The Wolf Of All Streets - Bitcoin Will Get A Massive Pump When Spot ETF Is Approved

Episode Date: October 17, 2023

Fake news about approval of the spot ETF sent Bitcoin price up to $30,000 immediately. I am talking to the two most important ETF people in the world right now: Eric Balchunas & James Seyffart. Benjamin Cowen will join me to break down what will the Bitcoin price look like when the spot ETF is finally approved for real.  Eric Balchunas: https://twitter.com/EricBalchunas James Seyffart: https://twitter.com/JSeyff Benjamin Cowen: https://www.youtube.com/channel/UCRvqjQPSeaWn-uEx-w0XOIg ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEK DAY! 👉https://thewolfden.substack.com/   ►►OKX Sign up for an OKX Trading Account then deposit & trade to unlock mystery box rewards of up to $60,000!  👉 https://www.okx.com/join/SCOTTMELKER  ►►THE DAILY CLOSE BRAND NEW NEWSLETTER! INSTITUTIONAL GRADE INDICATORS AND DATA DELIVERED DIRECTLY TO YOUR INBOX, EVERY DAY AT THE DAILY CLOSE. TRADE LIKE THE BIG BOYS. 👉 https://www.thedailyclose.io/   ►►NORD VPN  GET EXCLUSIVE NORDVPN DEAL - 40% DISCOUNT! IT’S RISK-FREE WITH NORD’S 30-DAY MONEY-BACK GUARANTEE. PROTECT YOUR PRIVACY! 👉 https://nordvpn.com/WolfOfAllStreets   ►►COINROUTES TRADE SPOT & DERIVATIVES ACROSS CEFI AND DEFI USING YOUR OWN ACCOUNTS WITH THIS ADVANCED ALGORITHMIC PLATFORM. SAVE TONS OF MONEY ON TRADING FEES LIKE THE PROS! 👉 http://bit.ly/3ZXeYKd  Follow Scott Melker: Twitter: https://twitter.com/scottmelker   Web: https://www.thewolfofallstreets.io   Spotify: https://spoti.fi/30N5FDe   Apple podcast: https://apple.co/3FASB2c   #Bitcoin #Crypto #ETF 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, we experienced the full emotional roller coaster of being crypto traders, investors, and enthusiasts in a matter of about five or 10 minutes. And you all that are here participated in that with us, right? It was macro Monday. I got the news that the BlackRock iShares ETF had been approved, got really excited, started FOMOing into excitable tweets on Twitter or X. And then moments later, you guys saw me in real time start to smell a rat. And then one of today's guests tweeted or X'd a few moments later that he thought it was fake. That was, of course, James Safer. We have him here today and Eric Baltrunis, both Bloomberg ETF experts here to point fingers and laugh at us

and make fun of our silly industry for being idiots. If you guys read my newsletter this morning, it started with telling you all to go to the mirror, put your hands into the sink, get some cold water and wash the cloud makeup off your face, because that's how I personally feel after experiencing that yesterday. We're going to talk it to death, I'm sure, today. And then after them, we have Ben Cowan into the Cryptoverse coming to join and give his views on the market. What a show. Can't wait to start. Let's go what is up everybody i'm scott melker also known as the wolf of all streets before we get started please subscribe to the channel and hit that like button. Yes, yesterday was absolute carnage and mayhem. It was a bit encouraging, I guess, to see that Bitcoin price settled in slightly above where it started the day. And before all of that nonsense was already up about 4%, still trading at a critical level,

just over 28,000 right now. As you guys know, maybe I'll just really quickly before I bring James on, I'll bring up the chart. If you're looking at the weekly chart, we're still right under that 200 MA and trading between the 25,000. We call that 31, but we also have a level right around 28,600. Still kind of in the same place and trading slightly. If you're looking at the daily, at least we got above that 200 MA with a close finally, but that monster wake up really scary. Either way, what I want to talk to Jamesames about right now we can bring him on hey man how did this happen like what complete insanity what was this like for you because you guys have become the go-to voices for every media source for anything regarding a crypto etf especially a bitcoin spot etf You guys have been

making the odds for a while there. It was 75% this year. Now you're saying 90% by January 10th. I have to imagine that you were like the president in wartime yesterday, just getting absolutely inundated. Yeah. I tweeted this out and I was talking to you a bit about it. I was actually like away from my desk when I saw the tweet, because I was scrolling through Twitter and then somebody DM'd it to me. I don't even remember who, I should look that up. And then as I'm looking at it, Balchunas texted me and I literally walked,

like basically ran back over to my desk and started scouring. And for anyone who's familiar with the Bloomberg terminal, you have like the instant Bloomberg messages. Think like AIM pop-ups like back in the day, if you're old enough to remember that. And I was just, as I'm like scouring the SEC website, I'm getting spammed with Twitter DMs,

people tagging us in these tweets, like Eric James, is this true? We were pretty quick to come out and say this. We don't think this is fishy. And I mean, it took me about 10, over 10 minutes to tweet it,

but I was telling everyone that I don't think it's true, but I didn't want to tweet it out to the public and say like, Hey, this ain't true. And then find out like later on, like, Oh, I missed something. So I wanted to like do a little bit of due diligence to make sure like it smelled fishy from the get-go seemed pretty unlikely that it would have happened the way it did. Uh, or they thought it was child point telegraph thought it was going to happen, but, um, fortunately we were right.

Let me ask you this question then, if it was true, how would you actually know? Because clearly you didn't see whatever confirmations you did need from the SEC, from your terminal, from basically anyone. What we had was effectively one tweet from Cointelegraph, which was picked up by Benzinga, which was picked up by Reuters, which was then hit as reportedly on the Bloomberg terminal. Right. And last week, the Grayscale news that Grayscale had lost in court was reported by Benzinga, picked up by Reuters and then hit the Bloomberg terminal and turned out to be true. Yeah. So that was part of the reason Eric actually tweeted that image,

like before I even said anything like he was like under the Cointelegraph thing, and I was like, this seems fake news to me on that. But he tweeted out the image on the Bloomberg terminal. But to be clear, the way the Bloomberg terminal works on those things is we're tied into the wires. So we get all the Reuters, any news that goes over the Reuters wire, any news that goes over a lot, New York Times, pretty much any major news source is going to come to the terminal. So it wasn't that Bloomberg vetted it and was like, this is true. But it did go over the news flow on the Bloomberg terminal. So this went far and wide. Right. So how would you know that it was actually real? So the real way is basically the way that I check to look for those delay orders, those disapproval orders. There's an SEC website where you can kind of look at the, it's called the self-regulatory organization rulemaking website,

but there's other areas where you can kind of get a hint of like what's going on. And there was nothing posted on anywhere. There are some hiccups at times where things don't get posted in the normal scenario places. So I was like, literally you can kind of back into them by guessing URLs potentially based on like the way the numbers have gone. So like I literally was just testing like 50 random URLs by increasing the number by one in Excel a little bit here and there. So like there are some like back hack ways. There are some people who are much smarter at HTML that you can see right when it's posted. But for the most part, you go to the SEC website, self regulatory organization rulemaking, and you would be able to see disapproval order

or approval order or order to institute further proceedings or something that says delay. That's where we see all these orders. So an approval order would be there and there is no approval without seeing some sort of official SEC order giving the approval to do this. And there was none of that.

And honestly, there was no inclination elsewhere. I also looked, there would have been an update to BlackRock's S1, which is basically the prospectus that says like what you're investing in. There was no updates to that either, which technically speaking, you don't need that updated to get this 19 before approval, this request process they're going through. But in order for it to launch, that would be updated, need to be updated with some more information. So the fact that nothing had moved on that front also gave me a little skepticism. But yeah, basically, you would go to the SEC website and you'd see an actual official order from the SEC. I see Eric is here as well. Good morning, Eric. Good morning. Hi.

Just wanted to walk everybody very, very quickly through how this happened, because we didn't talk about that yet. Just so you know, guys, Cointelegraph, as I said, tweeted this. They then four or five hours later posted this. Cointelegraph is among the best, I would say, two or three sources of crypto news media, which is a wild indictment on how trash crypto media is, if you look at how this happened. Just to give you guys the brief notes, apparently their reporters like to scour telegram groups for news. And then it was posted in a telegram group, completely unvetted. And basically someone decided to run with it, post it on Twitter. Then it went everywhere you can imagine. And then they obviously had to retract

it. That's the quick version. But something really curious I want to share with you guys. I don't know if you saw this, but right after this happened, my partner, Mario Noffel, as you guys know from Crypto Town Hall, was on stage with the CEO of Cointelegraph. And they asked her about it. And I want you to see what she had to say really, really quickly. Social media posts. And yes, this was disastrous. And this is an example of what cannot happen.

But this is what happens when we are having constant pressure to be the first with every news. And this is not a problem of of journalism per se it's a problem of the society that and of the technology i'm talking about indexation on google and talking about social media where if you're not the first you're the last mario literally sent that to me in a message while it was happening like on stage and said, you're not going to believe what this lady just said. Okay. Just to wrap for everyone. And then we're going to talk more about the ETF itself. She basically just said, it's not our fault.

It's your fault for believing it. And we don't have to report accurate. We just need to report first, right? That's the gist. So how do you guys then vet things like this that come in through your terminal? You see it on X. I mean, Eric, this is insanity. Have you ever seen anything right that's the gist so how do you guys then vet things like this that come in through your terminal you see it on x i mean eric this is insanity have you ever seen anything like this with a etf news um well i mean look to be honest coindesk when i shares filed for their spot filing coindesk had it at like nine in the morning i remember seeing it going and quote tweeting it say this can't be true can it and i And I just assumed they were, this was like that. That was true. So the crypto trade publications, to their credit, have broken a lot of stories that the mainstream media has not.

So when I saw it, I thought, okay, well, I said, I expect to see this headline sometime in the next few months, but this felt early to me. And the specificity of iShares was a little weird, although it could have come from an insider at BlackRock. And Cointelegraph has 2 million followers. So both James and I were like, skeptical, but we have to sort of start talking about it. And then I went on the terminal and this is where it got weird. I did an NHGO, which is all news headlines news headline search for i shares bitcoin and saw benzinga uh saying the i share spot was going to be approved and the source was reuters now three days ago on friday the same thing happened benzinga quoted reuters saying that the sec was not going to appeal and that was a true story and then someone had the reuters

screenshot so those two things coindesk breaking many stories and the thing on Friday and this being parallel in the terminal, I gave it a serious look. I'm sorry. Some people are now looking back and trashing everybody who talked about it. tweets were like this is happening it was more okay here's another source i said i was still skeptical but as it kept going and going uh over it was only like a 30 minute period and then bam um eleanor i think that's her name yeah it's a black rock immediately they said uh this is not true and so she's credible we know her and right, it kind of put the lid on it. And we immediately put that out. And then when the SEC denied it, so I felt a little like a pinball in a pinball machine doing my best to sort of figure out what the hell's going on. But to everybody who's like playing Monday morning quarterback here and like thrashing everybody for this, I tell you, crypto trade publications, as wacky and crazy and excitable as they are. We've been ahead of a lot of things.

And it was on the terminal in a headline from Ben Zigga quoting Reuters. So I will just sort of like put those two things out there to sort of explain why I wasn't just like fake news 100%. I did give it a serious shake i also thought it's possible that and this is a possibility that blackrock someone inside there because remember the sec is engaging with all these issuers so like just kathy wood talked about her experience with the staff blackrock and the sec are talking and the sec might have said something to BlackRock that had somebody thinking this is happening. And that person may have called Cointelegraph or said it to somebody. That's a very and that it might have been a month from approval, but the SEC would have signaled.

So you can't dismiss this entirely. That said, looking back, Cointelegraph getting it from this this random anonymous person in their chat. On not even their chat. It's a Telegram chat that they like to crawl. It's not even theirs. They did a lot to destroy the credibility I had for crypto trade publications. But to be honest, Coindesk built up most of that. So I think my takeaway is I'm a little more skeptical of everybody but Coindesk, maybe. I also think the block is pretty good. I don't know all of them, but Cointelegraph was one I didn't have a lot of history with. But again, these other crypto trades had built up some credibility.

So her response was awful. But then they tweeted out a transcription of how it happened, which was embarrassing for them. And I give them credit for that. So I think the way they handled it was mixed. I also figure out if I'm going to write a book about this 11 year saga, I'm going to write a whole chapter about this one because it's just such a fascinating case study on how the media works. And I'm going to title the chapter. If you're not first, you're last. I mean, she literally quoted Ricky Bobby. I mean, she literally quoted unknowingly, probably Ricky

Bobby from Talladega Nights. I don't ever know what to do with my hands. But yeah, so I brought up that story before. Kathy Wood says it's Gensler who's standing in the way of spot Bitcoin ETFs. Okay, we've seen this sort of anti-SEC attack before. I don't really want to dig into that, but what she also interestingly said was that

we should see a whole bunch of them approved at once. Right? So I have to imagine that was one of the signals for you guys is that this kind of one stood out. Obviously, it also seemed to be well outside the bounds of this very deliberate approach that they've been taking by, at this point, questioning certain ones, kicking the can down the road till January 10th. As I mentioned earlier to James, you guys had a 75% chance of this year. Eric, I know you have a steak dinner that you're going to have to pay for if it's later than January 1st, but now you're thinking 90% by

January 10th. Is that because ARK, basically they have to give a final answer on ARK by January 10th and then maybe we'll see a slew of these approved at that time? Yeah, I'll jump in here a little bit. So we always thought that our base case was we thought that ARC and 21 shares, which is the January 10th deadline, was going to come due. And the SEC wouldn't be able to deny under the rules that the reasons they've given in the past. The court basically wiped that off the table. And there's very few ways that I could see them doing it without ending up in court again. Right. So we put year end because that's the way we were looking at it. But we

always thought like early 2024 was likely because it isn't by 10 days. Nobody. I mean, maybe the crypto media report. Yeah, exactly. But I think you get credit if it's January 10th. Yeah. So like we just think it's unlikely for them to deny ARK and 21 shares on January 10th and all of a sudden approve in March. Right. Like they're not, I just don't think that's going to happen. The other thing is, like you said, it was kind of fishy because as we've been saying, which is what Kathy said, which obviously is what the SEC is signaling to people, they're going to let a whole bunch go at once like they did with the Ethereum futures ETFs. So I was like, why is just BlackRock in this headline?

I don't think that's likely. I know a lot of people think like Larry Fink has an in and he's going to go first, but like Larry doesn't want to be looked like BlackRock would much prefer not to look like they have super preferential treatment. Like they'll be just fine going out with everyone else with their brand name, their cachet. The wind just being BlackRock. Yeah, exactly. They don't need to be first in front of everyone. Like that would honestly be a net negative for him.

Everything you said is entirely accurate but if you've been following everything you realize that most people think there's going to be multiple launched at once right that's why the fact that it was iShares even though that was suspicious actually gave it credence that it was from an insider at BlackRock because they wouldn't know about the others so in other words you could argue the opposite in terms of whether that information was valid that's all i'm saying but i agree with you it'll probably be on a common clock and just real quick on the on our odds of the bet when we started this um we actually had the date thing that arc was due uh right around christmas we actually saw the public registry we and we realized it's actually january 10th but even with that we're sticking to 75 by the end of this

calendar year and then we're going up to 90 by January because of that January hard stop. But I do think in terms of the spirit of our odds, oh, late 2024 or years, it'll be years. I'm looking at a January 10th as sort of us on top of this. And our odds were largely on the money, especially because if it is January 10th, I bet we hear about the approval in 2023. I bet the word gets out that, okay, they're doing this and it's lined up for January such and such. But to James's point, if they don't approve on January 10th, they have to now come up with an entirely new reason. And if that was their plan, they wouldn't have reached out to the issuers with comments

and said, here, can you tweak this, do this, explain this, put this disclaimer in? And so we feel like they're probably going to do what they did with Ether, which is accelerate the rest of them, move them up to Arc State, and then let them all go out in two rounds or maybe all in the same day like Ether was, whoever's ready or whatnot. I don't know, James, do you have anything different than that? That's sort of, I think,

where, why we would call it. Even though I'd have to buy Todd dinner if it was technically January 10th, even though he was a good guy to admit that if the bet was as of the end of January, he would have still taken the over. I don't mind eating dinner with him. That's the good news. He's a nice guy.

And so, but that, I feel like minus that technicality of owing Todd the steak dinner, I feel like we were right to have such optimistic odds. If again, it's approved by January. If they deny, we'll have to eat crow. We'll have to sort of say, well, we, you know, we miscalculated this. 10% man, I play poker. I've lost my pair of aces. I've lost a pair of twos. Unlike the Cointelegraph editor-in-chief, we will take the L. By the way, I want to clarify. I just got this. She's the chief editor, not the CEO. I think I

might have called her the CEO. She is the chief editor of Cointelegraph. Doesn't make it any better, but we've had enough fake news around here to make sure that I don't want to get attacked. Now, I want to bring up this article here. It doesn't show you right now, but James, when I just looked at it, it was you on this screen in a very familiar vest in front of a very familiar background. But what we had, obviously, was this move. Bitcoin kind of pushed up to 28 000 before this news maybe that was somebody who had inside or was doing something but then we went immediately like teleported from 28 to 30 right yep and and right back down once the news was kind of proven

fake but what's interesting here is maybe this does give us a playbook for how traders are going to approach this etf launch when it happens I sort of was dismissive, honestly, had the opinion that, well, we saw the 25 to 31 move when BlackRock filed the application. Maybe we just kind of see the same thing when it gets approved because everyone's expecting it. But $2,000 in five minutes, that kind of changes my opinion. Do you think that this is telegraphing when we do get this approval, what is likely to happen and maybe bigger? I know you guys aren't price action guys, but that was a pretty astounding move from an asset simply on this one piece of news. So my view is like that kind of hinted to me that like the, our, our view of how likely this

is to get approved is not in the markets. Uh, like people just were not expecting that and were very bullish on it. So that, that, so one, I don't know if the fact that this just happened and people are paying closer attention, like this might be more priced in than it was as cliche as that sounds. Um, but we, we were on the record and both Eric and I and nature AC who runs the ETF store. Um, basically we thought this, a Bitcoin, spot Bitcoin ETF would be the biggest launch in history from a grassroots perspective. There's some funds that launched with like

tens of billions of dollars from institutions, but we thought this would be like, they would get over a billion a day. Now, if all of them launch at one time, it might not, like they kind of build momentum on each other. If there's one ETF that's launching, volume gets volume, gets more flows. That's what happened with Biddo. So if a whole slew of them launch, maybe we don't see like the largest launch of all time. But I've still and always will believe that this, like when this happens, it's going to be a big deal. But yeah, I think like people are more priced in and ready for it to happen. I don't know if it'll, I think there will be a huge move up, but I don't think it's going to send us anywhere. Like I heard, I saw people saying when we finally going to get it, it's going to send us to 50,000. I think one thing to say is when Biddo launched,

it was a huge Bitcoin bull market in October of 2021. That was more price sending flows to the ETF versus the ETF sending price to Bitcoin, if you know what I mean. It was more the price of Bitcoin and the power of Bitcoin's price movements that was driving Biddo getting over a billion dollars in two days, then vice versa. And I think if we don't have like a major raging bull market, we're not going to see that same type of like visceral demand, but there is going to be demand. People are going to leave those futures ETFs. GBTC should be able to convert. So who knows what's going to happen there if there's people hedged. So basically what you do is you go long GBTC and you're short Bitcoin. If all of a sudden that discount's gone and you can unlock it, people are going to have to buy Bitcoin to take off their shorts. So how many shorts are there on Bitcoin?

How many people are just going to sell and liquidate? We certainly saw a short squeeze yesterday. Even if this was just someone trying to trigger something, we had seen hundreds of millions before the news and then another hundred million even just on that news on a short squeeze. So if shorts gather back up, I think that's a very, very likely, I would say, scenario that we see that. Did you guys see Larry Fink's comments on this by any chance? I just, I think I've got it right here. Way beyond the rumor. I think the rally today is about a flight to quality with all the issues around the Israeli war now, global terrorism. And I think there's more people running into a fight to quality, whether that is in treasuries, gold or crypto, depending on how you think about it.

And I believe crypto will play that type of role as a flight to quality. Dude, you guys may be able to price things in at 90%, but if you had told me last year that Larry Fink, the CEO of BlackRock, was going to be calling crypto a flight to quality, I would have laughed you out of the room and said, you're fired. So it does seem at least that we're getting a different narrative here, right? I mean, this is him, the CEO of of black rock directly answering a question about the fake black rock news and what it did to price and saying that's just a little part of it yeah he became the spin doctor of all this which is so crazy to me it's almost unthinkable larry fink is sort of spinning what happened to hey this is why uh this shows the excitement for it it shows why our clients are into it.

I don't think that's what it showed, but it's interesting how it's put it that way. I thought it showed what fake news can do, but it does show the excitement. I don't know if flight to quality either. I thought this was just a trade that people wanted to get ahead of. But back to this idea, Michael Saylor was on, and I think he nailed it. He said, look, if you have 10 big asset managers, Fidelity, BlackRock, these are the biggest in the world. If they're declaring Bitcoin an asset class, that's all you need to know. Now, whether it trades up on, you know, before sell the buy the new rumor, sell the news, that's probably a little what's going to happen.

And whether there's not as much volume as people thought. And some of the media declared a dud because it only saw, I don't know, 50 million trading in the first day. Ether futures were obviously underwhelming. I just wouldn't get focused on that. We're not in a mania phase like we were in 2021. That was a mania. Bitcoin, a bit of launched into like beetle mania of like investing. It's all over. And so did CME and CBOE futures, by the way, and both of those were dead top of the market. Everybody was drooling with FOMO. It was just a special time. We're done. That FTX has sort of sobered everybody up. It's a new era. But long term, these big

tradify companies declaring this an asset class, and they all have hundreds, if not thousands of salespeople who are visiting advisors all the time. And now they have a Bitcoin ETF in their toolbox for these advisors, and they're going to pitch them on it because you can charge more than a Vanguard fund or competing with them. That's just like an army of salespeople doing bidding on the behalf of Bitcoin. That I think is the more important takeaway long-term, but I'm just not getting into the short-term stuff. If anything, I try to underplay it now. Yeah, we'll see what happens short term. Could be a sell off, could be less volume than you think. But I would have the five to 10 year vision in mind. Perfect. Before I let you guys go,

I know I've got you for like one more minute. Is there anything I might have missed? Anything important, some nuance here that people should look to? I mean, I think we're all now just kind of looking towards the end of the year. Yeah, yeah. The one thing I would say that's actually your end of the year comment, the one reason why we are 75% for 2024 or 2023 is partially because we don't know exactly what happens next with the Grayscale case. Honestly, we should find out this week or possibly next week because the SEC didn't go for that en banc appeal. So if the SEC needs to make a decision regarding grayscale before the end of the year, then we're going to get probably every other application is going to get approved before the end of the year. So we don't know, we're in a complete gray zone,

right? We don't know what the next steps are. This has never happened before. This is the court case where an SEC order on a 19 before has never been completely vacated. So no one actually knows what the next steps are. So that's why I've been saying it's a soft 75%, because depending on what happens with this Grayscale case, what the courts decide they have to do, or what the SEC decides they have to do, we could get a forced order before the end of the year. And we expect the SEC to approve, as I've said, but not guaranteed. So that's the part where it could happen before the end of the year and surprise some people. Soft 75%. I like that. Eric, any final thoughts? Or flexible 75%. I think Viagra solves that actually.

Big thing to focus on is the fact that the SEC is engaging with the issuers, giving them comments, and we're seeing the filings come back, addressing the comments. Very legal details. Remember, this is a regulatory body. They're concerned with legal stuff. That's as good of a sign as you could hope for. Timing, we just don't know. There's some variables, hence the soft. But if we had radio silence, I think we'd be pessimistic, frankly, or a little more doubtful. But this has never happened in the 11 years of these filings. That's what people should be focused on. And I think optimistic about. Love it. I mean, yeah, we used to just see passive sort of kicking the can down the road. Now that it's active kicking the can down the road, which we'll take as a huge win. Gentlemen, I know you have a lot more tweets and messages and angry

people to respond to, especially when CoinDesk today inevitably breaks the news that ARK has been approved or something like that. That's not happening, guys. So thank you. I appreciate your time. Always a pleasure to have, especially both of you. It's like having the Beatles here. So Beatlemania on my show.

Thank you, guys. I'll take it. All right. See you. Bye. Great to see you. Have a good one, guys. Thanks, Scott. Yeah, guys, really quickly before I move to Ben, which I know you guys are'll take it all right see you bye great to see you guys thanks guys yeah guys really

quickly before i uh move move to ben which i know you guys are all waiting for i just want to show you a few of the the takes that happened alongside this obviously we had the sec coming out and tweeting not great when you have to have the sec sort of passively responding careful what you read on the internet the best source of information about the SEC is the SEC. If you guys know Ryan Selkis, who's been here many times before, the best source of info about the SEC is the courts, who've been beating the shit out of you all year. I don't trust the SEC because it's a corrupt regulator that prioritizes Wall Street over retail, ESG disclosures over capital formation, and foreign entities over US and innovators. Ooh, ouch, that stings.

And then finally, I brought this up before, but Kathy Wood says it's Gensler who's standing in the way of spot Bitcoin ETFs. But to the same point these guys just made, regardless of Gensler, it seems at this point that the SEC is actually moving forward with or without him. She even went on to call this Gensler's personal Vietnam,

which is absolutely, absolutely brutal. I'm going to go ahead and bring on Ben. I know you guys have been waiting. Good morning, man. How are you? How's it going? Can you hear me okay? Yeah, you sound great. Yeah, doing pretty well over here. How about you? Great. What a roller coaster. The first important question I have to ask you is, are you going to take some of your Bitcoin and buy a Ferrari? This is the news I didn't report on somehow. We missed it yesterday. Lambo, who you can now buy a Ferrari with Bitcoin. Is that in your plans? No. Yeah, me either. Maybe I said, I tweeted, maybe when one Bitcoin equals

one Ferrari, I would consider it as a sort of a YOLO move. Yeah. Maybe if we plotted out the price of Ferraris denominated in Bitcoin and watched it asymptotically go to a certain level, once it reaches that level, then maybe. I love it. So listen, this is an article I brought up before that we were just talking about. But Bitcoin's 10% jump to 30,000 hints at traders' playbook for ETF launches. So this begs two questions for me. One, did this give a preview of what would be a huge move if we see this approval? But then B, which I think will be more interesting to you,

what I found most notable is that not only did Bitcoin go from 28 to 30, but Bitcoin dominance went absolutely bananas, right? I mean, everybody who had an altcoin seemingly in that 20 minutes sold it to get into Bitcoin. Well, I mean, I think that's the thing. That's the bigger picture is that, you know, I was listening to some of the stuff that was on your stream earlier. And, you know, they were saying it's sort of a flight to quality, but the altcoins are not quality, right?

Like they're very, very high risk assets. And, you know, their valuations are dubious at best. And Bitcoin is, you know, the least risky asset within the cryptocurrency asset class, right? It's the least risky. And so there is that relative flight to safety. So I think that's what's happening. And I've been saying for a long time that the reason, you know, the entire move that is occurring is not, in my opinion, because of new money coming in this year. I think new money will come in probably, you know, sometime next year. But it's because people are just simply converting their altcoins to Bitcoin. Right. And and that is the main thing. And what you notice is that Bitcoin went from 28K

to 30K and then it came back down to 28K. But the Bitcoin dominance is still at like 52 percent. Right. Like you say, the altcoins, the altcoins simply cannot compete with Bitcoin at these valuations. And, you know, if you look at a lot of altcoins, like if you look at like the altcoin market, total three, it's basically sitting on a support level. Are you able to show your screen? I think it would be really constructive

if you can do that at the bottom there, then we can kind of look at it while you're talking about it. Yeah, here we go. Perfect. Yeah. So like if you were to take a look at total three, I mean, these things, the altcoin market is sitting on very precarious support right here. This pattern, by the way, is Scott, is the exact same thing we saw Bitcoin do last cycle, right? Where, you know, it sort of came in here, put in sort of an initial low, and then it basically just formed these lower highs and higher lows, right?

This initial low go to the top, and then a series of higher lows and lower highs until it eventually broke down. And when it broke down, it dropped 50%. That was the worst, man. That was when we were at 6,000 forever, and everybody was convinced, oh, it's got to go up eventually and then immediately below four. Well, look at total three. Is it not? I mean, it looks like a very similar pattern, right? This is everything but Bitcoin and ETH.

And I'm suggesting that the way the Bitcoin dominance goes to 60% is that the altcoin market is just simply capitulating, right? And so the thing that I think is what's going on is, right, there's people they're converting their alts to bitcoin and um and it's sort of that relative flight to safety but the problem for bitcoin because it does affect bitcoin in the end the problem that i think will occur for bitcoin is that at some point all the liquidity or at least most of the liquidity from the altcoin market has been drained and there's no more you know there's not really much buying pressure from the altcoin market anymore and that. And there's no more, you know, there's not really much buying pressure from the altcoin market anymore. And that's normally what leads to Bitcoin sort of getting a secondary scare, like a last capitulation sometime before the halving, before the real bull market begins. Yeah. So, I mean, we've talked about this,

obviously, at length, but what you saw from Bitcoin now, does that change your view that Bitcoin will also get that one more drop, the kind of higher low that we see in every halving cycle to your point, right? I mean, we saw last cycle, it went all the way up to 14,000 and then right back to 3,800 on the COVID drop. And in previous cycles, it always kind of seems to make that higher low on that one last shakeout. But could ETF news in the coming three months change that? Anything's possible, Scott. I mean, I can't say for sure anything is out of the question. But I also think that things like what happened yesterday do not help the case for a spot ETF.

I do think one will eventually be approved. And I hope that it is because I'd really like for people to talk about something else, right? But I think that when a single tweet can instantaneously move the market like 7% and on a fake news event, that doesn't really make us look good. It makes the cryptocurrency asset class look

pretty immature, in my opinion, that something like that could happen. But look, last cycle, what we always see, everyone talks about the Bitcoin halving. I've seen this for the last several cycles. Everyone talks about it. And what normally happens is Bitcoin halves before the halving. And then people are like, oh, well, that's what the halving meant. Last cycle, the drop into the pandemic, we still dropped 50% even before that occurred, right? Like that was still a 50% drop. And then you go and this drop started in the summer, right? Go to the cycle before that. We had a drop starting in the summer and it dropped 50% before the real bull market began. So I still look at it and some people say, well, it's not dropping today.

How do we know it's not? I mean, how do we know that this isn't just a lower high and that this is still part of the 50% drop? It could be. And that's my concern for Bitcoin is that the liquidity is leaving the altcoin market. The purchasing power of these altcoins are going down. And at some point, I think that affects Bitcoin. So basically, there's just no money left. Once the altcoins bleed into Bitcoin,

there's nothing left to kind of prop it up and there's no more buying pressure until we start that next cycle. Exactly. Look at the total market cap. If there are a lot of new money coming into the space, why is the total market cap the same as it was back in February and the same as it was back in August of 2022? There's not really a lot of new money coming into the space. It's basically just money, money shuffling around from the altcoin market to Bitcoin. And one of the main drivers of it is is Ethereum. You know, look at look at what's going on with the Ether Bitcoin pair. I mean, it's collapsing right now. Right. And I've said before, this just simply looks like a distribution phase, just like we had last cycle. And I think it's probably going to go lower than a lot of people

think it will. Yeah. If it's going to bottom, by the way, it has to bottom here. Right. I mean, this is the Bitcoin and this is pretty much this area where it's hitting right now is kind of the last support before it's look out below. Right. From this entire move down here. I'm not saying that will happen, but that's almost I mean, that's's a 60%, you know, even to the top of that is another, you know, 20, 30% drop. Right. And some people have sort of pointed out that last cycle, the Ether Bitcoin pair bottomed out in September of 2019. But sort of the counterpoint to that is, well, it's now October of 2023, and it's still going lower. Second thing is this line on the chart here. This is the this line on the chart here,

this is the US, these are interest rates, right? So we know that higher risk assets like altcoins, like Ethereum compared to Bitcoin, higher risk assets are going to bleed to lower risk assets. And you can see that Ethereum did not bottom until after the Fed started cutting rates, right? So that's what happens with stocks, by the way, too. Well, exactly. It's the same thing, right? Like it's not some major conspiracy theory. It's just this is how the markets tend to work, you know, like higher risk assets bleed until sometime after a Fed pivot. And so, you know, I know people are hopeful that it'll bottom here, but you know, if history is any guide, there's a good chance Ether doesn't even bottom out against

Bitcoin until sometime after a Fed pivot. And the Fed's not going to pivot with the S&P at 4,300 or 4,400. Yeah, I just want to listen. I've showed this chart a thousand times, but it's just so interesting what you just said about ETH. I've never lined it up with that. But guys, this is the yield curve, blue, which is starting to potentially un-invert. This is Fed funds rate. These are the pivots that I've circled, right? And this is what the stock market does after the pivot. Everybody waiting for this pivot to give us liquidity is smoking rocks. The market goes way down and takes forever to come back every single time that the Fed pivots, right? So we haven't even gotten a Fed pivot. If the Fed pivots, you have to expect that the stock market is going to once again crash. And to your point, even if Bitcoin's fighting that, it's probably unlikely that altcoins will, right? One way to think about it, Scott, is as long as the S&P is holding up well,

it's probably too early for altcoins, right? Because as long as the S&P hasn't crashed, then there's no reason for the Fed to pivot. And as long as the Fed's not pivoting, altcoins will likely just keep bleeding back to Bitcoin. Right. But once the Fed pivots, then we still need to wait a while for them to bottom and then becomes a potential buying opportunity, which, you know, looking at your chart here, pretty interesting. Yeah, exactly. And I mean, you know, I don't know exactly how long it'll take them to bottom after a Fed pivot. But we do know that with things like altcoins, it probably wouldn't take very long because, again, the stock market is dependent on

a lot of other things. Cryptocurrencies, altcoins are more so dependent on just say like excess liquidity, right? Like if you were to look at total three, which is what we were talking about earlier, this is the altcoin market. And if we were to overlay net liquidity to this chart, it's basically, you can see how closely the altcoin market just loves tracking net liquidity to this chart. It's basically, you know, you can see how closely the altcoin market just loves tracking net liquidity. I mean, as long as liquidity is draining, the expectation is that the altcoin market will eventually follow. The yellow line, how are you pulling that net liquidity? Just curious for my own benefit. Yeah, I'm just adding the balance sheet to various central banks. We're adding the US, the ECB, Canada, the UK, Japan, China, New Zealand, and Australia.

We're subtracting out the TGA and the reverse repo. And then you get this chart. And by the way, as long as the dollar is in a rally, liquidity is drained because the central banks, the balance sheet of all these other central banks, we're converting it to US dollars so that we can add it all up, right? It's the same units. And so as long as these other currencies are just sort of bleeding back to the dollar and the DXY is going higher, then liquidity is also going down. In addition to the fact that you have the Fed reducing their balance sheet, you know,

basically every single week and other central banks as well, like the ECB. So liquidity is being drained. The riskiest of assets like altcoins, they're getting hit the hardest, they're getting hit first. But those might also be some of the ones that bottom out the earliest after a Fed pivot. Right. So here's my question then. So we have the four-year cycle, which if it ain't broke, don't try to fix it. In my opinion, it's repeated. Yes, we only have two really solid examples, but I'm following it until I have a reason not to. I think you have the same assessment. But as you just pointed out, there's a lot of macro that you can sort of compare to what's happening and that might be driving this. What if we get through the halving cycle,

but the macro still then is not aligning? What if it's next summer and the Fed hasn't pivoted and stocks are down? Would that situation change your opinion? Do you think we're going to follow the four-year cycle here sort of come hell or high water? I think we generally will track that cycle. I mean, it just seems like everything is played out just again, how it always does, right? We peak in the summer of the pre-having year after a low in in the end of the of the you know the midterm year um i think the the bigger risk is if so if if let's suppose that the the macro holds up and and we don't go into a recession or something but it we still have an inverted yield curve in the summer of next year you could have a an example where bitcoin tops out but it it it tops out at like a lower high

or something right like so it still is in a bull market for a while but it tops out at like a lower high or something, right? Like, so it still is in a bull market for a while. No, it's just 55 or something, right? Right, like it could end up being a lower high. I mean, I hope that, you know, I think that there's a good chance that all this stuff happens before the halving. I mean, the halving is still like, you know,

six months away and the bond market, I mean, treasuries are really screaming higher. And as long as they continue to do that, it's going to put a lot of pressure on equities, putting a lot of pressure on crypto. I mean, I, you know, when you look at various, can I show a macro chart really quick? Yeah. Yeah. So this, this is an employment. So I have macro risk metrics here, right? So you can see the interest rate risk is pretty high, but let me just pull up, this is the employment risk. So this just helps us identify if we're heading towards a recession or not. One of the interesting things is if you look at job openings risk, you can see that it has been moving higher recently, right?

And normally, when the job openings risk goes up, it normally corresponds with a recession, but it doesn't immediately cause the labor market risk to go up, right? So if you look at the unemployment rate, there's a lag between when the job openings risk goes up. So job openings are going down. Right. Not not in a in a linear fashion. Right.

It's a stochastic process. But job openings are going down. Normally, you can see here in like 2001, after the risk on job openings started to go up and signal a recession, it still took like half a year before we saw the labor market finally show weakness, right? In the financial crisis, right? The job openings risk started going up in, you know, like February and March, and it took until the summer for the labor market to sort of show that same weakness.

So we're seeing the job openings risk go up now. The labor market risk, look at this, it's really starting to come off these lows. It's really early, but you can see it's starting to pick up a little bit here. So I don't think that it'll take another 12 months for all this to play out, but it is a great question, Scott. Yeah, I think that people expect things to happen much faster than they generally do. I mean, we do macro here on Mondays every week and labor is always kind of one of those last things to go, right? Because A, we get this sort of, I'll call it murky reporting on what's happening with jobs. We know when you dig into the job numbers that now it's a lot of second jobs and a lot of government jobs and it's not

exactly what's being reported, but that once unemployment starts to take up, it tends to take up very, very quickly in these situations. Right. But the thing that we have to remember as investors, especially when it comes to things like Bitcoin and altcoins, is that when the recession is here, like assuming we get one, right, when it's here, that just simply means liquidity is almost on the way, right? Because that means we are close to a Fed pivot. And once we get to a Fed pivot, liquidity comes back. And then that's when we get, you know, the real bull market

instead of just sort of this grinding where it's just people converting alts to Bitcoin and vice versa and chasing pumps and all this stuff, right? So that's the issue is we just, we don't have an influx of liquidity right now. And I don't think a spot ETF is going to change that. If the spot ETF launches after a Fed pivot, then perhaps it could. But if a spot ETF were to launch today, I don't think any of us are under the impression

that that means Bitcoin is going to go up to 100K or something if then we go into a recession, right? There's other things that we have to consider. It certainly would be a short-term bullish. I mean, we'll look for- Yeah, I think it would go into the mid-30s maybe based on what we saw yesterday. Honestly, I said to the Bloomberg guys before, it was my opinion, maybe I'm wrong after yesterday. We saw when BlackRock applied, Bitcoin went from 25 to 31 in a week. But then we were back almost at 25, not so long later. So my opinion was we get the approval and we probably go from from 25 to 31 in a week. But then we were back almost at 25, not so long later. So my opinion was we get the approval and we probably go from like 25 to 31. Now we're sitting at 28.

Maybe it goes into 35 or 40. But to your point, that could also just be a part of this cycle right before it dips back down before the halving and then we head back up in the same cycle. Getting to 35 doesn't change much. One of the things that if you look at total market cap, there's sort of this like fair value logarithmic regression trend line, sort of assume diminishing returns and everything, of course. But what normally happens is we sort of tag

the lower regression line before we get the real bull market, right? So like in August of 2015, it was a double bottom, right? It wasn't really a higher low, it was a double bottom. Right. And, and in last cycle, it was a higher low. I think that there's a chance we're going to sort of come in here and I know it doesn't look like we touched the bottom here, but we did. If you look at the WIC, these are just the blue line just shows the daily closes. Right. If you look at WICs, we did go down to about a hundred billion or so. Right. Yeah. Yeah. So I think that's still that, that risk exists. And the issue, Scott, is is, you know, I think investors are going to get somewhat tired of, you know, all this spot ETF, sort of the false, you know, people who have been DCA Bitcoin, which, by the way, is what I have always suggested is the best, you know, the most successful way, I think, to navigate crypto.

But the issue oftentimes in pre-having years is, you know, people DCA altcoins, they DCA Bitcoin. The people who DCA altcoins all year, they normally just get wrecked constantly because the altcoins just keep leading back to Bitcoin. And then the people who DCA Bitcoin, they tend to do well for a while. And then we get that final flush. And then it makes them figure out what their resolve is, right? How confident are they? And if they see the recession headline, will they continue to hold? And I think that's the issue. And that's why you get that final flush just before the halving. So we still have six months. I think it'll happen. And if it doesn't happen, then it sort of leaves a big question mark is what does that mean for after the halving. So we still have six months. I think it'll happen. And if it doesn't happen, then it sort of leaves a big question mark is what does that mean for after the halving and

doesn't end up being a lower high? Sure. Yeah. And to your point, I think the recession headline will scare people. But also if we're in a legitimate recession and seeing the obviously consumer numbers that we've already seen, people, whether they want to or not, whether there's a headline or not, are going to be forced to sell if they need to pay their bills. The real core is that if we're in a true recession or heading into that direction, most people just won't have the luxury of holding onto their investments, Bitcoin or otherwise. And this is the most liquid one. I mean, look, when you have JPEGs selling at like 40K a piece, you know, there's still a lot of excess liquidity out there, right? And as people are forced to sell these higher risk assets,

that's going to be a drain on the cryptocurrency market, right? And of course, the Fed is trying to achieve this. The Fed is trying to sort of pull in that excess liquidity and get people to be more productive in society. Yeah, I agree with that wholeheartedly. I would be pretty sad if we don't see a nice move up a year from now following this cycle, because as you said, it does concern me. Does it concern you at all that so many people share this view, right?

You know, this is one of those seemingly consensus, oh, it's the four-year cycle. This is where we are in the process it's not always a good thing to be on the side of everyone i am too by the way just saying i mean look i i i don't necessarily agree with everything like i i think there is a risk that bitcoin does not put in a higher low i think there's a risk that it could put in a double bottom or even a lower low um on some exchanges in 2015, we did put in a lower low. That's right. I distinctly remember watching it and being like,

oh crap, that's a lower low. And then it, no, that was that. Hitmex would have gone to zero if they hadn't have turned the exchange off. So yeah. Right. So like, yeah, there are risks, but I, look, I mean, at this point, at this point,

as you said, right, it's not broke. Don't fix it. It has, I think the bigger question will be, do we put in a higher high or not? That, I think, could be the bigger question. You could get an example, by the way, where a recession strikes after the halving and we get a sell-off. By the way, after the 2016 halving, I believe Bitcoin sold off 20%. Sold off, yeah. 20%, right? You can get pretty substantial drops after the halving. So you could get a drop after the halving into a recession, but that still doesn't mean it can't go into a bull market in 2025, right? Which is normally a year where Bitcoin, where the asset class tends to do pretty well overall. So yeah, I think for now I will go with the status quo until proven otherwise, but I'm still in the camp right now that Bitcoin likely will have that secondary scare before the halving. Yeah, I don't disagree. Guys, all this stuff

that he's sharing up there, you can see it there at IntoTheCryptoverse. Everybody can go to IntoTheCryptoverse.com and get these indicators and your insight, right? Yeah, yeah. Guys, it's incredible, incredible, incredible stuff. Ben is more on top of his game than anyone. And I have to say, you've just been right. I know we all will eventually be wrong, how this works. But I think that regardless, you have a very defensible position and you've been really pragmatic and even. And I think that's more than you can say for a lot of people in this market. So I think we really appreciate that. I appreciate that. Yeah. I mean, I'm not under the illusion that I'm right about everything. I get things wrong all the time. And crypto Twitter never lets me forget it. I think. Yeah. But I think that there's a case we made that a lot of what we said is sort of playing out, right? Liquidity is leaving altcoins, going to Bitcoin, and eventually Bitcoin rolls over and crushes the altcoin market and then we start a fresh new cycle one thing to look for is at the beginning you would you would almost

expect altcoins to start outperforming like to show strength right but they haven't really been showing any strength at any point at any point right and if can i maybe show one last chart here this is the advanced decline index look at what's going on right now. For people that are unaware of the advanced decline index, this is something that people follow in the equity market quite closely. We've created it for the top 100 cryptocurrencies. And basically, an asset is said to have advanced if its closing price is higher than the opening price. And if it's declined, it's lower than the opening price. And so the ADI is just calculated by taking the daily advances minus the daily declines minus or plus

the prior index value. Look at this, Scott. What this shows us is that so many of the cryptocurrencies are declining versus advancing. Last cycle, you can see that the bottom didn't even occur until the recession when this was already putting in a higher low. You know, at can see that the bottom didn't even occur until the recession when this was already putting in a higher low. You know, at this point, what we're witnessing, the only reason Bitcoin is going up, right, is my opinion, is that all these altcoins are going down. They're just going down, right? And there's just nowhere the money's going to Bitcoin. And you can see that clearly here. Look at this capitulation. The last time it looked like this was here in 2018, at the end of 2018. And remember when we looked at 2018 earlier and how total three looks like it's sort of

following what Bitcoin did back then? I'm telling you, it does not look good. And I think there's a reckoning coming for the altcoin market relatively soon. All right. Well, we will all be careful on that warning for sure, man. Thank you so much. I really appreciate you joining, guys. Please follow him into the cryptoverse on X. I still call it Twitter. My instinct just goes to Twitter. And check out all those educators, man. Thank you very much. I'm sure we'll talk on Twitter spaces very soon.

All right, man. Thanks, Ben. Wow, guys. What a show today. Three incredible guests. We got the dream team of Bloomberg ETF analysts here to share their thoughts. And then, of course, Ben, to give us his very

sobering, I'll say, appraisal of the market. I'm hoping that we see the halving cycle repeat. If it ain't broke, don't try to fix it. And a year from now, we're somewhat laughing at all of this. Guys, got to go. Got CryptoTown Hall on X Spaces in 20

minutes. Come join us there. Mario's back today, which is awesome. I'll see you there. Peace.