The Wolf Of All Streets - Bitcoin Will Pump If This One Thing Happens | Benjamin Cowen & James Butterfill

Episode Date: August 15, 2023

Benjamin Cowen and James Butterfill join my show today. This is gonna be massive! Tune in at 9 am EST on Tuesday, August 15!  James Butterfill: https://twitter.com/jbutterfill Benjamin Cowen: https://www.youtube.com/channel/UCRvqjQPSeaWn-uEx-w0XOIg ►►MELD MELD will bring to bear the full power of decentralized financial instruments to the masses. Banks are at the heart of the economy, MELD will become a new set of banking tools that are by the people and for the people. 👉 https://bit.ly/meld-early-access  ►►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  ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEK DAY! 👉https://thewolfden.substack.com/   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 #Trading Timestamps: 0:00 Intro 1:30 Trump NFTs 4:00 Argentina - how it will affect Bitcoin 10:00 Bitcoin volatility at its lowest 13:00 What will happen when Bitcoin ETF is approved 15:00 Bitcoin ETF won’t be approved under this administration 17:00 Institutional adoption is still very low 19:00 Bet Big on XRP 22:00 Bitcoin ETF: another opinion 24:40 Confusion with Bitcoin Spot ETF in Europe 27:00 Michael Burry’s short position 30:45 Benjamin Cowen  33:00 Bitcoin vs Alts 40:00 DeFi: crazy systemic risk 42:00 Expect alts to drop 45% 44:00 Bitcoin dominance will increase 48:10 Who buys crypto these days? 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.

As the title says, Bitcoin will pump if this one thing happens. Are you interested yet? I'm not going to tell you what it is, and it's not something that's going to happen today or tomorrow, but we are seeing the macro wind shift in a direction that could be very, very helpful for Bitcoin. Now, today we had Anthony Scaramucci coming on, but he had a last-minute cancellation. But we've got something better. We've got James Butterfill and, of course, Ben Cowan into the cryptoverse. We've never had the show on the show before, who has a very passionate, passionate position on what's going to happen with Bitcoin and what

that is going to do with altcoins. We'll have him on the back half of the show. Can't wait to have these conversations. 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 gently tap that like button. We will get in a moment to that thing that could be very helpful to Bitcoin, although I would argue that there are quite a few of them right now. But first, I want to just go ahead and bring on James, have a conversation here about ex-president Donald Trump and his holdings. If anyone saw it, Donald Trump holds up to $500,000 in crypto, and it is Ethereum. Let me pose you this question. Do you think before this headline broke that Donald Trump had any idea that he owned Ethereum? I don't know. But this makes absolute sense,

doesn't it? Anyone who has a large amount of wealth should be diversifying, right? Yeah, but do we believe he did that? Or do we think that he had an NFT collection and got paid in his royalties and Ethereum and it's sitting in a wallet? That's my theory. He's been utterly dismissive of crypto. He's not exactly a fan of Bitcoin. He's been very outspoken.

Yeah, I have no clue about Donald Trump and his whereabouts. Was there a wallet address supplied? It would be good to go and stalk that wallet address. Yeah, I have no clue about Donald Trump and his whereabouts. I'd love to. Was there a wallet address supplied? It would be good to go and stalk that wallet address. Yeah, that would be your job, right? That's your thing. I don't I don't know if there was a wallet address. I think this came in a disclosure of wealth that we've seen across the board. It's interesting. Every time we get these disclosures, I mean, he's an ex-president. But there's a there's an account I love, whales do you follow them on twitter by any chance no

i've not seen those guys and i mean they've now have like millions of followers i think because they were kind of at the forefront of the exposing politicians trades very specifically by and uh every time i read one of their tweets it it just makes me shake my head. It's incredible how corrupt. One of them yesterday was like Senator Tommy Tuberville had puts against agricultural companies or something. The guy's literally on the Ag Committee making the policy about those exact companies and the Nancy Pelosi trades and stuff. But no surprise that politicians are much better traders, I guess, than the rest of us somehow, right?

Yeah. Well, that's worrying me sometimes, doesn't it? I mean, they've got a day job and it's not their profession. Yeah. Their day job is manipulating the stock market so they can take advantage. Those are my words, guys, not James. I don't want to get him in trouble. So here we go, man.

Let's talk about this. Argentina, right? This is the thing that could make Bitcoin pump and very, very long term. As I've said, notably, he is a pro-Bitcoin libertarian who believes in abolishing the central bank. So what do you think this means? So this was a guy that was featured on Twitter a few days ago. Maybe it's a bit older, the video, but I only saw it a few days ago of him whacking a pinata of a central bank so you know i think he's jumped on this populist idea of that when you have loose monetary policy or monetary policy that's not working weimar republic a really good example that germany in the 1930s it caused hyperinflation i mean we've not quite seen such the hyperinflation of the weimar Republic in Argentina, but it's been bad. And so much so that Bitcoin is at all time highs in the Argentine price in Argentine pesos.

But, you know, that whole kind of theme of bad money management by central banks leads to greater inequality and heightened populism. And we're experiencing this in the US. Donald Trump is a classic example of populism. I think QE is partly responsible for that. So it's no surprise what we're seeing in Argentina. And we're seeing this echoed across other markets. Like you look at countries, you look at Venezuela or Lebanon, for instance, or Turkey, where there's real problems with monetary policy and runaway depreciating currencies, Bitcoin volume growth is really high. And again, political instability, the same sort

of trend of a big pickup in Bitcoin volume growth. Yeah, there's a specifically way said central bank is a scam, a mechanism by which politicians cheat the good people with inflationary tax. And interesting, on the back of his victory, the peso got absolutely destroyed, right? I think it was another 20% overnight move in a matter of an hour in effectively lack of buying power, really, really, really rocking the market in Argentina. Does this have macro effects or is Argentina already such a disaster? I mean, I've heard stories anecdotally. One of my best friends lives in Argentina and daily he sends us group chat messages of his stacks of cash and how much bigger they get each month when he's paying his rent.

And we've heard stories on this podcast, on my podcast actually before, of people getting cash and instead of depositing into getting a cash into a bank, taking it out of the actual account and then putting the cash in dollars back into the bank in a safety deposit box rather than in their actual account to hold the cash, you know, dollars. I mean, it's been a financial dictatorship to some extent. I mean, for many years now, Argentinians have been in some respects banned from owning foreign currency bank accounts and moving money out of the country so people have been desperate for this financial liberalization and perhaps some people see bitcoin as the

solution you know i still think managing an economy with a bitcoin standard which is a bit like the gold standard might not be the most prudent thing to do. But yeah, I just think this is populism. You know, we've seen stories in the past where the prime minister or the president of Argentina has not been happy with the statistics, official statistics coming out of the statistical department and therefore everyone in the statistical department. So it's pretty, you know, I i mean it's very hard to believe macro data coming out of argentina now

for that reason um by the way we found your video we got it here let's watch i haven't seen it so He's got to be careful. I was going to say, when you watch the context, it seems like he's... Ask for it and see it actually. No, no, no. All right, we're going to do it. Tranquilo, con tranquilidad. Tranquilo, yeah. Do it easy. Para, para, para. Para, para. No, para. Para, para. Cuidado. No.

Cuidado. Para, acá, para. All right, I think we get the idea there. But it's interesting to note that everyone getting on Twitter talking about how this would make Bitcoin legal tender. We'd see an El Salvador situation. But really, he wants to actually talk about dollarizing Argentina, which by the way, is what El Salvador did, right? El Salvador does not have their own currency, which in my opinion is actually why El Salvador was able to adopt Bitcoin as legal tender because the IMF, World

Bank, United States couldn't attack their currency like they would in Argentina. We've seen in Argentina in the past, them talk about Bitcoin adoption and the IMF comes in and says, no way, your loan is off the table if you even say Bitcoin. Yeah, I mean, I feel sorry for Argentina when they were quite pro-Bitcoin and obviously had to shut it down because of the IMF. I mean, that is the one thing, if you say you're pro-Bitcoin, you're alienating the IMF, which is incredibly important for a country like Argentina that will and has received bailouts in the past. Now, yeah, I mean, going to the dollar standard, I suppose, is a double-edged sword. I mean, you're basically at the whim of the monetary policy of the Fed, and that has problems in itself. I mean, you look at a lot of Middle Eastern countries that are pegged to the US dollar, it's not always the most favorable thing. But on a relative scale, it's a lot better

than the Central Bank of Argentina. So is there some irony there that he wants to abolish the Central Bank, but then be beholden to central bank policy in the United States? Yeah, I suppose, but on a relative scale, it's a lot better, better, better central bank. So listen, if this guy wins, do you think that he's not even saying Bitcoin legal tender as much as people are throwing out throwing it out there? But do you think at least that gives us a much more favorable environment for Bitcoin in a country that massively needs it? I mean, the news is breaking now. I mean, it's obviously not won yet, but the news is breaking now. But it's not. It's amazing. The Bitcoin price has hardly moved off the back of this. But I suppose people are looking at what happened in Ecuador, perhaps, and don't believe that it's going to have.

Well, that's not really had much impact. So perhaps they don't believe Argentina is going to have much impact either. I mean, you talk about this not affecting the price of Bitcoin. I just happen to have a chart here. This is the Bollinger Bands on the weekly. This is the spread of the Bollinger Bands, an indicator, the lowest it's ever been in history, the tightest we've ever seen the Bollinger Bands, indicating insanely low volatility. You mentioned to me before the show that likely, what, tomorrow uh when the when the data comes in this will be the lowest volatility and exceptionally low volume as well for bitcoin nothing is moving the price there's

literally nothing that can move bitcoin price and what's interesting some very low volumes too so volatility on a 30-day trading basis is at 16.98 and the last lowest point was the start of this year, 16 point nine six. Trend is we're dipping below that. So we will be all time low volatility on record, all history for Bitcoin, which I think is really encouraging. And it fits with our thesis that Bitcoin is developing into the store of value and a state and a stateless assets a non-sovereign asset and you know stores stores of values do tend to have quite low volatility gold generally is a good example of that and i think bitcoin is slowly following that i mean just to put that in perspective now i think gold's vol is about nine percent at the moment the nasdaq vol at the moment is 16 so it's super close to

that um uh so i think it's off particularly off the back of the summer doldrums, super low volumes. It's really encouraging to see Bitcoin moving this way. I'm sure it'll have another volatile. But as you say, to maintain that narrative, it would have to remain exceptionally boring, which nobody who's invested in Bitcoin wants to see. Right now we talk about this low volatility, but everyone wants Bitcoin over 100,000, right? That's going to require some serious volatility returning. I mean, I think there's plenty of points that we can see in the future that are going to push up that volatility again. The Fed rate decision in September with Jackson Hole, an indication of monetary policy.

Then we've got the BlackRock, not decision, at least some sort of statement from the SEC about the approval of an ETF. Lots of potential things to look at that could be price catalysts. So, you know, and we know that Bitcoin is much more volatile when the price is rising than when it's falling. Yeah. And I mean, this is the story, obviously, that we have right now pulled up here. Seems like this is pretty obvious. Bitcoin spot ETF approval could help power up a new crypto cycle. Bernstein, is this the one thing that Bitcoin will pump if this one thing happens? If we get that BlackRock ETF approval or any clarity there? If we look at ProShares when it launched its ETF back in late 2021, it saw a billion dollars of inflows.

A billion? Yeah, immediately. In a week. And that was just a futures-based one. And I think the reason why, okay, what's the difference between a futures and a physically backed one? A physically backed ETF ticks many more kind of due diligence boxes than a futures-based one, because let's say if the issuer goes bust on a futures-based one, that's it, you've lost all your money. But if it's a physically backed one, there is a route back to the actual asset. And that's incredibly important. So, I mean, it's hard to quantify

just how much money would influence into Bitcoin, but I suspect it would be a lot more than a billion dollars because if you look at the futures-based, say, products on gold versus the physically backed ones, the futures-based ones are 10% of the physically backed. So there's potential for much, much more inflows into Bitcoin. Or should I say when one is approved? Yeah, and I don't think that BlackRock applies for an ETF.

And if it is going to be approved, I'm assuming they would get a little hat tip or nod from the SEC. And I think that they have a lot of money AUM probably lined up in advance to come in. BlackRock is not the type of company to launch an ETF and just have 100 million casually come in. It's going to be billions immediately. Yeah, I mean, there's been incredibly sort of interesting approaches to approving this. Actually, draw parallels to the gold market 20 years ago when ETFs were being created. They looked at these metal exchanges and looked for sort of larger exchanges to be kind of guarantors. And I think we could see the same thing with Bitcoin, say NASDAQ being a guarantor for sort of Binance or

something like that, some sort of structure. I'm not sure exactly how it will work out, but it could mirror the gold market in that respect. So Bloomberg analysts we've had on James Seifert, Eric Balchunas here, they're saying 65% chance of approval this year. A lot of that having to do with what happened with Grayscale. Apparently, we could see a Grayscale announcement as soon as today in that SEC case. Where do you put the odds personally of a approval if you had to guess i mean you're looking at this i'm below 50 i think it will happen just not this year sorry but you know putting a time frame on any prediction is uh is asking to gain a lot of criticism in the future i do also think it will approved. But there's people who think there's no chance. Former SEC attorney John Reed Stark says SEC will not approve a Bitcoin spot ETF. Now, listen, John Reed Stark worked at the SEC. He's a huge fan generally of SEC policy.

He likes Gary Gensler. He's an outspoken advocate against crypto. I've had him a number of times on Crypto Town Hall on Twitter. You've probably been on there with him. But he did a very, very long thread on this, like, except I won't even call it a thread now. It's just one tweet. But basically says there's absolutely no chance unless the Republicans elected, unless maybe Hester Peirce becomes chair, one of these things. But he's saying, to summarize, under this administration, it's just not happening, period. It doesn't matter if it's BlackRock or Jesus himself. Yeah, I think that's fair.

I mean, if you look at the mix, I think it was a, wasn't it a GOP bill that was the McHenry-Thompson bill or something like that? It looked like it was just going to go through the the house but it just never gets through the senate and i think that's with a lot of things uh the us is a bit of political gridlock um for approving any big bills and i just think from he's right from that perspective it would be very difficult to to get approved politically perhaps until a republican is is in power okay so what would happen if it did though though? We have the title, Bitcoin will pump if this one thing happens. I was supposed to be Argentina adopting Bitcoin as legal tender, which we have no indication will happen. Would a BlackRock ETF approval send?

I mean, what happens when these ETFs need to be filled for all those billions in AUM? I can't tell you how many clients I've spoken to that said, look, we just don't want to be the first mover here. When you look at institutional adoption, it's still very low. I estimate it's probably only between 5% and 10% institutional ownership of Bitcoin at the moment, which is theoretically very low compared to other markets, equity markets, for instance. So I think it would just take, it takes one big player to be investing in Bitcoin in an ETF.

Bitcoin approved, that will open the floodgates, so to speak. One person will do it, then they'll all start doing it. I mean, certainly a lot of pressure from their clients, their wealth management clients saying, look, I want Bitcoin in my portfolio. But a lot of them are still saying no. Yeah, I mean, three years ago to the day yesterday, I think MicroStrategy first bought Bitcoin, put it on their balance sheet. Of course, we had the same narrative then. Now a million companies are going to buy it.

We did see Tesla and Square. Of course, accounting rules made that difficult. But that alone sparked an entire bull market. That was the catalyst. We had a very boring sort of summer again it was a major set up a wallet. But from a corporation, actually, it's very difficult. And the thing that an ETF provides is it kind of democratizes Bitcoin to some extent. It makes people, it allows people in a regulatory framework to acquire Bitcoin, which they currently, for many of them, particularly investment managers, just can't do. So I think it will open up the doors for many people to access Bitcoin.

Yeah, I tend to agree. And talking about institutions, we've got an article here that is about, well, you, saying that institutional investors continue to bet big on XRP following Ripple's partial SEC win. Major investors are still showing interest in XRP, pouring cash into it for the 16th week running per data from coin shares. So has there actually been a shift to attention to XRP versus Bitcoin and such? Or are we just seeing increased interest in this specifically? Yeah, I mean, I'm just looking at XRP now. The total assets under management are small.

I mean, it's $24 billion in ETP, essentially products on Bitcoin, and there's $71 million in XRP. So still very small, but definitely, I think, as we've had various different rulings come through, various decisions made by the court, investors have been adding in drips and drabs to XRP, but it's consistently every week. So 16 straight weeks of inflows, bar like one or two weeks of outflows this year. It's pretty much every single week this year has seen inflows for XRP. So, I mean, I think that's, you know, really positive for XRP in that respect. And it goes to show when there's regulatory clarity, investors start backing it.

And, you know, same with Bitcoin. As soon as you hear something negative, you see investors pulling money out. It's in all our surveys we do. The top top of the list of everything of everything for crypto investors, institutional investors is regulation. That's what they're so concerned about. And until we have clarity on that, which we don't, I think it will still see quite sort of choppy or hesitant investor. I've seen some news. I don't have it here, but just that XRP is actually being adopted or looked at for a lot of central bank digital currencies now. Have you been paying any attention to that, that the ledger technology from XRP could be adopted for central bank digital currencies? No, I mean, I've not seen that. I had always assumed it would be like a sort of ethereum layer 2 solution i you know um uh i know from the bis bank for international settlements around 80 of countries are researching central bank digital currencies and so it's a it's a big buzzword within within central banks at the moment although some of them like i think it's denmark

has turned around and said the technological challenges are too great so they just said we're big buzzword within central banks at the moment. Although some of them, like I think it's Denmark, have turned around and said the technological challenges are too great. So they just said, we're not bothering. So there's a lot of interest. So yeah, maybe XRP, which is seeing a greater corporate interest or financial institution interest. Maybe that makes sense. But Ethereum, I think, has way more devs.

Personally, I'd trust Ethereum more. Just because it's more decentralized. Scott, I've lost you. I can't hear you. My sound is back. Now, Columbia Central Bank tabs tripled a pilot CBDC. This was in June, and they launched a platform in May that allowed central bank digital currencies effectively

to be built on XRP. So that's the story there. Just circling back really quickly to the ETF, Nate Garaci, who is, I don't know if that's how it's pronounced, president of the ETF store, he says, a lot of noise out there, so here's my formal prediction on spot Bitcoin ETF. First, I think Grayscale wins lawsuit. That could happen, like I said, as soon as today.

Second, combo of Grayscale lawsuit win plus coin SSA is enough for SEC approval. And then in other words, I think we're getting a SPOC ETF like close to 100%. And then on top of that, James Safer from Bloomberg pointed out that we could get a decision as soon as, and we will not, guys, but as soon as today, August 15th, is the big date that was originally tapped. Although we've already seen ARK be kicked down the road. But we actually could get to news on this today. So this is brewing. I suppose the SEC can't be seen to be treating one issuer more favorably than others. So if they make a decision,

it'll have to be to allow all of them at the same time. There's quite a long queue, isn't there? They can't just slowly allow some and not others. Yeah, plus maybe all these Ethereum futures ETF proposals There's quite a long queue, isn't there? They can't just slowly allow some and not others. Yeah. Plus maybe all these Ethereum futures ETF proposals now they're lining up, which to me seem more likely to be approved because they're effectively the same as the Bitcoin version. It's already been. Yeah. I mean, yeah, absolutely. I mean, very, very similar. I can't see from a structural ETF perspective any difference at all. But we know like first mover advantage you look at pro shares uh versus i can't even remember the other issue in the united states now but

valkyrie yeah i mean the difference is dramatic btf for b yeah they get they tried for btfd as their ticker which was amazing but yes it was they were i think 24 hours apart in approval and it was like a 10x in AUM for the first one. Valkyrie ETFs, $30 million of AUM versus $1.1 billion for ProShares. So being the first mover. Yeah, 50 times. Yeah, 40, 50 times more. And like you said, literally, I think they were approved within 48 hours of one another.

It was sort of that race. But that could be different with BlackRock, right? I mean, if you see some smaller name for some reason get approved first on a spot ETF and then BlackRock comes in, I think people are going to go to BlackRock. Absolutely. That branding, the trust of it all, I think it's incredibly important. It's such a massive name. The biggest asset manager in the world. Yeah, I mean, I can see it being incredibly popular.

I mean, it's already the case in the equity markets well you see some etfs are issued by uh by blackrock they're technically not as good as some of the others by smaller issues but their aum is much bigger they've got a massive sales force have well-established connections with a lot of investment managers so yeah i think they would kill the rest of the market. Yeah. If that thing gets approved, it is not going to flop. And meanwhile, in Europe, first spot Bitcoin ETF lists in Amsterdam. So this is, we saw in Canada, we've seen it in South America, now Europe. I mean, this is happening. I have an issue with this. I have an issue with this. Talk to me. Yeah. Our legal team is kind of a bit frustrated with this because it's it's technically it's quite difficult to explain i'm not very good at it but it it's under use it's law it's not use it's compliant

so it's it's it's a bit of a strange one here but it's a bit disingenuous to call it uh an etf i think um so you know i don't want to get myself in legal hot water here, but I think when many people sort of kick the, you know, kick the tires of this product and look at the due diligence, I mean, ultimately, whether it's an ETF or an exchange-traded product in Europe doesn't really make any difference. So if you have an ETC, exchange-traded commodity, or exchange traded currency,

that's FISCI backed. That's technically no difference to an ETF. I mean, this is confusion in America. An ETF means something quite different. In Europe, an ETF has to be USIX compliant. That means gold, for instance, can never be an ETF in Europe because it's 100% gold and a usage fund has to have diversification. And so I just think it's a bit disingenuous. It's good marketing, absolutely. But ultimately, it's absolutely no different to some other funds, physically backed products like ours, for instance, or any of our competitors for that matter. Sort of being fed lies. Shocking. Shocking that the crypto media maybe got this one wrong. Well, it's just their marketing.

Yeah. Well, it's funny because when we saw the BlackRock ETF proposal, there was also this huge debate as to whether it was truly an ETF or whether it was some sort of trust. But once again, it semantically was an ETF in that case. Yeah, I mean... Different, different than this. ETFs are just mutual funds that can be traded every day. They're open-ended, essentially. Like traded like a stock and share. That's as simple as that. Yeah, yeah, that makes perfect sense.

So the final story I had here, Michael Burry exits Alibaba, JD.com, stakes and portfolio overhaul. But the big story here was that the world was reporting that Michael Burry had put on a $1.5 billion short on the stock market once again, because nobody understands how anything works. That was the notional value if you added it all together, but really it's just tens of millions of dollars sort of at risk and he's not doing the epic short part two here, right do people pay attention to these people i mean because they were wrong once yeah exactly once and yet there are a lot of i think during the credit crisis there are a lot of celebrity celebrities made

but i know lots of economists that timed the credit got the credit crisis right in 2006 but lost their jobs because they were out by one year they They knew about it. And I think a lot of people who have got the timing right were just lucky. And even seeing the big short film, he was kind of lucky. He was really right on the edge of it. You can't hold shorts like that for a long period of time. So, I mean. Yeah, being right and being profitable are two wildly different things when you're aggressively trading these markets,

especially when you have expiries on options and puts. And Mike McGlone comes on here basically every Monday and says, well, I've been right a lot, but I didn't make any money on it. Right. It's like I was too early in 2008. You know, I was heavily short in 2007. In the beginning, I lost money. I mean, listen, like I think right now, personally, I believe the stock market is topping. But, you know, if you put on an aggressive put and it goes up another five percent before that happens, you lose your money. But there's another strategy you could take that's a lot safer.

Just wait for having a fall of pieces and buy. Exactly. That's what I've tried to do over my career. Yeah, I think you don't need to be right on the shorts. Actually, I tweeted earlier today something to the effect of 70% of the years in the last 100 years, the stock market has gone up, right? Yeah. I mean, and that's to your point when we were talking about the Argentinian peso. It's more about the denominator, right? Bitcoin's an all-time high against the peso.'s a great clickbait title but really the

peso is just absolutely dumping to hell yeah absolutely and makes sense for them to become uh to get pegged to the dollar essentially yeah well that would uh save the bitcoin price in argentina certainly would make that chart look very different well james i think i'll take it up enough for your time any final, anything we might have missed? Don't be too disconcerted by the low volumes in Bitcoin. You know, I think it's becoming an increasingly seasonal thing, very similar to what we're seeing in equity markets, for instance. I do think it will pick back up.

It just seems like everyone is away on holiday at the moment. That's why volumes are so low. Yeah, we see this almost every summer. This is a little different because the volatility is a bit lower. We have lower volumes. But I also don't think, considering the banking situation in the United States and the lack of clarity, that it's a surprise that we're seeing no volume. You almost can't trade in the United States at this point.

Yeah, I mean, it's, what, $3 billion a day versus $11 billion for the start of the year. It's not that bad. I mean, it's still the FTSE 100, for instance, trades $3 to $4 billion a day. So it's still a deeply liquid asset. Yeah. And there's also just, I mean, why? Why would you be taking a position right now, as you said, right? Just wait and see what happens. Wait till we get the next breakout. And listen, the next guest here is a great chart technician, probably has quite a few thoughts on that. So I'm going to bring him up in a second. James, thank you so much. Everybody, James's Twitter is in the description. Please follow him. Always a pleasure, man. Thank you. All right, guys. Well, now I'm going to go ahead and bring on on ben i don't know if he's ready yet or if

it's too early but we're going to get him anyway since i see him since i see him back there what's up man thank you so much for uh joining this first time yeah first time on the channel uh thanks for having me scott and we've had some productive conversations on twitter spaces and on twitter i want you to clarify something i saw that you tweeted at trading view the other day there was this massive gap up i think it was on total three or something is that correct and you can do a screen share if you want but there was this massive gap up and you basically said what the hell guys yeah because not it's not that i'm so petty that i'm you know that i'm no we can't include other other coins in their

definition of total three let me just share my screen so people can- Sure, yeah. Give us an idea of what's happening there. All right, I think you can. I gotcha. Yeah, so essentially what happened was there was this like massive gap up. A lot of it has been erased now because I contacted them.

And my general thought process was that, you know, it's okay to add new coins to the definition but if you're going to do that it would be nice to retroactively change the prior candles so that it doesn't mess up all the indicators going into that specific chart um and so yeah there was this gap up i i reached out to them to just clarify what was going on and essentially they just added more coins to the definition of total three. And now it looks to me like they've actually walked some of that back, because now you can see the total three has actually fallen back down to 344 billion.

So it's it sort of shaved off about 13 billion of the 17 billion that was previously added. So it seems like it seems like for now things are at least back to normal. I do imagine, though, at some point they're going to want to expand. But I hope that when they expand, they make an announcement on exactly why it's changing. I think this time there wasn't really any reason. We just woke up and saw the Bitcoin dominance below 50 percent, but the market hadn't really moved. So I think a lot of the markets said absolutely nothing. I think we all know that we talked about that. We just did historically low volatility here, pretty much historically low volume. You combine that with banking issues in the summer.

It's not a surprise that nothing's really happening here. But I think you and I actually share sort of a common idea about what comes next. I'm not convinced that Bitcoin's about to go up, personally, eventually. But I think that maybe there comes a dip first and that altcoins get absolutely just destroyed when that happens. Yeah, no, I completely agree, Scott. And, you know, I think it was you,

correct me if I'm wrong, we were doing Twitter spaces and you talked a little bit about maybe some systemic risk in the altcoin or in the DeFi space. Yes. I actually really do agree with that view. There's a lot of excess liquidity just sort of like frothing around in the DeFi space. And it wouldn't take much or a lot of

confidence to be lost there. And there could be a windfall event. I think about how, you know, Bitcoin has gone up right for the first half of the year. And if you look at like monthly returns of Bitcoin in pre-having years, every single pre-having year to date, right? 2011, 2015 and 2019, we've spent about half the year going up and half the year going down. You get about six red months and six green months. And this time in 2023,

we've had about five of the first six months be green. Same thing we had in 2019, five of the first six were green. In 2011, five of the first six were green. In 2011, five of the first six were green. But in both 2019 and 2011, five of the next six months were red. And I still go back to this idea that in the pre-halving year, you have to wreck both the bulls and the bears. And that way we all get sufficiently wrecked. And the issue, Scott, is that the altcoin market has been struggling all year, right? I mean, it really has. And Bitcoin has significantly outperformed.

But the issue is that alts have struggled with Bitcoin doubling in value. So what happens to alts if Bitcoin retraces any of that move? And I think that is the bigger issue here. And that is the most brutal part of the cycle, because that's the part of the cycle where the Bitcoin dominance goes up when Bitcoin USD goes down. And a lot of people haven't experienced that part yet, but I think it's coming. Yeah, I 100% agree. It always happens in every single cycle. We should see dominance continue to rise. And interestingly, in past cycles, not necessarily at this point in the four year cycle, but past Bitcoin versus altcoin behavior. If you saw Bitcoin go from 15 to 30 or 25 to 31 on that BlackRock ETF news and then go sideways like this, you would have seen altcoins absolutely exploding and it just has not happened. Right. So Bitcoin up and then sideways was the like that that was the formula for a good altcoin action. And we haven't seen it.

Yeah. So so normally you're right. You're completely right. When Bitcoin goes above like it's 20 week SMA or 21 week EMA, whatever you want to call it, when it goes above these fairly bullish moving averages and then goes sideways, that's normally the sign for the altcoin market to run if it's going to. But this time it didn't. And I think it's very similar to what happened actually over here in 2019. Right. So in 2019, Bitcoin had this massive pump through June, and then it essentially just

went sideways until September. And then it started off its final downtrend before kicking off into a new bull market that took us to new all-time highs in 2024 or 2020 and 2021 what's interesting is that back over here in 2019 you can see that while bitcoin was still moving sideways if we flip this back over to the altcoin market in you know around that same time period what was going on with alts they were they were they were they were going down right like they they actually fell below the 20-week sma two months two and a half months before bitcoin did in 2019 and so i i think that this was sort

of the sign the altcoin market was sort of the sign that like it was that liquidity was leaving the cryptoverse and that it was only a matter of time before it hit Bitcoin. So I'm basically of the opinion that not all of it, but a lot of the move by Bitcoin is just people going to the relative safety of Bitcoin over the altcoin market. Right. So we've seen people. It's a washing machine. We know that there's no new money. We know there's no new money. So Bitcoin can only go up to some degree if people are selling their alts into Bitcoin. Right. I mean, look at the total market cap of crypto.

It's basically the same spot. Look at this, August 15th of 2022. Same market cap as it is today. But what happened since then? Bitcoin's up since August of 2022. Most altcoins are down. So it's basically just been a rotation of capital. Yeah, that makes perfect sense.

And interestingly, we talk about the four-year cycle. I just have this chart that has kind of halvings, bottoms, presuming, of course, that we've seen the bottom here, just to be clear. I use RSI. It shows every time that weekly RSI has gone oversold. It's right at the bottom. We see sort of that move up. Everybody's saying, listen, the halving's coming.

That means we're going up, up, up, up, up, no more down. But if you look at any of these bottoming cycles, kind of to your point, right, we had January of 15, you have this bottom, then kind of sideways, but you come back down and make a slightly lower high here, right? That was in August in that case, you're talking about sort of September, a higher low, excuse me. And then the one you just pointed out, yes, of course, this is largely because of COVID, but you have this bottom sort of in December of 18, way up to 14, which you pointed out, but then all the way back down to just sub 4,000 on that COVID drop. We're just up since the bottom here, right?

So like, shouldn't we get a higher low, maybe some drop? I mean, I asked my guests yesterday on Macro Monday, I said, listen, what's your like, oh shit bid right now, You know, on Bitcoin. I say, listen, I say, I think we probably go to 26, 25 at some point, no doubt, but I'm also bidding 19 to 20. Because why not? Yeah. Yeah, no, it is interesting. There's a lot of people that are proponents of the sort of the cyclical behavior of Bitcoin, but I find a lot of them sort of ignore the fact that we usually get a shakeout before the halving is what normally happens. Because basically, the people that YOLOed into the altcoin market for the entire bear market, the last person finally realizes that Bitcoin is likely going to lead the bull market.

So they finally capitulate their alts into Bitcoin, and then Bitcoin drops, right? So then they get wrecked on Bitcoin too. They capitulate Bitcoin when it drops, and then the whole market resets, and then we go up. So yeah, I think we will have a secondary scare. We had it in August of 2015. We had it in March of 2020. And you know, I know a lot of people sort of a counterpoint to the March of 2020 drop is that it was a black swan, right? But a counterpoint to that is that, you know, we had an inverted yield curve in 2019. We had a recession in 2020, right? We have an inverted yield curve in 2022 and 2023. There is a decent chance we see some form of either a brief recession, a mild recession. It could be a hard landing. We don't know. But I think a lot of it is just history repeating

itself. And so, yeah, I think we will get that secondary scare. The nice thing about it, though, is it should really flush the altcoin market out and hopefully divert capital to more useful projects than a lot of the scams. I mean, there's a ton of scams out there. And a hundred new scams a day, it feels like. That was kind of my point about DeFi that you sort of latched onto there when we were having that conversation. I mean, this curve finance thing is a way bigger deal than people realize it's already in the past. And that's what we were specifically talking about in that point. And sort of, I think that the point that I made wasn't that, listen, we have hacks

or that DeFi doesn't matter. The point was that this guy was able to take a loan large enough on something illiquid enough without the foresight to see that that was big enough to cause systemic risk across DeFi in mass. One person's loan against a coin that they founded, this is the same Bankman-freed FTT just in DeFi, right? So I'm not saying it will happen, but as you said, if you look to DeFi, there's crazy systemic risk and it wouldn't take something huge to absolutely rock that space. Exactly. Yeah. And when you were talking about that, I think the people that came on after you easy systemic risk and it wouldn't take something huge to absolutely rock that space. Exactly. Yeah. And when you were talking about that, I think the people that came on after you were kind of giving you a hard time about it. I'm like, I think Scott's absolutely right. You know, I mean, like there is no one wants to consider the risk a lot of times until after it's already

behind you. Right. But we have to talk about it before it happens, because, you know, I look at look at ETH Bitcoin, look at this chart. I mean, this just to me, it looks like a double distribution phase, kind of like we had back over here. And so that seasonality, by the way, with ETH Bitcoin, guess when it's the worst? It's the worst from basically now until the end of the year, right? Like monthly average returns on ETH Bitcoin are red from June until December. So I think you're right. I think there is a lot of systemic risk in the DeFi space. And the only reason I think it hasn't been uncovered yet is because we've been risk on since January, right? I mean, Bitcoin has been risk on since January. And I just don't think it's, I don't think it's given the altcoin market reason to to sort of find that that true bottom.

And remember, Scott, you know, you pointed out higher lows on Bitcoin earlier during the secondary scare. But people should also recognize that even if Bitcoin puts in a higher low, a lot of altcoins can and will put in much lower lows. OK, it's guaranteed. So but I think a lot of people just sort of think like, oh, well, no, my altcoins already bled 90%. It won't go down anymore. There's a big difference between 90%, 98%, right? And we've seen those altcoins do that in prior cycles. Many of them didn't even bottom out until March of 2020 of the last cycle. Okay. So let's say we're right. How do you actually trade this? What would you be interested in? If your core assumption is that

Bitcoin is going to drop, altcoins are going to drop lower. I assume you have no interest in being in altcoins right now. But is this a situation where you look to short something? Or is it, as James and I were just talking about, you just wait for the wreckage and clean up the mess at the end? Sit and stable, sit in dollars, and buy a few choice altcoins and Bitcoin when you think the bottom's in. Yeah, so my strategy basically for the last 20 months has just been no altcoins until we see the dominance above 60%. This is another good way to look. And by the way, I don't short the altcoin market just for everyone to know.

I don't even know if we can in the United States, but I don't. It's a very dangerous thing because, again, you can be right about the direction, but it doesn't mean you're going to make money because all it takes is just like a random wick when you're sleeping to completely to completely stop you out. And then and then, you know, who cares if you were right? If you got if you got it stopped out on the way, you know, on the on the way that you thought it was going to go, you can still lose a lot of money shorting the altcoin market. But again, look, look at this chart. This is total three minus USCT over Bitcoin. It tends to peak at parity with Bitcoin and total three minus usct over bitcoin it tends to

peak at parity with bitcoin and it tends to bottom well it tends to we don't have a ton of data but around that 25 percent level so you know i would be more interested in the altcoin market once it drops down to about a quarter of bitcoin's market cap um and and that would essentially look from here i know and you said this is no stables, right? I love that because you and I had that original debate. Well, it's taking out USDT. Which is effective, right? Yeah. But I mean, you're still talking about another 45% drop of altcoins on their Bitcoin pairs,

right? And this does not even include Ethereum. If you want to include ETH, look at total two minus USDT divided by Bitcoin. I mean, like this is where we are right now. I mean, I mean, you can see the last time I drew this out, it was a 59% drop to get down to the bottom. Now it's about a 58% drop to get to get down to a potential bottom. And I mean, it's not that it has to go there. I mean, even if it came down to this level, it's still a 30 to 31% drop. So again, my view is that altcoins, they're too risky in the sense that there are likely some

that have bottomed on their USD pairs, like there's always a few. But it's really hard to know which ones those are at this stage. And so what I've said for the last 20 months is that anything you want to put in crypto, in my opinion, should just go into Bitcoin, because the dominance of Bitcoin should go up no matter the direction of Bitcoin USD. So like, if for whatever reason you want to, you want exposure to crypto, Bitcoin should give you the exposure that you want. Because, you know, if something crazy happens, right, and you know, and it doesn't get that secondary scare, and let's say like the spot ETF is approved, and we just go back into risk on and ever, you know, the Bitcoin will lead the way Bitcoin leads the way in the bull market.

You know, think about what happened in 2020. Bitcoin, when it hit a new all time high, ETH was still at like $600, you know? And then it went to $4,000. Yeah, right, right. So the altcoin market in general doesn't really make its move until after Bitcoin goes to a new all time high. Right. And I mean, I mean, it does make moves before that. But the real big moves that people want to talk about the alt seasons don't occur until after Bitcoin hits new all-time high, right? And I mean, it does make moves before that, but the real big moves that people want to talk about, the alt season, don't occur until after Bitcoin hits new all-time

highs. So, you know, I think if you want exposure to crypto, Bitcoin is probably where you want to be because even if Bitcoin drops 50%, the altcoin market would probably drop 70 or 80%. And if Bitcoin goes up, the dominance of Bitcoin goes up. So the dominance should go up either way. Therefore, the altcoin market is too risky. But if, hey, if you show me 60% dominance in the altcoin market, 25% of Bitcoin's market cap, then I would be interested in the altcoin market. I would too.

But the question is, if you're at 60% dominance, but Bitcoin's at 20K, you know, do you want to get back into Bitcoin anyways? Because, you know, that's going to have to lead the way. I just tend to agree that

I'm finding it hard no matter how many ways I look at this to make the case that it's better to be in altcoins than Bitcoin. I think both can go down. I just think you're going to lose a hell of a lot less if you're in Bitcoin. You're completely right. And when I say get into altcoins, if we go down to those levels, like if Bitcoin dominance is a 60 percent, when I say altcoin market might be worth the risk, I mean, like maybe like a few percentage points of your crypto portfolio. Like it still would be a majority of Bitcoin because look, you don't want to be the schmuck

who is right about crypto or Bitcoin in general, but you didn't experience any of the upside because you just YOLOed it all into altcoins and went to zero, right? Bitcoin at least provides you that upside. And it's more probable to work out than the altcoin market will. Yeah. Obviously, there's a famous quote, history never repeats itself, but it often rhymes. So even if it's not exactly the same,

we'll probably have a mimic of something that's happened in the past. But I guess the most important question then here is, what invalidates this idea, right? What if all of a sudden dominance for, I can't tell you why it would or wouldn't happen, but what if we're just kind of wrong? Yeah. Well, I mean, I guess one thing is if trading view decides to change the definition of total three again, that can knock the dominance back down. But I would say if you start, if you start getting getting daily closes or weekly closes on dominance back down here, like at 47% and 48%, I think that would be a warning sign to the dominance theory. If you look back last cycle, once we broke the range high on dominance, we consolidated for a bit, but we ultimately just kept going higher.

Here we are, we're doing the same thing, right? We broke this range high. And even a bigger, longer range. Yeah. Yeah. And it's just been, I think it's a lot of just just so much excess liquidity this cycle. And it's just taking longer to really pull that out during this rate hiking cycle. But look, if you were to get like weekly closes by dominance back down here at like 46, 47, even 48%, that would probably be a warning sign but as long as you're up here right as long as you're at like about like 49 and above i i think it's still it's still just more or less doing what it should be doing okay makes perfect sense any other final thoughts before i let you

go anything we may have missed or uh you want to make sure that uh everybody knows yeah i think the one interesting thing when i think about the altcoin market is is you know we we've seen a lot of people call for alt season, like basically every month for the last like 18 months. And the thing that I have to go back to is, so this is something called the social risk. So I basically I track like, you know, YouTube views and YouTube subscribers and Twitter, you know, Twitter followers to various crypto accounts and whatnot. And like, I constantly ask myself, like, you know, if you're buying altcoins right now, who's the marginal buyer when interest in crypto is still going down, right? Like, because the idea is if you go buy an altcoin, you want to sell it to someone later on, right? Like, but if interest in crypto is still going down, who's the marginal buyer, right? And

so when you look at this chart, you're not seeing lower, you're not seeing higher lows and higher highs on the social risk leading into a massive bull market like you can see in 2016 and 2017 and 2020 and 2021. You're seeing lower highs and lower lows more reminiscent of 2018 and 2019 after this peak. That's another reason why the altcoin market is still somewhat premature to be excited about. Just because interest in crypto is waning. Although I do think that we will bottom out in terms of social risk sometime in the next six to eight months. Yeah, I agree. And these are all your own custom indicators, correct? Yes, yes. These are mine. Where can people check those out, follow them, utilize them?

How do they get access? Yeah, so so just into the cryptoverse.com um but i also i also talk about them basically every single day on my youtube channel just benjamin cowan so you can you can find me frequently ranting about them over there guys you should definitely be checking them out your years are some of the very few videos i have time to watch make it a priority. Always. I find extremely interesting. And I find that more than most of us, you make an incredible case backed by data for your thesis, which I think, you know, we like to do things like say my title, Bitcoin will pump if this one thing happens. We rarely do that, by the way.

But today that was the title. And it was if Argentina president, none of that matters. Right. At the end of the day, you can find all of it in the charts and in the data. Right. And I try to back up everything I say with data. Even though I do that, I still do sometimes get things wrong. So we should know that there's no perfect solution here.

But at least I try to make it data oriented. I think you do an incredible job. Guys, everybody, please check out his channel. Check him out on Twitter. Look for him. And you're welcome back, first of all, anytime. anytime but also uh really awesome when we have you on space is really really helpful yeah yeah scott thanks for having me i really appreciate really appreciate being here well guys everybody check out ben thanks ben have a good one man all right guys

out that's awesome guys uh a walking master class and uh always really interesting to follow really always interesting to listen to and as as he said, he can be right or he can be wrong, but he's certainly got the data to back up his thesis, which many don't. I thought that was absolutely incredible. I would love to have him on more often. Guys, you've got to get off of here, heading towards Twitter spaces. We didn't talk about today, but meld, of course. So get on the waiting list over there.

Absolutely incredible marriage between actual legacy banking and DeFi, where you can mitigate a hell of a lot of risk that we talked about before. Definitely worth getting on the waiting list there, guys. Go do it. Otherwise, guys, that is all I have for you today. Can't do a better conclusion than having Ben Cowan on. I will see y'all tomorrow. Peace.