The Wolf Of All Streets - Bitcoin Skyrockets Past $65K | Can It Hold This Crucial Level?

Starting point is 00:00:00 Right on schedule for the four-year cycle, Bitcoin has made a higher high, breaking $65,000, leading many to believe that the bull market is back, baby. But this was a big week, tons of news, both from a regulatory, legislative perspective. Carolyn Ellison going to get two years in jail. CZ coming out. We have a lot to unpack today on the Friday Five. Good thing I have NLW here to cover it all. Let's go. What is up, everybody? I'm Scott Melker, also known as the Wolf of Wall Street. Before we Let's go. I lost a trampoline to the neighbors that was supposed to be a tight town. A few trees down in the neighborhood had definitely no power, but luckily my generator at least powers this room and my internet.

Starting point is 00:01:12 So my kids can go scream in the other room where it's really hot with all the neighborhood kids who have showed up at our house because we have coffee and a refrigerator. So the adults and kids are all here. You don't want to hear about any of that. You want to hear about the news. You also had a little hurricane action going on, right? Cause I was flying through Atlanta last night. I was supposed to be on a,

Starting point is 00:01:34 on a late night flight and was able to move it up about 12 hours to, to avoid. Cause the, the way that the, this is one of those, like everything gets canceled and then people are sitting there for three days, kind of a thing.

Starting point is 00:01:44 So luckily I got for sure. And then people are sitting there for three days kind of a thing. So luckily I got back. For sure. And then they canceled schools here for two days and then the storm didn't hit till like 10 o'clock at night. And we were just sitting here all day yesterday with the kids playing on the street. Why aren't they at school? Yeah, but I get it. So we got a lot to talk about here, obviously. Just sort of honorable mentions before we dig into the big stories.

Starting point is 00:02:01 Pretty big moves here from Bitcoin. It's above 65,000, huge options expiry today. But a lot of people who are looking at the market technically have been watching sort of this 65,000 area to hopefully break. And I think the bigger story alongside this is that altcoins are actually moving, right? So I think there's some new money in the market. It's not just Bitcoin. And it looks like we could close a very good September, which wasn't supposed to happen, I guess, in the eyes of those who trade on seasonality, leading a lot to believe that October and November could even be bigger than usual.

Starting point is 00:02:35 Yeah. Although, I mean, just by rational things, if September is usually bad and was good, then October, it doesn't necessarily mean that. Come on, man. No, listen. We do have history, though, of when September is actually decent of having even better Octobers, but you are right. Yeah, no, October is, we don't call it October for nothing.

Starting point is 00:02:54 And I think that some of this stuff is, this has been, I think, one of the singular strangest periods in crypto market history. Not bad, necessarily, but just really weird in the sense that we raced up to new all-time highs without any sort of real meaningful conviction or excitement. It was largely on the back of the ETF narrative. There's been no sort of new influx of money except insofar as whatever's coming with the ETF. There's been a quiet sort of trepidation behind the scenes that things really aren't that good. There's been a quiet sort of trepidation behind the scenes that things really aren't that good. There's the depression of sort of, you know, regulatory, you know, whatever. And then there's

Starting point is 00:03:31 no sort of like new exciting thing, like, you know, whatever people enjoy meme coins, but I don't think anyone's trying to posit it as the future of finance in the way that there's always been a future of finance sort of sort of narrative before. And so in that sort of context where people are sticking in there, like we are now like the diehards are here forever, right? It's important to have things that just jostle us, even if they're not going to pour new people in. And I think an outperforming September is exactly the type of thing that sort of shakes off the cobwebs, makes us remember that like we've been all gloomy at 60,000 and kind of gets everyone fired up again a little bit. I totally agree with that. And I've been cautiously optimistic, obviously, about October and November, but it always worries

Starting point is 00:04:15 me when that's consensus. But I think it's important to remember that that's just consensus among a very small echo chamber of people who understand crypto, and the rest of the world is still really not paying that much attention. So I think that we could be fine. There's also consensus desire and consensus intellect. And it's important to always know which one. October is always at least a little bit of both. Yeah, it's definitely both. But I would say that fundamentally, we see primarily tailwinds.

Starting point is 00:04:43 So things should be decent, but you never know. One of those tailwinds, obviously, this is the first official story here. Chinese stimulus, obviously. We've got a ton of articles here, but Chinese Politburo supercharges stimulus with housing rates. Chinese biggest stock buying frenzy in years overwhelms exchanging. I mean, they went nuts with this stimulus on the market. And big stimulus week aims to draw a line under China's slowdown. And of course, finally, China weighs 142 billion capital injection into top banks. I mean, from what I read, they're literally at the point where they're just sending hedge funds money to go buy stuff. Yeah, they're doing it. It's everything all over, it's everything all over the place. So they change

Starting point is 00:05:25 fractional reserve requirements to inject more liquidity, they're doing direct injections to add more liquidity. They're actually I think, considering direct payouts, which is something that two years ago, Xi Jinping was talking about, you know, how he's nervous about the spirit of welfare and how they don't do that. I mean, this is a definitely an about face caused by two and a half, three years of really failing economy. And also, outside of, this would be the first year, it was just the third year, basically, since the late 80s, that China doesn't meet its GDP targets, with the other ones being 2020, which was COVID, and 2022, which was the resurgence of COVID lockdowns in China. So this would be the first non-COVID year since the late

Starting point is 00:06:01 80s that China looks like it's not going to meet GDP growth targets. And obviously, that has them freaked out a little bit. So I think that the story is sort of two parts here. One is obviously China and that policy and being the second biggest economy in the world, obviously, has had huge ramifications around the world as well. But it's also now, we are really like all central banks are pointing aggressively in the same direction. You know, the Fed is sort of part of this story as well with like finally sort of shifting into the hiking or sorry, the cutting cycle period. And now it's sort of we've leveled it up again. So I think that, you know, this, if we go back to sort of that honorable mention story, to the extent that we're looking for an actual meaningful catalyst other than just, you know, we're shaking the cobwebs off and we like fall, you know, liquidity being injected into the system does tend to tend to produce, you know, tend to drive Bitcoin, you know,

Starting point is 00:06:55 performance. In fact, Lynn Alden commissioned Sam Callahan to do a study about this recently that they just I just think they just put it out this week, where they found that something like Bitcoin moves with the direction of global liquidity, something like 80% of the time, right? So it's like when liquidity conditions approve, Bitcoin does well, which is, you know, totally, totally makes sense, but it's, you know, there's some good numbers around it from Lynn and Sam, if anyone wants to go see those. I'm going to jump ahead and then circle back on some of the other stories we have, because we talked about catalysts and what those might be. And that's sort of been a narrative this entire time.

Starting point is 00:07:27 When are we going to get something that's going to send us flying? I think obviously Chinese stimulus is a huge story, a 50 bit rate hike instead of 25. Also a huge story. We can debate another day whether that means something's broken or this is actually a bullish signal based on the past. But we have some others that are definitely worth talking about. SEC Greenlight's listing and trading options for BlackRock spot Bitcoin ETF, BlackRock Bitcoin ETF options to set stage for GameStop, like Gamma Squeeze rally, Bitwise predicts. And then I want to wrap into that sort of another of the honorable mention stories, which is BNY plans crypto ETF custody as Wall Street Eyes digital asset revenue. For those who missed it, BNY Mellon, who is the largest custodian of assets on this planet Earth,

Starting point is 00:08:11 has gotten effectively a... They don't have to follow SAB 121, right? They've gotten an exception. They're going to be able to custody crypto assets. So there's a lot to unpack here. So first of all, options being allowed on BlackRock's ETF is huge for people who want the ability to hedge or complex strategies. It's going to bring a ton more liquidity into the market. This is a natural evolution, I think, of the Bitcoin spot ETFs being approved. But the second story that I want to ask

Starting point is 00:08:38 you about when I look at both of these is it's just BlackRock that's been approved so far. Last I checked, they're not the only spot ETF. And only BNY Mellon has gotten an exception to SAB 121. Last I checked, that's not Custodia Bank or any crypto natives who have been trying to do this. It feels like in both of these cases, the SEC is choosing incumbents that they're comfortable with and choosing winners. Yeah, 100%. Because it's just as Gensler gets more boxed in on how he can screw us up, he's going to find new ways to screw. The man could have one inch and he'd find a way to make that, you know, put a tack down in it for us. So listen, there's sort of a good thing and a bad thing about this. The good thing about this is that these are obvious parts of the ecosystem

Starting point is 00:09:23 that need to be there. They've needed to be there for a long time. It's all part of sort of the broader financialization of Bitcoin and the broader integration with the regular financial system of Bitcoin. It's a clear, steady path. There is an inexorable momentum forward for Bitcoin and crypto in this way. And to some extent, this reflects the fact that even Gensler and his antipathy can't fight that momentum. Now, what he can do is on the way, keep his thumb on the scale and do things in the name of, you know, whatever he wants to say, right? You know, it's like he gets, he's the last little bit of control that he can exercise, right? Is choosing who gets to do these things. And I think it's less about, in my guess, is that to the extent that there's a pernicious piece of

Starting point is 00:10:09 this, it's less about picking winners than it is about picking losers and making it harder for certain actors. I don't think that he cares about BlackRock versus Fidelity necessarily. I think that he cares about not Caitlin Long and not... That's sort of the thing that seems to be here. The SAB 121 thing, you know, most, I mean, this, we heard this in the, in the congressional hearings this week, you know, which may be jumping ahead a little bit as well, but, you know, it was very clear that Congress or many members of Congress felt that in the wake of the SAB 121 debacle inside Congress, where it was sort of, you know, both parts of the House voted to basically, you know, nullify this rule. Biden vetoed it, of course. They still believe that with all of that, the SEC should have voluntarily withdrawn that rule, right? They shouldn't have

Starting point is 00:10:59 made it be an issue that Biden had to veto in that way, or at least they shouldn't have responded that. They should have listened to the will of Congress, in other words. And there was a lot of anger about that thrown at Gensler. This is an example of sort of him trying to carve a way to say that he's listening to that, you know, by kind of creating these indulgences and sort of these exemptions, while not actually doing the thing that Congress thought, which is just get out of the way. Yeah, it just feels wrong to me. Although in the end, it's bullish. This is just yet again, one of those things where it's like you cheer for things that might make number go up and institutionalization. But if you are actually deeply believe in the ethos of this asset class, it should definitely have alarm bells ringing in your head the way that it's happening.

Starting point is 00:11:49 My instinct, my optimistic take about this is that I think that when it comes to the... Yikes. All right. Well, this is, we're frozen here. You guys can hear me fine? Give me some comments if you can hear me fine. Okay, you're back, I think. You were frozen there for a while. Yeah, okay. I don't know if that was my side or yours sucks basically that there's even more uphill battles for the crypto native institutions. But I think it was always going to be a challenge where at the beginning, the products offered by crypto native institutions are going to have to rally the home base of crypto natives

Starting point is 00:12:37 to build their support and slowly win back customers from the traditional institutions over time. And so I think even though that, you know, BlackRock gets a head start, even though, you know, BNY gets a head start, I don't think that that counts out the crypto native institutions as players in the long term for this. So there's limits to how much the SEC can can put their thumb on the scale. Speaking of the SEC, Gary Gensler took a beating. That's what happens sometimes in Congress. We know that obviously, every time he shows up, the Republican members like Tom Emmer take their opportunity to throw flames in his direction. Your inconsistencies on this issue have set this country back. We could not have had a more

Starting point is 00:13:16 historically destructive or lawless chairman of the SEC. But interestingly, this time, especially in the case of debt box, if you remember where some SEC lawyers actually had to step down, they basically perjured themselves in court. It was a pretty, pretty ugly offering in that case. I mean, everybody showed up. which made it a lot more awkward for Gensler because Pierce and Uyeda were able to basically publicly throw him under the bus rather than just writing letters and thought think pieces, right? So they were there. Gensler was under heat from both sides of the aisle. I mean, I don't think anything comes of it, but you gotta love it, right? Nothing comes of it. But I think that to the extent that there was one thing that really stood out to me, it was Ueda's testimony. This guy does not come off as some

Starting point is 00:14:10 crypto firebrand. This is a career SEC guy. He's been there since I think 2003, 2004. He's been through something like six chairs. And when he expressed his frustration, it's so sincere from the standpoint of just a public servant who really believes in the mission of When he expressed his frustration, it's so sincere from like, it's so sincere from the standpoint of just a public servant who wants to like really believes in the mission of this institution and feels like they're way off. And I think that that, you know, to your point, it's very cathartic for us to see Tom Emmer rip Gary Gensler is, you know, 18th asshole. But it's, yeah, it's much more impactful, I think, especially for Democrats, you know, and Republicans who are undecided about this issue or who's just been intentionally willfully ignoring it because it's so flamethrowery to see this guy who just seems so like normal, basically being like, listen, we're off.

Starting point is 00:14:57 We got to we got to recalibrate here. Yeah, he said that he was frustrated that the SEC had slipped from being the, quote, gold standard in administrative rulemaking. I mean, listen, in this industry, we all obviously have this spite for the SEC, particularly Gary Gensler, that's grown over the past few years. But there was a time when the SEC was a highly respected and regarded institution that made positive rules and that literally nobody even thought about. Maybe go back to like the 9-11 days and stuff. People were very positive on the SEC. So that does give us hope that maybe if things switch and we get rid of Gensler and the purses and Yedas are in power, that things could shift in the right direction.

Starting point is 00:15:40 And speaking of shifting in the right direction, whether you want to believe it or not, Harris vows to aid AI crypto sectors and pitch to NYC donors, says she'll encourage crypto business while protecting consumers at Wall Street fundraiser. Protecting consumers sounds very SEC-ish. Is this a real pivot or is this lip service? I mean, trying to actually understand that will send you into paroxysms of trying to figure things out. I don't think it matters. I think what's clear is that it's a signal that, look, Harris had one of two paths that she could go. She could either go consolidate the left and go the Warren route, or she could run towards the middle. You can totally not believe it. It's a very reasonable position to be skeptical of it, but she is clearly charting the middle path when it comes to business. That is like from a narrative perspective, that's what she's trying

Starting point is 00:16:32 to sell the country on. The fact that she's spending as much time with sort of Wall Street as she is at this late stage of the campaign is an indicator, right? Again, doesn't mean you have to buy it, but it's clear that she has decided and that campaign has decided that when it comes to the economy and the broader set of issues that relate to innovation as well, that being in the middle is better than being farther on the left. So listen, this has been for a very long time, a situation where the right was never going to even begin to give this campaign a chance. The folks on the left have just been desperately looking for any sign that they don't have to choose between their principles and their jobs. And people in the middle, I don't think are probably all that undecided, but maybe this gives them slightly more ability to just kind of not factor this in to the extent that they don't want to factor it in as a decision point.

Starting point is 00:17:31 Yeah. The deeply crypto native tinfoil hatters pointed out the fact that she was very clear to say digital assets and blockchain and never really said crypto or Bitcoin, which led them to believe that this will be an inevitable push towards a central bank digital currency, which would be a quote unquote digital asset, all kinds of other things. It's all a possible take, but I come with your more reasonable down the road, which is say what you need to say ahead of an election to, you know, alienate less voters and start moving the right direction. I'm actually surprised that she's mentioning this at all. Yeah, I know my gut, you know, for the last month was Trump won this round. She has no reason to really even talk about it. So I mean, at least it should be a positive that it's on the docket

Starting point is 00:18:12 on both sides. 100%. And I agree. My base case was no mention of this as well as it's just a non-issue for them. I'll break the conspiracies here. Like 100%, like even in a democratic administration that is pro-crypto, it's still going to have to run the gauntlet of more centrally controlled versions of it and digital assets and blockchains and plugging into the existing infrastructure. That's just going to be the way that it goes. I think the question is less whether that's going to happen and more where they end up on the other side. But there will be absolutely more interest in things like central bank digital currencies if a left progressive take on digital assets and crypto gets into power.

Starting point is 00:18:57 It doesn't mean that it ends there, though. Sort of a little honorable mention to this story was that after she said this, Stand With Crypto basically said she's in support of crypto now. And they gave her her rating and crypto Twitter freaked out. So they put her back to NA. It's like this major pushback. They were like, come on. Yeah. Yeah. In most cases, I think that the our frenetic insanity around this has gotten a little overboard. I think in this case,

Starting point is 00:19:26 the pushback was warranted. This was not a go from nothing to support. This is the first mention. It was a half of a half of a sentence alongside AI. It's hardly like we can say support. So I think that they did the right thing to peel it back. I think they got a little overexcited. Yeah. And sort of a story that I have not tracked so closely, but people are very passionate about. US Foreign Affairs Committee passes resolution demanding Binance exec Tigran Gambaryan's release in Nigeria. This guy's basically in bad health. I think he's been captive since February and effectively just for the actions of Binance. There's no clarity on why

Starting point is 00:20:06 he was actually singled out or targeted. And now we finally have the United States making a comment that this guy needs to be released. I think there was some fear about relations with Nigeria, as I dig into the story. But this guy's still sitting there. I don't know if he's in prison, but it's crazy. It's not the US S making a statement. It's former U S officials. This is, I mean, this is a, this one's real simple to explain. U S citizen gets kidnapped theoretically for the actions of his company. Like you send in the fucking state department to take care of it. This like, I don't care what the industry is. I don't care what the context is. I think the, the, the, the people who are incensed about this, who I count myself among,

Starting point is 00:20:45 it's as simple as what it means to be a US citizen in the world. This is a deeply disturbing state of affairs. And it's also, it's inconsistent and you can point to other circumstances in which the US has been much more proactive as compared to this, but this dude has just been languishing in Nigerian prison, which turns out is not a Michelin star accommodation. So yeah, I don't want to like dig too deeply into it, but it always sort of anecdotally just shocked me that when obviously the war in Israel started, there were American citizens that were taken hostage and we just kind of never heard about it. Yeah. I remember a time when if there were American citizens hostage anywhere in the world, that that would be the only story on our media

Starting point is 00:21:30 for months to come until it was resolved. Do you remember that getting caned in Singapore? Yes. And not that long ago, either. I mean, just to use one kind of media version of this, if you go back and watch The West Wing, which is again, about a left administration, this is only 15 years ago that the show was, of the most popular on TV. Every season, there was a hostage situation where the Democrat president wanted to send in the entire Air Force to take them. It's a very weird shift that has happened. I think this is why it's notable to people and why it comes up more and more. It seems to be a bunch of different times, you know, but listen, it's way, way beyond the scope of this show. But I think one of the things that we sometimes don't discuss enough as there's been a rise in isolationism and sort of, you know,

Starting point is 00:22:13 turning back inward and, you know, all for understandable reasons is part of what you lose when America withdraws from a global leadership position in the way that we have is the ability to go throw around our weight and get people out of prison when when you know they get kidnapped and and so unfortunately i think this is part of a consequence of a broader american withdrawal from you know leadership role but like i said way beyond the scope of this show yeah it must have been 1994 1995 i just remember being like a senior in high school and that guy michael fey was going to get caned or you know last six times in singapore and it was like a foreign relations disaster. That was a main story.

Starting point is 00:22:48 You're talking about a kid who was going to get hit with a stick. It's really wild, I think, what it's become. But as you said, we don't need to talk about that. We can talk about other people who are going to be in captivity as our final honorable mention here. Caroline, sentenced to 24 months in prison for FTX fraud. Told to pay $11 billion. I freaked out about that one until my friend met a lawman and said, they can say any number they want.

Starting point is 00:23:11 Doesn't mean she has it. And I think that's important because holy crap, if she had $11 billion, there would be some serious question marks, I would say. And then in just the spirit of this, CZ apparently going to end up being released today a couple days early. So some big figures in the crypto industry going in and out of jail. But I think definitely worth talking about this 24-month sentence. Apparently, she was the rat snitch of all rat snitches of all time, according to the judge.

Starting point is 00:23:37 Nobody has ever cooperated more than Carolyn Ellison to bury her ex-boyfriend, SBF. But it's two years enough. Yeah, I don't know. It's interesting. I mean, look, we have this sort of perspective is two years enough from where we're sitting. But if you put it in the context of sort of white collar crime more broadly, I think that this follows the pattern that we've seen, which is quite clear that basically everyone involved in the prosecution of this case wanted it to be a signal, I don't think just to crypto, but to white collar crime in general, that prison is one of the things that happens when you commit this type of crime.

Starting point is 00:24:13 That hasn't historically been the case, right? There's lots of fines and fees and things like that, but prison wasn't that normal for white collar crimes. So the fact that even the collaborator, you know, who sort of was, you know, integral to the prosecution's case, getting two years is not nothing. I mean, the judge spent about a half an hour talking about how Carolyn was Sam's number one victim, only to end with, but that still doesn't mean get out of jail free card, literally, and now you're going to jail. So I don't know. It's, I think, totally reasonable to ask whether it was long enough or whether it should have

Starting point is 00:24:49 been longer. But in the context of sort of what I think people might have imagined 10 years ago, especially if this wasn't in crypto, it was just sort of normal Wall Street stuff. I don't think they would have anticipated a two-year sentence. Well, maybe she can have a freak off with a thousand bottles of baby oil in the Brooklyn prison with SBF and Diddy. And maybe they'll throw Eric Adams in there with him. Goodness gracious. What? What the heck? I don't even know how to finish after that. That's all we got for you guys today on the Friday five.

Starting point is 00:25:18 We will see you guys next week. Of course, follow the breakdown. NLW, he does a great job of this every single day. Go get some sleep, man. I know you had the red eye. Talk to you soon, guys. See you on Monday. Bye. Thanks. Let's go.

The Wolf Of All Streets - Bitcoin Skyrockets Past $65K | Can It Hold This Crucial Level?

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