The Wolf Of All Streets - Bitcoin Rises Amid Chaos In The US - Will The Rally Continue?

Episode Date: July 15, 2024

Join Dave Weisberger, Mike McGlone, and James Lavish as we break down what's happening in macro and crypto! Dave Weisberger: https://twitter.com/daveweisberger1  James Lavish: https://twitter.com/jameslavish  Mike McGlone: https://twitter.com/mikemcglone11 ►►INTERACT WITH ME HERE, THERE ARE NO BOTS AND YOU CAN EARN $RTB WEEKLY 👉https://roundtable.rtb.io/shortUrl/OBKErCO ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEKDAY! 👉https://thewolfden.substack.com/   ►► The Arch Public Unleash algorithmic trading. Discover how algorithms used by hedge-funds are now accessible to traders looking for unparalleled insights and opportunities!  👉https://thearchpublic.com/  ►►OKX SIGN UP FOR AN OKX TRADING ACCOUNT THEN DEPOSIT & TRADE TO UNLOCK MYSTERY BOX REWARDS OF UP TO $60,000!  👉https://www.okx.com/join/SCOTTMELKER  ►►TRADING ALPHA READY TO TRADE LIKE THE PROS? THE BEST TRADERS IN CRYPTO ARE RELYING ON THESE INDICATORS TO MAKE TRADES. Use code 'TENOFFSALE' for a 10% discount. 👉https://tradingalpha.io/?via=scottmelker  ►►NGRAVE This is the coldest hardware wallet in the world and the only one that I personally use. 👉https://www.ngrave.io/?sca_ref=4531319.pgXuTYJlYd  ►►NORD VPN  GET EXCLUSIVE NORDVPN DEAL - 40% DISCOUNT! IT’S RISK-FREE WITH NORD’S 30-DAY MONEY-BACK GUARANTEE. PROTECT YOUR PRIVACY! 👉 https://nordvpn.com/WolfOfAllStreets   Follow Scott Melker: Twitter: https://twitter.com/scottmelker   Web: https://www.thewolfofallstreets.io   Spotify: https://spoti.fi/30N5FDe   Apple podcast: https://apple.co/3FASB2c   #Bitcoin #Crypto #MacroMonday The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

We witnessed one of the truly saddest days in American history, certainly one of the saddest days of my lifetime with the attempted assassination of Donald Trump. I think regardless of your politics, your feelings on any individual, we can all come together and agree that that was a horrid moment. Hopefully one that galvanizes people, although I have my doubts. We were very hesitant to even do a show or have a show talking specifically about politics or what happened because it seems to minimize the importance of that event, but chose anyways to show up and discuss it because after all, that is our job to talk about markets, to talk about what's happening and what the likely effects of these events will be. I've got Dave and James here waiting for Mike. I'm not sure if he's going to be here, but Dave, James, and I are going to unpack everything that happened recently and what it means for the market, for the globe, for the economy, and for all of us as human beings. Let's go what is up everybody i'm scott melker also known as the wolf of all streets before we get started

please subscribe to the channel hit that like button i'm obviously not in my studio i'm going through airpods so i apologize for any uh technical issues we might have we were having trouble even uh getting everyone on the screen before i'm just going to go ahead and bring on james and bring on dave what a few days guys crazy i i did post a few things this weekend but but I tried. I was so emotional that I really wanted to throttle everything back. But, you know, it's amazing. There are amazing thoughts that go through your head when you hear about stuff like that. I was actually at a fundraiser for one of the most idiotic Democrat boondoggles on the planet, which is these new windmills that they're putting in off the New Jersey coastline for off-door wind power that are much bigger than anything that has

ever been tried ever in the world in one of the harshest environments where we've already seen what amounts to whale genocide going on and Greenpeace and all the others because it's wind or ignoring it. And so here we are. And the people think before this happened, I mean, literally like five minutes before the news, people were saying that, you know, we're going to fight it in court, but really the only hope is for the Biden administration to be replaced because if he doesn't get replaced, you know, they, and they went through a litany of mistakes they made. And then the news comes out and the entire audience is like, there are people speaking and everybody's on their phones.

It was one of the most surreal things. So you're in this, this, this group of like a couple hundred people, very engaged, very interested in what's being talked about. And the whole audience is like on their phones. Yeah. I felt like the whole world. I mean, obviously it felt like the whole audience is like on their phones yeah i felt like the whole world i mean obviously it felt like the whole world did that i mean we were yeah i'm just saying that you know it's almost like you were in like a boxing match with two people like beating the crap out of each other and everyone normally standing really into it and all and then

the entire crowd goes quiet and they're looking it's just amazing it's just a surreal experience yeah pretty surreal we were uh we we have just finished up we're leaving um san clemente where we spent a few weeks out there and california and um you know my my wife turned to me when i had gone to uh the men's room after eating lunch and we she turned to me and showed me the news it was just and then the entire everybody every the whole place was just silent it was like almost the entire you know um street it was crazy so i mean we've lived through uh assassination uh attempts before um and uh like you you said scott it's a it's a somber moment. It's a real dark moment for the country.

And so, but, you know, we wake up this morning, the markets are open. And we've got to kind of, you got to get your head together and be focused and make sure that you're positioned properly because things are volatile and uncertainty remains. Although, like you said, the certainty of in when Reagan had the assassination attempt, I don't know, Scott, if you have that graphic, but he pretty much, it was such a landslide victory to his reelection. It was incredible. I mean, I think every single state was red except for maybe Wisconsin. Dave, I can't remember. Yeah, I don't remember which one. I mean, I do know this. I think that people and, look, the media has sold their soul for the most part, one way or another.

I mean, Fox on one side, but everybody else, most of the rest of the media, you know, abandoned all pretense at journalistic integrity. The New York Times basically came out with a famous thing when Trump was running in 16 saying, yeah, we don't care about being objective. You know, when you have that world, they're complicit in what goes on, Biden put a bullseye on Schumer. We'll do whatever things necessary. All this other stuff. I mean, there's so much of it. They all know that they went too far. It's sort of like anyone who's raised children has that moment when their kids have done something not just bad, but bad so far that they know they can't get away with it. And they give you that look that says, okay, I'm about to be punished. All the Democrat leaders, not all of them, there are quite a few that are not like that. I mean, I always talk about Richie Torres in the Bronx.

I don't think he's ever done that. There are quite a few that have not. But the ones who have know who they have. And they understand they've been radicalizing people. The media certainly has been radicalizing people. And, you know, when you get to that level of complicity, you have two choices is do you dial it back or do you double down? My guess is you're going to see both. after and and i kept said nothing all weekend and you know i'm not like ryan selkis who's a trump supporter who's like screaming about putting roasting people over open pits of flame i'm not saying any of that what i am saying is we saw the most stark comparison between a sitting president and his challenger that has ever been seen we have basically cadaver-like, not admitting anything, not saying anything, not really

leading, not doing a thing, waiting, waiting too long to make a statement, making a statement that's way too short, not taking questions, et cetera, versus I'm such a badass and I love this country that I'm going to put my life in danger. And if anyone read the first lady Melania's letter, now, I don't know if she wrote it or her speechwriters wrote it, whatever. She obviously approved it. And so did Donald in all likelihood. That was one of the most heartfelt best written letters I have, you know, public statements I've ever seen. The best we get from Jill Biden is just is pablum to justify her putting her husband through another election cycle, which quite clearly over 70 percent of America thinks

she's committing elder abuse. So that that sort of stark comparison is going to resonate at the polls with with swing voters. And there's just no way around it. I mean, you know, the world has changed. And no matter how you want to slice it, the world has changed and has changed in a reasonable way. Yeah, I mean, when you talk about it from a market perspective and the odds, you know, polymarket, which is the best we have, I think, where people are, you know, the Sharps are putting their skin in the game, actually betting their own money on what's going to happen. It's at 70%, I think, that Trump's going to win, went up 10% on the day. So we're not speaking in theory of what happened. This is what people are putting their money where their mouth is and what they believe is obviously going to happen.

And when you talk about the markets, I mean, these headlines, right? Bitcoin retakes 62K as Trump trades back in vogue after we get an attack. I personally like it. But think about it. There are two points here. Bitcoin rallies as Trump optimism powers crypto after shooting. It just seems so, I don't know, tasteless. It's clearly true. Before we talk about Bitcoin, I just want to make one other point about what this means for the election.

And one point about crypto. The point about what it means about the election, and one point about crypto. The point about means about the election is simple. There's an old expression, a picture is worth a thousand words. In propaganda, in media, in persuasion, they say a powerful image can make all the difference. Many people believe that the image of Nixon with a bead of sweat on his brow when he was debating Kennedy was enough for Kennedy to win that election. People don't understand Nixon was a, was the VP of an incredibly popular candidate and was, was probably the odds on favorite to win, given the way the country was going based on, you know, voting on the economy and the various other things. The debates happened and Nixon didn't look as, he just didn't look as presidential as JFK. And yet, you know, people today look back, oh, JFK must have been wildly popular. No,

that was not an easy election. It was extremely close. That image mattered. We now have images, so many of Biden, you know, from the debate, from wherever, that are negative images, but that image, that picture of Trump, the one, you know, that look, it's up there, going to be up there in people's minds with Iwo Jima. Now, could it be? Probably not. You know, was it, but what does it demonstrate his personality to a T? Yes. Everyone who says, you know, says this doesn't make any sense. It's like, when does he ever care? He cares about Donald Trump and he cares about this country. And he clearly does. I mean, you could say whatever you want. I mean, you know, that picture

basically sums up, this is a man who will fight for what he believes in. Full stop. And that resonates. There's still quite a few Americans out there who believe that a leader who will lead from the front, not from behind, is important. I mean, I'm not going to lie. I'm one of them. I mean, I, given the fact that the Biden administration has tried for all of his term to strangle my business, hurt the people who I care about, and destroy jobs from, and has succeeded in destroying jobs from friends. There's no way I would have voted for Biden anyway. The issue was, do I, you know, vote for RFK or do I vote for Trump who can win? You know, that decision seems to have been made for me. But, you know, it was never going to be voting for the current

administration. But there are a lot of people on the fence. And think about the other thing that happened last week. And it was huge in the election. The Republican platform comes out that Trump wrote. If you read the National Review or any conservative website, any of the more extreme ones, they were all pissed off. You know why? Because Trump basically told the the the wing, the extreme wing of the Republican Party to take a hike. And for the first time, the Republican platform does not call for a federal abortion ban. For the first time, he clarifies that he that he supports IVF. reports ibf so at the same in the same week that trump tacked to the center visibly on the only other issue other than his personality the democrats had this happens taking away the issue of his personality at least in or at least modifying it that's why your odds are the way they

are and and there's a lot of people saying oh i, I don't believe it. We were going to do the 2025 project. The Republican platform literally contradicts the 2025 project on most of what they say are the extreme parts of it. Parts of the 2025 project make perfect sense. It's not about the bureaucracy, DOE, that kind of stuff. I agree with it. There are other parts that I absolutely hate, but the ones that I hate, things like the national abortion ban and conception and stuff like that, those are not in the platform. Those are not what Trump stands for. Yeah. I think we need to pivot from Trump's political beliefs and back to- No, I know. I'm just saying that when you understand the election onset matters. Now, the last piece is the fact that he immediately said he's going to go to Bitcoin 2024 and speak. Yeah. Well, he's not canceling anything.

And he didn't, you know, he didn't change his flights from the RNC. So he's at the convention, you know, he's meeting with delegates. Can you, Scott, can you see that map that I put on?

Can you see that? So this is Reagan after his assassination attempt and his reelection. And so, you know, pretty stark difference in that, pretty stark difference in the map there. But look, he's going to speak at the convention. He changed his message to apparently to be one of unity. And so it's going to be strong. So now you pivot back to what's be one of unity. And so it's, it's going to be strong. Um, so now you pivot back to what's going on in the markets and, you know, you can see the markets this morning. Um, it's, it's pretty interesting that we just turn around and, and the market is trying to

position itself for what they believe will be the Trump trade, which is the dollars is higher. You've got the 30-year treasury yield that crested the two-year yield for the first time in a while. And so what's going on there? Well, people believe that Trump's policies will be inflationary. And so you've got the rate premium trade coming back. It's called the steepening trade, the yield curve steepening trade. And that's pretty much the favorite trade of Trump re-election. So it's interesting. And then as far as Bitcoin is concerned,

yeah, it's obvious. He's made it very obvious that he's pro-Bitcoin on his platform. And he's the candidate that you need to vote for if you are pro-crypto and pro-Bitcoin. He's made it really obvious. So it's not surprising at all that Bitcoin has rallied. And it rallied on the backside of news that Germany was done selling. They were sitting on top of it for days or maybe even a couple of weeks. And so that's over. And Bitcoin got to a level. Scott, you do a lot more, you know, TA than, than I do, but it got to a level that I could see that was pretty strong support level. And so once we got to that level, you turned around and you, you had some shorts that apparently were liquidated at the 62,000 level last night. It kind of held that level um as now support and here we are so we'll see what

yeah the chart was screaming bottom i was saying it all last week only because i am a very simpleton and i like one really good indicator and that's when rsi is oversold and you get bullish divergence it's it's it's simple but it works you had it at the top you had bearish divergence you know you're where price is making a higher high and RSI is getting weaker. We have RSI getting stronger while price goes down. You flip back the 200 and MA and here we are. So, you know, listen, technical analysts will tell you all day that regardless of what happens in the news, the chart had it there. This is a pretty big news event.

And, you know, I think that those are that that's maybe not the case here. I love that there's people in the comments saying I have Trump derangement syndrome. I think that it was one of the most powerful, impactful, incredible moments I've ever seen from any human being, regardless of what you think of him. And so, yeah, I don't think that's fair. I think I just try not to play politics and to ride the middle. But I think it's very clear here that he's going to be better for the industry. That said, it's worth us discussing the fact that, you know, Ro Khanna, the Democratic congressman who will be at the Bitcoin conference as well, actually, I'll be interviewing him again from Silicon Valley, did finally host his longaited roundtable with the Biden administration, Cubans, Garamucci, Brad Garlinghouse, all the hits. And they said they made tremendous progress.

Listen, show me the money. I mean, show me the money. If you're going to veto SAB 121 and then have a conference, I don't believe it. So we have to see actual action and not rhetoric. But it's very clear that at least there's fear on that side, that this could be a pivotal issue that swings the election. That said, this election is done. Well, I mean, the problem with, with Roe,

I think Roe and Ritchie Torres both kind of embody a Democrat that I respect, right? So nothing personal against people like that. I mean, you know, we disagree on the way we should draw the redistribution line. We disagree on how much government should be used to steer the economy as opposed to try to, you know, help those who need to be helped. But generally speaking, on most social issues, a lot of issues, there's a lot of common ground between, you know, the centrist Republicans, which, you know, I'm definitely one of, and others. I mean, you know, huge props to what he's trying to do. I mean, but if the administration continues to push forward with Carolyn Crenshaw to be renominated to the SEC after she wrote what was and there's no way to sugarcoat it. She wrote a dissent on the Bitcoin ETF that were it a forget college were at a high school economics paper, it would have failed. It was so bad, so politically rabid. It should have been an immediate, if there was a way to

fire her from her job, she should have been fired. It was embarrassing. So bad that I actually wrote a full point by point takedown. She made comments that were so mindlessly stupid, like the concentration of Bitcoin mining risk, not understanding how a pool works, not understanding anything of it, never taking the time to dig an inch below the surface of any of what she said. This takedown is available on the CoinRoutes blog. I've posted it repeatedly. If you go to the blog at CoinRoutes.com, you'll see a takedown of her dissent i mean it's pages of just absolute rabid anti-bitcoin stuff and and many of the things she said were exactly what was rejected

by the courts and if you're an sec commissioner what you're basically seeing is she basically said i don't care about the ports i don't care about what's common knowledge or what's the law. I have my agenda. And her agenda is against our industry and against progress. And this is the person you put up to re-nominate for the SEC. I'm sorry, it is an immediate disqualification from the administration. You want to get something, at least pull that. SAB 121, there again. It's not like this is controversial. And what they did in the aftermath of that veto is even worse. And people should know this. So it's not controversial because SAB 121 was a accounting guidance. It didn't go through the peer review process. I mean, the public comment

process didn't go through. It wasn't subject to the procedure act it's advice except for every single bank knows that if you violate staff accounting con you know the guidance you will get an enforcement action against you so it has the force of law so that's bad enough but what does this advice do this advice basically said if you're a regulated company you can't custody crypto and then what did they do afterwards after the veto was secured? They started giving exceptions to their friends. And so if you're a large, well-connected donor institution, you could get an exception. If you're not, you can't. So let's just, Dave, unpack that for the listeners, because it sounds super confusing. It's that, you know, SAB 121 was,

yeah, it was a staff accounting advice from the SEC directly to financial institutions. And so it didn't go through the review process, as Dave is saying, it didn't go through the comment process of legislation, meaning it didn't go through Congress. So Congress should have vetoed, they should have struck it down because it wasn't really a law that went through the process, the public process. It was an end zone run that the SEC did by just issuing this statement of advice and policy that wasn't from the legislators. And so they should have struck it down. And the president should not have vetoed it. It's ridiculous. And obviously he has Elizabeth Warren and her anti-crypto army in his ear. And so nobody really believes that anymore that we've seen over the last month, at least the last two weeks, nobody really believes that Biden is the one who is pulling policy anyways.

It's his administration, it's his staff, it's the people around him. I mean, he can barely stay awake, apparently. But the reality is that he should not have vetoed that. And now the backdoor, you know, the system of cronyism is back in place where the SEC can give a pass to certain large institutions. And that's what Dave is talking about. That's right. And that is exactly the opposite of the kind of level playing field pro-innovation administration that we need. It's even worse than the original conception of just stopping the banks from being able to offer custody. And it's just, the reason I brought it up, Scott, is because what Roe wants to do, what Mark Cuban wants to do, and look, I've had conversations, some public ones with the Mooch,

what they want is the administration to tack toward the center and embrace those sorts of ideas. The problem is that it just, as Mike McGlone is fond of saying, show me the beef. They haven't done it. And, you know, I'm sorry, but, you know, look, I'd be perfectly happy to, in fact, it would be great if they would do that. But until Elizabeth Warren is out of politics and until the stench of of this cronyism is removed, you can't possibly think that this is anything other than a token effort by the administration to try to decrease one issue that's going to hurt them. And that to me is crazy. Now, the funny thing is, is Arthur Hayes wrote something that went much farther. I don't know if you did, you have a chance to read his, I forgot the title. Not recently, no, no, no. Yeah, he just put out one. And he basically said the same thing about Trump. He said, well,

you know, make sure you get words or actions from the Republicans, you know, on the piece of paper signed before you sign up to vote for these guys. And I understand that philosophy, but we have a very stark choice here. And it matters. And that's why when you show if you want to know why it's Bitcoin rallying, if Bitcoin, if Trump won the election, Bitcoin would have been at the all-time high already. It would have been a god candle. He didn't win the election. 70% means there's a 30% chance he loses, right? So keep in mind, this is just a taste of what happens.

You think if he wins the election on the day that he wins, we get a god candle to the upside? Unless we're already there. Unless we're already into pricing. I think that would be well-priced in person. I think it would be priced in. I mean, David, we have a big rally in the fall, which is what you and I have been calling for

in the first place. I mean, your base case has been that in September, October, November, that's when we're going to see the beginnings or the next major rally in Bitcoin. We've been saying that. I mean, just based off of the four-year cycles. We can't.

Yeah. We can't. As far as our aligning would be an understatement at this point. Yeah. Go ahead, James. I was just going to say we can't ignore that now we're in a situation where the economy is turning over. Even banks are talking about their smaller customers, their lower income customers are struggling. You're starting to see it in retail price. You saw the producer price, the producer prices are hanging

in there and that's not good. Just to unpack for people. That means that producers are still having to pay for raw materials and products that they're going to make into retail products and their margins are getting squeezed. So everything kind of squeezes now with the high interest rates and borrowing costs. And you're starting to see that. And the Fed knows it. They're just looking for enough information. We're going to keep hearing the trajectory to 2% is solid. The trajectory to 2% looks right. We're on the way. And at some point, that'll replace the we've hit our 2% target. And so they will concede. Will they do it in July? No, not unless we have horrific retail sales numbers and our next PCE. But I do expect PCE is going to slow. And that's the other

inflationary number other than CPI and the core PCE that extracts food and energy which is pretty volatile so you know um we we probably will get a fed pivot here and and the fed futures are showing a super high percentage um uh yeah it's over 80 percent that the that and i haven't seen the markets this morning so i don't want to quote the exact number, but I wrote about this weekend. But that we're going to get a cut in September and another one in December. And then a more than two-thirds,

like it's over like 85% chance of each of those. And so, and then a two-thirds probability, 67% or something, that we're going to get another cut in between those two meetings. So it's super high likelihood we're going to get two cuts, maybe three, according to the markets. And you're starting to see that in the markets. We've got political unrest. You've got a former president, current presidential candidate who had an attempt on his life, and the markets are up today. I mean, you could say that's resilience. You could say a lot of

things. You could say that it's just the Trump trade. But it's clearly everything kind of filtering into the probability, and we started seeing it late last week, the probability that the Fed's going to cut. Everybody's making the bet here that the Fed's going to cut before it's too late. They usually don't. I mean, we've talked about that ad nauseum. They usually wait until it's too late. This is an election year. There's massive fiscal stimulus coming out of Washington with $2 trillion plus deficits. So it's a lot of noise out there and it's hard to

look at past and say that this is definitely what's going to happen. The Fed's trying to avoid that very problem that they wait until it's too late. And people are sorting out their bets to saying that they're going to. They're going to cut before. They're not going to hold for longer and wait for the 2% inflation print. They're going to cut before that because they're going to say that the trajectory is in the right direction and we're close enough and we don't want to slam on the brakes here. We want to keep tapping them and then take our foot off. We've already seen QE, you know, they were going to cut that from 80 billion a month to 40 billion. They cut it down to 25 billion. And so that's why M2 is expanding.

You know, we're seeing an expansion in the money supply now. And so it's interesting to see that this inflationary, these inflationary policies are still kind of in place in the back doors. But you're seeing certain parts of the of the economy, grinding down from high interest rates and from and from exactly that. So James, I want to ask you, this is the yield curve, obviously, you're talking about, can you unpack that? I guess if we zoom in more, you can see that the steepening as it's rising, right, right, right here, I guess, if we go in on a daily, you can see it, I would say much more dramatically that it's coming. So it would be un-inverting if it gets to that red line, basically, for people who don't understand, we've been inverted historically. Why is that the quote, unquote, Trump trade, just unpack it for

people? And what do you think it takes for us actually to normalize, to get back to 0% or above? Yeah, I think, well, it goes from the 10 all the way to the 30, is the Trump trade would be that people expect high inflation and higher interest rates longer term. So you would have the two-year rate come down versus the longer rate. So if the bet is that the economy is going to roll over and we're going to go into a recession, then longer-term interest rates would be lower than the current rates

because you're expecting that the Fed's going to ease after a certain period. The three-month and the two-year, what people look at as far as the kind of short-term rates, you know, T-bills are just, they're basically the Fed funds. And so, you know, you're looking at that and saying, okay, well, now these rates are coming back up compared to the shorter term. What does that mean? Does that mean that we're going to have liftoff here? And the answer is, it means that people are expecting that Trump policy will be inflationary. He will not try to balance the budget. He will not curb the spending out of Washington. And his policies will be expansionary in that there'll be less regulation. There'll be less expense. There are fewer expenses for,

for small business and, and for even large companies. And, uh, and so, and trade policy will be, um, it will be positive for us companies. And so that's what you're seeing. You're seeing that likelihood of long-term perpetual inflation. We've been talking about this for a long time, but I believe that it's a foregone conclusion that we're going to have high inflation for a long time. Whether or not they admit it in the CPI and the PC and all that, people feel it. Everybody around the country feels it and they're great you see all these videos now people making the same exact purchase just clicking a button and having the same exact items bought from two years ago and the items are up 30 50 70 it's like you can't ignore that

there's real inflation out there and so that that's, that's the, the, the people are looking for that real rate to come up. And so that's, that's what, that's what that trade is. And you can't, you have to contextualize this to Bitcoin, right? So, you know, we've been talking about things, but let's try to bring it together. So why did your thesis and my thesis, what was our thesis that we would languish post-having and see a rally in the fall? Well, the reasons are a couple. First, euphoria into the having people buying the story. And then the cascade of the miners are going to collapse. So they're not the network's not going to work. You know, what's going to be the catalyst, all that going into the summer.

It seems to happen every time. And so at this time we had added to that, you know, market sales from Germany, the Mount Gox is going to come live, yada, yada, yada. And so we had a period and we've had a prolonged period where if you look at this this 140 days are we at now 50 i don't know but it's a pretty long period of time since it hit the the i won't call it an all-time high because in any rational way it wasn't but since it hit the local high uh we've had this period we're in this trading range we're still there and i don't expect to i think there's a chance now that we do break out of the trading range on the

upside over the summer, which I didn't think. Well, on that, on that point, Dave, that one thing I didn't say before we had, you know, Jeremy back off, you've also seen hash rate really come down mean that we've had minor capitulation here. Finally, people look at the public miners, but you've got a lot of small miners out there that have long-term energy contracts that have been selling Bitcoin just to keep up with the operational costs. And so they've been doing this ever since the halving, and they've been playing chicken, hoping that the price of Bitcoin comes up before they

have to shut down operations. I think you've got to change the verb tense. I think you're right, but I think that already happened. Yeah, I'm saying that. From peak to trough, we saw what looks to be, I mean, a 20-plus percent correction in the hash rate. That has since stabilized. And if you look at the level where we are, the absolute level of approaching 700 exahashes,

keep in mind that we were below 200 or at 200 back in January of 22, or back in the end of, not January 22, the end of 21. We were well below 200 when that happened. Yeah, and it got to 660 and it's back down to 550 according to blockchain. Yeah, I'm looking at a different yeah i mean it's hard it's really hard for the listeners it's really hard to tell exactly what the hash rate actually is these are all yeah it's it's non-trivial but the fact is it's it's more than triple where it was the last time we were at at the point yeah actually at the all-time high so that's Now, people say that's overplayed, but that's true. But hear me out. So the rest of this is happening. So we already had this idea

that seasonality and understanding why would be in the cycle. We've seen the price of gold and the price of all risk, other assets, risk or otherwise, because of the inflation of the monetary supply go up. So the coiled spring that we look at for when Bitcoin finally rallies is rather substantive. Gold is at a much higher price at $2,400 than it was when Bitcoin was last at $2,400. Yeah, I fully expect gold to break out. Exactly. And I think they move. So the issue is, is this the cycle that Bitcoin becomes an inflation hedge? I would have said no. I'm not so sure now. And I think that matters. So people buying Bitcoin or buying it as a long-term hedge against currency debasement, do people think

about that in terms of the CPI? I mean, maybe in the back of your mind, but I think for the most part, people look at the CPI and say, well, if it goes up too much, they're going to be forced to hike rates and that's going to hurt my risk assets. And so it sort of had this kind of weird negative, good news is bad news. Scott, this is where you use humans are going to human all the time on this stuff, right? You know, but I'm not so sure that that's the way it's going to human you know all the time on this stuff right you know but i'm not so sure that that's the way it's going to get looked at uh you know it's particularly in a deregulatory environment as we as we go into the fall so look about what could be happening

in the fall simultaneously you could be going towards a positive administration for the asset class in general allowing most of of America to actually participate fully. You could be at the same time having a very clear fiscal stimulus at the same time as the Federal Reserve is saying, OK, well, we really shouldn't be choking things off. At the same time, you're getting FTX giving back dollars to people who wanted to be in crypto, which is larger, by the way, in total dollar size and value than Mt. Gox. And by then, Mt. Gox will be resolved. We will see how much got sold versus didn't get sold versus I wanted it then, I want it now.

You know, a lot of the people who owned in Mt. Gox, quite frankly, a lot of them are, well, look, you know, until Bitcoin passes gold, I'm not selling. You know, they call that hodling. I mean, people say, I'll never sell my Bitcoin. I find that kind of ridiculous. But I do think it's not ridiculous to say, I'll never sell my Bitcoin until it gets to a price that I think fairly values it as a digital store of value. And I think that those forces all combine. And that's why, look, I made my bet. I think that this cycle, which means by 2025, I expect there's a very real chance of, actually, I'm more bullish than Max Keiser.

He keeps saying 220 is in play, and I think 240 is in play. Now, is that going to necessarily happen no is it a bit hyperbolic yes but would i be surprised if it happened no why would i yeah i don't think like i mean listen we've had muted cycles each time obviously you know from all-time high to all-time high you know, many multiples before. Last one was 3.5x, you know, 20 to 70-ish. But even if we do a 3x from the 70-ish highs or 210, 225, you know, overshooting by a few percent or undershooting by a few percent, it's a surprise.

No, and I think I have it. You've got different dynamics now. You've got the ETF dynamics that we didn't have before, and that's a lot of institutional capital that's been sitting on the sidelines that can absolutely pour in. They are not price conscious like we are. They just aren't.

They go along together. They're like the ultimate sheep. It's funny about we when you use that word because I've basically been trading like them, i.e. I haven't been trading, right? Because it's- Dollar-cast average of buy dips.

Yeah. I mean, we. I mean, if you're an individual investor, you're probably looking, meaning retail as a whole. They're not as price conscious and price sensitive as retail as a whole. They move together in large swaths. Yeah, I mean, look, all I'll say is this, that if you think of the headwinds, what was the biggest risk?

Oh, and we haven't talked about the other story, which would be ridiculous and totally on script and totally unconfirmed, so people shouldn't be rushing in to buy on it. But multiple sources are claiming that Xi is going to unban Bitcoin for his people. That's right. And just all of this. I've heard that rumor.

I'm not saying it's right that he's doing it. I've heard that rumor. And we're finally done with this one. And speaking of nations, Germany is finally done. this one's going to look stupid is i i made that i made the call and i think it'll be another one of my right calls i made the call at 54 000 and people said are you calling for a pico bottom dave and i said well a local bottom and honestly a bottom if you told me that the stock market's not going to crash or risk loss, it's going to crash, I called it. And I basically said that the people that from

Saxony, you're going to look as stupid as Gordon Brown did, or when he timed his gold sales at an average price of $270. Yeah, right. I mean, it's just like, it's one of those things now understanding that from what we know now is they the law said they had to sell it. The one thing I will say about the way they sold it was the law didn't force them to be stupid and they were stupid. They could have moved all of their Bitcoin to exchanges. And sold nothing for a month you know they could have done this months ago and then use algorithms such as my companies or others uh to sell them in a way that no one would have known until after they

were done and you wouldn't i mean it looked so it looked so clumsy i mean it was so clumsy it was either intentionally trying to push the price down or uh just giving it to a trader that had no idea whether to just blow it out. You've seen those trades before where you just blow it out. I don't care what price you get, just get rid of it. But it looked either intentional or incredibly clumsy in their trades. Why would you just dump hundreds and hundreds of coins in a matter of hours? You could see when they came out there. It looked ridiculous. So, I mean, let me give you some numbers just to understand it.

So I'm writing our first half report card for CoinRoutes. And on $8.4 billion in the first half of spot, Bitcoin alone, and we traded a hell of a lot more than that over the quarter, but just $8.5 billion of spot using our vanilla algorithm, which is the one that I would recommend to someone like that, order sizes over 20,000. So it's 13,000 orders. You can do the math. These are reasonable tranches. The total cost compared to the midpoint of where Bitcoin spot was trading across a group of exchanges was less than six basis points for our customers. That's net of exchange fees. And if you compare it to the midpoint, it was less than six basis points for our customers. That's net of exchange fees. And if you compare it to the midpoint, it was less than three basis points.

These people lost double-digit percent. It's incredible. Contextualize those numbers. Now, why do our clients do so much better than you might otherwise expect? Because there's a lot of stupidity in the way people trade this stuff. A lot of people just pick up the phone or do a telegram message to a group of OTC brokers and say, what's your bid for this block? And of course, the ones who don't win get to sell in front of it. And the ones who do win makes a widespread. And it happens. It happens all the time. Or worse, others just go and hit

the button like these idiots did on exchanges and just start market selling. And you see it all the time. I mean, it's unfortunate. And the market's a lot better today than it was two years ago and dramatically better than it was four years ago. But the truth is there's a lot of stupidity. And why do I care about this? Well, I care about it for a lot of reasons. But for our listeners, probably the most important thing is is just shows how early we are in the cycle. Nobody would do that if they inherited a, if you were, if you would see somehow a block of Apple stock or Tesla stock or whatever, you know, you would not sell it like

this. You might do a secondary offering, which would be, you know, fractions below the current bid, but you would do it in a way that your banks would make sure, yeah, which would be fractions below the current bid, but you would do it in a way that your banks would make sure, yeah, they would make some money, but you wouldn't destroy the price of the stock. They just don't do that. But with Bitcoin, they do it. And it tells you how early we are. It's people aren't taking it seriously. So imagine a world where governments who do seize it, start taking it seriously and people start trading it seriously. That maturation is where we will be when Bitcoin is on parity with gold. That's been my thesis all along.

And clearly we're not there yet because you get people out there who say, well, it could go to zero tomorrow. I should sell it immediately. And that's literally the mindset you have to have to get that done. And so from a viewer perspective, you need to understand that every time one of us, any of us, I don't know how many thousands of people are listening to this call, but every time you're in a conversation over a barbecue or whatever, and someone asks you about Bitcoin and you start talking to them, the odds are high that if you're talking to a group of people, at least someone in that group of people will start doing the research. And that gets more and more. And you get more and more people to understand the value proposition,

the markets will improve. And as the markets improve, it becomes a virtuous cycle. And so that's kind of why this German thing, I think, is a big deal, because it becomes an object lesson. James, I just want to ask you about, actually, I just saw this tweet. It's not necessarily Bitcoin related, but here it is. This is interesting. 27 of 34 global central banks, or 80%, are expected to ease their monetary policy by the end of 2024. The highest since 2021. That was just 10% expected in 2023. 42% of central banks have been easing monetary policy. Canada and the European Central Bank were the latest to cut. Meanwhile, the market is pricing the first Fed rate cut in September and a total of two cuts

this year. Basically, it just says the world is waiting on US rate cuts. 80% of the world is just ready and waiting. I mean, that's a lot of central banks cutting. Right. So in that meantime, we've had softer, we still have inflation, but we don't have the same inflation we had a year ago. And it's giving Fed a little bit of firepower here to say, maybe we can start easing. We've had a couple of prints that are okay. The unemployment rate has ticked up over 4%. The SOM rule has not been triggered yet. We won't go into math of that, but basically it's not there yet,

which is good because the SOM rule means we're in a recession. But you're going to get a few, you're going to get a few things here. You know, this week we're getting, we're getting retail sales, really important number tomorrow that, that the medium forecast has that dropping by 0.2%. So that's going to show, likely show that the consumer is slowed down. They're not spending as much because they're just at their kind of limit. You've seen the credit reports that people are at their limit, especially in the lower demographics of available credit. And so use of credit has slowed. And that's a negative indicator. Means that people are running out of runway there. And then we've got things like housing starts and whatever, but that's not a really big deal. We've got our jobless claims, but next week we get GDP and we get PCE. And these are numbers that our next Fed meeting is at the end

of the month. I do not expect the Fed to cut rates in July, but I do expect them to have plenty of firepower by September to do so. So that would line up with that chart, Scott, which is, yeah, I think that the Fed's going to cut in September, and they'll likely cut again in November, and then again in December. That's what I would expect the trajectory to be. But it's going to be an orgy of central bank cutting the second that we cut. What's that? Yeah. It's going to be an orgy of central banks cutting once we cut because yeah i mean it'll be like the green light that it's okay yeah part of the part of the issue here is that when

our our rates are higher i mean we're seeing what happened what's going on in japan i mean japan is a is an extreme situation with their um yield curve control and holding that two-year or their 10-year down to 0% for so long. It's holding that beach ball down. It's up at, I think it ticked over 1%. And so the Bank of Japan has had to come in and buy yen, sell dollars to kind of hold the yen from running out of control. And so meaning falling, the yen getting weaker versus the dollar. So everybody's on guard and standing, waiting for the dollar to weaken here. Because as we hold rates higher, the entire world is looking at our rates as a place to get yield and just you remember how long

we went from for zerk policy and you know we had a decade of zero interest rate policy yield um hunger is real and people don't want to give that up and so they're looking for any spot where they can get yield and if they can get a a better yield in the US dollar, they're going to do that. So that makes central banks reluctant to be cutting their rates in the face of our rates still high. I mean, I think that last week was fascinating because everyone, there were all these headlines that the dollar average dropped. And if you look almost all of it, I mean, it was most of it was the end. So the end basically was at 161 dropped down to 157, which is another way of saying, okay, mission. Yeah. The DXY doesn't have that many currencies in it. Exactly. That's right. And so pretty much all the others were, you know, 20, 30, 40, 50 basis point moves. That was a multi-percent move. And effectively, what it was, was the Bank

of Japan, and almost certainly with borrowed dollars, I doubt they sold their treasuries, because the treasuries at the same time strengthened, the yield went down. So liquidity was pushed into the market. We don't know the data yet. Well, we won't know it for, I don't know, when do we find that out? in a month or so, James? I don't know. Yeah. Officially. Yeah. But they did, they did. I mean, I don't, I can't remember if they announced it, but they did intervene, you know? Oh no, they, they intervened. The issue is, is where'd they get the dollar? Where'd they get the dollars to do it? Oh yeah. I mean, that's a good question. I think it was borrowed, not sold.

Swap line or not. Yeah. That, that Yeah, I haven't seen that on the Fed balance sheet. Exactly. Exactly. And so the point being that those sorts of actions are extremely, you know, liquidity. The notion that we're going to be able to get through this without extreme liquidity being injected seem to me it seems impossible. And I think that when we clear the politics out and we clear the cycle out and you get to the sort of why are we in Bitcoin for the first in the first place kind of narrative, that liquidity is there and is real. And so when the reason that Mike's not here, he would be saying, yes, but, you know, show me the beef. And, OK, I could do all that stuff. I won't make fun of him when he's not here because. But his central thesis is that we're going to get a great reset because they're going to have to pull the liquidity out. And at the end of the day, where I fundamentally disagree, it's I don't think there's a hope in hell that they're going to pull the liquidity out. They're going to try to taper it, but they can't. Because if you do that,

this isn't a perpetual motion flywheel. You have to keep throwing liquidity at that flywheel to keep it moving. God forbid it goes down. I mean, what happens to the US economy if the stock market crashes? The stock market, yeah. That's a first derivative. And then you've got the treasury market locking up. That's it. I mean, that's light out. You can't have it. The point is, the policymakers need the wealth effect. They need it. And there's no question about it. We're at stretch valuations on the S&P. But if you've noticed over the last couple of days or a few trading days, the Russell has broken out to the upside. Now, what's the Russell? For those who don't know, the Russell 2000 are, people think of it as small cap. It's companies that are listed, sampled by the Russell Corporation, over $100 million in market cap, but below the top 1,000 companies in the United States. So you have a company 1,001 to company 3,000 in size. So are those small caps and the small businesses?

It's not really small business, but people use it as a proxy for small caps. That is generally considered much more sensitive to the business cycle, much more sensitive to liquidity and rates than large companies. Hire for longer crushes those companies. Which is why. Because the buyer squeezes their margins, it makes it difficult for the profit. Those companies also suffer disproportionately due to regulation as well. So one would expect the ultimate Trump trade, although probably we could talk about tariffs and stuff, whatever. But the fact is the ultimate Trump trade is buy the Russell short the larger caps.

Buy the 2000 short the 1000. And why? Which is why the Russell is up 1.4% today versus the S&P up point point 4%. Right, exactly. And now do would the ultimate trade end up being the shorter the other side? No, it has been by the small caps. Why is there more sensitive deregulation and they're more sensitive to liquidity. And that's something that it's telling you something that I said last week on a crypto town

hall. Honestly, most of what's been going on in the market has been fairly rational lately. And that's a rational response from a market perspective to recent events. The actual only irrational response that I've seen over the last three months has been Bitcoin dropping down to 54,000. I mean, now we're at 63 or 62,950 or whatever it is. But, you know, it's to me, that was irrational. But honestly, real rationality will be dramatically higher prices. The only asset that I know that I think is dramatically undervalued that I look at is Bitcoin. In the crypto world, there are a few others as well. I won't go into them because we can talk about them anytime people want. But on the macro side, it's really all roads lead to liquidity. All roads lead toward governments having to stoke and push on that string where people are taking debt and to make it easier.

And that's why it's hard to be bearish on assets that are directly related to that. Now, does that mean that companies are going to be able to generate more cash flow, when they're already at, you know, 200% of GDP is market cap? Maybe not. Maybe not. And that's Mike's point. But I do think that it's important for people to understand what we're talking about here. What we're basically saying is, only way out for the governments in this debt cycle is to engineer more nominal growth to create higher nominal taxes than we're currently spending. That's it. Can they do it? I mean, honestly, don't know for a while,

but they certainly can't do it with a massive regulatory state. They certainly can't do it by increasing tax rates final words they're hoping that they're hoping to bridge that gap and my you know i don't there's no systematic like the the great machine of the united states uh treasury and fed but the reality is is the market is hoping to bridge that gap between the Fed and Treasury having to inject liquidity into the markets to produce what you're talking about, which is nominal growth, which is just expansion of the money supply to make the tax receipts higher nominally in order to keep managing those debt payments. But I think the market is hoping that we can bridge that gap between that and the miracle of production that we hope to get from AI. And that's a whole other discussion, but that's the hope that we can do that. For next time. Yeah, hopefully we'll have Mike back next Monday.

But thank you, gentlemen. This is one of those days where it's tough to decide what to say what not to say you know i see the comments people i love people saying i shouldn't be in the middle here this this comment actually i ran this one scott why choose to ride the middle when you have complete lunatics on one side and good people on the other side about having some conviction and standing for good versus evil like i don't even literally know which side is which because here's how i view politics just so. Like I don't even literally know which side is which, because here's how I view politics. Just so people know, I don't do myself in the middle.

There's independent and there's unaffiliated. I'm unaffiliated. I think there's politics and I'm like orbiting the entire thing because I think it's all birds of the, I think it's varieties of birds of the same feather. So I don't view myself. I think I'm rational. So maybe I'm moderate if you had to

qualify me, but I just, I think that it's all a huge, unfortunate game and I want to be outside of it entirely. That's the point of Bitcoin. The reality is there are extremes on both sides that have been given a disproportionate voice. That's correct. Unfortunately, the media does everything they could to make those extremes be what we all hear. That's exactly right. So that's the gist of it. Anyways, I shouldn't have said that. Anyways, we'll be back next week, obviously, 9 a.m. Eastern Standard Time.

I'll be back tomorrow with my show, back with my normal high-quality sound and lights and everything. Guys, thank you so much once again. We'll see you next week. Bye, everyone. Peace.