The Wolf Of All Streets - Bitcoin Tumbles to $115K! Can The Rally Continue? | Macro Monday

Episode Date: August 18, 2025

I am Noelle Atchison, author of the Crypto is Macro Now newsletter. And before you start to worry that you've come to the wrong place, I am stepping in for Scott today. I am, however, you'll be pleased to hear, joined by the usual gang, Mike, Dave, James. Hi, so good to see you. How are you guys? Hello. All good. And before we dive into this, do please hit subscribe if you're watching this on YouTube. The button is just down there.

And if you've already done that, and you like the show, do please hit the like button, which is right next to it. It will help more people find the show. And thank you in advance. So let's dive right in. Mike, I want to hear from you first. Please, what is the macro mood in Bloomberg today? It was kind of subdued this morning. Chris Collins, a U.S. economist, pointed out he doesn't expect much from Chairman Powell at Jackson Hole on Friday.

because last year he used Jackson Hill to tilt towards easing, which started in September. But things have changed since then. It's switching over to Ira Jersey and U.S. rates, expects the market, the market's basically priced for rates to drop to 3 to 3.75 percent, the lower bound of cuts, expects much steeper cuts to happen as things get going. He said, the long end could sell off a bit because of higher inflation, fiscal stimulus, rising deficit. Audrey Shield Freeman has pointed out the dollar weakness,

kind of still her buys, particularly as expects the Fed to start cutting rates later on, as ECB and other central banks will start curtailing their cuts because they're running ahead. So it still expects the dollar to be weaker in the next 12 months. Michael Casper was fitting, our equity strategist, filling in, fitting in for Gina Martin Adams, who, by the way, has left the firm. If you're looking for some really good talent, she's on the market. He says, point out PPI is obviously running hotter than CPP. API is typically a bad sign for operating margin contraction, just pointed out, but, you know, earnings have been hot and strong and been beating a lot of estimates.

But he pointed out that some of those key things are just pointed out to overheated pairwise correlations. Michael's very much of a quant are quite extreme. Small cap earnings have been good, but watching manufacturing PMI's for small caps earnings this week. And then I focus on commodities. I just want to point out how historic this year, I point out how historic this year, by just looking at gold versus crude oil. Right now, it takes 53 barrels of crude oil per one ounce of gold. As we head towards year-end, looking back at year-ends, going back 100 years.

There's only been two any close to that. And the highest close as ever were in 1933 at 39 and 2020 at 39. So we're running historic levels here now, gold versus everything. And I just don't see what really stops gold from going higher. It's got a nice little bull flag pattern. To me, it's just waiting. Essential ETF buyers have shift to major, major inflows. Central banks are still buying.

And I still see pressure on crude off. Some kind of shock's going to take it to not get cheap like what always has three times since 2020 get towards $40 a barrel. So it's, and I also point out, it's not alone. Natural gas is doing the same. Corn is doing the same. Grain's doing the same. And then I ended up with, to me, the key commodity that has to go up and is risk of putting

in a peak. crude oil did in 2008 is copper copper has this very similar situation it's now inching lower still up in the year but if it heads any lower from here it'll put in a peak that might be as enduring as crude oil since 2008 we've never got above that level and then of course i watching that bitcoin gold ratio i pointed out i still you know the range for the year has really been from 25 to 36 recently peaking back downward and i think it's much more likely that um gold's going outperform bitcoin if the stock market backs up a little bit It is August. It's August 18th. Picked some Adulterms. In fact, you know.

We wish they were some adulterms. Mike, I have a follow-up. On oil, what's your sense of how much geopolitics is playing into that weakness? Now, we are arguably hopefully near closer to the end of the war in Europe that we have been since February 22. Hopefully, she says, as the European resident on the panel. But I don't see any indication from that in the oil market. So I wrote about in 2022. I enjoyed pointed out of the best way to really hurt. the Russian war machine has crushed the price of oil. And where did Trump go when he first got

elected straight to Saudi Arabia? So you should be, the markets should be figuring out what's going on. They're trying to do everything they can get the price of oil lower. Now, sir, and we had that little spike on hostilities in the Middle East that got it to turn out near 80. And here we are pushing out 62 below last year's low. And I don't see what's going to make it go higher. So geopolitics are completely coordinated on a global basis for lower prices, I think. I don't see what stops, some kind of shock. And the key thing is if there is some more day taunt in Europe, when the first markets get hit will be natural gas in Europe. But U.S. natural gas has already started pricing for that. The U.S. front natural gas prices back down to 287. That's down 20% in the

year. The price way out in January was up at five bucks just a few months ago. Now it's pushing towards four. And the whole world was, you know, had them pretty colder than normal winter last year. We need another one of those. Those price will go down. So we need some kind of surprise. is geopolitics, I think, are completely coordinated towards lower oil prices, at least for now. And some kind of shock in that system will take it to go higher. I don't see what it is. And that's what we head towards the end of the year. We've already passed peak driving season or near it.

And so the problem is everybody's bearish, which tweaks my, as Scott said, spidey senses of contrarianism. James, do you agree that, or the dollar's heading lower? I mean, look, if rates are heading lower. it's just a question of timing and so of course the dollar is going to be pretty tied to that and oil is uh in the mix too but you know i mean all eyes are clearly on the fed almost 50% of the articles that are on my Bloomberg feed right now or something about the fed or about Jackson hole or about what Powell has done or what Powell might do and you know i wrote about this last weekend and uh my newsletter for those who already read it they they know that

I think that it's a very high probability that Powell uses the data from the last few weeks to kind of have air cover to ease a little bit, but not, you know, they're not going to do a I don't think they're going to do a 50 basis point cut right out of the gates. I think that would be, I also don't think that it's necessary. I think that might send the signal, the wrong signal to the markets, that they're, you know, it might be jarring. Even though the market's priced in a full cut and then some last week, the Fed Fund's futures, it showed over 100% chance of a 25 basis point cut, which means that some investors are betting that or hedging against a 50 basis point cut out of the gates like

they did last year, like Mike was saying. But we're in a completely different position. You know, this is not a federal, this is not a political move right. for an election. This is a, you know, this is, this is a situation where you've got Powell who wants to cement his legacy that's closer to Volker than, you know, than Burns. And so he, what he wants to do is, is kind of have his victory lap, you know, like, like, one of the Bloomberg articles I read this morning was, it's kind of like his valedictorian speech, you know, like he's going to, he's going to say, okay, I did it. you know um he's and often fed chairs we will use this last meeting and this situation to kind of

write their right their history you know their own biography to say what what we did how how we're doing so we'll see it's it's just a different kind of for for those people who are wondering what the heck we're talking about um the fed meets at jackson hole this week uh and it's actually a lot more than that it's called the uh economic symposium everyone's there right from the central bankers from around the world the economists you know leaders there's it's it's become a circus a zoo it used to be a really tight small meeting um and for them to kind of batter on ideas and and and uh maybe float some ideas of policy but now it's gotten to be just a circus and so the world depends on this little town in Wyoming, you know, the small city and, and everybody is standing waiting, waiting to

hear comments from the Fed chair on Friday morning, how to go. You know, how was the barbecue? But really, you know, did you catch any fish? But, you know, and investors used to think, it used to be where, you know, it's kind of off the cuff, a little bit more relaxed. It wasn't, you know, your, you're, you're, it wasn't a formal setting where you've got a podium and a bunch of reporters that are that are lined up for their questions it used to be just kind of off the cuff well this is how we feel and so you might have gotten a little bit more um you know a little bit less guarded answers in the past but now i think it's uh they they use this as a oh this is us off the cuff but it's not off the cuff everything that he says every single word and syllable he utters he knows that people are hanging on

and markets will react to it and so what i think is um you know there are a lot of different dangers to what he could say but and we can talk about that but i believe that he's going to come out and be very you know he's still going to be very guarded with his words and very vague and he'll open the door to a 25 basis point cut, but he will not, he will, he'll pretty much shut the door on a 50 basis point cut and say, look, we're, we're still data dependent. We think that inflation's moving in the right direction. We think that, you know, that the jobs are clearly, there's, there, we have to pay attention to those job numbers. And that's a second mandate, right? So stable pricing, full unemployment, whatever that means. And so, you know, but, you know, but, you know, but,

he's, but I think he's going to say something along the lines that we're still watching the tariffs to see if this is just like a one-time pass-through or if this is going to be structurally higher prices for a while. So we can all have our beliefs on what that really will be. It's a pretty complicated situation. But I think that's where he comes out. And I think that that's what the markets are kind of pricing in here. So to Mike's point, yeah, the two-year Treasury, which is kind of the benchmark for inflation expectations. And actually, well, no, the 10 years really, the benchmark for that. The two years, the expectation for the Fed policy, right? So where are Fed funds going to be over the next couple of years? And this kind of averages out that

because it's on a duration curve. So it averages out what people's expectations are. It doesn't mean that people think that rates are going to 375 in two years. It means it's going to lower than that because it's got to average out your duration over that time, right? So that's that's what you're looking at. And when you had those unemployment numbers and then the CPI coupled with it, you know, you had this two year really drop hard and yield drop hard from just on just about 4% down to 370, 365. And so, but that's that's come up a little bit and people are tempering their

expectations of the cuts. It's a long answer, but that's kind of where my head's at. We also on Friday will get a review of the Fed policy targets when they share their new framework going forward. That could also add some confusion, as if we didn't already had enough. Dave, you've been nodding and shaking your head through James' answer there. I mean, part of me is just disgusted with the notion that, you know, these group of policy Wongs who have basically been wrong for 40 years in their economic projections. You know, 20,000 employees, 900 PhD economists, and frankly, a monkey throwing darts does a better job of predicting what's going to happen to the economy that we hang on their

every word. That said, we do hang on their every word. And markets do react to everything they say. And they will care if he had a bad cup of coffee on Friday morning versus a good one where he's happy. and that's just kind of the world we live in and it's it's sad it's all theater the reality is they are going to print money in order to fund fiscal deficits that it is them and all the other central bankers in my mind the most important story of the last week is the one that we haven't talked

about and it's it's actually a very interesting one it's larry think becoming the head of the world economic forum now we laughed But ask yourself a question, what is the final boss for Bitcoin to actually make Mike say, oops, vis-a-vis gold? And the answer is when central banks consider it an asset. Right now, central banks do not consider Bitcoin a viable asset. They consider it a speculative piece of something. I don't know, you know, they have different words for it, but no central bank has adopted it whatsoever. And they are 100% believe the gold is a strategic asset. And that's, by central banks been buying it.

Ask yourself the question. Having someone who is on record as saying Bitcoin at $500,000 is a completely normal and $700,000 wouldn't be crazy based on the price of gold as it was when he made those, those things being head of the World Economic Forum is relevant. And the answer to that is if you're not paying attention, the answer is of course yes. And it does matter. And the theater that we're all subjected to from the Fed and from, all the talking heads that we see, really, it's a question of where does it emanate from.

Now, I'm not going to get, like, some of the conspiracy theorists on X, there are lots of them who think that these guys are plotting to make us all eat bugs or whatever. I'm not going to go down that rabbit hole. That's nonsense. But they do want to control the economy. And by having somebody who believes that Bitcoin can be a part of that reserve asset conversation as one of the key power he already was one of the key power brokers but now officially so it's very very relevant so yeah we'll have our central bank theater on friday and yes in

september they'll wave his arms he'll take his victory lap whatever i mean look there's three ways that powell could go he could go he could he could identify himself as an anti-trumper with severe trump derangement syndrome and say f you're wrong and affect fight, in which case you'll have a split vote for sure. We're ready to split vote last time. It'll be even worse because there are a bunch of other Fed governors. I probably want to stay on the as Fed governors who won't if they go along with it. Or he could go the opposite way and say, you know what, wave the white flag and do, you know, a 50 basis point cut. But I agree with James. I think that that is exceedingly unlikely, regardless of the fact that some people do have

that as possible in the dot plot. So we're left with what is going to happen is almost certainly what James said, which is to say, no surprise, things move in that direction, and the markets are left of their own devices. So that's my thought on the Fed. I think there are, and what's going on on that part of the macro picture. The other part of the macro picture that people refuse to talk about is the dichotomy between the consumer prices and producer prices, a large part of that is expectations of rent. You may have noticed that mortgage prices have been steadily creeping downwards. And that, because 40% of CPI is owner's equivalent rent, that is why CPI and PPI are diverging slightly. That is one of the reasons. There are some other reasons in there,

some of which are transitory. It's not worth going into, but I think all of that matters. Now, Why does that particular fact matter? That particular fact matters because if you are trying to control inflation and if you actually care about such things as opposed to the theater, then what are you going to try to do? Well, one of the things you want to have happen is long rates to come down. And so you're literally targeting the long end in order to decrease consumer inflation because of owners equivalent rent. And the long end is kind of tricky because mortgages are based on a blend.

there's arms there there's a lot of different pieces we always reflexively say it's the 10 year it's not really true uh it no but they're keyed off of it they're keyed off of it they're totally right 100 percent anyway that's that i think that that's what people need to watch watching the longer end maybe you know somewhere in the two to you know the two the two the two to ten matters the seven and and how it gets there matters uh that's going to matter for a lot of financial assets. Lastly, I want to tee up, Mike. And that is, a lot of people have asked a lot of questions of, you know, what is what is all

this saying as we enter the fall? And the answer is, I think this fall is a high risk season from a market's point of view, full stop, not saying it's going to crash. I'm saying there is, if I were, if there was a crashometer that says probability of crash that it is a double-digit integer, probably a low double-digit integer, but still a double-digit integer. Why? Valuations are extremely stretched. The Fed is likely to be, you know, to kind of start doing what people, what the administration wants, which means people will have the perception of less artillery in the chamber, as it were, you know, behind it. And the fall,

when absent managers want to sell, the question is to lock in their gains. The question is, where there'll be liquidity there. And I think, and I'm talking about the stock market now. I haven't mentioned crypto yet because there's some other things in crypto we should get to, but I don't want a monologue, you know, through that. But I do think that, and it really is interesting to understand whether or not we are entering a risky period in stock assets and extended assets, assets that are directly tied to earnings in the economy, which, by the way, look good right now. And all the analysts are saying earnings look good, if by good we mean continuing to increase close to a 10% clip.

So I'm curious, you know, what are your people around? What are the Bloomberg folks think about, you know, projecting into October of this year, Mike? Yeah, well, that's the million-dollar question. And Dave, I think you nailed it. And we all know, veteran traders, that we all know the volatility is going to pick up. We'll get that dip. Everybody's going to buy it. going to go straight back up, but I do appreciate you mentioning things like Larry Fink. I don't know how

you did in 1998 when long-term capital collapsed. I did very well with clients just noticing patterns and out-of-the-money, Eurodollar options that were, Fed was tightening and these option, these out of money prices kept going higher. I'm like, something's wrong here. We just bought some. They expired and the ones that finally worked went up 10, 20x. It just took a while. I see similar situations now. Yeah, it's a volatile time I see. It's in time of year. We all know you don't want to be buying volatility or buying the market and selling volatility in August. You want to wait to what spikes and it's going to spike. We're getting a little bit of that now.

It's just minor stuff. The key thing I like to point out is the macro. First, look back from the future of the macro, we have a most discombobulating unconformist president in someone, maybe history measures. Now you can, it's not making a point about him, but it's a point about markets. to look at back this period from the history and say, oh, that was awesome. Within the first few months of becoming president, we corrected less than 20% of stock market and recover and everything was fine. All the cryptocurrencies that helped get him elected, we're fine, he went straight up.

To look back at that kind of scenario from the future, I think, is very unlikely. We're going to look back, I think, from the future and expect and have read about a lot more volatility as we shake up the world order. So what's happened so far this year, what's just tilted over the Bitcoin, it's proving it's a risk on asset. The absolute high for the year in Bitcoin came last week when Bix traded at the low for the year, 14.5. To put that in context, the last few years of Bix averaged around 14 or 15 percent. This year, the average is 20 percent. I suspect by the end year it's going to head that way. Yes, I'm a bias. Volta is going up, stock market is going down. I've been

wrong on that. The year so far, the Bitcoin's low came on April 8th. That was the day that the peaked at 52. That was a closing basis. So you see the difference now. That's why I'm sticking with gold. Gold's becoming more and more of a risk asset. Central banks get it. Investors are now getting it. And what we're seeing in crypto, I think, is mass respect to the backsets. It's compared to similar what I saw with the humery of long-term capital management, with the peak of the internet bubble in 1999, with the pink of the Japanese stock market in 1989. And now we're going to start a little bit of a flush. So the question is, how far, how fast? And what are my indications. So I look at commodities. Clear deflationary forces in crude oil, happening in natural gas,

happening in all the grains. We're not seeing those demand forces. That's a typical cycle to a lower price after a higher price. I think we're getting it in cryptos and Bitcoin. Okay, Bitcoin might be different, but I'm sorry, it was one cryptocurrency in 2009. Now there's 19 million, so there's massive supply. I think they're going to get towards a low price cure. Right now it's just a little bit too high. And I think they're the best leading indicator on the planet. So to me, that's the things the watch into the year end, let's put this way. So how do we going to end this year is going to be a major setup? We're going to get some volatility. Maybe it's starting now. It's only August. Let's see what we feel about this in September, October. Does it bottom and go back up?

It basically, the way I look at the stock market has to go back up. Or things like copper are starting to tilt lower. There's really no hope for crude oil. There's really no hope for, you know, even some of the grains, unless the industrial metals, unless the stock market stays lofty. And I think then the whole world facing these tariffs is going to start kicking it in matter. And the one key thing that will start be hurting eventually is U.S. earnings as, you know, U.S. companies pay those tariffs. Not to mention skepticism about the vast amount of CAPEX for the AI productivity boom that we are. James, I want you to run with that. But first, could you open with a view a year from now you're looking back on this year and what was the biggest change?

The biggest change? Well, look, I think. a year from now, liquidity starts to dry up. So where are we? We're in August, 2025, August, 26. I do think we've already recycled people. You know, I think Mike is right. I just think he's a little bit early here.

Look for volatility to drop off the map any minute, you know, or volatility to pick up and for the stock market. market to drop off and have a serious correction. I just think that it's going to take, it's going to take a while. We still have expansion of liquidity happening from central banks and, and we're going to continue to see kind of what Dave was alluding to, some sort of yield curve control along into the curve. And what that means is, you know, we've got, we're still running two trillion dollar deficits. Doge tried, but I mean, it's, it's like taking a couple of deck chairs off the Titanic. You know, I mean, like, it's still pretty heavy. It's going

to, you know, it's still, it's still weighted. So the issue is here that we're running those deficits. We're continuing to expand liquidity to match that. And you have to. It's a first principle. Even if we do get a drawdown, they're going to come back with some sort of fire hose. I don't know if it's a, if it's a money bazooka. It really depends on the kind of downturn we have. But, you know, if you pull back and go really, really big picture, yeah, Mike, he's Trump, you know, like I'm not a, you know, Ra, Ra, I love, you know, Trump and everything he does. He's made plenty of mistakes, you know, and he is unorthodox.

And that's why has people on it. edge. You've got a, you know, a cadre of, of European leaders flying to, to plead with him to be, you know, to be on Ukraine's side here. Whereas all he wants to do is stop the war, you know, and in, well, at least that's what he's, that's, that's how he's positioning. So, but the, the point is unorthodox or not, what does Trump care about? He cares about his legacy. And what is really his biggest benchmark to his legacy, the stock market, you know, he talks about it all the time. He talks about rates because he wants rates down because he wants GDP nominally to go up to

expand liquidity. So the stock market will go up. And we have one year until midterms now. And so we're already halfway there. He can't have a full on collapse between now and midterms. So that collapses his legacy, you know? So I do believe this is going to be extended for a while. I think it's going to be really hard.

This is probably the most difficult part of this cycle is trying to time just how long this could play out. And I think it's going to catch people off guard. And we're going to continue to expand into next year. And so, yes, Bitcoin has been and continues to be treated as a risk asset on Wall Street. no it is not one of the thousands of cryptocurrencies it's clearly separated from that and it's been and it's been separated from that because it has talked about separately from every other cryptocurrency so they all key off of bitcoin the only one that is kind of beginning to march in a different direction a little bit is eth and that's because i think that you know with stable coin bill

that that changes uh the the use case for eth and strengthens it although it's not the only one that could be used for stable coins, clearly. But there is a use case for it, and that's kind of solidifying. But Bitcoin is different, you know, and we're not going to get into that argument again and debate again here today because I think our listeners are tired of hearing it. But let's go back to the point. The point is that it is still being used as a risk asset. You could see it.

It moves in weekends where there's uncertainty, just like this weekend. And on such little volume. I mean, like, this is super unimpressive. The volume was anemic this weekend. So it's not that big of a deal, in my opinion. It was more of a buyer strike than a deluge of sellers. And a short term movement, but you've been stressing that this is a longer term play. Anyways, that isn't just susceptible to U.S. liquidity outlook.

It's a global. Exactly. All central banks are, but they're all keying off each other, you know. So they're all in deficit. it then developed countries and they need to they need to continue to expand liquidity to match it so and the lower dollar helps yeah and will bitcoin will bitcoin be uh suffer in that environment of course it will i mean it's still that's that's where how it's been positioned unless we have something with that's more catastrophic that i don't wish for if we have something that's

more catastrophic which is melt down on the banking system i think bitcoin acts a little bit differently than you would expect. And it would act much more like gold. But that's not what I'm hoping for. And that's not what I expect. So whatever the Black Swan is, buckle in. Dave, could you talk about what you see being the main Bitcoin drivers now as opposed to ETH drivers? Or do you think they're starting to run in tandem? Well, they're definitely not running in tandem. The Bitcoin driver is adoption. That's the only thing that matters. Other than that, we're in a trading range. know, we, you know, we've been in it, I, I'm a broken record about this, but when you look at the, you zoom out even a tiny bit, you know, we broke through, we had a trading range where we had a dip

down into the 70s. It was the 70s through to, you know, 112 was a very serious resistance level that people talk about. And it sat in that range for many, many months. It broke through that range and to become into a smaller range, which by the way is a classic bull market setup. of between, you know, where are we, 112 as support down to up to 122 with some, you know, some flipping around. And, you know, we're settling down, we're in the middle of that range, settling down on low volatility as it waits. If you look at Bitcoin volatility and it is at lows we haven't seen since the summer of 23. Do you remember where we were at the summer of 23? We were in the 20s. In the summer of 23, we had some rather substantive interest.

Its volatility was really low. That was when we had the fake flush from 29 to 26 that got everybody panicked to be a percentage terms. It was a big deal. It was a liquidity cascade, et cetera. We're not seeing any of that right now. But it is relevant because, and by the way, I can coordinate. I was just checking volumes.

Yeah, the weekend volumes were the lowest we've seen in a long time. So it's classic summer doldrums. That's fine. But the reality of Bitcoin is its range bound with low volume, nowhere near enough sellers. And look, I'm preparing some reports on TCA during, you know, July and transaction cost analysis from CoinRout's clients in July. And the amount of institutional orders that were absorbed by the market, both buying and selling, was extreme with costs that would effectively be. cheaper than any top 10 market cap stock. And so there's a lot of liquidity in the market that's there at a certain price. But right now, we're not near there. Now,

Eath is something total. And oh, by the way, there's two other things in Bitcoin. One is the micro strategy effect. When volatility, people do not understand this. And there are a lot of people are about to get caught off sides. I see James Smiley, maybe you know where I'm going with this. micro strategy is a major seller of vol in order to buy bitcoin micro strategy stock has been languishing and all of their their stuff has been languishing as bitcoin volatility plums toward the lows as mike is fond of saying don't buy don't sell the extreme low don't buy the extreme high volatility in bitcoin terms is approaching the extreme low that is what is depressing the prices of the micro strategy complex and a lot of people that are in there there are a lot

shorts that are piling up because it's become a very deregore trade to short micro strategy, which effectively means if Bitcoin volatility picks up, just volatility picks up, that the whole thing is going to create a gamma squeeze. It is definitely building towards that. It's not there yet, but we could enter September with a very, very interesting short leverage play on Bitcoin in a place that people aren't looking. Everyone thinks of the digital asset treasuries, so-called DATs, as the reason for the next crash. I actually think it's the opposite.

I think the Dats are the reason for the next rally because when people are forced to scramble to cover their shorts, and we've seen this time and time again in markets when things get irrational. Now, Ether is something totally different. Ether, if you look at it, had really, really bad news. It was trend, it was dramatically, lower it was a hated asset and into that into that world tom lee jumps in with a really good

track record and a bazooka full of money and so what happened it was an epic short covering rally an epic you know lack of sellers people stopped selling and the the the path from 2000 actually 1400 but 2000 is more of a stable price to 5,000 which is a huge rally in percentage terms i mean you know put that in perspective and bitcoin rallied the same amount You know, we'd be at like 250 right now. So it's a very big difference. But the reason behind it is the Stablecoin bill, yet there was news that the market's ignored in Ether, although it doesn't see, it seems like it's not no longer ignoring it,

that the two, that the largest stable coin issuer that for under the Genius Act circle is not going to use Ether, they're going to use their own blockchain, right? And the news that Stripe is going to build their own blockchain. And effectively, you could get wrapped around the axle about whose blockchain people are going to use, but understand something. This is important. When Wall Street or banks or anybody else wants to use a financial technology to underpin their product set, the most important things they care about are it works and it's cheap. They want it to work because obviously they want it to work.

But they don't want to pay a lot of money to the underlying plumbing if they don't. have to. So then you ask yourself the question, well, they have to. And if they have to, like in the case of a SWIFT, they have no choice because it's the only thing. In the case of stable coins, though, you know, what blockchain they want to use. I mean, Tether, you know, it does most of its volume on Tron. Tron's market cap is just a little bit below Ether. I mean, right now, where's Tron? I have to go down a while to find it. Tron's market cap is $33 billion. $500 billion, ether is over $500 billion, right? So you start asking yourself, the drivers, should it doesn't make sense. Well, the answer is sort of. It's not stable coins that are going to drive

ether. It's the ability to tokenize assets and have them transact easily. And so you have to ask yourself, is that a long term or a short term, and what does that mean and who's going to win? And there's all sorts of uncertainty there. The potential is still huge. There's doubt, but the risk is much higher. And when the market starts pricing the risk of ether the same as the risk of Bitcoin, it's fundamentally wrong. And so I just want to conclude by saying that the $19 million, forget the $19 million, because most of that is pumped dot fund. But when you start talking about a thousand serious crypto, you know, assets that people look at and probably, you know, a few hundred, there's one. And then if we're looking at a few hundred and $299, if you're looking

a 300. Ether leads the list of the 299. Bitcoin is the one. And that doesn't mean I'm a Bitcoin maxi and I don't think there's value in the others. It does, however, mean you have to look at them differently, just like you look at Nvidia different than, you know, than JP Morgan. They're very different. And you can see days where Nvidia goes up and JP Morgan goes down. Sure, there are days when they both go up and down at the same time, but there are quite a few days when they go the opposite. I want to wrap that into what you were saying earlier, Dave, about Larry Fink, assuming temporary directorship of the World Economic Forum and whether this is, you know, where the biggest impact is going to be. I want to throw it first to James and then, Mike,

I want to get your take on that. James, do you think the World Economic Forum is relevant enough for this to have an impact on how global markets develop? Sure. I mean, you know, they, Claude Schwab has created a situation where he's in every single major leader's office continuously in their ear telling him what to do. So remember, Black Rock's think being the head is temporary. So we don't know who's going to be in there long term. And do we know how long he's going to be there, Dave? No, but I've seen all sorts of rumors in innuendo. The problem is is innuendo mill when it comes to BlackRock, there's so many conspiracy theorists. There's so much, which is ridiculous.

I mean, and the W.EF as well, yeah, the dumbest thing you hear, well, the dumbest thing. It's hard because it's confusing to people. It's, you know, BlackRock bought this much, Bitcoin, blah, no, they bought the the ETF bought the Bitcoin and the ETF is bought by the investors, the underlying investors. So, and, you know, yeah, you have a custodian. They're the creator of the ETF and, you know, they're the manager of the ETF. But the owners, it's just like the argument that institutions are only acting for themselves. Well, no, the institutions are acting for their underlying beneficiaries.

So if you have a foundation, yeah, it could be a small number of beneficiaries, if it's a foundation for some sort of, you know, art museum or something like that. but if it's a if it's an endowment for a university, there's a lot of beneficiaries there. And then if it's a pension fund, you know, a retirement fund, well, there's thousands or, you know, tens of thousands or sometimes hundreds of thousands of beneficiaries. It could be millions for some of these companies have been around forever. But there are thousands or tens of thousands of beneficiaries to those pension funds. So that's one of the things that you have to look at,

that when when people get upset about institutions being in the market and doing things, it's what goes back to what Dave was saying, which is the most important, you know, development, long-term maturity for Bitcoin is understanding. As more institutions get into this, there's more understanding, which goes full circle back to your question, Noel, which is for Bitcoin in particular, I think it's very important because it brings it straight on to the biggest stage in the financial leader world,

meaning of the leaders of all these central banks and all of these governments, they have no choice but to listen now to why Larry Fink thinks that this is an important asset, why it is separate from everything else and why it is digital gold. And so they have to hear it. It's kind of like when Microsoft gets, they have one shareholder that says, you need to hear Michael Saylor tell you why you should have Bitcoin on your treasury and they say fine he literally has two minutes you know we'll give him two minutes on the board and that you know to go through his presentation and and it's just we'll we'll hear it but we're not going

to hear it well now if you have black rock on this in this position which unfortunately does wield a lot of influence and power then these leaders are going to have no choice but to hear it and it's going to be all over the place again central to many conversations about global economy and so that is a very important thing because it it's not that it just gets it gets shoved down people's throats it's that they have no choice but that's what's on stage that's what they have to hear about and if that's what you know all of the the mainstream media decides to focus on for a while then you have no choice would hear it. And that's kind of what the same situation here, in my opinion. And he's also known

for insisting that everything will be tokenized sooner rather than later. Mike, I know you touched on this earlier, but Dave's quite right. This is an overlooked development. So could you expand a bit more about why you think Fink is going to be relevant in his W.EF role? Well, what's first of what you said about tokenization? That's exactly right. It's someone who came from futures and being in the trading pits in Chicago and all the New York traders just to get pissed off when the futures market in Chicago move the treasury market. That's happening and it's just a better technology. Token nations is overwhelming. It's a key trend. I'll continue to point out in this space. It's the proliferation of crypto dollars now or stable coins. Now, yes, most of that's used to

trade cryptos, but all that's going to treasuries. It's a good thing. Finally, our Trump administration figured it out. But just remember what Larry Fink is. He's in a great space. The thing we used to say when we're in the pits, we're selling shovels. He was great. He's, you know, he's making money because people are buying his products to track ETS. So let's dig into some of the things that's been said here and what's happening now. Everything that Dave said about how market's so bullish and thing is exactly very similar. Mirrors what I remember hearing in 1999 with Internet sex in 2007 and 2006 with the housing market.

He heard it before. Sounds exactly the same. It's the hubri and it's the human nature of bubbles getting. towards extremes. So Dave also mentioned low volatility in Bitcoin. It's actually not very low. It's volatility in everything. So if you look Bitcoin 60-day volatility, it's at 26.6%. It's somewhat low, but divide by the S&P 500 at 10%. That's 2.6 times S&P 500. The average over the last five years is three. It's right there. See what matters. The stock market is all that matters. Then we point out over earlier about something about, you know, Trump and really into how wonderful

the stock market's doing, but just remember where he came in the president. In history, there's only one president in that country had a similar level of stock market capitalization. It was Herbert Hoover. Didn't work out so well. So that's my point is these things are all trickling down to things we've all seen before and prudent investors. Don't just buy highs and try to put treasury and Bitcoin in the same sentence, which is an oxymor. And treasury means treasuries, not Bitcoin, a highly speculative digital asset. And then I'm sorry, I come from an index environment at S&P. When we create an index, we use a an index of things that are similar. Well, there's things called cryptocurrencies, and maybe there's thousands of it.

Bitcoin's just one of them. You take out the stable coins because they don't pay interest, and that's the key thing to remember about tokenization. tokenization is going to bring on-chain stuff that plays interest, tracks actual markets, actual physical, actual markets that have earnings. Well, we have thousands of cryptocurrencies that are just numbers on the screen. They track nothing. They have to hope they're wonderful.

And I just point out the key thing to remember Michael Saylor, I completely agreed with him in 2010 when he noticed his Michael Strategy company at that time, which was a software company, was not going to make it and tilted over the Bitcoin and did a great trade. It was awesome. He got a 10x. And now he's doubling down at the highest levels. And markets at very expensive levels in August. Not a good idea.

I like to say we're going to at least get a little bit of a flush, maybe 20% correction in Bitcoin. Remember, 50% corrections are normal. But now we're at the stage where this whole asset class, particularly Bitcoin, had systematic risk. I didn't say systemic, systematic risk, which I have never seen. If it does what's normal, drops 50%, it takes the whole system with it. It's severe deflation, falling deflation. We've seen signs of that, certainly in China. Right now, they have minus 3.6 pPI.

Their money supply is running double the U.S. about $45 trillion. And their debt to GDP by some essence is 300%. In Japan, it's 200%. The world's tilting that way. The whole world is dependent on U.S. stock market saying lofty. And we have the highest correlation ever between cryptos in the stock market. And we have hubris and signs of 2019-99 exes is at the peak. I say stick with gold.

What's been right so far, gold, I think gold's going to continue out before. Speaking of, speak. Sorry. I just have to point out. I just have to point something out. Look, I was trading in 1999 and 98 and 2000. And Bitcoin, in fact, either kind of had a shadow run that sort of looked like that, maybe if you kind of squint at it through one eye. But we haven't seen anything close to

euphoria. We've seen no margin buying in the crypto complex. I mean, funding rates have been below the below standard, below average now for so many months on end. You know, even in the liquidations over the last week, we saw something we've never seen before. We've seen, in fact, even the last 24 hours, we see ether with double the amount of liquidation of Bitcoin. Bitcoin liquidations are are at crazy low levels because there's no leverage in bitcoin very very very low so every time you talk about hubris and euphoria it's just missing the fact that there is no they're there it's just not true now there will be times when it will happen we've seen it before i've alluded to several in this conversation but that's just not there so other stuff you talked about fine you know

we'll let noelle drive the conversation but no i'm sticking you can you're entitled to your own opinions not your own facts there is no froth in any measure in any measure in any metric in Bitcoin other than maybe price. And that's a matter of opinion. But there's certainly no leverage in the system. The liquidations are small. The fundings, open interest, everything is low. And volatility, predicted volatility in the Bitcoin market is at a Bitcoin oriented low. Okay. Relevant to that, I wanted to do a sidestep and pull on something that blew me away last week and does tie into everything that we've been talking about. And that is the latest Bank of America Fund Manager survey, which has for the first time this cycle long cryptocurrency.

in the most crowded trade section. Remember last cycle, Long Crypto was a regular top-of-list vote from fund managers, and these are global fund managers surveyed as the most crowded trade. Now it's back for the first time this cycle, which suggests that maybe there's a teeny bit of frost coming in, but really not much because only 9% of respondents voted that as the most crowded trade, whereas 12% said Long Gold was much more crowded. Now, what is interesting there is that most of the respondents don't even hold crypto to start with, which is another tailwind that I think is largely overlooked.

And who wants to run with that, who's actually paid attention to this? When the tide goes out, we'll see who's wearing clothes. Simple as that. Warren Buffett's way overweight cash for a reason. He obviously doesn't right the lock. I like the rock. I hate the fact the rock's outperforming and everything. But if you look back, just the S&P 500 versus S&P 500 total return, Stocks, rocks from beating S&B 500 for almost seven, eight years, the same level.

I mean, that's not good. As Dave knows, he doesn't like when I pointed out, but you have to go back to 2021 for the same level in Bitcoin versus gold. These are bad signs with markets at August, the all-time highs and a new president that's completely dependent on the stock market in Bitcoin going up. And early on, so I just, you know, to me, that's... I mean, Noel, the thing that's interesting here is gold beating the stock market is another way of expressing the stock market denominated in dollars, and there are more dollars, and gold captures the effect of more dollars. Full stop. That's what you're talking about. I can't repeat it for the thousandth time on this show. What I can say is that Bitcoin in that conversation, it's all about adoption. In 2021, the Bitcoin network was one-sixth. as strong as it is today, one sixth.

And so, yeah, I mean, am I saying Bitcoin's going to six X from here relative to what it is? I mean, I suppose Larry Fink has that. That's the middle of his range, by the way. It's not like it's a crazy number. Is it going to happen immediately? Of course not. Well, I shouldn't say, of course not. Unlikely is probably the best answer.

It's, you just have to look at it now. Now, when you talk about crypto, though, Ether had huge inflows, right? in, you know, over the last week, I, I'm not told on Ether. I've been, I wouldn't say I'm bearish on it particularly in the long run. I don't know. I just think that on a risk-adjusted basis, Ether's price seems very expensive to me on a risk-adjusted basis compared to Bitcoin. That's the way I would phrase it. I think that a large amount of it has to do with, will Tom Lee and others, you know, continue, will those inflows that came in last week be sticky or not. And that's going to be a fascinating topic. I don't know the answer to it. I just don't see it

in the same breath. And that makes me, I had a very convivial conversation with Max Kaiser on a spaces last week where he and I were in agreement. Now, in the past, there are a couple things he says that drive me nuts. But the truth is, is that if you look at the value proposition for Ethereum versus Bitcoin, they're very different. Now, he, of course, calls, says all sorts of really nasty stuff about every all coin whatever but you know it is we are getting to a point where where there's different investor cases for different cryptos just like there's different investor cases for different stocks and you have and we could go through all of them but this is a macro show so that's not really the point the point is is that on the macro level saying they're all the same probably

not a good idea speaking of altcoins i've been asked a couple of times over the past week does the Ethan Run signal the beginning of Altcoin season. And I'm going to go on a limb and they say most of us here would say no. James, can you expand on that? What would you look for for a sign that out coin season is starting? Well, I mean, look, I'm not an expert by any, by any means on all coins. I've only traded a handful of them that was in the beginning of me even entering this whole space and trying to understand it. So I don't trade any of them ever. That's just me. But But, you know, what I do know is that Bitcoin is the bait, that is the ballast for all of them. So if you're looking for a clue of where, where everything goes, look to Bitcoin.

And if Bitcoin rips higher, well, then of course, all coins are going to follow. And they're going to, they're going to outpace Bitcoin some of them because they have a higher beta to Bitcoin. It's not the reverse. and that's um you know now i do believe that we we could have a downturn here in the next couple months we it's just we're in the summer doldrums like we're literally all on vacation here you know i mean i'm on vacation but like the the market is so quiet this drawdown um this weekend from bitcoin was again it was on anemic volumes it's a buyer strike not a herd of sellers it's a big difference and so people are just kind of stepping back to see what's going on they're they're nervous

and it's and they're the ones that are standing around because there's no like there's just not enough people around right now there's not enough volume um and as we get into September we this is classic you know the end of the year window dressing season where portfolio managers have to put their they reposition their books to um either take in some gains and them in or get some of losers off the books or whatever it may be and just reposition it. So when they come up for review, then their book is positioned the way they want to be able to talk about it for their bonuses. I mean, that happens every year.

This is how institutions work. They get paid at the end of the year. And this last quarter is when things are priced out. So that produces a fair amount of uncertainty in repositioning in the markets, typically in September, October. And that's, that's just the reality of, of, you know, the financial market. So. Yeah. And we got quarter end coming up. And then there's always the dreaded October, which is generally when big crashes tend to happen to start. I have no idea why. There's also a argument to be made that outcoin season already started a while ago with

the meme coin frenzy. And will any new altcoin season be any different from what we've already seen? Again, these are, this is not necessarily going to be what we're going to be talking about here because it has nothing to do with macro except risk sentiment and liquidity obviously. Can I think one point, Noel, which is a large part of all coin season has to do with their, when you're quants when they look at markets measure two things. I mean, you know, people talk growth and value, but really it's momentum versus mean reversion.

All coins are the ultimate momentum play. People buy them because they're hoping that it will continue to move. And when they stop moving, they tend to go in the other direction. right so the question is is it a pause or is it a stop and that you know if you're asking is there going to be an all coin season an all coin season is really just an excessive amount of momentum playing in the market right that is the key is understanding how these markets Mike Mike one of the points he Mike makes all the time which is 100% right is that and this is true about crypto crypto is a trader's market there are investors and

Bitcoin. Now, there are some investors in Heath and other places, but there are traders love these assets because of their volatility. Now, what does that volatility mean is it becomes self-reflexive? When momentum moves, they move. When it stops, what happens next? And it's instructive to look at what you see here. And I think that we'll get a pretty good idea in the next three to four weeks as to whether or not there's any momentum that's going to be reintroduced into this market, one way or the other, because that is what matters, because these things do tend to feed upon themselves on the macro side, because momentum is quite literally how almost the vast majority of crypto traders play it.

Yeah, especially in such a narrative-driven market. Now, we've only got a few minutes left, and so I want to go from the medium-term view to the short-term view again. And let's end with what each of you think will be the big takeaway from Jackson Hole on Friday. And notice that again, this is on a Friday. There's only one day of trading before we all take off for a nice, well-deserved weekend. But Mike, start with you. What do you think the main market takeaway from Jackson Hall will be?

Matt, I think it'll be a big fat nothing, and they're not going to do what they did last year and hint at cutting rates because things are signaling that way. I don't think he's going to solidify the view of cutting rates, probably because we still have a lot more data to see before we get to the September meeting. Dave. I mean, honestly, I don't expect a whole. lot i think that you know we are i just think it's more of the same i mean who knows people will parse his words and just like you know when besent said an offhand comment last week that took bitcoin down who knows there could be offhand comments that matter but my my dead middle of the range

is no more of the same james yeah i think that um he's going to point to things going the right direction because that is that that's good for the narrative of his legacy and in saying that it's going to open the door to that first september rate cut but it's not going to be like he's not going to solidify it like mike says he's not going to come out and say we're definitely cutting because then the the market will rip and the you know the the rates will the probabilities will go to 50 basis point cut and that's not what he wants but so he's going to temper it he's going to remain You know, he's going to continue to lean on that line that they've been leaning on, which is we are data dependent. And it's going to leave the door open to him to change his mind when we get another CPI number, the PCE number, another PPI number, unemployment numbers, all before the next Fed meeting.

And so he's going to leave it open for him to pull back and say, the data is not there. But as it stands now, all things being equal, likely a cut is what will be gleaned from his comments. But again, the most important thing is the stuff he's not going to say. So that's really what you've got to pay attention to, in my opinion. To hear what he does is a? Yeah, exactly. Of course. And I have one quick follow up for James and zooming out a bit.

Besson said last week that he thought the Bank of Japan. should be raising rates now. Here we have the U.S. Treasury Secretary getting involved in foreign central banks economic monetary policy. What's your take on that? Is Bessent just trying to talk down the dollar or is he just posing for the TV? Yeah, I mean, it's a little bit of both, probably, you know, but like Japan is, Japan's in just a totally different situation here. Maybe they're 50 years ahead of us, but everybody's turning Japanese, just like Mike said. And I think, you know, we Bacent is trying

to help rain in that situation there too. You don't want hyperinflation anywhere and that would be bad for the entire market. So yeah, it's just, I think it's just, again, it's just posturing.

Yeah, let's hope so because things are changing, but we can only take so much change at a time, right? That's all we have time for today. Unfortunately, I could, as always, talk to you guys. all day, but I know we have things we have to get back to. So seriously, Mike, Dave James, thank you so much. Thank you all out there for joining us today. And don't forget, tune in again next week.