The Wolf Of All Streets - Bitcoin Smashes $94K ATH! Is $100K Around the Corner? | Crypto Town Hall

Episode Date: November 20, 2024

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Happy Wednesday morning, everybody. I know this is going to come as a surprise, but space isn't glitching. Stopping. I know. I went to, as usual, hit the mic to speak, and my mic wouldn't go on. We've had a number of guests also saying that they are glitching, so we're waiting to get some more people on stage. But who needs more people on stage when you have both Mike McGlone and Dave Weisberger, and we can effectively just talk about Macro Monday, my YouTube show. And what better day to do it? Because you guys made a bet, I believe in March, whether Bitcoin or gold would outperform for the next year. And we are really, really close to the exact same levels on that Bitcoin gold ratio as

we were back then. So I got to say, it could go either way. I think I'm obviously in team Bitcoin, but I think when you made the bet, the Bitcoin to gold ratio was about 34. Now it's trading about 35.6. But Dave, you were underwater pretty much since the bet until the last two weeks. Yeah, you know, I should be doing this. If this was video, I would have done it from my roof deck. So you could look at Biscayne Bay and, you know, you'd see me. I'd do it from a lounge chair because I was. I want it to be very dramatic.

Never, never really flustered about it. I always felt just like you did that the fourth quarter would be the start of the rally. And, you know, maybe I'll be maybe I'm wrong, but I think the first quarter of next year is where the blow off top happens. And if we're not anywhere near a blow off top and we are not by any metric. And I heard you talking with Chris this morning. I think that, you know, he and I align very well on as far as the charts go. But it goes beyond that. I mean, in turn, the only thing that the only really fluffy part or you know you know bubbly part of what's going on now is in the us and that's the way the the cme futures are trading at extended premiums and the reason for that is still that a lot of the market makers for bitcoin uh bitb and and whatever

you know the options on the uta and i bit options uh and future basically the only way they can hedge is in the futures market because they're not allowed to touch Bitcoin spot so we don't have a lot of bubbly stuff going on we've seen little mini spikes in funding rates but nothing major so yeah I haven't really changed my opinion I mean I I called for 240 in the blow off top everyone thought I was crazy people still think I'm crazy, probably for good reason. But nothing has changed as far as I'm concerned. It doesn't mean we're going to go there in a straight line, though. Damn, if there's one thing we know, that won't be the case.

Mike, your turn. Well, I'm good at losing bets to Dave. Hats off to Dave. They know where he at. Yeah, well, I'm willing to concede already. We need you to come down in Miami, Scott, so we can have a nice steak dinner on me or whatever we want to eat. Very much, Scott. Let us know. We could even take –

All steaks are on me. You guys have spent enough time on my shows, I think. Go ahead. So the key thing is the world changed on November 5th. I did not expect Mr. Trump to get elected. Wrong. Stopped out. Move on. The world changed. It's a matter of time. Bitcoin gets 100 grand. What it does beyond that, Dave might

have a better idea than me. And I just look at the speculative Xs are quite extreme. Just this quote from Micah Saylor this morning, criticizing Warren Buffett for destroying value. I mean, I worked for the Japanese firm in the 90s firms, and I remember hearing the same thing from Japanese. I remember hearing the same thing in 1999 and 2007. It's just you have to be careful about this bravado, and that's just signs of peaks. But this right now has a good reason to keep running. Now, I think it's a matter of time. Gold gets to $3,000. What's the key risk is if we wake up one morning and Mr. Z picks up the phone and calls Mr. Putin and says, nope, done, sorry, with this limited friendship, I'm going to be a friend of the US no more, Cold War, let's go detente. And that's a risk. But overall, to me, the biggest

risk for all risk assets is, and gold is to me, I look as more of a put on the S&P 500, and I look at Treasury bonds, more puts on the S&P 500, The US stock market has to keep going up. Yet I hear so much of people making expectations for next year for all the markets, and it's just assumed the stock market's going to keep setting record highs. So that's great. I mean, they hope it happens, but we are getting pretty expensive. But I think we've reached a pretty significant bond ventilation vigilante type inflection point. Now, we've had the Fed cut 75 base points, yet bond yields of 10 units are up about 75 points. That's a really bad sign. Sure, we have Trump that got elected, which I have pointed out from terms of gasoline and diesel and crude oil could be very deflationary. But this is also a bad sign that that market is reaching an

inflection point where right now we're at a 22 year low with the earnings yield on the S&P 500 versus the 10 year note yield. There's just certain levels that prudent investors, I think, are fine alternatives like Bitcoin, not gold yet in the US because gold ETFs are still outflowing. But to me, that's the biggest macro for everything. And I see it in commodities. I just look at a one year basis, gold's up a third and crude oil's down 10%, iron ore's down 20%. So I'll end with this. For me, everything, I'm a commodity guy and try to figure out Bitcoin. But the bottom line for me is everything is tilted down to one major commodity that has to go up now, and that's copper, because the doctor is showing signs of failing. And if it goes goes down it means we see a little bit more correction

in equities um bond yields follow what's happening in china and does bitcoin care not at all it's amazing how it's just showing that negative beta to gamma it's doing nothing but going up it's quite impressive well one thing i am curious uh if you read uh because it's the second time now that blackrock has come out with a thesis that apes something that I've said years later. So in their recent theses, BlackRock went on a spirited defense of why Bitcoin will ultimately not be a risk asset and probably shouldn't be lumped in with risk assets. Now, I'm curious what you thought about that, because we all know, anyone who's listened to us, i've said it trades like an option

i don't want to go through the whole whole analysis now but it trades like an option on its own adoption which makes it risky but it's not really a risk asset and if you believe that it's a reach escape velocity then it will transition and they're starting to call for that whether it happens this cycle or not i do think that's very relevant from a from a macro side it's what you'd expect from a sell-side strategy selling a product. I think we have to be careful with the source. And I don't disagree with it, but it's still three times the volatility of the golden S&P 500. We still haven't had a 10% correction S&P 500 for over a year. Let me get through that to see a sign, at least that and a little more to see a sign that

it's going to be be like a treasury bond. And I wrote about this five years ago. It's becoming more treasury bonds and gold. But it's it's just such a speculative frenzy right now, Dave. I don't disagree with that. Got to see it. But let's consider it. I mean, I sell. So I remember doing the same thing when you're on the sell side, you need to sell product. Yeah, I'm not going to be the one to, I'm not going to defend sell side analysts in terms of their motivations. But I think the reasoning that BlackRock said in that report, I thought was fairly rational and sounded a lot like things that I've been saying for the last couple of years. So confirmation bias here. I apologize to everyone on the panel and all the listeners. I am guilty of that as much as the next guy.

So you guys invoked the name of Michael Saylor, whose stock MicroStrategy is currently trading at $483 American dollars. For those counting, that's up 12% on the day. That is up 120% on the month, literally trading at $200 a month ago, trading up 178% for six months, trading up 602% year to date, and trading up 846% in one year, five-year casual 3,073%. More volatile than Bitcoin, capturing all of the upside, and more people talking about the infinite money glitch uh at what point does this micro strategy move start to get scary or is that have we already uh blown through micro strategy being scary here mike you can jump in on that one if you'd like well i have um personal experience i mentioned this is the only stock

in my entire 40 about 40 years in the business i've had two fathers and in same different occasions different areas ask me about their sons holding this stock it was like shocking but you know what is it four times the market value of bitcoin now it's quite it's frothy i get if you're going to buy bitcoin now you're not buying microst strategy now there was some great opportunities to buy one of the bid discount but i just saw it was in the morning the chat we have a finance and crypto chat and bloomberg which i actually started in 2018. um and um one guy was saying yeah i own some microstrap strategy i'm selling it and buying other proxies for bitcoin so i think that that makes sense. But what you're seeing there, I think part of that Scott, there's got to be some major shorts getting hammered doing the ARB.

And that's the key thing about this page is from a trading standpoint, it's the best place in the world to be a trader and do ARB, it's futures and a lot of that's coming out. But I'm sure there's some going to be since there's some pain in this micro strategy trade at the moment, just I just know a few young people about half my age who bought it, were smart and held on with iron hands. God bless them. I think what's interesting is last time we saw the shorts getting squeezed heavily on microstrategy, which was very public and a fund blew up.

I think they had basically a billion dollars liquidated on that or covering that position. We saw Bitcoin go down. Obviously, the reason being, you kind of talked about that ARB trade, Mike, if you're going to be short microstrategy, you're probably long Bitcoin, right? So if you're covering the short of microstrategy, you should be selling Bitcoin. This time, Bitcoin continues to rocket up as microstrategy is just rocketing up more. So sort of a different situation. Yeah, well, it's one of those lessons I learned as an ex-hedge fund, ex-trader using a lot of leverage.

No sympathy for people losing money on leverage, but there's guaranteed there's a good squeeze going on. And I think from the guys who passively long it, the good traders who are not getting squeezed know that you're supposed to lighten up and look for other proxies for that positive beta to positive delta to Bitcoin. It's just getting quite extreme. I mean, this thing passed 400, I think, yesterday. It's at 486 now. I think it passed 300 last Monday and 200, like I said, within a month.

So, I mean, just absolutely. I thought it was expensive around 200. There you go. Yeah. Well, yeah, but you didn't try to call it top. So those are two very different things. You can be right without calling the top there. But I think, let's take a look at Bitcoin trading now at $94,819. Looks ready to push through $95,000, $100,000 very squarely in the sites. I think there was an idea earlier in the year when a lot of us said $ by end of year wasn't a crazy target. People thought we were nuts, certainly over the summer.

I mean, now you're a rounding error on a day's price action away from hitting that level, whether it does or not. I mean, 95 is pretty much 100, right, in my mind. And I guess a lot of debate as to what will happen if when we get to 100,000, is that going to be a major psychological level that we sort of get rejected at and consolidate for a while? We've never gone back to retest 74,000 all time high from March as support that usually does happen with Bitcoin. Anyone here have specific thoughts on this sort of 100,000 level, if it is meaningful, if it is not? Gary, I'd love your opinion. Listen, I know you're a buyer at all prices. You and I have talked about this a lot. I know you're actually now, I think, testing that

Bitcoin algorithm pretty heavily for buying awesome stuff. I mean, what are you looking at here now that we're sitting at about 95,000 sort of heading into the last part of the year? Well, I'm trying to figure out this micro strategy trade has run away from me a bit. I got into it a month, maybe less than a month ago on the options and the equity. Dude, it's not sure I've ever seen a run like this buy me a plan can you buy me a plane just one small plane yeah well not sure i'll buy you a plane but you know buying the plane's easy uh running the is expensive um but you know are you guys seeing that can you just hand that are you guys seeing a rotation from micro strategy to the miners to micro strategy?

It seems like that's happening. Most certainly, Scott, we're going to get to 100 grand, right? We're going to play with 95 to 100 grand here before probably Thanksgiving's next weekend, you know, next two weeks. It's just so much buying man um so i don't i most certainly i i don't know how micro strategy fails here i i do appreciate mike saying hey look man this is you know unprecedented topiness um but what what like what makes this market go down here i don't really know i'd love to somebody to tell me why would this market sell off 20 or 30 percent here generally like you mean bitcoin or just the market in general well i mean bitcoin uh because i don't really you know yeah i mean bitcoin i mean i just see so much

demand yeah like and there's no headwinds guys there's like we'd have to have a nuclear bomb drop i mean the only thing i would say is i haven't looked and i know that dave does but i don't know how much open interest is or how heavily leveraged people are long but you know if we did see something like that i think it would be just sort of a massive flush and then, you know, back the other way. I don't think it would stay there long. It would be exciting. I would love to see that. See, that's what I'm looking for. I would like somebody to say, hey, look, this should correct 20 or 30 percent. I've got some fresh powder. I need to figure out when and how to deploy it.

Or do I just jump on the bandwagon right now? I mean, listen, you've been doing it so many times. I will tell you that it's been a long time, but I have visceral memories in 2000, in the last couple of months of the internet bubble. And it was day after day like this. And in fact, I said this last week, so that you get a rally on Monday. Tuesday is a reversal day because people, it consolidates.

Wednesday, whatever happens on Wednesday is the trend for the rest of the week. And it will continue through Friday. Lather, rinse, repeat the next week. And most of those weeks, Wednesday, we're up. And therefore, Thursday and Wednesday, we're up, and therefore Thursday and Friday, we're up. And, you know, I can't tell you how many times I heard people say the market can remain irrational longer than you can remain solvent from people who were on the short side.

And that is the trading pattern that we're in. And so that is different than Bitcoin's ever had. Because game theory tells you, and you know this, as you and I talked about it, there's a lot of people out there who don't consider Bitcoin as investable as they would like, because there's not as much liquidity as they would like to get. Well, that is not the kind of thing where, that's not where bottoms are formed. We'll just leave it at that. You know, you need higher prices to get that to attract that liquidity. And that, I think, is playing out now. It's not going to be a straight line, but that's what it feels like. Dan? Yeah, morning, guys. I just want to chime in. A couple of key metrics that I check

when I wake up in the morning. Obviously, the price. I'm in Asia, so it's a little different. It's 11.40 almost here at night. A couple of metrics that I check that are important are ETF inflows and then the number of Bitcoin on exchanges. The number of Bitcoin exchanges is quite important because that's the number that's effectively available to buy. The number of Bitcoin available on exchanges, you can check on, I think it's like Glassnode or something like that. That has come down by about, I think, 400,000 Bitcoin over the last month, from about 2.7 million Bitcoin available on exchanges to about 2.3 million available. Now, you know, I have some Bitcoin exchanges just to classarize my trades. And, you know, I can assure you they're not for sale. So there's a lot of those Bitcoin that are on exchanges that are not available for sale.

But for it to come down by 400,000 Bitcoin over the last month, I think it's real. I think the supply side tightening is very much real. And the ETF inflows are incredibly real. And you've also got to remember that the ETFs are not in the wirehouses yet. They're not available on Vanguard and a bunch of other places. I just tried to purchase some iBit call options through my brokerage, Saxo, and they're not available there either. So I think the demand side for MicroStrategy, part of it is that a lot of people aren't unable to access the ETFs or other products like that.

And so I think that's the reason it's going into MicroStrategy. I think there is almost an unlimited bid on MicroStrategy right now. And there's very clearly a limited amount of Bitcoin. So this is my third crypto cycle. And I remember sitting in a bar in Kuala Lumpur in 2017 and watching Bitcoin price go up by $1,000 in the space of a few minutes, as I sat and watched it. And that's when it was trading around $5,000, $6,000. So as a percentage, that's quite substantive. So I think, yeah, I think we're seeing the things that we've been predicting for a while,

which is supply-side shock and almost unlimited demand. And I think that's what's leading to the situation we're seeing. I don't really see a situation where we pull back unless there's something very significant that happens. Satoshi moving his coins would obviously be a massive thing that would cause a sell-off, a massive flaw in the software, some bug. I put this in as massive black swans. I don't think they're going to happen, but that's the only thing that i can think of that mine csl off here james you and i spoke this morning on youtube obviously and everybody's talking about the options i mean objectively yesterday was a monster day for notional volume on the ibit options now we're getting bitwise options today and others i mean about $2 billion, as you told me.

But what kind of struck me when we spoke was how heavily that is weighted towards calls, right? I'm betting on much higher prices in the future, not much evidence that it was the carry trade with people shorting the futures and getting long spot. I mean, people are speculating on much, much higher prices, right? Yeah, you know, I teed them up and here we are. Sorry, sorry, sorry. I know. I see. I saw your mustache for November today on YouTube and I know that it just got in the way of the mic button. Yeah, I couldn't figure out how to turn the mic off or mic on. It's my fault. Yeah. I mean, the numbers numbers were extremely impressive. I mean, so you said you're right. It's about $ futures ETF that traded about 360 million on

the same day. GLD, the most liquid gold ETF with the most liquid options market traded about 5 billion. So I bet on day one traded just shy of 2 billion when gold GLD usually trades 5 billion. So one, yes, smashing success. Honestly, it's these ETFs are just, you know, every time they look at something new, they kind of break the old record. We don't really have a record of the first day of trading volume because it's not typically something we pay attention to. These ETFs go through a special approval process, which we've talked about on these spaces many times. They also have to go through a special approval process for options. Whereas like the MicroStrategy 2X levered ETF had options the day it listed. So it's not really clear to get to know exactly what the record is.

But as you said, it's heavily skewed to out of the money calls. Like all the trading, the vast majority of the trading was in contracts at $55 a share for iBit or higher. And $55 a share is equivalent to like $97, $98k. And one of the most traded strike prices was the $100 strike price, which is equivalent to $176,000 per Bitcoin. Obviously, a lot of those are sort of call options. But I mean, that falls in line with Dave's view on where Bitcoin could be going. So people are obviously taking shots. And that's the furthest out you can go on the strike price basis. So we're very early days. We have a bunch of other ETF options coming online today. So iBit was the only one available yesterday. Today, you'll have both Grayscale products with options. You'll have Bitwise's

product and you'll have Fidelity's product and you'll have ARK's product. So we're very early days in seeing what these do. But you'd be crazy to assume that that options positioning, the heavy skew to out of the money calls didn't impact causing the helping raise Bitcoin to new all time highs yesterday and today. And you mentioned also there's still very, very low size that you're allowed to trade, right? For most ETFs, the vast majority, 80% plus or more that have options trading, the position limits are something like 200,000 contracts or 250,000 contracts. There are some with smaller limits at like 75, 50,000,

but the smallest limit is 25,000. If you look at the volume and liquidity available on IBIN and FBTC, even BITB and ARKB, it would justify much higher position limits. But the SEC is worried about manipulation of the underlying spot price. I guess they're worried about gamma squeezes. Who knows exactly what they're worried about, but they're worried about manipulating the underlying Bitcoin price. And they've set the limit at $25,000. So there's basically, you know, there's a weight being held around how much these options can be used. I don't know how much of an impact that had on day one. But the other thing I would say is IBIC got to launch their options before all the other ETF issuers. And ironically enough, that position limit, if somebody is actually bumping up against it, it'll probably push liquidity to the other ETF issuers. The other ETF issuers should be happy that there's a 25K position limit on these contracts, as far as I'm concerned. And the other impact of that is

we're unlikely to see as many Bitcoin covered call, Bitcoin structured product outcome ETFs until that position limit is raised and until we get flex options. But I think all of that is coming. It's just a matter of time. But this actual turnaround to get these trading was pretty fast once we saw the election, right? Because I think there was this sort of notion that the SEC or CFTC in this case would take their sweet time, right? And it seems like they kind of ended up trading overnight from when we heard that that could happen because they were approved months ago. Yeah. So this process is rather unique. So with the ETFs, it's really just the SEC and multiple divisions at the SEC that approve the listing of the ETFs. For options on 1933 Act or commodities

based trust shares, you have to go through the SEC's Division of Trading and Markets, and you have to go through the CFTC and the OCC. So we had the approval of these things a couple of months ago, like you said, from the SEC, but we didn't have anything from the CFTC. The problem was we had plenty of examples of other ETFs that just never got through the CFTC approval process. My expectation was I thought it would happen in Q1 of 25, but I always said it could happen in 24. And I guess, yeah, you're right. Things just happened rather quickly. So CFTC approved last week. We got an OCC letter essentially yesterday saying they were

ready to go. And I was scrambling to figure out, does that mean they're going to start trading tomorrow or just this week? And sure enough, they started trading literally the next day. So we're in the same boat with these other contracts. Now we have the other ETFs trading their contracts today. So it was rather quick. I don't know if it was the election that did it, but maybe they just wanted to get it off their plates. But yeah happened rather quickly gareth you had your hand up before yeah i was just gonna say i feel like it's a it's just been a perfect storm gary was kind of asking earlier like wait you know what what stops this train from hitting 100k and then going down from there or crashing and i mean michael saylor going on VanEck's space last night,

I don't know if anyone here listened to that. That was hugely interesting. He's really clearly explaining his strategy and how MicroStrategy is going about this. And I've seen so many interesting takes on X in the last 48 hours. You know, very, very reputable traders, economists kind of saying, when does the microstrategy bubble burst? And Michael Saylor is saying, it doesn't. I'm not an expert on this stuff, but I mean, he really has cracked this infinite money glitch. And I feel like with

microstrategy, what they're doing, the amount of publicity that they're getting on that, Saylor's bullishness, his announcement that he's going to be doing a presentation to the Microsoft board next month, talk of the Bitcoin bill in January. There's just so much bullish headwind that it just seems inevitable that the price will go past $100,000. And I mean, it's great that James is here. He could talk a bit more probably about the inflows. But the ETFs yesterday, I can't remember. I saw the tweet earlier this afternoon. But there's only so many Bitcoin being minted every day. And there's like 900 Bitcoin being bought up yesterday by the Bitcoin ETFs cumulatively.

So there's just such a massive demand for Bitcoin at the moment. It does seem inevitable. And the reality is like Michael Saylor is raising a lot of money to buy a lot of Bitcoin. And it still pales in comparison to what these big financial institutions and asset managers are doing. So it's just honestly, the rate at which things are going right now is quite crazy. And I mean, I've been watching the MicroStrategy stock today, like within the range of trading, we're at $500 already. It's unreal. Yeah. Michael Saylor's last purchase of 4 billion Bitcoin just the other day. And by the way, it just raised another, I think, 1.8 billion when it was supposed to be 1.2 because there's so much demand and raising another 42

billion. But I think the last purchase alone was, you know, three to four months worth of mined Bitcoin, like the next three to four months worth of mined Bitcoin. So from the perspective of mining and the having, yes, I think that the supply is effectively gone. But we all know that there's a lot more supply in the market than just what's being mined because there's huge whales and there's always somebody that's selling into this price action. I'm going to let James and Dan jump in in one second. But Mike, when you hear things, because I'm going to let you be the bad guy instead of me, when you hear things like infinite money glitch, and he's so bullish that he says it can't ever go down. What stops this train? Nothing. I haven't been here as long as you, but those are the same signals that make me buy things when everybody tells me they're dead and

going to zero. I'm not saying you should sell it, but those feel like sell signals. Have you ever? Nothing goes up forever. It's a lesson I learned in the training pits and certainly with customers is a great way to stay in business is take profits once in a while. It's just a question how much. I mean, you nailed it. The premise of the question that we all know the rational money managers out there is you're not. If you're going to do this environment, you use an option strategy and options open up means you have to be careful of the skews. You know, as an ex-option trader, I know I find a lot of ways to be selling calls and buying something against it and locking in some good profits.

But this is classic, classic, extreme stuff. And you don't want to be the first guy buying here. But, you know, that's a key thing. I'm careful about all everything I see in cryptos now. It's just so bullish. I mean, it's great. It should be. It had a great change for the world. You know, the world changed on November 5th. But as you said, you nailed it. There's just certain times, you know, all bull markets ended in euphoria and we're definitely in euphoria. I mean, you know, something can go up and continue to go up and trend up. But 20% a day gets a little scary.

Just saying. At least for a flush. I don't think it's a general comment on the path, but it starts to get the spidey senses tingling. James, then Dan. Yeah, I mean, commenting on MicroStrategy real quick. I mean, honestly, I thought the thing was expensive, hundreds of dollars to go per share. So I'm not necessarily the right person to talk about it. But I will say, it's likely to be added to the Q. So it's right guaranteed obviously things can happen but in december it's likely to be added it's gonna cross that rebalance date or reconstitution date for that index and it's likely to be added to the queues which there's hundreds of billions of dollars

that track that index and then you got to talk about the fact that it has the possibility of getting into the s&p 500 as well so So that said, the S&P 500 committee has a little more discretion. They didn't add Tesla for forever, but you could be looking at micro strategy being added to the two biggest US indices at some point in the next year or so, which is another tailwind on top of whatever

this blow-off situation is right now. Yeah, I want to be clear. Listen, I'm to be clear. I'm friendly with Michael Saylor. I've been to his house a bunch of times. We've talked Bitcoin. I've had him on my shows. I absolutely think that he is a legend. We'll go down in the annals of history as a Warren Buffett level investor.

That doesn't mean that the stock can't ever go down or flush out some of the excess. I think the path continues to be up for a very long time, especially if we consider that the crypto bull market is likely just getting started. I'm just saying in a vacuum, the terminology infinite money glitch and can't ever go down are usually signals of euphoria. Go ahead, Dan. Yeah, I just wanted to correct Gareth. He understated the ETF inflows by 10x. The numbers of Bitcoin acquired by the ETFs yesterday was around 9,000. There's about 450 new Bitcoin mined per day, 9,000 swept up by the ETFs. Just the ETFs alone are 20 times the daily issuance, right? And you forget about everybody that's DCAing, the retail people that are DCAing, there's a massive amount. You

have other companies that are acquiring. MicroStrategy are also acquiring. So it's feasible that yesterday you might have seen a month's worth of new Bitcoin taken off and put into cold storage. This simply cannot continue forever. As I said earlier, this is the supply shock. We spoke about it for a long time. Bitcoin has spoke about it and said this is going to happen. Yeah, I just wanted to create it. It was 20 times the daily issuance of Bitcoin was swept up by the ETFs yesterday alone. I missed a zero. My apologies. It's easy to happen in this market. Dave, go ahead. Yeah, I agree with you when you say, look, infinite money glitch and all this other stuff.

Look, he's pyramiding. You take the Series 3, it's right there, you know, it's leverage up as the price goes up, the underlying collateral is still what it is, as long as it's the discipline of micro strategy is enforced by the market. However, it's not reckless pyramiding. So to put an example, you know, the idiocy that you're talking about this morning that on a day when the market goes up so much get liquidated on the long side, because they do 50x leverage it drops three percent in a small correction you know eight a day when it goes up

ten percent i mean you get knocked out yeah okay that is the fuel for the flushes that you generally see the difference between there are two points about micro strategy the first thing is there's no scenario short of a cataclysm short of there there is a flaw, you know, a major black swan, such as I forgot who was talking about them. I mean, if Justin Bonds is right, and there's in his stuff, and a lot of what he says when he uses words like bank run, that makes my head hurt, because it's, it's unbelievably ignorant. And I'd love to debate that with him, but he's not here. So I don't want to go there. But the fact is, MicroStrategy's leverage is not the kind that's going to get wiped out. Even when it went below 20, you know, in the FTX meltdown, he wasn't really close to getting stopped out based upon the bond covenants that he signed. So I think that it's not really as bad to the downside. But as far as the upside is concerned,

there's a limit to what he can do relative to Bitcoin. But if Bitcoin does a 10x, I mean, is it unreasonable to think that MicroStrategy will do another 20 to 30x? Of course not. And, you know, there's a lot of people playing that trade and there's all sorts of interesting dynamics around there. But what you have is a moving target. It's not a fixed ratio. And a lot of newbie traders look at it as a fixed ratio. Look at the market cap. It's too high relative to it, except for when Bitcoin goes up, he can buy more. And so it a leverage play in a fairly well balanced way of doing so far more so than most of the leverage ETFs, which use futures and have enormous roll costs baked in which where they get they get wiped out. MicroStrategy doesn't have that component. So if you're looking for a leverage play, that's being managed somewhat professionally, it makes

sense. And that's why the demand is there. I mean, look, I've had, you know, I've had it in my retirement fund for the last year. Obviously, it's my best performing, you know, holding, but you know, so be it, right? You know, that's the theory behind it. My question is, does that become the inherent risk in the system, then if something does go bad, and you know, everyone just sells off a load of shares? Does that change anything? And also, does microstrategy become a secondary play for everyone that can't get Bitcoin anymore if the price just goes completely parabolic? It's a lot more affordable to just buy microstrategy shares for the common man that's giving you indirect exposure to Bitcoin, knowing

or banking on the fact that it's just going to continue appreciating in value. And let's say the Bitcoin bill gets passed in January next year, and the price goes into the hundreds of thousands of dollars per Bitcoin. I'll take a whack at answering. I think that there's two pieces here. First, will people use it as a proxy? Yes. But I think that a lot more will, and in fact, the numbers bear this out, a lot more are using the ETFs to be a direct proxy. Ones who are more aggressive, who want someone to manage a levered fund, will go there. And so I think that there's different use cases for different things. The more interesting question about microstrategy is, is what we're seeing over the last week to two weeks a trickle or the beginning of a flood of corporate CFOs saying, you know, wait a minute, this guy's on to something.

We should do something with our cash. Dave, what does that do to MicroStrategy stock if 10 other companies start raising convertible notes to buy Bitcoin? Well, I'll tell you. Parathon's doing it. I'll tell you. Parathon's doing it. Its ratio, its outperformance of Bitcoin spot will slow, but Bitcoin spot will jam.

Therefore, in absolute terms, it will do well. So the more, and that's why Michael Saylor hasn't stopped sharing his playbook, right? I mean, he's just shouted it from the rooftops, which has been amazing to me. You'd think if someone figures out something, you know, this smart, like they wouldn't just offer it to everyone else. And that's, he's just gone on every podcast, every available platform and told everyone what he's doing. Look, that's because his, his mandate, his goal. And I've had this conversation at Gary, we were together in Austin or Nashville.

One of the two. And when we kind of shook hands, I know you took a meeting. He just wants to sell Bitcoin, not his, but he is he views himself as the world leading salesman for Bitcoin. He wants every country, every company, every person to buy Bitcoin. And that is what he's trying to do. And, you know, I see the laughing faces, but I think he'll basically tell you that. I mean, his goal is to get as many people on planet Earth, including institutions and countries to buy Bitcoin. So none of that conflicts with the interest of MicroStrategy. True, but there's an old axiom. When in trading, is it ever bad

to be first? It's terrible to be last, you know, if you're the last buyer. But, you know, buying first is always good, which, by the way, applies to the game theory with regard to strategic reserves, whether the Trump team will do something there, states that are looking to do it, other nation states, other companies, et cetera. So, I mean, once you've established a position, I mean, there have been all sorts of examples, historically good and bad, of people who establish positions and then talk about it. I think in his particular case, he's clearly a missionary in his belief system, and I understand it. And you say it.

I think he genuinely believes that. But you don't get poor by buying first and having other people buy after you. Yeah. Dan? Yeah, just to come back on Gower's point, he said, what would happen if people start selling off MicroStrategy shares? I think if people start selling off MicroStrategy shares,

that's not going to tank the price of Bitcoin. All that will do is reduce the premium that it's trading at. If MicroStrategy starts selling Bitcoin, we are completely fucked. Yeah, but I can't imagine... Right, I mean, with that... i can't imagine right i mean with that i can't imagine he said he'll never do it you never know but right he's still buying clearly they so what we've done now is build up a massive kind of danger or risk now with my strategy one

day michael saylor wakes up and decides that bitcoin's a scam we're in big trouble so it is a huge risk it's a concentrated risk of having that much Bitcoin with one person. We are putting faith in somebody, which is against the initial idea of Bitcoin. It's supposed to be decentralized and no people and all that kind of stuff. And through the cycles we've seen, whoever makes themselves

the main character usually ends up in prison. I'm not saying I expect that's going to happen with Michael or anything, but we do have to be cognizant of the fact that micro-strategy holding that many Bitcoin is a tangible risk. It is a real risk. I don't lose any sleep over it, but it is a fact.

Doesn't Block.One own more Bitcoin than MicroStrategy? Does anyone have those numbers from the EOS ICO? Right. Binance do, but obviously that's for their customers. I think as I recall from seeing today, it's Satoshi, then Binance, then MicroStrategy. I could be wrong. pose a strategic reserve of Bitcoin, which could start, obviously, with not selling off what's left from Silk Road and other confiscated Bitcoin, but being proposed to buy 1 million, 2 million more Bitcoin for the United States. Interestingly, as much as we cheer for that, and I think it would

be amazing, we've seen in this country that when there's regime change, and I know that nobody wants to hear it, but one day there will be a Democrat president and someone in power. I have no idea when that will happen. They could just change the laws and sell all of that off. Wouldn't that be a similar risk, Dan? I mean, exactly the same thing we're talking about with microstrategy. The United States would own just as much Bitcoin, and they could flip one day, and you get a different president, and they say, yeah, get rid of it. Absolutely.

So any one person holding that much Bitcoin is a risk. I mean, that's just mathematics. It's just obvious. Yeah, it's a complete risk. I mean, we saw Germany dumped all of their Bitcoin a while ago, right? They dumped it at something like 50K, which is ridiculous. But it is a risk. We also, we've had for ages the idea of the Mt. Gox coins coming back online

and then being sold. And there's always these waves. Then we have the Bitfinex getting their Bitcoin back. And there's always these – when you have concentrated holding, it's not decentralized. It can be coordinated that they want to sell it off. Yeah, I suppose the idea of the U.S. building up a massive reserve of it and then selling it off is at least four years away. So hopefully by then we've got mass you know hyper bitcoinization or whatever but yeah it's obviously a risk let's

not you know pretend it's not but look can i just say that hey scott can i just add like i i do appreciate the gentleman's comments there is risk when there's consolidation. But the play that we're doing is we're moving from a highly centralized government. We don't even know who to blame. Massively centralized. We know the money is monopoly money. And I'm OK moving to a group of people, cohorts, who actually are going to advantage themselves against the governments. I want more companies buying Bitcoin like this. I think it's a really good that we have some multi trillion dollar entities that can offset this crazy government policy of basically just burning money up to do nothing. So for me, the risk is I'm moving into a new money system. That's the way I look at this.

And do I have some possible risk? Of course, but I already know I have all that risk. We're being obliterated here every day. The classic statement is the only way to surefire lose money is to keep it in your bank account and have the purchasing power eroded every year through inflation. So sitting on cash is the only 100% surefire way to lose money, right? And so I agree with you. I'm just pointing out that having some person hold a million Bitcoin is a risk if that's something that can be collectively sold at a point. Having a million people hold one Bitcoin each is far less risky than having one person hold a million Bitcoin. Absolutely. I agree with you.

And so, yeah, but I'm saying the only way to surefire lose money is to stay in cash and you're just going to get obliterated. That's what Saylor said. He said we were sitting on, was it half a billion dollars of cash? It's like a melting ice cube. So I agree. Look, I think it's better if more companies buy, then you have that diversification, you have that distribution.

But yeah, if one day Michael St strachan does decide to sell we're going to be in big trouble it's just a fact yeah i'm looking at the now uh so micro strategy owns you know mid 300 000 i chat gpt it uh bitcoin as of november 17th it was 331 000 i think they actually bought more since then uh block.one holds 140,000 Bitcoin. But just so people know, Block.one has 140,000 Bitcoin. And that is from the ICO of EOS, which was the largest ICO ever that never did anything. And now they're sitting on a pile of 140,000 Bitcoin. Just in case you're wondering how nonsensical crypto can be.

That may be the most absurd thing that we have in this entire space maybe ever but i guess a nice boon to them i mean is anybody else here worried about concentration risk i mean if you're worried about you know the satoshi wallet having a million bitcoin and it seems like you should be worried about any wallet having bitcoin go ahead james yeah i to say, I agree that it's kind of like, you know, it's always a little unsettling to me when somebody's, you know, hungry, hungry, hippoing as much Bitcoin as a micro strategy I have taken control of. But you mentioned the 1.1 million Satoshi Bitcoins. I mean, the US spot ETFs are likely to pass Satoshi in ownership of Bitcoins in the next couple of weeks.

Last I checked, they were just shy. They're over 1.07 million Bitcoin in the US spot Bitcoin ETF. So they're nearing in on, as a group, passing Satoshi's estimated Bitcoin holdings. But they're held on behalf of their clients. So it's the clients that decide to sell them. passing Satoshi's estimated Bitcoin holdings. But they're held on behalf of their clients, so it's the clients that decide to sell them.

They're not held by BlackRock themselves, so it still would be a distributed effort to sell them. Correct, that's exactly true. But you could also make the argument that technically MicroStrategy's Bitcoin is owned by their shareholders. Not necessarily, but it's more a concentrated risk on who controls where that Bitcoin goes. The risk for the ETFs is if they were to be seized

by government, I think, is more likely. There's a concentrated risk there if the government were to seize them or something was to happen to that. Or since most of them are custodied at Coinbase, there's a concentrated risk there if something happened to Coinbase's custody. Yeah, I mean, the number one complaints

I got before the ETFs, there was a whole bunch of like bs complaints about what the etfs are going to do to manipulate the markets but the one that the couple of concerns you just hit them one concentration in both uh coinbase custody that's definitely a legitimate concern to be worried about it's pretty much all there and it's not just the u.s etfs it's like global institutions, for the most part, a lot of the Bitcoin is custodied at Coinbase. And the other one is, like you said, the one, we call it the same problem with like gold bugs. A lot of true gold bugs don't like gold ETFs, because they don't have the actual gold. And they're like, if anything goes wrong, I want to have the actual gold. And like, okay,

that's a legitimate concern. If you if you're worried that the government's going to seize your Bitcoin, like they did seize gold and, and stuff like then, yeah, you the ETF is going to be disadvantaged versus holding Bitcoin itself directly. So those are the full few, like, in my opinion, legitimate criticisms, and reasons why you wouldn't want to hold an ETF. But there's plenty of, you know, accounts and people who literally do not have the ability to hold Bitcoin because they're not allowed to or don't have access to or simply have tax advantage accounts. And they lean on that stuff that way. And it's also probably, as was said earlier, why a lot of people are buying MicroStrategy. Yeah, I would put the odds of either of those events happening below 1%,

significantly below that. But if they did happen, they would be catastrophic. So I'm not losing any sleep with that. I'm still irresponsibly long Bitcoin, holding spot Bitcoin, options, the rest of it. I just think it does us all favors in moments of euphoria like this to be honest about the risks that are out there, no matter how small they are. Yeah, I mean, I remember last cycle, people not realizing what the risks were, look how many they were, right? Most of us, right? Very few people saw FTX coming, for example, right? And I think that we all know that that was highly problematic. So I want to, I know we got to wrap in a couple minutes, but did want to just point out, we've had a lot of conversation here, Dave, you and I, especially about Lutnik,

CEO of Kenner Fitzgerald and where he would land. A lot of people thinking that he would ended up being Treasury Secretary of the Treasury, ended up, it looks like he will be leading the Department of Commerce, the Commerce Department, which is basically trade and tariffs. So Dave, I mean, what do you think of that appointment? we knew ludnick would land somewhere he was a you know pivotal in the transition team here um and what does that mean for for crypto well you know having a bitcoiner and a supporter of non-government- stable coins as the Secretary of Commerce is undeniably a good thing. I think that, you know, there will be a lot of interesting questions of what's under his remit versus others. But the real thing that everyone cares about is, are we going to get all the ores

pulling together or not? And look, I don't know personally or very much about a couple of the people being talked about for both Treasury and the SEC. But I think that the most important question is how philosophically aligned are they going to be and where will it be and how are opinions changing? So, like, for example, you know, at the SEC, people are, you know, very concerned that Mr. Stebbins is a candidate because he was the GC under Jay Clayton who filed the Ripple lawsuit and, you know, et cetera, Hinman, yada, yada, yada. Don't forget, at the same time, Trump himself said Bitcoin was worthless and And the whole world has basically said, okay, well, he's been converted. So and we all saw Jay Clayton go from not allowing Hester safe harbor, which I will contend and always will that it was the biggest mistake he's made. And arguably the biggest thing that that that has screwed over the crypto industry for the last six years. But he went from that to advising companies in you know, in the crypto sphere to you know, go digital. So people do

change. We don't know what their actual opinions are going to be until they start making policy. So right now, there's just lots of hand wringing it over the question of are they all going to believe the same thing? With Howard Lutnick, you don't have that question. We know where he stands. And I think that that's important that he has that cabinet seat and he's sitting there. So I do think it's very relevant. I get to see a cabinet appointment of someone who is not outspokenly pro-crypto or Bitcoin in some way, shape or form in any position.

I mean, look, the crypto community wants to see Bill Hagerty because, you know, I reposted something, you know, from I think it was Nashville where he just eviscerated Warren's, you know, discussion, you know, her entire position on Bitcoin and crypto. But, I mean, he's very, very clear. I think a lot of people, you know, think that Scott Besant would be very, very good. I'm not sure how he pronounces his name. I'm sorry if I butchered it. But, look, I think we all have to take a wait and see attitude. I mean, some of us want to see change. So like, you know, the thing that drives me crazy is we talked about SEC and CFTC. And we have someone we have Vivek and Elon Musk, neither one of which probably thinks they

should be two agencies. Now, whether they'll be able to work with Congress to change that or not, I don't know. But that's a major if you want to make government more efficient, don't have two redundant, overlapping, fighting agencies in charge of financial markets when no one else in the world does that. So who knows what's going to happen? I think we all are in the wait and see stage with significant optimism. Yeah, we're going to move to wrap. DB, you haven't really had a chance to speak i just happened to pop onto your profile while we were talking and you did us the favor of posting that chart of top btc holders uh what i find which we were just discussing obviously what i find

interesting is here here is that you have coinbase one obviously so satoshi's private binance is on behalf of their customers blackrock's on behalf of their customers, BlackRock's on behalf of their customers. So it's really MicroStrategy and Satoshi at the top two who have actively, on their own behalf, purchased this much Bitcoin. And as you go down, it's just largely exchanges and ETFs, right? So there's very few entities that are even close to the size who have actively managed and bought Bitcoin for a personal position, even if you consider it a micro strategy on behalf of their shareholders, right? It's a really interesting chart, DB.

Yeah, yeah, for sure. And honestly, I'm just here for the ride right now. I'm the tech guy, and I enjoy listening to these brilliant analysts. So this is the point in the cycle where I just sit back. And tech isn't very useful right now. You're building the bear. Exactly.

That's when you study. That's when you do all what I do. And yeah, these chats are great. I'm not high enough to be in the roundtable chats, but also not an analyst enough to be here sometimes. Well, we appreciate you and we appreciate all these guests and you guys showing up day in and day out to participate in these conversations. It's much appreciated. This show certainly wouldn't exist without all of you are committed to being here a few times a week and to all of you, obviously, in the audience, 5,325 of you, by my count, today who have joined. And I ask that each and every one of the 5,325 of you by my count today who have joined. And I ask that each and every one of the 5,325 of you follow all of our amazing guests on

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I guess we'll have to wait and see. Talk to you guys tomorrow. Bye.