that you got all the all the math you know it's not the smart version beautiful mind is the smart version. Beautiful Mind is the smart version. It's Hangover is the dumb version. You guys are a beautiful beard. We were a wolf pack of four today.

That was pretty good. We were. Honestly, man, I pride myself on movie references and I'm not going to sleep tonight because of Ferris Bueller. That was so dumb. I know every line of that damn

movie and Fast Times at Ridgemont High. Yeah. You dick. In our world, 40-year-olds, we should know nearly every promising line in Ferris Bueller's Day Off. How many times have we actually seen that movie?

In true form, when you get old, you start misassociating things. You might remember them, but you won't remember what movie it's from, is the point. I'm never going to get over it. 48's the new 60. In my life, there's losing millions on Voyager.

Wrong quote. The balance of the scales. Tell you right now. All right. I got to go to Twitter spaces. Andrew, you want to go on Twitter spaces? Yeah, sure. I could use your help.

Yeah. Okay, buddy. I'll see you guys. 10 minutes. Tillman, you're always welcome to, but you never show up, so it's fine. You're going to go on day you're skiing or something. All right something all right guys we'll see you later that's all we got for the show check out arch public goodbye