The Wolf Of All Streets - Bitcoin Rallies Towards ATHs! Can The Bulls Keep Control Or Is The Cycle Top In?

Episode Date: October 27, 2025

Today’s market action comes as optimism builds around a potential Trump–Xi trade breakthrough, easing global tensions and driving risk assets higher. Meanwhile, JPMorgan expects the Fed to end quantitative tightening this month, a move that could unleash massive liquidity into markets and further fuel Bitcoin’s run. On the innovation front, Zelle and Western Union are both adopting stablecoin payment systems, Japan has launched its first yen-backed stablecoin, and Trump’s new CFTC chair Michael Selig has vowed to make the U.S. the “crypto capital of the world.” With Bitcoin eyeing a record monthly close, ETF inflows climbing, and macro policy shifts aligning in its favor — the question now is whether this rally has the strength to break into new all-time highs… or if the market is setting up for a massive pullback.

Bitcoin is trading in a key level right around $115,000 leading bulls to say, hey, we're headed to all-time highs. Bears saying it's still all over, and we're going back to zero. I've never seen, I don't think, this much disagreement in the community as to the future direction of Bitcoin. And we know that a lot of what's happening is being driven by gold, tariffs and everything else happening in the macro. We're going to talk about all of that here on macro Monday with. James, Mike, Dave, and myself. Let's go. Good morning, everybody. Welcome to Macro Monday here from beautiful Las Vegas, where I have decided to share in James's pain, wake up extremely

early to do macro Monday. I know you do this every week. And James, we didn't even know, but we wore the same Vegas themed, apparently, Bitcoin hat. Mine is a bit wise. Mine's a bit wise. Mine's not. I don't know where mine. Mine is a nothing. But mine should be bit wise. That'll be cooler. Now I feel like I need a new Bitcoin hat. Mike, we're going to get you one of these, buddy. Are they talking about Bitcoin at the morning meeting at all? It's, it's colored gold. It's color gold. Mine's white. I just, I have a very bad hotel lighting here. six o'clock in the morning. Mike, we're going to get you in a Bitcoin hat anytime soon or has the tone not changed? Come on. Not changed. I put Bitcoin and copper in the same bucket.

They'll do fine as long as the stock market keeps going up and both are showing more divergent type weakness, which is what you'd expect in kind of late stage bull market cycles. So what are they talking about at the meeting today? I've got to imagine there's a lot of chatter about China at the moment. Well, one consensus is everybody started talking about QT ending. So Ana Wong came in. She thinks that the Fed might announce that they're going to end QT this week. She said that Powell hinted that in his speech in September. Ira, Jersey doesn't think that's going to happen until later. But she says part of it is a shutdown. So this packing to the head of some of our headlines is the lack of official data means that 50 basis points total additional cuts from the Fed is going to happen. They may be able private data did not change your forecast.

She thinks unemployment is going to be stabilized between 4.3 and 4.4% for a few months. Key things she pointed out with the government shut down, federal contractors are not getting paid or will not get back paid. And there's two federal contracts for every worker, which is a pretty significant drag in the economy. So she pointed out that might be a non-reversible economic effect. Expect the government shut down the continuum. GDP to be pressured, most notably from that. Ira Jersey pointed out the markets price for cuts for a while, and it's priced for a pause in January. He's skeptical about that. He thinks the neutral rate's going to go to 3%. Markets agree with him on that. Expects of both steepinging to continue.

The long end, they'll hover around 3 or 4 percent. He means attenial. It's maybe get down to 386, which is key 10-year support. Two is 10. It's expected to continue a steepening to get to around 100 based the points, currently it's around 50, and then he pointed out about QT, which I mentioned earlier. He thinks that's going to happen, but not until maybe December that they're going to start announcing it. Jillian Wolfe, our equity strategies, pointed to your key question that she's been getting was how are tariffs impacting earnings. And she said the key thing is earnings have been great, most knownly from Mag 7, but from a broad basis, they're well below where they're at the start of the year. And he said, her key point is Beach are coming from already lower

expectations. Broad base index earnings are running around 8.9% and that was down from 12% prior at the beginning of the year prior to Liberation Day. And one thing she pointed out is U.S. is having more inflation than the rest of the world. And there. Audrey Shield Freeman pointed out the ECB's got a meeting this week. They're going to be awaiting. Still bullish a year old dollar, the euro versus hour, much less than earlier, expecting to maybe head towards the 123 level. but key caveat is if the dollar, if the U.S. economy continues to improve. And I think Anna did mention expecting 3% GDP in the next estimate. For me, I just pointed out how soybeans are the stud in the center of what's happening

with negotiations. They were below nine in August, and they had 20% discounted what you could get in Brazil. They're popping up to near 11. And just like all commodities, most commodities, corn, soybeans, means wheat, crude oil, natural gas. If they get higher, I expect more responsive sellers because they're oversupplied markets in markets heading towards low-prose cures. And I tilted over to copper.

And just what I mentioned earlier, to me, copper and Bitcoin are in the same buckets. They're typically underperforming the equity market this year. And typically, and oftentimes they outperform. And they're, to me, late stage bull markets are at ripe to drop if the stock market or when the stock market does, which might be never, but at some point, well, until it doesn't stay this low. And then I just point out the broad commodity market. The key thing I point out is metals are beating everything in this year.

Bloomberg Gold Metals Index is up 40%. Typically, that's what happens on total return basis because metals are in the center of the universal electrification and it's got gold in there. But it's a question of duration. And that's why I point out copper is the key wildcard. If stock market keeps doing fine, copper will be fine. Otherwise, it's just more ready to drop if on the back of the S&P 500. Back to you.

All I heard was that soybean is the stud. That what I heard? Soybeans is the stud. You did hear that. It was. It is. But the problem is it's, it was just, you know, it's the center. It's kind of the center of the negotiations.

For me, it is. I'm a former farm owner and from the Midwest. And they just getting hammered, but it's massive supply out of Brazil. Why? Because prices went up so much in 2022. It just brought on that supply. The key thing is right now, because of the trade war, the largest buyer, China, has been buying from Brazil, but prices are high there.

And I think it was just a great little bait and switch on Trump. I mean, yeah, we want to buy cheap beans. We'll do it from the U.S., but it's like for a little deal. And they got it, and they got, it's win-win for China, and soybeans will pop, and they have. But they can stay above 11, probably not, because they're just going to bring a more supply and pressure price. Soybeans, man. All right. Well, listen, we can start in a lot of directions here, but I realize that we haven't had the opportunity to talk about this one.

pet rock no more jp morgan to accept bitcoin ethereum as collateral i think this just sort of uh passed through the headlines as usual because of our uh goldfish brains but holy crap yes that jp morgan jami diamond uh he's been changing his tune actually slightly he's sort of made a comment yeah i don't love this stuff as much but here we are but i mean this is about as big as it gets if you want the institutionalization of this asset class. So can I tell some financial history here, Scott? So this is not a done deal yet, but when J.P. Morgan basically says this, you can pretty much guarantee that the wheels are in motion.

So you have to go back to 1988 to understand what's about to happen. In 1980, pre-1988, equities were treated on balance sheets of, corporate America, including, you know, the investment banks, et cetera. By the way, back then they were investment banks, commercial banks, because of Glass-Degel, were not allowed to trade or deal anything with the stock market. That's important. But understand that pre-1988, equities were treated exactly as Bitcoin is treated today, i.e., if you have an obligation on your balance sheet, like a swap or someone or you make a loan against it, you have to reserve 100% of collateral against it. That was the

the rule. As a result, the businesses that we now know as stock loan prime brokerage, in fact, the same thing was true with corporate bonds. So it was interest rate swaps and a lot of the repo markets were all sleepy businesses run by a lot of guys with that their names ended in a vowel based in Staten Island and Brooklyn. And Mike's laughing, but it's true. And effectively, it was a fee-based business to do stock loan to facilitate stuff going in the stock market. They made very little. They had no political power within the banks. In 1988, the Basel rules for banking changed, and they allowed equity subject to certain haircuts based on volatility and risk, but they allowed equities and particularly broad-based equity indices to be used as collateral. From that point

on, securities lending became one of the most explosive and important businesses on Wall Street, and you should understand what that meant. It created a massive explosion. We're not a small explosion, a massive explosion to the point where we now talk about the prime brokerage cartel and all the prime brokerage, and James is a hedge fund, he knows this exceedingly well, who provide all the financing for all the 1.30, 30, long, short, and other hedge funds all around the world and care about short balances and equities more than anything else because of securities financing. It is cartelized. They make 90% of the profits from this. The holders of securities who loan them out get a pittance compared to what the banks make, the people who want to borrow pay a premium, and the banks get

that. They sit in the middle of all of it. And we could talk about whether that's good or bad. But what it did do is it's one of the reasons and one of the pillars of financialization and why stock and comparing stock market returns today to comparing it pre-88 is literal foolishness because it matters. The prime brokers is to put an accent on that prime brokers need you to run on margin. We were at Credit Swiss back when I was with a prior hedge fund. We were with Credit Swiss. We got a call one day and said, you guys aren't using enough margin because we were heavily long on one of our portfolios. And so they literally forced us to buy US treasuries to go on margin because they needed us to be on margin. It just wouldn't work mathematically if we

weren't on margin. It's like nonsensical. But that's just, reality. This is what I wrote about this weekend. Oh, sorry. I hadn't read it. I hadn't read it. Yeah. It's okay. The whole setup for this, though, is really Sab 121 and that getting repealed completely. And this is what we were talking about last year. We said, this is a big deal. Banks are going to be coming in. I said they're going to come in this year. They're going to come in and start offering products. They're going to start saying you can buy Bitcoin through them. You can hold Bitcoin through them. And you're going to be able to collateralize with it. Guess what? Here we are it's happening and this is not a surprise you know they've been given the green light lizzie warren

has been sit is she's been stuffed in the back seat and uh and here we are with the anti-crypta army has been disbanded and you you know the banks are on board they're not going to be sanctioned by the cc anymore for getting in this space and that's a really big deal and it's something that nobody was talking about all year long this is this is yet another signal that which brings us to you know one of our key disagreements, and Mike, I really do, you know, respect you and all of your experience and everything you've done and especially in the credit world, you know, but the Bitcoin is being, it's being carved out as something completely different here. And that is an incredibly important distinction to make.

And the banks are going to get involved in this. And once they get involved, it's going to, you know, continue to be adopted as a separate asset how long that takes i don't know but this is this is a really big deal and that that's why you know when when when sab 121 was uh when that when that was overturned by congress and then Biden overturned the overturned by with an executive order you could just see that the that you know the crypto army anti-crypto army was scrambling and choke 2.0 was scrambling to make sure that they they keep this clamp down. But now that they've been given the green light, the banks are like, all right, this is a profit center. We're going to go for it.

Now, you know, how quickly it happens, like Dave said, it's going to take some time. But it is, it's, it's, this is a, this is something to be very attentive to if you're in this space. But it's actually an incredible history lesson that Dave gave us the way that these other assets were treated because Sab 121, as people know and James said, basically said that these banks, if they wanted to custody it, had to have enough cash on the other side of the ballot sheet because the Bitcoin and crypto that they were holding would be liabilities. That ended up being a pro-bank rule or against crypto and the banks didn't care because they didn't want to custody crypto. And now in a sudden, ETFs got approved and Coinbase got to custody every single

ETF because the banks literally couldn't do it for that reason. And then the banks had to scramble to change the rules the other way. And now the banks that we have the Genius Act are trying to scramble to go the other way and stop the crypto industry from making yield on stable coins. It's just this bipolarity bounce back and forth for what's the key word to all of this is disruption and if you in if you're paying attention you hear that bitcoin is disruptive that's the key word it's disruptive to the business that these big banks are doing it's disruptive to their to the way that they make fees and how they hold their assets and it's really that's a it's a critical piece of information that just keeps getting glossed over and maybe you know some of the the the pundits just don't

understand it, but this is a really big deal. I need to jump in here because there is what you guys are talking about is a first order effect and people are saying, oh, it doesn't matter. The ETF's already big. It's already in the price. The second order effect is probably 10x this first order effect. And that's what you need to understand. The reason I went back to 88 is because the ability to finance and equity has created an entire industry, which created enormous leverage, enormous, and it's one of the reasons the mag seven is one of the reasons for a lot of things one of the reasons behind mike's charts showing all-time highs versus uh you know versus GDP of market cap right it's definitely part of it and it does matter i'll give you one simple little

example which will which which you'll get immediately scott because and maritio agrees with me by the way because so maritio runs leaden which is he's a friend of the show a friend of scott has been on multiple times. Right now, if you want to do a Bitcoin back loan on your house, you can pledge Bitcoin to get an amount of money to buy a house. You cannot at the same time pledge loan to value against your house. Now imagine someone who has just very simple, not huge rich person. Someone has four Bitcoin. Four Bitcoin in the future will be a rich person, but today that's not a rich person. Now let's say you want to buy a million dollar house. Well, if you have four Bitcoin, that's $400,000, that's not helping you very much.

Let's say you don't have any other cash because you don't believe in the fiat world, et cetera. Once this is done and once the Basel rules change, you'll have Bitcoin is collateral, now all of a sudden you can pledge your four Bitcoin, get $200,000, $50,000 loan to value. That's your down payment and have loan to value against your house. And so as long as you buy a house that the bank would give you a mortgage, if you had $200,000 in down payment, all of a sudden, boom, boom, you're done and dust it. Right now, try telling the bank that you're going to get that your down payment is coming from a loan against Bitcoin, and they will literally laugh at you because they have to, they would effectively have to say you don't have a down payment. It will be a 0% down.

It's just one simple, little example that affects millions, well, not millions, because there aren't millions, but tens of thousands of Bitcoiners, potentially. And it becomes something that becomes a, it's the difference being outside the financial system and inside the financial system. The supply demand dynamics and the way the market is priced does not, that is not in the price. It's not even close to it in the price. And by the way, it probably shouldn't be in the price for people because it's in the future. The Basel rules will still have to change. JP Morgan's Citigroup, all these others, Bank in New York will have to effectively use their muscle to make it happen. But they don't want to see the leadens and all the other of the Bitcoin lending firms,

the, you know, CJ's company, People's Reserve. They don't want them to disrupt their model. They want to be the first ones to offer this hybrid. They'll probably end up buying those companies. But the fact is, is the banks don't like to lose out on money. And so they're going to put their lobbying behind this. So if you don't think that this is a big deal for the Bitcoin price, then you are literally not paying attention. Now, admittedly, chartists, technicians, traders will say, well, we're still in a range and that's all true.

That's fine. Maybe we fill the CME gap for Sunday. I don't care. this is a very big piece of news. And there's another piece of news that literally is a, you know, in leverage, you know, you have hinges and more important. The news about Zell using stable coins to go international is a huge piece of news. It's telling you that the banks are going to use stable coins as part of their actual processing,

meaning that they're going to be capable of moving funds from tokenized assets to non-tokenized assets back and forth. And Stripe is already doing this and developing their own layer one to do it, right? Which means more and more bringing tokenized asset Bitcoin being the most obvious tokenized asset into the mainstream financial system on a global basis. So if you're looking at price charts of Bitcoin and you're not understanding that we are clearly at an inflection point for what's happening here, then it misses the boat. It's, I would argue it's a bigger inflection point than a $10,000, which all we had was Paul Tudor Jones and other people talking about fast. Oh, yeah.

That's the essence of my-Western Union, too, in case you're wondering. Right. I'm just saying that's the essence of my argument. That doesn't mean that Mike will be wrong that we, that Bitcoin will drop at the stock market drops. I'm not saying that. But what I am saying is this is a massive- everything you're saying about stable coins. What do you say?

I think Mike agrees with you about every. thing you're saying about stable coins. But when we're trying to understand macro forces, it's sort of like you're talking about copper. So right now, we don't have what I'm about to say. But let's just say for the sake of argument that for whatever reason, China decided they were going to double the amount of construction they're planning over the next year. And you thought that copper price was going to go down. Well, then you'd say, well, that's insane because they're going to need a ton of copper in order to do that. And obviously, they're not. But the fact is that when you value assets, you have to look at supply and demand, and you have to understand

why people are buying and why people are selling. And so that's the essence of the argument of Bitcoin. By the way, the stable coins do apply. That argument does apply to other crypto assets. The collateral argument does not. I mean, it will at a certain point when they're, but right now it's Bitcoin-centric. When it gets to Ethereum and maybe a couple of others, it's fine. But banks aren't foolish. They're not like the morons who assume that they're, you know, and whatever collateral was smart to be 10x levered on, not realizing that the collateral could go down at the same point, meaning they get wiped out almost instantly in a drawdown.

Banks aren't in the habit of losing money. And so they will haircut these assets based on their volatility. And if you haven't noticed, Bitcoin's volatility is not even projected to be over 2%. Right. I mean, Bitcoin's volatility is relatively low and it has gotten much lower. Right. So there's a lot there. Anyway, Mike, we've probably teed you up for about a half hour of RAMs.

So go for it. No, it's this is, it harkens back to things that were predicted by Safi Denomis' book, The Bitcoin Standard. I remember reading in 2018, initially thought, no way. And then agreed with him completely. And I still agree with him in the macro big picture. I don't disagree with everything you said, but still doesn't alleviate the clear signs, a classic signs of pile on into poor performance euphoria that marks peaks in markets.

performance is still showing that horribly unfortunately just pointing out the facts i know you don't like when i say now good news is the bitcoin gold ratio finally bought it bottomed again at 25 that was good support but it's doing with the stock market making record highs it's a prerequisite for bit going going up but what you also described is the best days of bitcoin performance are completely over it's volatility that been averaging over 100's drop the 50 percent's going to drop probably similar to golds in smb 500 predicted that five years ago it's heading there so these days these high High in the sky expectations of it going to a million dollars in a short time soon. I think I'm missing out what's happened.

Now that's in the space, now it's more like equities in stock market. It's trading like the equity market. Very much similar. So it's tilt us over to the macro rather than just one asset, Bitcoin. There's a cryptocurrency indices. Now, I do like when people separate them as an index provider, you start with the whole space and you create an index. We did that, Bloomberg Galaxy Crypto index. It's way under the form.

Yeah. not me, but a lot of other firms. And we obviously, because I came to a mix. I'm saying Bloomberg Crypto Galaxy index was your idea. Initially, and then, of course, we did it with Galaxy. We needed that background back then. Yeah. And so, and it's, unfortunately, it's not ticking live, which was another mistake, but oh, well.

But the point is, that's how you create an index. It's just, you don't separate, here's the best stock in the world, and here's the worst stock in world. You do it as an index and put it in, let the market decide. And that's what's happening. I just point out that performance is still happening. It's poor performance. and everything's dependent on the U.S. stock market,

continuing to do this enormous, inordinate rally and continue to break out like this. And then you look at a thing that was happening with gold, even gold's too expensive. That's why I stick with the key premise I started pointing out last year that this is late-stage cycles for Bitcoin and crypto bull market. That's showing up. It was towards a breakout in gold, got really lucky,

did a massive breakout this year. Now it's showing late stages in extreme of a bull market. So you kind of got to say, thank you very much. And what's left? In Northern Burden for the U.S. stock market, it has to go up. And that's why I tilt over to other things. The things are like on the year now, the Bloomberg 20 plus treasure index is up about 8%. Yet it's got zero volatility.

So, you know, that's my point is we're at that stage now. Yep, we better go up. Stock market has to go up or else look for alternatives. Bitcoin and cryptos were great alternatives. Now they're lagging. Gold was a great alternative. It's too expensive. What's next?

Nothing like just cash. So when you look at gold, I just want to make the point that, you know, because I talked about this at length earlier. I think gold is in a range now, and if that range is confirmed that we're in a probably 3,800 to the 4,300 range in gold, it's going to look a hell of a lot like what Bitcoin has done for the last, you know, eight months. If that is in fact true, then the hotball of money that has been pushing gold and silver coming from all the CFDs, all that retail flow is going to go where?

We kind of know where it's going to go. So let me answer that question. Is it going to go to an underperforming asset that's a higher volatility in bay and a higher volatility gold? My point is, that's my point, Mike, my point is that the steady buyers, the institutional buyers and gold are going to stay there. I don't think they're moving, not yet. I agree with you there. But the hotball of money, the retail people who are waiting in line at booths, to get slightly better fees to do their contracts for differences at all these frigging conferences

and spend and buying gold on margin that, you know, 500 to 1 or 100 to 1 or whatever, that money is going to move back into the next big thing, which may very well be a rotation to Bitcoin. It might be something else for all the hell I know. Who knows? I mean, I don't know. But that's been the thesis. The thesis, would it, would gold settle into a range?

I would say that a failure at the 50% retracement level of, of the most recent move is kind of indicative of that, but it will ultimately go higher because we're printing more money. Can I come in? I will happen. Yeah. Scott, pull up this chart that I just put up. This is really important.

First of all, this is gold in white and this is Bitcoin and blue. You know, you clearly have bouts of euphoria in Bitcoin. It's just, there's just no way around it. You've got these huge moves up. settles back in. Huge move up, settle back in. Huge move up, settle back. But if you look closely, the curve of price is the same as gold. Okay. It's the same curve of the, you know, the rise in price, a percentage rise in price. Okay. So the next thing you do is you pull back and you think, okay, what's going on over the past year, right? So if you look at this,

this is the first bout of euphoria that we've had in gold in god knows when right so this is a really sharp move upward in gold this has been a bout of euphoria and we said that this is going to revert we said this you know you can go back and listen to our shows david i've been hammering the table this is going to revert and they're they're going to meet in the middle here and what has happened they've met in the middle again So the question is, and this is where Mike, you're, you know, this is the question. This move here in gold, what is that from? Is it from people expecting that we're going to hit a recession?

Or is it? And there's uncertainty, global uncertainty, geopolitical uncertainty, or is it because central banks and investors are waking up to the fact that there is no fucking way that this train is stopping that we are going to continue to not just print money but we're going to print liquidity we're going to allow for more and more and more liquidity because the system needs it the system is on a life support machine that requires just an endless amount of oxygen and it's going to continue and so the question is how violent is this going to be and are we going to continue to see gold march upwards and bitcoin follow it or is bitcoin going to have hit its bout

of euphoria first but either way we're getting more leverage in the system we're getting more liquidity it's just a question of when and that this is my thesis is that it's not that central bank's bankers have learned their lesson it's that there's no lesson to learn they are on life support and they've got to keep going because that's the way fiat's work and it's going nothing stops the train as... I'm going to... Nothing stopped the train. So I'll answer your question with my view.

The next big trade will be U.S. Treasury bonds. Following the lead what happened in Japan, what you described right there is what I live through in Japan, just pumping the system with money into the deflationary environment, what's happening in China right now. That 10-year-old yields 1.81

percent. Their debt to GDP is running 300 percent, and the money supply is running about 40. to $50 trillion, almost two times U.S., a massive pumping inflation or liquiding the system to avoid the normal deflationary forces that happen from the cycles like they had and they had in Japan, like you had in the U.S. So to me, that's the key thing. That's the next big trade.

And before it was Bitcoin and Cryptos, they were the great place to outperform the stock market. That was gold, the great place to outperform the stock market. Now, all the thing I think is left is just a little bit of pickup and stock market volatility, a little bit of normal reversion. Yeah, and maybe we get 5% down in a week. Oh, my gosh, help us. That's my point.

We're at the late stages of the, and this stuff can last a long time. But this is, this will me point out. My answer to your question is what you said is potentially going to happen just like it did. It's doing in China right now, just like it did in Japan, just like it did in the United States post-2007, just like it did in the U.S. Post-1999 and post-1929, and it's all going to be on the back of one thing. The stock market just ticking down a little bit and it kicks in the, but it means that everything goes down with it. Okay, I hear you. Go back to my chart, please, Scott. So here's the

Nike. Here's the Niki, right? Here's the, and I just want to be clear, Mike. Are you talking about this move? Nope. Or are you talking about this move? Hang a hand. This was a massive housing bubble. That's where we are right now. And that's where China was about 10 years ago. And then the way back down, just going the way back down, that was the massive pumping the system with liquidity. And the move we have since 2010 was the Chinese, the Japanese government buying ETFs, one of the top buyers on the planet, they still own a lot. That's what's happening in China right now. It just like happened in 1933, when the U.S. debased against gold. That's when you get the inflation after the deflation. We're still in that cycle. We're still in that cycle. I pointed out in all

the grains that's happening, but we're in that everybody's, you're messing with recency bias. We had the big pump in 2019. It was a time to buy Bitcoin in stocks and gold. Now, we only have one left. Okay. This is Japan for everybody who's watching. It's the Japanese index. This is kind of like the S&P. Okay. So here's the difference. So Mike. The difference is the U.S. dollar is the global reserve currency. Like the U.S. dollar, is going to continue to be needed across the world, right? So this was, this has been a pump of liquidity into the world, right? We know this. It's like this has been the, this has been the carry trade for the world, right? So now you look at where the stock market is in Japan now. So did they learn

their lesson? No, there's no lesson to be learned. They're just trying to survive here. And the, the entire world is going to be on this standard soon it's just going to continue and so the question is do we have a painful drawdown like this now i'm not going to say we don't i'm not going to say we don't have a painful drawdown from some sort of black swan from some sort of global geopolitical event whatever it may be i'm i'm not going to say that because i agree with you that if that happens the the air comes out of this thing and it you know it could get ugly really fast will bitcoin go down yes it will it will get destroyed along with every single other asset in the world we'll have we'll be entering a global recession global depression however how do you get out of that they're going to

print to oblivion on the other side of that and they'll probably do it quickly to avoid the the global depression just like we saw in 2020 it was a five trillion dollar print in 2020 what do you think it's going to be this time you know i remember that real quick dave i remember the 90s the entire narrative this is when i was in high school and college was that japan much like china now is going to take over the world do you remember the movie rising sun you're going right where i was going scott i literally started writing the chapter in million dollar frat boys because i thought everyone should know i'm chronicling all of this uh because i literally built the first program trading system in

Japan for Morgan Stanley and we talked about how it was used for index arbitrage and Morgan Stanley and Solomon Brothers were the two firms. It's actually funny that I ended up moving to Solomon Brothers and building the customer version of that system for them. But understanding what happened from the peak of that euphoria down was I went at a front row seat for understanding the Japanese companies while all the movies were saying how incredibly brilliant they were in terms of efficiency. Japanese companies, if you literally took the technology that existed in 1989, they understood how to maximize that for production. And they were the powerhouse in production in the world. But the corporate culture of those Japanese companies, and I was right

there in Japan, I had to upend our corporate culture, the Japanese local corporate culture, in order to get anything done, could not adapt to changes in technology. It was completely incapable of it. And so there was a huge structural reason why that euphoria turned to despair. In addition to the obvious, which was there was the inevitable problem when you have a bubble that burst. But Japan was far worse because their corporations were run unbelievably hierarchically. Now, if you look at all the companies that are successful today, none of them are. And I'm talking about all this in book because I literally wrote a chapter about it and I could talk about it. And if we ever do a podcast about the book or talk about it, you know, we'll get there. But so there was a

massive reason. But there's one other thing that needs to be talked about. Let's go back to Mike's question. Who's buying gold? And why is gold going to go higher? And this is not just a euphoric peak and we're done, a rotation. First of all, we're printing more money. But who's the most likely buyer of gold? Come on. If you think that China and Russia aren't converting their excesses into of gold as opposed, even though they're not telling us about. Buying treasuries. If you don't, as opposed to buying treasures, we know they're not doing nearly as much as they used to.

It's not like with the price of oil that Russia isn't banking excess. Of course they are. That is a big deal. That is a structural shift. And so to think that gold's going to go back because the charts say it should go back when we're printing that many more dollars, I just think it's wrong. It will, I'm not saying it's going to rocket from here. I do think, however, that it's in a range now.

It will stay in a range for a little while until the next breakout, until someone realizes what's going on. I mean, look at why is the market up today? The market's up today because Trump and Xi are chatting and we're likely to get a trade deal. But what is China really doing? They're trying to move away from being, you know, recycling and supporting the U.S. government as best they can without hurting their own productive capacity. And they're doing an interesting tap dance.

That's what's happening here. And so to ignore the effect of China as the largest producer of stuff in the world, putting some of that excess into gold. And that's why we're in the, that's where some of the central bank buying is. And it's not just China. It's all the smaller countries that are in the, the Belton, what do they call the Belton Roads initiative? You know, the ones, I don't want to use bricks because I think that, you know, that to me that feels all this, conspiracy theory nonsetorial you want to be the reserve currency because they understand what that would mean for their product is not going to have a currency that's just so that's not that's right

and so i don't believe that i think that we all we all think that that's getting a stable coin though i don't know if you i saw this news well yeah but the point here is is from a macro point of view there's a bit underneath gold relative to constant dollars that can't be ignored that i believe will eventually transition towards Bitcoin and then all bets are off. But we are nowhere near that now. And so that's where why we talk about, you know, Bitcoin up today because there's a trade deal with China. That that gold is down today. That will not all of that reinforces Mike's thesis.

All of it. I mean, I'm not, I'm not going to validate what Mike is saying. It actually validates it. So we agree in a lot. Obviously, people prefer and we disagree. But we just show you a few charts, walk you through the micro to the macro and where I'm thinking is. I don't disagree with like any thing you said, but markets look ahead. They look forward to things. So this has been my premise since Bitcoin. I would say I was early, guilty. I mean,

don't deny that. And complete respect for those of you that do it, I just say it. I mean, I used to do it. I just say it. I don't trade hardly at all anymore. And everything's got to be preclear. And this is just what's happened to Bitcoin and gold and cryptos in the stock market since 1,000 Bitcoin. Just hear me up for one second. Obviously, since we reach 1,000 Bitcoin, That to raise the threshold golds up 53%. It's too expensive. We got too expensive. Bitcoin is running double the volatility of S&P 500.

Yet it's just going down, but it's only matching the performance. I mean, this is what's happening despite the massive pile on. That's classic signs of peak. We're getting all this talk from Matt Hogan saying all the inflows, yet it's only doing this. That's a bad performance. And then you look at the overall crypto index, massive access supply down 10%. That's a problem. Now, it's up a little today.

Good luck. Good luck with that one. Let's point out some key things that's happened that you haven't seen this chart before. I guarantee you. This is, the VIX now is down to 16%. Oh, 15%. It should have got a little too high. I had that one pump above 20. We use traders will look bad. But if you take the VIX versus actual volatility, 90 day volatile in SMB 500, it reached the highest just here in 13 years. That's just how extreme things are. And then I have to overlay with this Bitcoin to gold ratio. Yes, I know it bothers Dave. But as a risk manager, I'm telling my people who I'm managing is if you're overweight longness asset, you're performing. performance basically sucks versus most other assets. So it's still, it's bounced from 25, it's getting back up. It should there as long as volatility stays low, I show you two other charts and I'll let you tee off on me. Again, the same Bitcoin and Gold ratio.

It's bounced from that key pivot. It should have bounced from there, mainly because stock market volatility is just hovering at this really low level. I think the next big trade, I've been wrong for a while, might be treasury bonds inching higher, Bitcoin gold going down. And here's one key reason why. This crocodile jaw pattern, there's a U.S. market cap the GDP. No, it's just taking not just a U.S. Hubbard versus the rest of the world. It's the same chart. So, okay. And then this is just the price of gold divided by a basket of U.S. Treasuries, the price of a basket of U.S. Treasuries, going back to 1973. You got to go back to 83. The last time it was just slow. So I'm just looking for a little spark for reversion. And that's why I say, you know what's going to take? Maybe just 5% of the stock market. When I get that narrow, I'm just completely frightened by what gold has been telling us this year. Absolutely. I mean, Halloween is going to be tamed. What is telling us?

I can't wrap my head around how a 5% stock drop would matter when in April we did 20 plus. Well, that's the point, because we're so elevated now. So April, we all knew. I don't know, it was kind of weird back then because any of us who read about Mr. Trump or read the right books, you know, the no trade history about Robert Leisheiser, completely expected that. Some of us did. The bounce was great.

Now, obviously, he backed off a little. But now it's because we have, we're so elevated, we're so expected. It's the time of year now, Scott. This is bonuses. There's no room for a market to go down. You start like crypto index is melting. It was up 30%. Now it's 20% now's 20% the year.

You trickle down from here. You run through stops. Oh, I got to save my bonus. It's over and that's the key point. It's at the overstage. It has to go up now. That's why the risk is going down. And that's why maybe gold figure that out and gold got too expensive.

So that's why I'm just sometimes there's time to be out of the market and just clip coupons and to me is one of those guys want to see a crazy chart this is the monthly candle on bitcoin currently at 114,539 spreading from just above 100 to basically 126 in the time it's been 27 days of October that this candle has developed we've had I'm going to guess 25 billion in liquidations just to trade at the exact same price and how much is the stock Now we have a green October, but how not, if you think about how speculative and insane that people participating in this market is, that we're trading at the exact same prices at the beginning of the month and have had the largest liquidation event plus in this month. Yeah. It's just wild.

But it's, but here's the, here's the funny part. The funny part is that so many people saw that liquidation event, their muscle memory said, oh, my God, this is like Luna. and we know what happened after that, and that isn't happening. It's very clear that that's not the case. So, and it was similar sizes, arguably bigger in certain respects, more money wiped out, more money made. Remember, it's a zero-sum game on the liquidation side. When people are being liquidated, those things, there's other people who are making

tons of money on the other side. But the truth is, they're called market makers and exchanges. Remember two weeks ago, right after the event, I came on here, and I, said let's wait a couple weeks and see if there's bodies floating to the top of the pool and if there are no structural companies who are being forced and some obviously did there's some obviously people had to liquidate collateral and what gets liquidated bitcoin first ethereum second both of them in huge size ethereum had a farther down tom lee bought more you know he's you know he's basically atlas supporting the ethereum market uh i don't know if his shoulders are going to get tired or not

we'll find out, but, you know, that, that don't, don't laugh. There are people, hedge funds and auditors who are going to shoot against that at some point. But the truth is that we're not seeing force selling. And remember, in all of Mike's charts and all the things that he talks about, force selling took the natural price for Bitcoin after the liquidations was somewhere around $30,000. It was only, it was a very steep V, if you look at it, based off of the largest single force selling liquidation in in terms of, you know, any adjustment you want to make of Bitcoin history

with when FTX went kabum. FTCS going to boom at that point, you know, it took it from the 30s down to 16. It didn't stay there very long. I went back up to the 20s. It was back up to the 30s pretty quickly and then stayed in the 20s and 30s for a while. That was a kind of event very much like the poking of the Japanese bubble sped up a little bit where it literally took out. I mean, just here's the statistic, and it can't be that difference. Coin Routes literally had 75% of our customers stop trading for multiple months, and more than half of them wiped from the industry. You don't have a price recovery when half the industry is wiped out from trading.

That takes time. And so you have to understand that didn't happen this time. It didn't even come close to happening this time. And so don't compare price charts from different eras. there's always fundamental reasons underneath it. And that's not to say it can't be shadowing it, but it's not the same. So let's start with a classic lesson I learned in trading pits. Never be a weenie for the teeny.

And all you described was the S&P 500 dropped 3% in the day. Big deal, it's nothing. Wait till the next time it drops one third. That's always happened and stays down for a while. That's what I'm waiting for. It's going to happen. The signals are there. Maybe it's going to take another year or two.

Gold's telling us this. Bond yields dropping in an environment like this. It's wonderful. We'll stock, you know, VIX reaching, just hovering at these lows. But that's my point. That 3% correction always in the stock market is what spilled over. It's a little bit of liquidation, a little bit of liquidation in these highly volatile cryptocurrencies, most of which track nothing.

Yes, Bitcoin's different. I get that. That's my point. That's just a little sign. It's wonderful. We're still ticking higher, but I just, I have to point out with the relative value and being a responsible risk manager here. You're buying Dogecoin and Ethereum and Tether and a crypto index.

you're basically completely subject to that stock market going higher. And by the way, you've been underperforming for over a year now. Those are very, there's too much in that that's conflated. First of all, you know, every time you talk about, you know, stock prices being elevated, all I will say is corporate profits are equally elevated. Now, there is a huge difference in fundamentals. We're talking about macros between an administration that is dedicated to grow and grow and grow and out of it. And whether it's cutting regulation, which they're doing, or they're going to go to a much more accommodated monetary policy.

And the clock is ticking. We're now almost in November. And so that means we are now six months away from a new Fed chair. And it will be either Hassett, Warsh, Waller, Bowman, or Reader, according to Bessent 30 minutes ago. Waller is making this case. Waller is a bitcoiner. So we got to remind you, who pointed Chairman Powell? Trump did.

Exactly. Is it going to be that much different? Yes. Trump has, understand this administration, the guiding force behind this administration is whether, I don't know chicken and egg. I don't know whether J.D. Vance convinced Trump that he needed to grow his way out of what is a problem and that we need to re-shore and re-manufacture and do all the things that, you know, J.D. Vance in Hillbilly Ellogy talked about and has been talking about his whole career. or Trump came to that conclusion watching what happened after he left office and therefore selected J.D. Vance because he was one of the great spokesmen's for that policy, but it is exceedingly different. The only consistency between the two administrations is deregulation. That's the only real consistency. And, you know, in this case, build a wall became,

okay, we're going to stop people from coming in and we got to get them the hell out. That's the two big differences. Monetary policy in the first administration wasn't even on his radar. He didn't even know about it. He didn't have three children basically saying, Daddy, this is the future and understand. And I can tell you as someone whose life has was changed because Ian Weisberger, my son convinced me that crypto was the future. Most importantly, Bitcoin was the future and understanding digital assets and tokenization were the future eight years ago. I am a very different person, a very different investor now than I was eight years ago. So why should I, as a father, who listen to intelligent arguments from my brilliant son,

why is he, why we think he's different, he's the same? Of course he isn't. And I have this, this is very visceral for me because I understand it. I can tell you inside baseball, I was speaking with Christopher Perkins from Coin Fund on the Wealthyon podcast, and he was at the Fed meeting last week about payments. crypto where Waller famously said crypto is woven into the fabric of the financial system and talked about stablecoins and utilizing all the technology. He sat with him at dinner that day for lunch. I don't want to misquote the meal. And he said that privately Waller is 10 times more

bullish than even in that speech and is deeply passionate about crypto and Bitcoin. If that guy ends up as Fed chair. I can't even begin to describe what that would possibly mean for the industry. And at the same time, Trump names Michael Selling to chair CFTC selling cites crypto capital gold. This is the guy who is the lead counsel for the crypto task force for the CFTC and has a long history of working with Atkins from the SEC. And the reason they're citing that they would appoint him is basically because of crypto and because of the working. relationship he would have with the SEC. I mean, zooming out and thinking about where we were a year or two years ago, these are just mind-blowing announcements, the people that we can potentially

have in control and their relationship to this industry. I mean, I think you need, but I want to let Mike, you know, rant, but I want to make it clear that my point isn't that everything Mike says is wrong. So I'm not saying that. What I am saying is the macro backdrop, the fundamentals underlying Bitcoin, the fundamentals underlying an industry, which, by the way, there are many pieces of crap in the industry. I mean, we know that. I love the fart coin. You know, our listener, Ryan Ladd always updates me on the fart coin Bitcoin ratio.

But, you know, I want to see a lot of those assets go to zero. I personally don't believe of the, forget the number, whatever the number is. I don't think there will be more of today's than 100 and maybe less than 25 of today's. crypto assets that end up with real value, anything close to where they are today or more. But I think the aggregate of what will be tokenized assets and crypto currency type things, you know, commodities, not equities, will be dramatically higher than where it is today. I do think both of, you can hold both of those thoughts in your head at the same time, which is another way of saying from Mike's perspective, Mike, I think, you know, Doge is interesting

because it might be one of the ones that make it. but the truth is there's a lot of crap there and there's a lot of access there and i don't know whether and at fact i doubt seriously that it will clear up this you know over the next year or two but i do think over the next 10 years it will clear up anyway go have fun well i think that the next crypto rally will come on the back of a flush and all the speculative accesses i use doge because it's the most prominent one it's number nine and it's worth 30 billion and it's a joke it's silly You know, a way you can avoid support some of that stuff. And we'll look back from the future and we'll say, yeah, when you have everything the most expensive in history, all risk assets.

The key point is what you described is how things have changed in this space. I remember getting in it when all the people I saw Bloomer saying, what is this crypto-silly internet money stuff? And that was the time to get really bullish and then reading all the right books and seeing when everything you described. And you got in it to be away and have any, you know, a liability that's not attached to any type of other entity. I mean, not a liability and asset to any other government. No one's tracking it and you get your way from things like the U.S. government, any major authority. Now it's completely shifted. If you're buying cryptos now, like the insiders were in the past, you were trying to get away from the system,

you're supporting the Trump administration and Trump family because they're heavily invested in it. And you're beholden to the Trump administration because they're supporting. That's wonderful. That's great. But that's late stages of a bull market. That's not. Uh-oh. We lose Mike.

When you want to... He's back. I'm back. So my point is classic late stage stuff and it's showing up and all the numbers of poor performance. So I'd like to see that change. Right. And here's the rebuttal to that, Mike. And this is going back to your morning meeting and the expectations of what the Fed's going to do on access to capital.

Right. So everybody expects the Fed's going to cut. Here, Scott, you can share my screen. Yeah. This is what the market expects. The market expects we're getting a cut. It's a 97% chance we're getting a rate cut this meeting this week. It's going to happen.

And there's basically a 97% chance we're getting another one in December. And then there's a 50% chance we get another one in January at this point. Right. So that's right now. we also expect that QT is over. Why is QT over? Well, it's because of this, because the bank reserve balances are falling so quickly that the Fed's going to start getting nervous that they aren't at ample supply. Where that exactly is is up to debate, you know, whether it's a percentage of GDP or percentage of total bank assets, whatever that is. This is getting to a point where they're starting to get nervous that, uh-oh, we're going to have a September. 2019 issue, and we're going to have to go do QE right away because we get a lockup in liquidity and the sofa rate jumps, you know, 8% in a day. Is that possible? Yeah, of course it's possible. You know, of course, we do have the, we do have the standing, you know, repo facility now,

which will help stem that, but that's not, everybody can't access that. So we've been talking about this for a few weeks now. So that's one thing. The second thing is now we're cutting rates. Mike, why are we cutting rates when inflation is, at 3%. I mean, look at this is, the inflation's not stopping. It's not like we can say, oh, yeah, we tackled it. It's over. It's at 2%. That's the target. It's not stopping. It's up here, and we're cutting, right? We're also cutting rate. James. When unemployment, just, when unemployment is a 4%. That CPI number, just put your finger right back on when they started cutting rate in 2007. Rates, unemployment, the inflation number was higher, was running higher and

peak higher and then it collapsed with crude oil and the whole market collapsed potentially similar now so the question is are they doing that because they're worried about they i mean what are they worried about what exactly they were to that's right they want to avoid they want to avoid this that's why they're cutting rates they want to avoid this they need to avoid this because if they don't the treasury is in such a massive problem with you know this you know the math you know the math you know we have two trillion dollar deficits right now that could blow out to three four five trillion in a nanosecond if you have if you have this happen and so they can't have you make it a good case to be bullish gold yeah i am bullish gold i'm bullish gold and i'm bullish bitcoin that's exactly

right bitcoin is it's like being along the stock market on leverage and it's but you can't ignore people like just you got it you got to listen to people like ray dahlio like i see i met him myself who are talking about gold and Bitcoin in the same sentence. Yeah. Because of everything that Dave and I have been talking about for well over a year now. Ken Griffin is using Bitcoin and gold in the same sentence. So I agree with you. I've always agreed that you can't hold gold without some Bitcoin in this space.

There's times to be overweight gold and underweight Bitcoin. And I pointed that out last year and I stick with that. It's probably better still to be overweight gold and underweight Bitcoin. Now gold's up so much. probably better to be underweight both. Underweight both to repeat. Underweight both. Well, that's where we disagree. Totally.

You know, I'm heavily weighted in both. And so that's just what I mean, way, way, way, way, way, way, way, way more way more weighted in Bitcoin. I mean, I'm not, it's, it's not even close, but that's, that's, you like got a 300-pound guy in gold, but then there's a 900-pound guy. It's like a 9,000-pound guy. Both passively overweight, but that's a, yeah. They're a relative overweightedness.

I mean, it's just interesting to me, and I know we got to wrap momentarily, but I do not see Bitcoin trading like stocks or like gold for quite a while now. I mean, it's, you know, and I know it's hard to zoom in on a day-to-day basis and analyze whether Bitcoin is digital gold or stocks, but Bitcoin has just kind of been doing its own thing for months here. trading in a range while gold and stocks both effectively make massive moves to the upside. And I don't think that they're aligned even on the small moves. And I think that even if Bitcoin can't go as much up as the other two, that's just the

holy grail for your portfolio. Bitcoin's up something idiosyncratic. Friday versus the S&P of just under a percent. And gold's down. But gold, look, it's playing. out as the scenario that I said it would probably play out. And it's not, I'm not, that doesn't mean when Bitcoin's out of the woods because Bitcoin is dead in the middle of its recent range. You showed it on the candle, right, Scott? But gold is being bid at the base layer by probably

China and a bunch of other central banks. And a lot of speculators have come in and treated it like a risk asset, which is why its volatility is so elevated. And when that happens, you get blow off tops, settles into ranges, and it plays around, and you'll get fairly sharp moves. And gold volatility is dramatically higher than it was a year ago, right? You know, we know that, and we went through the data. So it's not remotely surprising to see these sorts of things happening, but the real question is when or if Bitcoin will break out of this range because people who are invested in it dominate enough such that the people who are selling it, i.e. the massive distribution phase

that we're going through, realize that, okay, the people who are buying it thinks that it's going to go, it's going to 10x from here relative to gold. In today's dollars, remember, you're getting a 10% kicker a year based on new dollars, right? And new every, every currency. That's really the question. And until then, it's going to trade rangebound and trade just like Mike says. with the stock market. That is the sole question. The sole question at some point, somewhere in the neighbor when the ETFs came in, all of the original sellers that were keeping it in the 20s and 30s said, okay, well, let's wait, we're done. You know, obviously it doesn't really work like that. It's not binary. It's a process, but more or less that happened. And so it went

and ripped up from the 20s to over 100. And yeah, then we had the dip in the in the spring and then the rebound and we're back in the same range. So the question is, when does it revalue? And Bitcoin historically, and that's where the four-year cycle thing kind of coincides, historically is like a ratchet. It goes through periods of revaluation. And when that happens, all bets are off. Now, will that happen again? Yeah. Is it going to happen on a four-year cycle due to the happening? No, because the happening no longer matters. I honestly think that there's no such thing as a Bitcoin cycle anymore. Well, but that's just what I'm saying.

It's a liquidity cycle. It's a question of it's the liquidity and when will it ratchet higher in a revaluation? And if the answer is. But even that, Scott, has been muted because it's also the liquidity cycle. Yeah. So the question really is saying that for years. Because it's going so mainstream on Wall Street's can be difficult for the politicians

to rail against it anymore. Right. And that's why it's just going to get. It's over. So that's the point. Will Bitcoin have another part of the revaluation cycle, yes or no? If the answer is no, then it's a purely liquidity trading asset, then it's the S&P on steroids.

And then Mike is right. I believe the answer to that question, however, is yes. Mike believes the answer to that question is no. And that's why I started this show specifically on the story that Scott mentioned, which is yet another proof point toward the answer being yes. That's why. But that is the key. So if you're invested in Bitcoin, that is what you believe, unless you don't really understand

what you're invested in. James had a final thought there no i mean that's that bitcoin is that's the whole point is that it's becoming the ultimate store value for you where it goes from there on other on on from base layer to layer two and all that is you know this is all being it's all being formed and created now and it's not there yet we can all agree you know you're not going out and paying for things in bitcoin and i don't want us to just jump to a bitcoin standard i think that would be catastrophic for all markets we don't want that you want this you want this evolution you know and again like you did the whole start of the show scott is that that signal coming from the big banks who are jumping on board here

you just you can't minimize that like you you you can't put enough emphasis on that it's really important for the evolution of bitcoin as that store of value it's just something to consider and and to And to be focused on if you're a long-term, if you're a long-term investor, this is something you want in your portfolio. It's as simple as that. So just one final thought in that is I think history is going to view this period of using cryptos and treasuries is, yeah, you probably should have been using treasuries as treasuries. And we'll tell. That's a great place to end because it gives us a place to start next week. All right, guys.

that's all we got uh i have the dave and i got to go do crypto town hall james i'll see you later all right see you guys that's mad i get two weeks i'm going to have seen mike and james in person dave we got to get to go where are you going to meet uh i don't know we got to figure it out we still made our big dinner yes right we got a big dinner coming all right we'll figure it out thank you gentlemen we'll be back next monday of course for macro monday see you then later Let's go.