The Wolf Of All Streets - Bitcoin To Crash To $88K? Charts Signal Massive Sell-Off! | Macro Monday

Episode Date: May 19, 2025

Join Dave Weisberger, Mike McGlone, and James Lavish as we break down the latest chaos in macro and crypto! Moody’s downgrade of U.S. credit has markets reeling, driving bonds, stocks, and the dollar lower as gold surges. Meanwhile, the UK overtakes China as America's second-largest creditor, underscoring a major shift in global financial dynamics. Plus, Bitcoin's wild swing from $106K to $103K catches traders by surprise—are these sudden liquidations signaling a local top? Dave Weisberger: https://twitter.com/daveweisberger1 James Lavish: https://twitter.com/jameslavish Mike McGlone: https://twitter.com/mikemcglone11 ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEKDAY! 👉https://thewolfden.substack.com/ ►► Arch Public Unleash algorithmic trading. Discover how algorithms used by hedge-funds are now accessible to traders looking for unparalleled insights and opportunities! 👉https://archpublic.com/ ►►TRADING ALPHA READY TO TRADE LIKE THE PROS? THE BEST TRADERS IN CRYPTO ARE RELYING ON THESE INDICATORS TO MAKE TRADES. Use code '10OFF' for a 10% discount. 👉https://tradingalpha.io/?via=scottmelker Follow Scott Melker: Twitter: https://x.com/scottmelker Web: https://www.thewolfofallstreets.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.

Yesterday had the highest Bitcoin daily and weekly close ever. A huge bullish signal, right? No, it immediately dumped right after the close, leading me to believe that maybe we have a local top here. I know usually these titles are about articles that we read and huge hyperbolic prices. Well, this one's on me. I think that Bitcoin is likely going down probably means we'll be at 150,000 very, very soon. But I have my concerns and

we're going to talk through all of that and more with the gentleman here on macro Monday, Dave, James and Mike. Let's go. What's up everybody? I'm Scott Melker also known as the Wolf of All Streets. Before we get started, please subscribe to the channel and hit that like button going to bring on the gentleman right now. That move to me yesterday was so sketchy guys. I mean, we can break it down. I think we'll go into actually we'll do it later. I wanna start with Mike.

I have to tell you Mike, everything in me wanted to make the title Bitcoin to crash 10K says Mike McGlone. I figured that'd get a smile out of Dave. But I decided to be more measured, you know, like, and we can dive into why later. But let's start with the morning meeting and then, you know, on the agenda, definitely we have the debt downgrade, 10-year treasuries making a new local high here at 4.56. We have a lot of macro to talk about.

Go ahead, Mike. So, sir, first starting with the downgrade, Anna Wong said it's maybe political, since it somewhat was. She said a lot of these measures and things from Moody's, even our colleague, Ira Jersey, said it's downgrade is meaningless. It's been on the radar for a while. It's something, obviously, in the market, it's been a trigger for people just to maybe stop covering shorts and hit bids and things. But honestly, what they're excluding a lot is the potential revenue from the tariffs

is extraneous, Dogecoin costs is extraneous, and potentially the cutback in government spending and government payrolls and things is extraneous. So her point is, in bold magenta, her point is, the point is a house bill as it is is not a deficit buster That's been modern people calling the deficit and it's a deficit buster if you include everything in it So that's her bias all focused on that and she didn't dig into dug into details But I don't think we need to do that Ira pointed out that Lot of this self is just part of last week's rally down great just flipped it a little bit was just part of last week's rally downgrade just flipped it a little bit. His point was he specs a lot of leveraged and duration-type managers

expect to be significant buyers with that 30 or about 3% about 5%. Maybe he said maybe can you go another 10-15 base points he thinks the duration people are really in here. Expect to set the debt ceiling to be raised and with plenty more T-bills, which means we'll have to manage that, which is the exact opposite, exactly what Treasury Secretary Yellen had to deal with and a lot of people criticized, but now, best is to do the same thing. Gina was still somewhat indifferent, but her point is we had the worst first quarter for U.S. stocks versus the rest of the world in history.

Operating margins are turning over as US corporates pay tariffs. The drop in oil prices is really hurting energy profits, but it's generally pretty good for the rest of the market. Audrey Chilb Freeman, who is our FX strategist, pointed out she's structurally bearish the dollar. And the key thing she's worried about is more downgrades in US market data. And my view, my focus was on gold. Gold is pretty significantly supported around $3,000.

Last year's high was right around $2,800, so it's hard to get bearish here, just a little bit overbought, significant resistance about $3,500. And I pointed out, for crude oil, last year year's low WTI was $65 a barrel. And it's kind of hard to get in some decent bear market. It's hard to get bullish unless we can stay above that level. It's more likely to go to $55 or lower. That's been my call for too long. And then I focused on the Bitcoin to gold ratio. I know Dave loves when I talk about that one. I don't want to team up too much. But I just been pointed out, I think it held pretty good resistance about 33, it bounced from 25,

and I think the risks are heads lower as gold's proving it's the risk off and Bitcoin's proving it's a risk on. And right now we're seeing more of a bias towards a risk off market. That's the Bitcoin gold ratio. So yeah, digging into one of those topics here, I just wanted to show that quickly,

but James, you wrote an incredible newsletter as usual on the information is tier this weekend, US debt downgraded again, our treasuries becoming junk. This is the inspirational tweet, which we can dive into, but we don't have our AAA status, right? Got the downgrade.

I mean, everybody knew that, yeah, this is, it's kind of, is it just symbolic that we finally had Moody's admit that the US debt is not AAA? It's not prime? I mean, this is what's so crazy about this. We're talking about the global reserve asset and it's not prime. I mean, that's,

that is a problem. And what that's telling you is that the entire world is waking up the fact that this whole debt system can't go on forever. We can't just continue to raise leverage forever. You know, with, with our deficits running at nearly seven percent of GDP Moody's is now Concerned as well, and it's it's a little bit late for them, but the the answer to the question is no We're not junk status. You know that's that's like below triple B minus so you know investment grade is Versus junk is a massive jump. But it begs the question of where are we headed? And the answer is, eventually we will be headed to junk

if we don't rein in spending. And that's what every single official has been telling the Congress for years and years now. They're like, this is unsustainable. Every single chairman of the Fed or the SEC or the Treasury is just saying like, this is is unsustainable. Every single chairman of the Fed or the SEC or the Treasury is just saying like, this is just unsustainable. We can't keep going like this. We've got to rein in the spending.

And so what you're seeing is across the board, Mike, you can see on your screens that the Treasury, the longer duration Treasuries for all the major countries, the world, developed world are rising. The yields on them are rising today. And that's because of unrestrained fiscal spending. And it's starting to concern investors. And they're starting to be concerned that they're not going to get a real rate of return on that long end of the curve. And so they are demanding, they're demanding a larger, they're demanding a larger return for that larger yield for that.

So that's the crux of all this, is that it's clear that fiscal spending is completely out of control and we've got to rein it in at some point here in the near future because the growth of debt is going parabolic. And so eventually, I think I agree. I think Mikey said that about 5% is kind of the that's kind of the magic point where where investors will step in.

I think that's right. But I also think that the 10 year can get there too. The 10 year can- I was gonna say 5% on the 30 you're saying, which is where we are. Yeah. Yeah. Just to be clear.

We're at 4.5 on the 10 year now, which is a 2% move, a 2% move in the global, the global reserve asset, the benchmark treasury of the world is just mind boggling if these things are whipping around like this. So that's one thing. The other thing is, I mean, you're looking at risk and I saw you pushed down to the bottom of that newsletter, Scott, and we're looking at the credit default swaps on US treasuries.

Here's a crazy thing and actually I'll bring up, let me stop sharing this part of the screen and I'll share this other one. But what's interesting about this is that the US is now rated. Can you see this? Yes. The US is now rated, can you see this? Yep. Okay, so now you see the US, this is $60,000 for every $10 million of CDS that you have on.

So if you have a credit default swap to hedge against $10 million of US Treasuries, you're spending $58,440. That's high, right? Per year to ensure that, right? It is high, because you can see here, let's go to the five, let's go to over the last year. This is where it's been on average, and here it is now.

Okay, well, you know, honestly, it was quite a bit higher than that in when we had the crisis. Let's go back to 22. So honestly, it was quite a bit higher than that when we had the crisis. Let's go back to 22. Oops, sorry. Let's go back to 22. You can see that the average is still here.

I mean, look, this is where we are now. Look at all the other countries over the last three years. This is, we are pushing up against that limit again. And why is that? It's because we have no budget. We don't have a debt ceiling. And so everybody's wondering, when does that run out? When do the special measures run out?

Well, surgery secretary Bessent said on, I think he said on Friday or Saturday that they, he can keep this going until August, and then that's it. So you've got this new tax package that will add about $4 trillion to the debt for the next whatever, I think it's seven years or 10 years. Is that right, Mike? So I can't remember what that measure is, but it's $4 trillion is the ad. That's number one. And then you've got basically what's happening here is investors are hedging against an unruly market that possibly gets tripped

up or that we have some sort of technical default like we did in 1979 but we just didn't get the budget passed. We tripped that. We tripped in a payment and because back then you were you were putting stamps on envelopes and they just didn't have enough time to get the payments out. It was like it was a technical default really and they made everybody whole a few days later, but that is something that investors are concerned about. And it's not a 0% probability. It's a non-zero probability, and that's what you're being told here. But what's crazy about this,

let me just zero back in on this. Here's what's crazy about this. Right now, bonds in the US, okay. US treasuries are deemed riskier than every single major European nation here. Look at this. That's crazy. Even Greece. Greece is at 57. How is that possible?

Because they already did their austerity. They've done their austerity. They've already defaulted on their debt back into 2015. But that's where we're at. And that's concerning. So what does that mean for the bond market? Well, here's what we're seeing. And this is what gets to Mike's point is that we're seeing a demand for term premium going up. You can see this one, right? Yeah, you could see this. So you see the term premium going up, meaning this is the amount of yield that investors are demanding above what they normally would because of risks. And so this is basically what the term premium is

for the 10 year. And again, what's mind bogging about this is that we're talking about the benchmark strategy of the world. So- Hey James, can I ask a dumb question? So if the debt seal, I mean, what is the trigger for the CDS to actually pay? Is the CDS trigger to actually pay that people who hold US Treasury bonds don't get paid their interest in premium? Or is it a technical default where theoretically we have a day or two where they screw up on the debt ceiling and there's an issue.

Because that to me matters. I mean, the former is... It's up to ISDA to decide what is the trigger ultimately, but if you trip an interest payment, that's a default. Sure, I understand that. Yeah, so even if it's technical, you know, it's a default. So that's the issue, right? That's the issue. That's really the issue. It's not, it's not that people think that the, that us treasuries are going to, it's

not that, that, that investors believe that us treasuries are going to, you know, be defaulted on like the treasury is not going to be campaign with their goods. They're going to, you know, take a haircut on them or something like that. That's not what's happening here, but it is a, it's a risk. But if you, yeah, but here's why, okay. It's not just that people think they're not gonna get paid an interest payment or their, you know, the problem is,

Hey Eric. All right guys. Are you up in New York today, Mike? That's awesome. So the problem is you've got all these investors who need those treasures and are counting on getting their basis back and their interest payments. And if they don't get them, then they're going to miss a payment for something themselves. That's why they have these CDS on them primarily.

It's because they're going to trip up a problem. It's not like they're not going to be made whole. Of course they are, but they may take a few days. A few days in Wall Street is a lifetime if you're using your treasuries to borrow against so that's that's one of the that's one of the problems so it's not necessarily that people think they're gonna default it's that if they do even for a day then it could be catastrophic for their own

business and they need to be paid to to be able to yeah no I understand but I but I the reason I asked the question is because, I mean, look, if there's anybody on the planet who thinks that the UK is less likely to default than the US, then they haven't looked at the fiscal situation. This short term. This just short term. Yeah, yeah.

No, no, I understand that. But I just want to make sure our listeners or viewers understand that that's what we're saying. Because this is one of those cases where Mr. McGlown and I are 100% in agreement. It's just very, very different. But look, there is something that did happen this weekend and that is going on that does matter.

And it is very, very clear that there is no, not even a risk of this administration being able to bring the budget into what anyone will call austerity. And it's very, very, very clear. Meaning that anybody who was waiting to, you know, thinking that Bitcoin or gold were going to have a head face headwinds because we're going to be spending less and our budget deficit was going to start, we're going to go to a positive, you know, we're going to go to a

surplus and it's going to bring down the debt. Anybody who thinks that no longer can think that. And in fact, the pivot, and it was a soft pivot rhetorically, but it does matter, from Treasury Secretary Besant, is that we need to grow our way out. Now, not to be snarky, but you guys have heard this before, you know, from a certain person who likes to use funny backgrounds and wear shirts to promote their home basketball team, that the only way out of the budget deficit issue is really through deregulation and causing dramatic increases in GDP. The problem is a lot of the regulation

that hurts factories is state local. So they're kind of in a bind. And I don't wanna go, I actually disagree with your partner, Larry, that there'll be a big print I think it will be a building print that will eventually Become so large that people see it and and that's what's going on. I don't think it's a one-off thing I think it's a no more like a wave than

That that would be holding all things constant But we could have an issue here where you have disruption in the treasury market and that will cause a massive print. I mean, let's just face it. You will need the Fed to step in. That's just their job. I think the Fed is gonna be stepping in far sooner than you think.

Then I agree that I do agree. Yeah, that's really the point. The point is that all roads lead to monetary debasement here. But Mike Mike do you think that the Fed steps in faster than we think? Because right now now aren't we pricing basically a quarter point by December? No, no, no, let me be clear Mike Not okay. I'm not talking about rate cuts. I'm talking about liquidity We're different 2019 like a 2019 repo crisis type of liquidity event

where they step in immediately. If they won't even, they will not hesitate. Or a VTFD from a response to Silicon Valley or whatever it is. Yeah, exactly. Now you can answer. Sorry, I just wanted to make sure you're answering the right question.

Scott, I shared the screen on just the chart of the five-year CDS. This obviously took off when all this tariff stuff was happening and this tax package was coming to you. That's people's concern. It's obvious that this wasn't just a gradual increase. It shot up overnight, so just FYI. One thing I do enjoy is piggybacking a little bit when Jamie diamond says about when us gets downgraded every country

There's a higher rating is based under the protection of US security US military and in virtue everyone those countries runs massive net exports with the US so, okay We know what's getting fixed now as for Kurt take just at least the new administration is doing, making efforts to cut back on that. So to me, that's the macro bigger picture. This 5% long bond is part of the problem, I think. You can't have, as James so eloquently described, is the US riskless securities ratcheting up like this without major problems. And the thing about the Fed is,

the Fed, here's my point, I think we've reached that massive end game of what's been really appreciated in risk assets since the Fed put started in October 19th, 1987, is they can't ease anymore because they ease too much, risk assets are going up, creating, and gone up way too much as a key point

for Gene Amart Adams, their US risk stock markets are just way too elevated, created all that inflation, can't ease because we have too much inflation, why do we have too much inflation? Because we have too much, we created too high. We have way too much risk stimulus, risk assets too high. This is the end game, but part of what really accelerated this whole thing was 2009 is when cryptos were born, and they rode that way up. And this to me is my macro big picture, that's why I was willing to put that number on how risky these things are now when we

get this capitulation, which is just a matter of time. Hopefully it's not going to be that bad, but here's where we stand right. Let's see if we end the year right now. We have gold up 23%, crude oil down 13%, S&P 500 basically unchanged, and Bitcoin up about 9%, and most crypto indices are down. So that's a risk-off year. Yet, the key thing about this is bond prices have been, yields are higher. It's where do we end the year now?

And to me, that's the key thing that matters is the tilt. We've all seen this bounce in risk assets. The thing is, it can't compare to any other bonds. The most significant comparison was Q1 first half 2020. But what created that bounce? Masco Fiscal Monitoring Stimulus. Here, it's the opposite. So this to me is a classic short covering rally. And everything that matters now is if the US stock market can keep these gains. And to me, the risks are from that time, the end of 2019, we rallied the S&P 500% just giving back 20% of that is nothing in the big picture, but it's a really big, significant deflationary

factor that I think we're seeing that gold's figuring out and that gold Bitcoin ratio is figuring out. So looking forward, it's now about how do we end today? I think what's going to happen now is when we start heading lower in the stock market, that's going to prove that even Dave said it happened a lot in the crypto. That was shortcoming rather than something to push it back up. And we head towards that normal deflationary recessionary. We never got in 2023.

To me, that's all the macro that matters. And the key thing to see here is we're in a lose-lose situation. Bond yields are spiking and his economy is declining and slowing down, which is a known known if you just look at most of the other data in terms of defaults on auto loans and profits and margins and things. This is a lose-lose, but where does it stop? So I look at, to me, the next big trade is everything heads lower and the thing is what's most significant leading risk assets on the planet are cryptos. So far as the Fed, one thing I'll end with is the Fed's out of the picture right now.

I think the next what you should expect from the Fed is the next, not 25 base points, when they ease, they ease to the guys. They're 75. Exactly. That's my thought is, and that's a problem. It's going to take the market to go down to do that. And these are things we spoke about over a year ago when they started easing with risk assets on a on a on a tear. Now we're all stuck and we all realize that and we're not stuck if we take profits and book some of those profits and this is how I end with

this. This is what's happening. Most of what I'm hearing everywhere is institutions are selling dollar assets mostly equities on rallies and a lot of Americans are doing what they can to take those really expensive assets and offshore. So a couple things here. First, you're starting to hear, even in your statement, a very important distinction, and that is Bitcoin and crypto. And I want that to be clear. I got a lot of hate last week.

I was on multiple spaces and people were like talking about Ethereum and I'm sitting here and I said, listen, I think that it was it hit almost point two five, you know, point zero to five on the ether Bitcoin ratio. And I said, I think this is the top for a while. And I got all sorts of hate from everybody yelling at me. What are you talking about? And my reasoning is that Bitcoin will outperform Ethereum for the rest of this year. I think it was the top. I think Bitcoin will lead higher if we get a bull market. And I think we could get a bull market in dollars because it'll be the dollar going down, not so much the others. But there's two points here. Point number one, that whether it's Ethereum or Solana or Chainlink or anything else for that matter, they are risk assets. There's no question they're risk assets. They are speculative, technology based assets that are going to be worth a lot more money as a group, in my opinion, in 10 years time as the as more and more use cases gets here

and people are speculating on who are going to be the winners and they're looking at the total addressable market they're saying okay my god this is cheap this is getting in early this is like buying Cisco back in the early 90s okay cool but to say that they're not risk assets is literally the height of insanity you know we know they're their risk assets. Now let's talk about Bitcoin. You mentioned Jamie Dimon. You opened the door for me. Thank you very much. JP Morgan even came out with a report saying Bitcoin will outperform gold, but the two of them will both outperform everything else. And their reasoning is the same as my reasoning. And that is that we are inflating the value, we are debasing the dollar. And if you don't think corporate profits are going to go up in that environment,

then what do you put your money into? You put your money into gold, you put your money into Bitcoin, because those are both assets, that's their investment case. Now, you might believe Bitcoin is priced right now for a 90% chance of failure. And I want to repeat that because that's that's important. Bitcoin is priced at you know, relative to where to the market cap of gold that is clearly the monetary premium Bitcoin is priced as if there's a huge chance that it will fail to become that that global store

of value. And let's do it a third time. That's accurate, correct? If you're saying, listen, are you saying it- I'm saying that's how it's priced. Okay, all right. I'm just saying very specifically- No, he's basically saying that if you believe it's gonna become that global asset that-

That it has to surpass gold, right, of course. Well, yeah, and it's a million dollars. Very, very cheap. Right, so it is priced as if the likelihood is that it will fail. And yet there is a lot of smart money, including the insiders of the president of the United States who believe that it will not fail, that it will eventually succeed. And so-

Dave, can I ask you a question? I'm sorry to interrupt because you're making a great point, but I just for people listening, you're not saying Bitcoin fail as in go to zero, but it's failed to become the global reserve asset because Bitcoin can be very successful. It's a niche product for techno nerds. It can be extremely successful,

continue to go up and not catch gold and become the global reserve asset. So it's... I'm not so sure that that's true, but I think that the value of Bitcoin as a niche techno nerd asset is dramatically lower than the value and probably lower than where we are today. That is Mike's scenario. The scenario of $10,000 Bitcoin is a scenario where Bitcoin is viewed as my space, right? You know, if Bitcoin is viewed as something that failed, it was in an anachronism and it never got there. It never got critical mass. But the truth is, you finish yours. Well, well, no, no, that is my interpretation of what it would take for Bitcoin to drop at that point, based upon the data that we're seeing, based on the fact that since November, we're in a 20% range. And in the last 11 days, 11 days in Bitcoin is an eternity

with all this shit going on in the bond market, Bitcoin has been in a $5,000 range, actually slightly less, you know, for almost two weeks. That is, you know, Bitcoin has been less volatile than pretty much every single one of the Mag-7 and less volatile than a lot of other assets. It's it's kind of crazy at this point and the reason is the the the the the it's stuck between a rock and a hard place the rock in this particular case are

long-term buyers who are just scooping it up as people panic sell it to them and the hard place are the speculators who every time they think this it's gonna be this time they jump in like they do on a Sunday and of course they run up and they're like Wiley Coyote They go up over the chasm and boom now all of a sudden There's the the the the patient buyers didn't follow them and so boom it's right back down to where it is now To me Bitcoin is gaining critical mass from an adoption point of view for this particular type of assets when you have JP Morgan Making the call it is it is fairly clear to me that that's what's happening.

So that's why I look at this. And we should talk more about the technicals of what's going on, but here we have a situation where we have to look at the University of Michigan from last week. You're talking about- Oh my God. One of the most outrageous things we have ever seen in data is that there is now when you look at inflation expectations and you look at economic expectations, we now have a 10% difference based on what political party you have. Now, what is that telling you? It's telling you that the media is screaming two different narratives.

And so if you wear a blue t-shirt, you believe MSNBC that Trump is destroying the economy. And if you wear a red t-shirt, you believe Fox News that it's going to be a new American nirvana. And by the way, they only survey like six or 700 people continuously. This is not a very large data group. This is insane. No, but this is what people base it on. All of Wall Street looks at the Michigan indicators, which I've written about this.

I was actually on Fox. One of the things that Charles Payne brought me on Fox News to talk about, they were blown away that this Michigan survey, I mean, it's a few hundred people. It's literally like a blade of grass on an entire football field of Americans. But it's so obviously politically biased. I mean, Mike made the point earlier. Well, I think that the Moody's thing might be politically biased, no shit, Sherlock, no shit. You know, it's like, we have the most polarizing president in history.

And you have, and the divide and the fault lines are, are, are, are all over the place. And it, look, there, this wouldn't happen under any other scenario. I mean, everything is getting politicized these days. And so when we look at economic data, the only thing that's not politicized is to some degree is money managers are like, well, okay, where am I putting my money? And do I really think that this economy

is in constant dollars is going to go down? I mean, and that's really the issue. The issue is dollars. I mean, I was in London trading Italian equities when the Italian market got devalued against the pound. And I will tell you that it stamped an indelible mark on my memory. Okay, I'm old, this was in 1992, so let's just get that out of the way. I wasn't in a trading pit. Before the Euro.

It was before the Euro. So I was sitting there and what happened that day was one of the most interesting things ever. People started off sorting Italian equities and the day ended with the largest single one day gain in Italian equities ever. Now if you held it in any other currency, they were effectively flat by the end of the day.

But the Italian lira was devalued effectively by 20% and Italian equities were up 20 some odd percent in the same day. So if you're calling for a macro-devalued- Merging market kind of stuff, by the way. Yeah, exactly. But I mean, the point is, is that it's still a pretty major economy. At the time, it was even larger relatively, you know, in the world. And if you understand that, if you believe that the US dollar is effectively being devalued, you have to understand that the stock market will move in inverse to the to the same magnitude of that devaluation and and that's something that people need to understand because

Bitcoin will do so and do so without the drag on earnings that is dragging it down in the first place And so that's why I look at it differently Anyway, now I've gone on and so I'm not gonna going to say I'm going to end here until I end. So I'm now going to end. Yeah, before Mike, I want you to kind of clarify the case. But I think Dave did a pretty good job of saying that's not what you were saying. But Dave, my question there, I guess,

I remember when gold was 12 trillion, 13 trillion, right? And there was this argument that Bitcoin would have to rise to eight or nine and gold would probably come down and they would meet in the middle and Bitcoin become the global reserve asset. That was pretty much consensus for Bitcoiners. Now you have big gold at what 22, 23 trillion 21, right? Yeah, but 21 because a million dollars of Bitcoin. Yeah, not a lot of a lot of that is just on people's wrists and

and in gold, you know, I think getting at like, so let's say Bitcoin is a million dollars a coin. So you know, let's forget lost coins, all that 20 $21 trillion market cap, okay. But can't gold be 40 trillion at that point? And Bitcoin still wildly successful. I just don't understand the goal has to become the global reserve asset. No, I think that it's really, really, really, really great point, Scott.

So here's my base case. My base case is gold does go to 30 or 40 trillion and Bitcoin joins them at somewhere like 20, you know, basically at 80 to 90% of gold. And go up together. Because at the end of the day, neither are close to where gold was in terms of percentage of actual financial monetary assets. Gold is being owned by central banks. It's going to be years before the major central banks think about investing in anything other than gold as a backing. Now a lot of smaller countries are going to move into Bitcoin first because they're

going to try to leapfrog. They're already doing it, right? We're seeing. But does anyone in the G7 really care about El Salvador and Bhutan and others? They won't care unless the United States decides that we need to diversify our holdings. And we'll see what happens there. I will continue to say I will be stunned if the United States sells gold. I will be stunned.

I mean, the last major country to do so was the UK. And so it's actually kind of funny that the UK once again is saying what they're saying about Bitcoin. I mean, Gordon Brown sold gold at 277, was that the number? It was under $300. It didn't work out too well.

No, it did not work out too well. Which is, and so like the UK in financial circles has been wrong in pretty much every major decision they've made since the empire kind of more or less kind of slid away. Oh yeah, there was that whole pound was the global reserve currency thing. Well, I mean, look, that was because of

a mercantilist economy, which the World War has basically eliminated. That isn't their fault. But selling gold at that time was just such an unbelievable, just unbelievably stupid trade. But no, I think that when you look at the monetary premium of gold, it's really obvious. I mean, my wife, you know, the engagement ring

that I had bought her, you know, at her 10 year, you know, anniversary, and we're gonna be 36 in a few weeks, was platinum with diamonds. And at the time, platinum was double the price of gold. Now platinum is less than almost one fourth the price of gold, if we could do a 1.3 something or other price of gold. You pulled an England on that range. And the reason that platinum is less than one-third the price of gold even though

It's 30 times rarer is because of monetary premium and that monetary premium isn't going anywhere and Bitcoin is Getting a higher and higher percentage over time of that monetary premium. And so that's why you know, even even she got it Got it. It's a great way to help orange pill women Yeah, by the way or jewelry people or Indians. They love gold Yeah, they do Nations so here's here's here's here's the today's point and and what we believe and what we're talking about This is Jesse Myers. He does a lot of work on this to just determine what the The universe of investable assets are in the world. So now we're at one quadrillion

In in of investable assets in the world, which is 1,000 trillion. Okay. So what what we're talking about here is yet gold could easily double and That and this whole chart double, you know, it could be too- Or James, if you look at the box on the right money. Exactly. There is nothing, nothing, nothing. And I talked to Jesse about this and he agrees.

There is literally nothing stopping gold plus Bitcoin equaling that box on the lower right. And if you think that box in the lower right isn't gonna grow over the next five to 10 years and grow fairly substantially, then you're smoking something. And that's an assumption that it doesn't start taking that gold and Bitcoin don't keep eating into

the bottom left and the middle box on the bottom because at some point, first of all, people are waking up to real estate has been a tremendous store value for long-term investors forever. That's why we got into such a problem in 2008 is because investors are like, well, then real estate never goes down. Well, that's right, until it does.

But here's the things that you start hearing people and it's a very, very, very, very small minority of investors still who think this. But it is growing that people realize that, God, if I just buy Bitcoin and hold it or gold, then I don't have to deal with tenants, I don't have to deal with, I don't have to deal with tenants, I don't have to deal with maintenance costs, I don't have to, you know, deal with the illiquidity

of the market, of real estate, I can just buy this thing and hold it. So gold and Bitcoin will continue to take market share from there. And like you're saying- Without property taxes. And without property taxes, all of that stuff. Without property taxes.

And then, and then the bottom middle is, that's the point at which, that's where Bitcoin explodes. Once it starts taking market share from the bond portfolios. But I want to make a point here. I just want to make, but I want to make it clear, though, I don't think that that's happening this year. That is a long way off still. But we're starting to hear rumblings of people worried that this whole fiscal issue is not going away and those bonds are really, you're losing money on those every year because the expansion of the money supply and fiscal deficits that are driving the devaluation, the debasement

of the underlying currency in those bonds. So I just want to slip in a point because I completely agree with everything you just said. The reason I keep that chart up there is this is this chart is so important. One of the things that people were saying yet last week and I found it ridiculous is that well won't the government's start push back against book Bitcoin and gold because you know of this rally aren't they worried about it and the answer to is is on this chart until Bitcoin plus gold is substantively greater versus

that green box governments donments don't care. The instant they start worrying about it hitting the gray box, they're going to care. We got a long freaking way to do that. You're talking about gold at 40 trillion, Bitcoin at 30 trillion. It's still probably they don't care. They'll care when gold and Bitcoin is 100 trillion. It's still probably they don't care. They'll care when gold is and BIC plus Bitcoin is a hundred trillion. That's when the governments will start caring because here's the thing that

people always we know this is true but we always but we don't kind of look at it. It's that government officials don't give a crap about anything after their term is up. They're trying that you know so they're not going to care. If they see that the trajectory and they say, Hey, I think Bitcoin is going to be a problem here. Maybe we should do something about it because it's going to make selling bonds harder. Right. If that is a true statement that they start to see, it would have to be something they think is going to happen in the next three or four years, or they're literally going to ignore it. And that matters. So people who want to understand

why I say Bitcoin is at a 90% discount, it's because of the orange to the yellow box. But if you really want to get down to it, it's the combination of the yellow and orange to the green box. Yeah, if gold, if gold and Bitcoin are 100. and Mike, I want you to just jump in kind of unpack all this. But if gold is 100 and Bitcoin and money's gonna be 500. Money's gonna be like three or 400. Yeah, you're right. And but that's the trajectory that it's going to. Of course, it is no two ways about which is why that's what's that is why which is why yields are going up.

So I got a little a little wrap for this. And first off, starting with a quote from Benjamin Disraeli what we anticipate Selma occurs, that's the problem I think with people just assuming this is gonna be an easy ride for Bitcoin to do just what Amazon did But remember took an eighty Point this this is this is my point from here on every Every time it gets expensive, what Dave started with, I have to piggyback on that is I've actually deliberately started ignoring all the comments on X. LinkedIn is much more tame because I know exactly what their positions are.

These are massively speculative people who got a lot of, are trying to play that game. Oh, I want to be like, okay, nobody else make a lot of money. I have way more long risk assets like cryptos. And they get mad when we point out the facts of what happens with people like that. It's one thing that's so important, what Dave said, we have to remember is when you get those kinds of responses, I know what your position is,

and in boldness what I've said always in the past at major peaks in markets is that's what happens. Human nature will never change. So I want to piggyback on that a little bit and give you the big picture. I don't think Bitcoin is going to fail by dropping 80 to 90 percent That's what it always has done in the past and when people tell me it's over Mike Okay, that's when I worry because it always done that now council on piggyback in little what James pointed out was we are in a significant

Space of the bondage of Lanty's telling there's a problem with you as bond market I would point out never underestimate the self-correcting mechanism of the US market. What you point out, James, and the big yield differential between that Chinese 10, you know, that 1.66 and the US at 4.52, it's not going to last long. It's lasting a lot longer than I thought. But everything here is predicated on being lifted up higher by the US stock market, which is way overdue for a correction. So let me give you my macro big picture.

Piggyback and everything you've said is we are overdue for that and crypto should lead the way lower. That's my point is, it's not, I need to also, it's done it many times in the past. When you see someone who's going to get pain, when I sense pain, I sense a lot of fearful pain and I can warn people, I have to say well if you're buying Bitcoin here and you're first, number one you have to fully anticipate the complete success of the Trump administration. Okay they can still succeed and Bitcoin could drop a lot. Which is not underestimate, it just started, it's only been a hundred days or so when you're, that's when you have peak

of you know polls and then you always trickle down you have corrections in between. We have to point that out. The key thing is this space has so much speculative accesses. It's very much akin to 1929 in the US, 1989 in Japan, and there will be a purge. So I want to point out one thing you mentioned about JP Morgan. In 2018, JP Morgan wrote, and again, it's not, it's an analyst at JP Morgan, wrote a piece about how Bitcoin futures were failing, and I rebutted it right, I'm like, they were missing key fact,

that they were using nominal value. I'm like, yeah, use futures price, you use futures contracts. It was taken off, it was just one of my key things. They were completely wrong. And now I point as the, on everybody's on board and point how bullish it is, that's when you have to take back,

pick back as a rational investor who have got in early and say Okay now I have to be very careful with this space because it's in the mainstream. Everybody's bullish and it's very expensive That's my point is this is not as a strategist This is where I have to point out those facts and be very careful what you say I don't think bitcoins gonna fail if it drops 80% It's gonna purge the excesses and that will be part of its success. We need to get things like Dogecoin worth $33 trillion that tracks nothing out. That has to be purged out and as everything gets tokenized, as Scott had

a great interview with Scott with Michael Schoenstein who is a friend, I listened to that on the drive into the city, pointed out, when everything gets tokenized, it's going to put them on the same platform where you're going to set short bait. Yeah, so short bait in Ethereum hasn't worked, but next it will. I still will stick with those. This is the risk. If we get that normal, okay, we've only had two in the last 25 years, two 50% drawdowns, US stock market, we're overdue for that. And we should be pricing and expecting that. The question is, when does that start we should be pricing expecting that. The question is when does it start? So to me that's the macro big picture. Everything you said somewhat

solidifies those views. We have the hubris, we have major financial institutions pointing out how great this space is when, you know, we all loved it when they hated it. That's the time to love it. And now that's so much love, you have to be very careful about the valuations. And that's my point is I will end with this. Everything will be fine in Bitcoin as long as the stock market goes up. And that's what this year is proving with that Bitcoin gold ratio.

And I fully expect the stock market is gonna go down. Bitcoin potentially even that ratio will lead the way. Yeah, I just hate those. That's what's been doing. Yeah, I wanna talk more about the short-term price action, something we never do here, but we put it in the title. So I just really quickly have to mention it obviously. I mean, James, you kind of giggled right before the show when I said I hate Sunday pumps in

general, but yesterday smelled so bad to me, like I had to leave the room. It was so bad. You're like, that was sailing. Yeah, it was sailor and maybe some other, you know, large institutional buyers that that are adding it to their treasury. I don't know if GameStop is out there yet or not, but you know. We saw there was a healthcare company in Singapore, a company in the UK. I mean, now it's like three a day, the treasury.

So that door has opened. Matt Hogan was right about that. He said the next bid. So that's what makes me fundamentally remain obviously bullish. I think we have a huge bid under it. Yeah, for sure. And that's the question is,

as more and more companies add Bitcoin to their treasury, as more sovereigns do it, the question is, Mike, for me is when does it really fully decouple from risk assets? You've heard me say this for years now, that Bitcoin's been the tip of the risk assets spear. And it has been. If you want to know where the market's going on a Sunday, if Bitcoin sells off hard, it's likely the market's going down because you've got managers who are selling Bitcoin to meet margin calls or anticipate them. Yeah, it's what they can sell. But you know, this, I believe, is the beginnings of it. It's the beginnings of Bitcoin decoupling. Has it decoupled yet? No, of course it hasn't.

You can see it hasn't decoupled fully yet. But will it? Yes, it will. It's just a question of time and how long that takes. But, you know, as far as Mike, as far as the drawdown the market, if you look at historic historical values and P ratios and the If you look at historical values and PE ratios and the valuation of the market to GDP and all those values, of course, it is due for a pullback. It has been. And this almost V-shaped recovery off of the Trump tariff issues and the sell-off, then the march right back to near all-time highs. I mean, it's been staggering. But the question that the bond market is asking, and this is where you just keep turning to the bond market,

is the question the bond market is asking is, are our fiscal deficits going to continue to drive this engine forward, continue to debase the value of the currencies underneath all of these bonds? And will that keep this market buoyed to the point where it does not have a 30%, 40%, 50% sell-off? And that it may have a small sell-off, but nothing like that, because it cannot be disrupted, because we are so financialized in the US that if the US stock market is disrupted, the US bond market is disrupted. If the US stock market is disrupted, the US bond market is disrupted. If the US bond market is disrupted, the Treasury is disrupted. And that's not going to do so the Fed will step in far faster and

earlier with some sort of acronym or quietly out there buying, you know, assets in the open market like they did in 2019. That's that is what yeah, they'll be out there buying bonds. That's right. So that's the question. The question is, and that's what everybody's asking. And that's why you're seeing the bonds, the bond yields go higher on the longer end of the curve. It's because they're asking that very question. And what am I going to need to be,

I need to be compensated for the duration risk and that yield risk on my, the interest rate risk on my bonds We were so we're still talking about bonds with the S&P 500 up on the year I'm that's my point that we haven't had the test we we had one little minor test was down 15% That's my point when it does go down and stay down. It's not My point is goes down and stays down. We have to remove some of that wealth from the system. It's always has happened.

Now you're telling me it's gonna be different. Great. No, I'm not saying it's gonna be different. I'm saying the question is, what is driving, well, the difference between here and what we saw in 2007 is the debt to GDP ratio is just off the charts. It's not even close.

I get it. It's a completely completely different universe. Everybody's becoming Japan. Exactly. I just have to say, James, my answer to that, I agreed with you 100%. But if we get 10, 20, 30, 40 of these Bitcoin treasury companies, I'm not talking about companies that add Bitcoin that just buy Bitcoin. I'm talking about people raising debt to buy more Bitcoin. If we get 2030, 30, 40 of those,

that 30% correction becomes a 50% correction when they have to liquidate it. Exactly. You just described a systematic risk in a highly volatile risk asset that I never thought I'd be writing about or anything. I just, the shocking amount of risk in this space is unprecedented.

I used to use the inordinate burden. I'd say, okay, well, copper will be fine if long the stock market goes up. The inordinate burden stock market goes up. Now all that inordinate burden is shifted over to cryptos and the number one we know is Bitcoin. So here's the problem. The problem is is you're right if Bitcoin, if in fact that was a substantial amount of what was going on here and it was already done. What you're seeing is the beginning. Predicting the crash when things are starting, you got to go up the mountain before you come down the mountain.

And yeah, is there going to be more volatility? Sure. Is there any way that little bitty, I forgot the color of the Bitcoin box. It isn't going to be a bigger box relative to gold where people realize they can borrow in depreciating assets and buy Bitcoin, and it becomes that kind of slow groundswell, which is literally what we're happening now. We're all hyperbolic about this, except for it just hasn't happened yet. The total percentage of ownership that's on leverage in Bitcoin is way lower now than it was in 2021. 2021, people were paying 50, 50 to 100, 100% annual interest rates to go along Bitcoin.

Now they're paying nothing to speak up because the funding rates are so low. And the people who are raising this debt are getting ridiculously good deals to do so. They're paying these sailors, what's the sailors effective interest rate that he's paying? It's really, really low. And so to say that that's creating lots of leverage in the system, well, you're fast forwarding. In two or three years, there might be a lot of leverage

in the system, but there isn't leverage in the system now. How often in history and do you know in life when people get a mar asset right and it goes up and make a lot of money and they add to that position that they're fine. I mean, I've just been in. No, I agree with you. That's just shocking what he's doing.

And I mean, it's just irresponsible but people are starting to say, hey, look at me, I can do this too. Yeah, I mean, you're right. The key word in that sentence is starting. Yeah, I don't think it's probably that. He's got, he has laddered the maturity of his debt ladder, the maturity of his debt on both time and price.

So, you know, he doesn't have anything. Michael, you would have to have a sustained down 60% plus. That's normal. Bitcoin, that's normal. For years and years for him to have any, have to refinance any of this debt or sell Bitcoin to pay it off. I think he's fine. Yeah, I think he's fine.

It's the copycat. that are gonna basically just be hedge funds, larping as treasury companies that are. Where's the supply gonna come from to fund all the copycats, to fund sovereigns, to fund states, and to fund people just using it as a treasury asset because they see what's happening to the bond market. I mean, do you think it's an accident that Bitcoin has not is not gone below 100,000 in the last 12 days? It's not an accident. Right. You know, you've seen

all sorts of volatility elsewhere and it's not I mean, even today Bitcoin is almost up on the day now. Right. You know, it is up compared to Friday at 107. It's at 103.5. I mean, I can share the trend. No, no, no, 107, wow, but look at, look at, look at. I do the night tonight. Yeah, I do the night tonight. Look at iBit versus Friday, okay? It's down a half a percent. Yeah, that makes sense. If we're talking about it trading on, you know.

Apples to apples is down a half a percent from the last trading session. But the point is that there are, there is a thesis that that Bitcoin box will grow to be the size of the gold box as currently exists. And I think most of the people who believe that believe the gold box will continue to grow so it won't quite catch up. It'll get to 80 or so percent.

That is a thesis. And there is a lot of money that goes into a box says this thing is not going to be determined based on today's squiggles. It's going to be based on what we see over the next couple of years and the average holding period For the people who've been buying is north of a year and a half And so that changes that dynamic the volatility that Mike is talking about Happened in a world where the average holding period was way the hell less Where the average were prices? I mean look I run a company that is the number one

algorithmic, or I used to run a company that is the number one algorithmic provider of trading software for derivatives of crypto derivatives in the world. I am telling you, this is not a guess that every single major move up and down before 2024 was run, was led by derivatives. And so all the volatility that you're saying it used to do was in a derivative led market where people were on average, on average over 10 times leverage. I mean, 10 times leverage in the United States is insane. Nobody, even futures people who are doing that,

yes, they could do 20 times leverage on the dollars they have in the account, but they all know that they have infinite loss on that collateral because of because there's no real time liquidation. And so as their overall portfolio, you never find people who are doing beta at more than five times leverage, you just don't. I mean, those people are nuts. And we look at them as nuts. So that was what was driving Bitcoin. Of course it was more volatile back then by definition. So it's a problem I have now with people who are buying it and saying that's over. I mean

they're buying an asset that has 40 to 50 percent annual volatility and expecting it's not going to drop 40 to 50 percent. We stop those people out then we'll go and get Polish. But not now, not here at these levels, the highest ever for S&P 500. It's too much of a pile on David. You see it before. I understand. Look, people ask me the question. So I wanna make two points here.

Point number one, your 40, 50% volatility is comprised of backward looking stuff based upon. No, of course it is. That's the only way to do it, but when the leverage in the system is one fifth what the leverage in the system used to be, don't expect the volatility to be the same in terms of just general up and down volatility. That is a very important difference.

And it's not different this time, it's because that's the nature of the market. And then the reality is that, Mike, as you said, Doge is not being adopted. I don't, at least I don't think it is. You know, the other- Unless X becomes a payments company and they adopt it. Thousands and thousands and thousands

of these cryptocurrencies are not being adopted. Bitcoin's being adopted as a separate asset. And you're seeing it happen in real time. And that is the difference. Something that's different this time, it's the difference in the fact that it's in the adoption phase. Just like, you know, as Amazon was being adopted as the new marketplace for the world, that it had tremendous volatility, confusion around it, a lot of doubt, massive short sellers around it because they just couldn't believe that, you know, their grandmother was going to actually put the credit card online

to buy something. And now, you know, my mom is probably has an Amazon package delivered every day, you know? And so it's like, those are, those are things that, that you have to take into account as well. It's not just that this time is different It's that bitcoin is different it truly now I want to make I wanted to make a second point because I said there were two the second point is That I am not Not a permable here. I think that there is a very real chance. We will we are still in the same trading range I won't change my opinion unless we for some reason and I think it is exceedingly unlikely we break with

conviction below the high 70s level. Do I think we're gonna get down there? Actually no. I'd say I think that we're gonna hold around these levels and then go higher. I'd really do because and the reason I do Mike is I sit on these Twitter spaces all day long and I listen to all the Bitcoin bulls and they're all bearish. They all think we're gonna test the mid-80s. Josh Mann who calls for 444 says we're gonna go to 84. They're all bearish.

I wanna be the other side of them. If they were all bullish, I'd be in the McGlone camp. 100% because you're right. When everybody says something, they're only talking their own fricking book. I agree with you. You are, everyone should listen to what Mike said there and if you want to bookmark one thing out of this out of this we are all violently in agreement

that when people get angry and mad at you and they're talking their own book they've already exhausted their firepower they've already made their bets they're all in so you are right about that but the reason that I actually I think I'm being contrarian saying that that 100 might still be, we might not get there. I mean, it's kind of crazy for me to think that because it's so close. But I think one, you know, I think new all time highs near 120, 130 are more likely than that 84 level. Now am I putting, am I betting on this? No, I'm sitting on my hands. I mean, I don't own that much Bitcoin. I'm not a crypto billionaire, crypto millionaire even. Well, maybe, but whatever. I guess if you add it all up across every account. Never talk about it.

No, I know, most of my money is in ETFs. He doesn't want you to know anything. No, no, I know you're right. That's actually a very important point. I mean, you have to be crazy to claim to be a crypto deca millionaire. And oh, I keep it in my wall. It's in my apartment. Or your, I mean, it's insane, which is why, by the way, I always laugh at all the people, the Bitcoin max used to say, well, I can't believe you have most of your

Bitcoin and ETFs. I go, well, yeah, because they can't steal it. You try it, you get it back and they have to kill you for it. And even then it's, it's not that easy. So of course that's what you do because, you know do because you know until we we have really good solutions for this And so but but anyway, the point is that it's I think that being contrarian is really important I get the most nervous when everyone's bullish and yeah, you got a lot of people I feel like in the long term, but they're not leveraged the leverage players are I feel like in the long term, but they're not leveraged. The leverage players are are the ones who I kind of look at. And

that's why I love that meme. You know, the meme Scott, the one that says what people think hodling is like the straight lineup, and what it's actually like on the ground and grenades flying in. Yeah, because because it's true. It's not easy. And it never will be. Like I said, my only concern was short term because it was a Sunday pump. It made the slightest of all time high daily and weekly closes while being wildly overbought with bearish divergence with RSI on every single timeframe from the daily

all the way down and even maybe on the weekly. So listen, but to me, I will once again say dips are gifts like and Bitcoin, it's always been that way. But right now, I think the whole market to me is like the once again say dips are gifts. Like, and Bitcoin, it's always been that way, but right now I think the whole market to me is like, the big dips are more viable than the rips are sellable. But we'll see if that changes, you know. But I just think there's so much uncertainty in the world. Treasury is doing this,

but maybe that is the case for Bitcoin, right? A lot of people were saying, hey, look, Treasuries are up, the bond market's falling apart, they downgraded our debt, Bitcoin's going up. I don't buy that. That's why it went up on a Sunday this time. No, but yeah, no, no, just expect volatility, have confidence when when you step in and get some really good prices, though. But

by the way, the Sunday pump wasn't sailor, you could do the math is that he did it before. But I'm saying somebody, you know, some buyer, that's what I'm saying. Yeah. A single buyer who kind of was pushing price. I don't know if you saw this, James, but speaking of Bitcoin treasury companies, I just literally saw this news come out

that Natalie Brunel is appointed to the board of some of the awesome. It's pretty cool. Awesome. Good for her. Yeah. There are another of the Bitcoin treasury companies. Oh my gosh, it's 1005. Guys, we pushed it again. I appreciate that you guys take this extra time. Who's going to James you're going to Vegas, you live in Vegas.

I mean, maybe there. Yeah. Yeah. Dave. I will be flying in on the 27th. So I get in for I could probably make a dinner on the 27th of you guys are up for it. I'm only going for like one night probably because yeah, yeah, I'm flying in on the 27th, so I get in for, I could probably make a dinner on the 27th if you guys are up for it. But- I'm only going for like one night probably, cause yeah. Mike, we need you in Bitcoin Vegas, man. I can make that one, unfortunately.

Yeah, James, let's- Ships going? Yeah, yeah. All right. All right, guys. Yeah, for sure. All right, guys, thank you so much. I'll see you guys next week for another Macro Monday.

Later. Thank you so much. I'll see you guys next week for another Macro Monday. Later.