The Wolf Of All Streets - Bull Market Ending Early? | Crypto Town Hall

Episode Date: April 16, 2024

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Lawyer ETH, is there a reason you're changing your profile photo every three days? No, this is like, I'm going to stick with this one. I think I didn't want to be a bear anymore. I was done with the bear. Is that an ETF as well? No, this is just something I made in mid-journey. It's just like a face, you know, so it's not my face, but it's a face. You can think it's my face. So you've moved away from NFTs as well, NFT PFPs? Yeah, I don't want to, I want to be able to sell those.

Yeah, have you been looking at the market though? from NFTs as well. NFT PFPs. Yeah. I don't want to, I want to be able to sell those. Yeah. Have you been looking at the market though? The last one was, the last one was Mid Journey 2. I was never using a, like a, something I could sell. I want to be able to sell my NFTs.

What was your NFT? Wasn't it a bunny once? No, it was just a bear in a city. I don't know. But the NFT market just, not doing too well.

No, I mean, E market eth nfts no but if you go on farcaster you can get these free mints that go up i hear about i don't know i'm not i'm too busy for that yeah i know that um um there's also nfts on um obviously bitcoin ordinals are doing well yeah yeah and um and i heard someone say base nfts i haven't looked into that have you seen anything there i mean i think there's been some attempts i don't think there's a lot of traction actually like again like i think the base nfts that are mooning are are related to firecaster uh like i think there's going to be a lot of attention there but yeah no i think that all that eef nft energy from last cycle I think is probably going to go into Bitcoin this time.

Interesting. I mean, but I'm not sure that you'll see the Maxi, the Bitcoin Maxis buying them. I think you're going to see like the old ETH traders move over to Bitcoin to try to get it, like move it over there. But I think most Bitcoin Maxis don't want to part with their Bitcoin for pictures. Yeah. How are Solana NFTs doing? Any idea?

I don't think very well. I mean, like there was a, you know, a pop punk did some good art that did very well. And people try, I think Magic Eden tried to copy that. They even contacted, like they wanted me to do a collection, but then very quickly they were like, nevermind. We're moving off from that. Cause I think Solana just like the NFT movement just didn't go very well

there. Yeah. It's interesting. And obviously all that, all these traders and djs just moved into meme coins yeah you know we're following the hype right yeah i can't blame them um matthew i'll give you a thumbs up before we kick off the show uh are you now see nft market yeah it's just been interesting to see sort of a a drop in a drive of liquidity on both the Sol and the ETH platforms as well. A lot of people moving over to Bitcoin from the RUNES perspective, but it'll be interesting to see.

I definitely agree that it's tough to think people are giving up sats for pictures at this point. And why do you think the NFT market just didn't pick up like the rest of the market? I think it's just a matter. I mean, it's all an attention economy, right? We talk about liquidity and how the pendulum moves back and forth in the market. You've seen the Bitcoin halving take up a ton of the oxygen in this narrative ecosystem. And you've got another part with the runes and this sort of new protocol.

So people are really eager about that. And you've also seen, you know, just a, you know, kind of an overall drag on the market in April. So it's been kind of just interesting to see where liquidity flows from time to time. All right, let's kick off the show. Let me just check the news for the day. Mike, it's a pleasure to have you. We haven't chatted about the markets for a while. I know we briefly chatted in one of the spaces a few days ago. I want to get your thoughts on the markets in general. I think we saw a pretty big correction a couple of days ago due to geopolitical reasons when Iran attacked Israel. But then those concerns have eased as of Monday, as of yesterday. And it just, it seems to be coming to be, you know,

easing further and further as time passes, you know, Israel hasn't responded there. And then looking at the outflows, so outflows are at $33 million. I think the ETFs have kind of slowed down as expected. We'd love to get your thoughts on the markets in general and maybe you can start touching on the um the hong kong spot bitcoin etf that's expected well i appreciate you having me on and when you say mike i'm always concerned typically when you yell mike in a crowded room there's 10 people who'll answer so i appreciate

being one of the few mics the key thing is uh yeah i think you pointed out um first of all beta started to back up finally and bitcoin potentially leading that way now there's always reasons um the latest um violence in the middle east and you know thwarted attacks by by iran was quite shocking i understood they launched over 350 missiles and drones and virtually none of them got through. That was kind of shocking. But the bottom line there is you have to first start with crude oil. Crude oil looks like it's peaking now around 85, about similar to when it did last year, about 95. And you can really see that in hedge fund positions, managed money net positions are about as long as they were at

the peak last year. So crude oil, for crude oil to keep going higher, in my view, you need some form of continued disruption of supply in the Middle East. And we haven't really had that yet. And it's probably more likely to drop. And particularly if the stock market goes down. So it's one thing, look what happened. It looks like the Hang Seng has had its bounce and it started to roll over. Bond yields in China have just reached a new low. Bond yields in the top 10 countries, economies ex-US, that's China, Japan, India, Germany, right now, the average of those four are about 150 basis points less than the US. So from a bond standpoint, inverted curve standpoint, the world is heading towards a

deflationary recession. And the US is the lone star, and S&P 500 is the final bastion of buoyancy. And if that goes down, the dominoes trickle down. So the way I see it is this latest uptick in US bond yields is part of the high price cure. We all saw that happen in commodities. Commodities go up too much in 2022, and that just makes them go down. And to me, that's what's happening in Bitcoin and stock stock market right now. We have the high price cure kicking in. I don't think it's a coincidence that we have sticky inflation with the stock market making record highs, Bitcoin making record highs, and crude oil bouncing.

Now it's a reversion process. And I'm afraid to say it. I think it's going to continue. So we'll just look at simple technical chart patterns. One thing that's really concerned me in S& in sp500 those of us who are pattern recognition type people things lessons i learned in the trading fits 30 years ago this chart pattern we've had since the low is one of the most disconcerting i've ever seen now we've had the first correction we have gaps below the market and smpe minis in the market you drop 10 percent sp500 and mean

nothing it looks like it's just getting started. So to me, that's part of the drag, the back and fill of a typical bull market. And the question is, how much lower does it bring down Bitcoin? And then what happens when we recover? So I'll end with this. I'll stick with what I'm concerned about is gold outperforming the S&P 500. It's very disconcerting. I think that's going to continue.

It's up 15% in the year and S&P 500 6% now. It was 10% for a while. And the key point was in Q1, you had a great year. And I think prudent investors said, thank you. And they're still rolling over to T-bills. And this issue with the high price cure looks like it's just getting started in risk assets. And talking about Bitcoin, Mike, talking about Bitcoin, how long do you expect this correction to last and how long do you expect it to go? Well, there you go.

Exactly. I wish I knew, but to me, the number one thing right now is beta. We have to get through this process. We have to prove to everyone that this risk asset that typically trades about three times the volatility of beta is not going to suffer when beta goes down and beta is peaking. So let's just look at the S&P 500 right now. It's below last month's low. That's the first time we've done that in a while. It's way overdue. So we have to see. And I just, if it's normal, if S&P drops 10%, Bitcoin drops 30%. That's normal the way it looks. You want to see divergent strength. It'd be wonderful if it goes up,

but that's very unlikely. And the bottom line, I think, now, as we're seeing just a little bit back in Phil and Beda, that the fastest horse in the race is doing what it usually does. It leads the way, and it's potentially going to go down a little more if Beda keeps backing up. Matthew? Matthew Dixon or Matthew Hive? Yeah, hi. Thanks for having me again. Yeah, I've said for some time, I think the liquidity is draining from the market.

And obviously, Bitcoin, among others, has to suffer. So I don't see that changing. I know everyone said it's election year. But even so, the big concern is, I mean, the Fed aren't able to lower rates because they've got sticky inflation. But I think the economy needs it now. So we're beginning to see now unemployment or employment becoming a problem in the U.S. So as you say, U.S. is the last bastion of growth. China had better figures than expected. But even so,

we don't even know how accurate those figures are. So I think that world economy is slowing. It's just off the back of all the money printing we had back in 2008, back in COVID times. And I think it's just an experiment, which we haven't even seen the outcome, the results of that experiment as yet. And I think the outcome is going to be that all that money printing just caused money to flow into risk assets like Bitcoin and didn't produce any real meaningful productivity gains. And so I think that now we're beginning to remove liquidity, the market's going to suffer. So we're hoping that this would just be a simple ABC correction down for Bitcoin, in which case probably we'll see a bottom around maybe 58,000. But that could

change into an impulsive move to the downside. So I saw S&P the other day. It's been a reasonably long held parallel channel to the upside it broke back to the downside and had three um three big candles i think on the uh on the weekly now i think to the downside um so that's looking quite negative once we've broken that channel and it's you know we retest it and broke the downside same with sp with the dollar index. But basically, it broke the upside. So again, it's a fairly long held channel. It broke above that channel, retested the channel. Now it's pushing again to the upside.

So no telling quite where that will stop. Obviously, US dollars are a flight to safety. And, you know, even gold is not really... You see, gold fell 30 percent back in the 2008 crash and when people really need cash real liquidity they'll cash anything in whether it's gold doesn't matter what it is so over the weekend obviously most markets were closed bitcoin took and crypto took the brunt of it um i think we'll see the rest of the markets follow through. As I say, I think we've seen potentially a top in the market. We just need to watch and see and see what Israel do when there is any retaliation.

Hopefully, they'll see what happened as a win. But I doubt it. I think there is going to be some further progression. On a positive geopolitical note before going to Matthew from Hive and then and then going to david david be good to get an overview of what you discussed with danish in the space earlier and then we've got eric to discuss the hong kong etf but before that matthew did give a thumbs down on the israeli side first i know a lot of you coming to talk in 2049 maybe you're in dubai already just fyi dubai it's a massive storm right now um the airport's flooded this city i know it's a desert but right

now if i look out of my window it's uh it's uh all hell is broken loose and dubai is not used to rain so all food deliveries taxis everything's stuck so if anyone's in dubai put your hand up if you're struggling you're probably not on the space because you're probably struggling to to get a place to to get into your hotel but just a heads up if you're coming to dubai and talking 24 and you're pretty pretty screwed scott our co-host, is freaking out in the airport. He lands in the next 30 minutes. But just going back to the discussion, on the Israeli side, obviously, I'm covering that very extensively. There's been updates earlier today that the response could be as late as Saturday, which is a good thing. The later it is, the better, as late as Saturday, and could be targeting

Iranian interests outside of Iran, which is a de-escalatory move, which would be a very, very positive move. So that's on that point. But going back to the discussion into crypto, Matthew, I saw you – Matthew from Hive. I saw you put a thumbs down earlier. I would love to get your thoughts on what Matthew and Mike – or Matthew Dixon and Mike said earlier? Well, maybe I hit the emoji wrong, but I think the thing that's the most difficult is uncertainty in the markets, right? Especially when we talk about risky assets

like Bitcoin or some of these other cryptos, not knowing what these retaliations are going to be or not knowing what the scale of them is going to be is going to make these markets really, really shaky. And I think too, one of the big challenges is we haven't had a whole bunch of additional retail inflow. Like I think in the first quarter, you know, after the ETF was released, we had some significant inflows and some increased liquidity in the ecosystem. But the same players, it seems like, have still been here.

So you haven't really seen an influx of new people. Why do you think that is? Well, I think, you know, from an RIA standpoint, there's still people who don't think this is a store of value. They don't think that this is an asset class that they want to be into. And even, you know, some institutional investors, like they can't advise this for their clients because there's a fiduciary issue with advising against or advising for super, super risky assets. So it becomes difficult to market it in some sense. But I think when you start to see players taking salaries in Bitcoin, or you start to see some of the Google trends pop up and spike, that's when you'll get a better sense that retail is coming in. It just hasn't

quite happened yet. And David, I want to go to you before going to Dave Weisberger and Travis to send you an invite. David, can you give us to you before going to Dave Weisberger and Travis, I'll send you an invite. David, can you give us an update on the discussion with Danish over the last couple of days and any concerns on inflation, David? Of course, you can comment on whatever has been said, but any concerns on inflation with the geopolitical risks in the Middle East? So Middle East, not particularly concerned about its effect on the United States at this point. Certainly things could change. But in terms of, you know, I think the market is coming around to, you know, Larry Fink said just a couple of days ago he expects two cuts this year still. I think other people are backpedaling quickly. There's even been a little bit stronger

of a talk about rate hikes, although that's still the minority. I tend to believe that, you know, I've stuck with my story and will continue. I think we'll get one token rate cut for the end of the year. And I think that the market will generally be smooth sailing through the election, I should say. I think that the candidates are going to do everything in their power, especially Biden, since he's in control, to go ahead and make this economy feel as good as possible and will, you know, in whatever ways shape possible, whether it be with student loan forgiveness, tax reform, other types of relief, mortgage-related reform, go ahead and try to put money in people's pockets and make people feel good about the economy and hope that people will

vote vis-a-vis how they feel about the economy. And then maybe with some, you know, social policy issues like abortion. But nevertheless, you know, go ahead and keep things rolling. I think after the election is over, regardless of who wins, and that's a big divide between what life will be the day after, depending on who wins, I think there's going to be a very sobering moment. I don't know if it'll come immediately, but I think there'll be a very sobering moment where people will think, will rethink about what the reality is vis-a-vis our country's balance sheet, our country's ability, and I say our country being the United States, ability to issue more debt, you know, how much in terms of deficits we can continue to run. I'm sorry, Matthew, did you want to say something?

Yeah, just it sounds like almost like helicopter money. How can the Fed do that? How can that be done? How can government do that with inflation being such a potential problem? Because they can. That's the bottom line. Look, I believe you're right, right? If I were running my own pocketbook or my own household, I do not run it that way. However, that's not the way our country is run. And maybe it's an incredibly irresponsible, but it is what it is. Um, and I have to trade the market. And if the market is, if the participants in the market are going to feel good about things, you'll eventually be right. I might be dead by then, uh, but you'll eventually be right. But until then I have to,

I can't fight the tape. And I believe what, I'm just saying what I think the tape is going to go ahead and do, not necessarily what I believe the reckoning should be. And I think that the government can keep this up for really an extended period of time. Again, I believe there will be a very sobering moment. I don't think it'll be a catastrophic sobering moment, but it will be a sobering moment where we sell off considerably and risk assets aren't priced as high as they are right now. But again, I think for reasons that I've explained, there is no catalyst for that to happen before the election, unless the only unless is is is if inflation runs incredibly shockingly high. If inflation runs shockingly high, when I say shockingly, I don't mean shockingly to me or you.

I mean, shockingly to the market high. Then I think, you know, maybe the script needs to be rewritten even from before the election. And on the inflation side, Dave, you don't think that's a risk with the recent tensions in the Middle East? Because the first thing that was discussed from an economic perspective is the impact that will have on inflation and what happens on the straight of home wars. I really don't think so. I really don't think those trading routes have a lot to do with us. We'll find out. I'm not a shipping genius. That's not my area of expertise, but I don't think those routes are particularly important to the United States. More importantly, by the way, to counterbalance that, there is now also talk that the Fed may need to go ahead and rejigger its target rate to 3%. So, you know, you've got goalposts moving all over the place. And, you know,

folks that are in the market on a daily basis certainly need to be aware of the fact that none of this is static. There's a lot of dynamic activity going on all around, not only in terms of the substance, but also in terms of what the parameters are. Dave? So I was at a grad five conference yesterday in New York and listening to a chief economist from, you know, one of the Wall Street banks, Stonex, and she's made a couple of really interesting points. is really close to their inflation target because they're using the PCE deflator, which was 2.8%. And 1% of that PCE deflator inflation rate comes from housing. Now, why does that matter? Because policymakers are saying, well, wait a minute, one of the main factors for the cost of housing going up in places like New York and Miami, where it still is going up and being held up in other places from falling less is interest rates.

And so there is growing, you know, trial balloons being floated by the we need to ease to save our political skins camp, which is what David was saying, which, by the way, I totally agree with that, that they're going, they might justify rate cuts on the basis of lowering housing costs because of the implied mortgage rate. By the way, Dave, Dave, can I cut in for a second? The ECB, the ECB just did that change of script and no one screamed at them. So I agree with you. They say our 2% is coming in 2025, right? Somewhere out there, but we're going to start cutting now, right? I don't see why that can't happen here in the United States. And yes, people will all cry foul on Jay Powell, but at the end of the day,

they'll forget about it a week later. You're right. That's exactly right. But the point is the justification. That's where your justification is. The other data point on housing that she said is that ex-New York, Miami rents are down dramatically and they tend to be and housing prices tend to lag that by about four months on average. Although in this market, the market is stuck because with interest rates being as high as they are, people don't want to sell because the average mortgage is dramatically lower than the average new interest rate for issuance. So that's the thing. So that was the first thing that she said that I thought was rather interesting. The second, in terms of geopolitical risk, the common Wall Street consensus is if the Straits of Hormuz gets closed, Brent will spike by 40 bucks to like 120. In fact, it's bandied around as an if-then like a computer statement.

Now, I don't know if that's true or not, David. I have no idea. But I'm telling you, that's Wall Street consensus. And so that's one of the reasons people are so twitchy. Now, the thing to keep in mind is oil price increases are a shock that could result in high consumer inflation. But the reality is the Federal Reserve has very little to do with oil prices. And they know that. And that's why they use things like core, even though core, excluding energy is bullshit, because energy filters into everything else. But a lot of people in the Federal Reserve and a lot of economists believe high oil prices actually is a break on economic growth, meaning that oil prices spike, it's going

to tank the economy. Therefore, the bigger risk is to jobs and towards recession. Once again, tortured logic saying, well, OK, CPI may look like it's going up, but what we really have to do is cut rates. So effectively, what I'm saying is I think that the politics and the justifications are starting to align. Under normal circumstances, with what we're seeing, you would never be thinking about rate cuts, but Powell said what he did for a reason. Last point, Mike McGlone is up here. Let him talk about this. He and I will say the same thing, which is rate cuts will happen when something breaks. That break could be the stock market falling. That break could be

banking implosion. That break could be we run out of capital in the reverse repo and we need to do something to restore debt market sanity and liquidity. But that's really what they're holding their dry powder for, I think. Let me go to Eric. Eric, can you hear me? Yeah. You've made some predictions that went viral on Twitter regarding what you expect the Hong Kong sport Bitcoin ETF, what inflows you'd expect from that. But the numbers were not too exciting. I know symbolically the Hong Kong ETF

would be a great step, but from a numerical perspective, it's not really that good of a development for us. Is that true? Yeah, I was probably a little too negative maybe sounding, but remember 500 million in Hong Kong is 1% of their ETF market. That'd be the equivalent of me predicting that the Bitcoin ETFs in the US would have 85 billion. Currently, they're at 60. So it's not that off. What people just really need to understand is the Hong Kong ETF market, all told, is

50 billion. So even the US spot ETFs here after three months have more than the entire Hong Kong market. Now, the one question and the big variable is Chinese local investors. It's very, very unclear and probably, you know, not going to happen that they'll be able to buy these ETFs. It's really against the, you know, it's banned in China, you can't buy Bitcoin. And so maybe some brave soul will try to buy the ETF, but you can't get them through the stock connect program. So I guess I'd use the word it's officially banned. So I don't really see a bunch of Chinese investors buying this. I see local Hong Kong retail investors nibbling on it. That would be like what the big the Bitcoin futures

ETFs there have 100 million. So I would see this would be a little bigger than that. Anybody who's like, here's the big takeaway, though. If you're a big investor institution, and you have connections and a good broker, you're going to buy the US spot ETFs, you're not going to mess around in your home country. I don't care if you're in Europe, Asia, is it too hard? Is it it too hard for investors in Hong Kong to buy the US ETFs?

It depends on if you have a good broker. If you're an institution and you have a giant asset manager or bank who has a brokerage account that is international, most of them are going to try to buy the US ETFs. This doesn't just apply to Bitcoin. There are pension plans all across the world and endowments and bigger investors who use SPY and GLD. Because the ETFs in the US are like 10, 20 times more liquid than anything in another country. And they're 10 or 20 times cheaper. So you've got like, it's so those are the two things that matter most right cheat cost and liquidity. And so the bigger investors in Hong Kong who have connections will probably likely use the US ETFs that leaves Hong Kong retail,

but 500 million for Hong Kong retail is a home run. So you've got to really kind of balance all this out. And a lot of this comes from me talking with our analyst who lives in Hong Kong, Rebecca Sin. The other thing is she was talking to me, the infrastructure there for this is not great right now. So we're probably going to see some wide spreads on these ETFs, probably see some percent premium discounts, which nobody loves. In the US, the spreads are already one basis point and the premium discounts are pretty tight. So even though Hong Kong is going to add in-kind creation redemptions, which can sometimes help tighten up percent premiums and discounts, I think the US, even though we can only do cash here, cash creations and redemptions, we'll still see

tighter premiums and discounts. And so I don't mean to be like Mr. US, but it's just a fact. And so if you look at any big ETF, like SPY, GLD, IWM, you're going to see a good chunk of international investors, the big ones, in those ETFs. So I think IBIT, FBTC, the big liquid ones are where the bigger investors will go to. Now, Chinese locals, this is a question with the government. It's still an unknown if for some reason the chinese government just turns a blind eye and starts like i don't know and people start to find out they can get access to the hong kong bitcoin etf i'd recalibrate but it looks like that's just uh you know against the rules um so that i i'll i'll end there but that's just sort of – and the reason I was slightly negative is that this one firm predicted $25 billion.

That would be like me saying – that would be the equivalent of saying the US spot Bitcoin ETFs here will have $4 trillion. I mean, it's just – it'd be half the market. So look, I'm pretty bullish in general on the Bitcoin ETFs. I think ETFs do a good job of delivering Bitcoin to regular people. But you've got to really recalibrate based on the market size and the history of that market. And that's all I'm doing here. Terrence? Yeah.

Hey, sorry. Sorry. So, Eric, I had a question. Do you know, or does anybody on stage know, how much MSTR or Mera can people buy in Hong Kong? Do they have like the equivalent of ADRs there? I don't know. I'd have to consult with Rebecca on that one. And let me go to, without getting too deep into the Hong Kong market, Matthew, I saw you put your hand up earlier as well. Yeah, just a quick note. And the in-kind redemption is

really important because it does allow folks to have a mechanism to move money out of Hong Kong, which is typically and historically very difficult. So even though there may not be a huge volume spike in some of this, it is an interesting vehicle for people to sort of adopt Bitcoin for another use case, which would be to take in-kind redemptions and move money out of the country. I agree with that, by the way, just real quick, that in-kind creation, there could be some, that could be a magnet for certain kinds of investors. And I will say one thing, Rebecca and I were talking and, you know, our view of 500 million to a billion is more in the short, medium term, long term, it could be well, well beyond that. Especially if the rules are loosened for Chinese

investors, and the ecosystem there gets more liquidity and the fees come down. Certainly, it could grow. But I think you'd have to see the overall Hong Kong market grow at the same time. So 10 years is like, it could be much greater than what I'm saying. But our predictions are more for the short, medium term. And Eric, I wanted to ask you about the performance of the Bitcoin ETFs in the US and looking at, I think, the last few days, the GBTC's holdings are down 50%. So can you tell us more what that means for the markets

and what are your thoughts on the performance of the ETFs in recent days and weeks? Yeah, I mean, first of all, this was the greatest launch in ETF history. I also think the Hong Kong thing is somewhat overshadowed by how great the US was. Let me just say this. I think, if anything, people maybe underrate how amazing the ETF launch was here. And speaking of performance, iBit, which came out January 11th, is up 37% since it came out. Now, for me, as a 60-40 person, that's extraordinary for three months. I'd take that for three years,

to be honest. So the flows are also extraordinary. If nothing else happened, if the price was zero or flat for the next till the end of the year, the flows were flat. And I would say that this was a huge success. So we've only got three months in. So I think it was such a big success that it can kind of maybe make you put too much pressure on other things that happen. But I would really just, I want to, everybody should appreciate how amazing this launch was. And the returns are great. Grayscale is probably going to start trickle outflow soon, or it has been trickling more because the big sort of bankruptcy unlocks and the Genesis and all that sort of, I'll call that like artificial outflows. They aren't really

sentiment driven. Those are done. So now we're just left with, does a retail investor want to take the tax hit and get out and that is an equation many are going to have to come up with. We think many will just hang in there because it's probably worth paying 1.5% 5% a year, then taking the tax hit, but some will leave. So we'll see some also, over time, a lot of the assets are the ETF still has 20 billion in assets or something. But there's going to be less and less actual people in the fund. A

lot of that money is just because Bitcoin went up and the value of the holding so they're going to run out of people to actually leave the fund even if it does have a lot of assets. So I'm pretty optimistic that GBTC will will start to be more of a trickle than like a bloodbath. And they have this new ETF mini me coming out BTC which which will we think charge between 20 and 30 basis points that could and they're going to automatically put some of the existing investors in that almost like a way to throw them a bone for like hey thanks for hanging with us now

you're paying less in fees that's their way of giving a fee cut while having a product that stands to get some inflows potentially because it's more competitive fee wise that move has been done by many firms in other ETF areas and it works. I shares in the emerging markets area IMG is a good example that the mini me cheaper mini me thing is a common maneuver and it usually is pretty successful. So that could also help counteract their outflow situation. So I'll leave it there.

Matthew, any comments before we go to Dave and Mike for final updates on the markets? And Preston, you and Lloyd, I know we haven't discussed anything from a legal perspective. Actually, we'll go to Preston and Lloyd. Anything interesting on the legal front? I know there's some movements on Circle and Tether kind of figuring out regulations moving forward. Not sure how important that is. I haven't looked into it. I'll give you the mic, Preston and Lloyd. Preston, you there?

Mike isn't working. Lloyd, is your mic there? I was hoping he would go because I don't really have anything interesting to update all these people with. No, we already had an interesting discussion. I think Preston's having some mic issues here. We already had an interesting discussion. I think Preston is having some mic issues here. We already had an interesting discussion instead of having it on any legal updates. We talked about NFTs earlier and the deathly NFT market. But last question I want to ask Dave and Mike, kind of wrap up the show. Just markets moving forward, what do you expect to see? And do you expect the bull market to continue moving forward?

Obviously, a lot of it depends on interest rates and other macro factors. It would be good to get your predictions moving forward. Dave, do you want to go first, and then we'll go to Mike? Dave Weisberger. All right, Dave, I think you're having Mike issues as well. Mike, do you want to go ahead? Yeah. First of all, I think this is a tremendous opportunity for tactical traders, which is my background coming from the trading pitch in Chicago.

So I can't – sometimes I'm supposed to feel bad about being bearish, but I don't. I think these are great opportunities. And right now, the overwhelming force for everything is beta backing up. It's just an overdue correction. Even our senior equity strategist, Gina Martin-Adams, said beta needs a backup. So I think a normal 10% correction is what we've all been waiting for. And we'll just see how cryptos, how Bitcoin, forget about the rest of cryptos. Most of our spec is digital assets. The number one here is Bitcoin and the adoption

of Bitcoin on the process of demonetizing gold, which Dave says all the time, becoming digital gold. But the bottom line is, if beta backs up, Bitcoin, which has a much higher volatility, should back up too. It's just a question of how, when, and where. And I'm fearful that we're in for more of a more bigger picture drawdown in equities and that recession pendulum that everybody pushed the wrong too far the wrong way last year is swung too far against this you're just going to swing back a little bit and some of my key indicators the key things i like why not look look at if you look the

vix volatility index a 52 week moving average minus t-bell rates it's the lowest since right before the financial crisis that is number one rule is volatility is very low it always mean reverse and you look at bond yields in the rest of the world, they show you a global deflationary recessionary tilt. And if the US stock market falls, dominoes fall and Bitcoin is part of those dominoes. Press send is your mic working now? Let's find out. Is it? It is. Legal leap. Sorry, I'm just munching on a piece of chicken, and that's now been dispensed with. Legal leap. The most interesting thing that's happened in the last week is the Uniswap litigation, or rather the Uniswap Wells notice. There hasn't been a whole lot of change from the previous position.

I haven't seen anything that's really gotten my hackles up, but that's really what's focused everyone's attention, because it reflects a move by the sec directly against some major titans in defy and essentially it reflects a move by the sec which a lot of people think is you know possibly not uh they're not doing so from a position of strength but other than that there's not really a ton is the sec is the sec still a concern i think barely anyone's talking about it anymore the whole you know I remember prior to this bull market going full steam ahead, all we were talking about the SEC's war on crypto. And suddenly now it feels like their impact is minimal. Are we just getting a bit too complacent?

I mean, they exist. They continue and they continue to harass the industry. And it's pretty clear that they're doing so at the direction of political forces in Washington. But I think ultimately, you know, crypto is a global phenomenon, a worldwide phenomenon. What we see is we see other countries, Europe, of course, adopted Mika, soon ESMA, the European Securities and Markets Agency, is going to be adopting, implementing regulations for that. The UK is doing some progressive regulations on crypto, some additional regulations around stable coins there. So I think what we're going to, the rest of the world has moved on, right? And crypto is going to do just fine. There are regulatory regimes being put into place that allow crypto to be crypto and still exist

within a supervised or regulated framework. So I think the rest of the world is going to keep proceeding down that route. And the world is going to keep proceeding down that route. And the United States has to sort out its domestic political situation before we're going to be prepared to do that as well. Appreciate that. I think, Dave, go ahead. Not sure if your mic is working now. Yeah, sorry. So yesterday, I did a fireside chat in front of about 500 traders in know, traders in New York, you know, part of our security traders association with John Deaton. And, you know, we talked a lot about that domestic political situation. The other thing that's really fascinating, and of course, he, for those who don't know, he's running against Elizabeth Warren, otherwise known as public enemy number one in this

community for lots of reasons, actually a bigger enemy for me now for a bunch of other reasons, but we won't go there. The fact is that there are many people who believe that Uniswap, going after Uniswap was a politically bad move because of how many young people and young voters, which the Democrats need, participate in DeFi. And so we'll see how the enthusiasm for it goes. I mean, we all know why Senator Warren had blocked the stablecoin bills, because banks make money on float, and stablecoins make the system more efficient. And efficient means the bank makes less money. It also is actually good for everyone in the system. This political thing is going on. It's a big deal. But the point that probably isn't known

to the people in this audience is arguably the SEC's biggest overreach right now has nothing to do with crypto. And it has more or less the entire financial industry really angry, you know, like badly angry. And that's this legislation or rule proposal that you may have heard of about predictive analytics. Effectively, what the SEC is saying as if the Federal Trade Commission had blocked Amazon from doing the personalization algorithm that tells you what you think you might want to buy. Now, I know a lot about that because the person who wrote it was my ex-boss at Two Sigma, John Overdeck.

One could argue that if they had the rules, that rule, it also would have blocked pretty much every major fintech company from doing pop-up ads, etc. It basically means the entire internet economy would not have been dominated by US companies. And there are a lot of people who are lobbying that. That move is going to be a political, there will be a political firestorm behind the scenes. You may never hear about it. But trust me, there are lobbyists with lots and lots of money who are now have targets painted on the SEC. But that's a good thing.

But that's linking it back to crypto, Dave. That's a positive thing for crypto. The SEC is focused on moving away from crypto. And there's more backlash against the SEC even outside the crypto world. And kind of linking it to the comment you made earlier about this being a politically unpopular move, the Wells notice to Uniswap. That's a really interesting point to make is that you're seeing gradually, especially as this bull market continues, gradually the SEC war against crypto is starting to backfire on Elizabeth Warren and her crew, which shouldn't be ignored.

Could that mean, Dave and Andrew, could that mean that the SEC will slowly start stepping away from their war on crypto now and focus elsewhere, including AI? I mean, I don't think that. Look, I think that cognitive dissonance is a powerful motivator. Once you've decided you're right, you really change. But it does mean that it's more likely that their mind will be changed for them. On the other hand, I would expect no change, no catalyst, no anything until the election. But it is worth understanding the forces that are going on. Now, that said, there are people like Anthony Scaramucci out there who think Biden is going to tack toward the center,

which would include both on the border and in financial services. And particularly, he thinks of financial services. He thinks the administration is going to try to tack toward the center in the summer. I don't necessarily believe him, but I know he said it. And so that would indicate that would be more your thesis. Yeah, I don't think there's any world in the short term and probably in the medium term, long term being post-election and what the fallout is there, where the SEC is going to soften in any way, shape, or form.

You know, Dave just brought up Scaramucci, you know, and I have conversations inside of his organization. And some of the quotes have consistently been that the SEC doesn't care about court losses. Number one, because they win 98% of them anyways, if a couple of high profile ones don't go their way. And at this point, effectively, the one that didn't was Grayscale, and they pulled back, and now we have Bitcoin ETFs. But they don't have to think much about what happens if we lose this particular lawsuit. On top of that, we saw in the last time that they were embarrassed, right, capricious and whatever the other words that were used to talk about how they lied, lied in court, and they had to pay court costs. Remember, the people that are paying those court

costs are the actual taxpayers, right? So it's not coming out of anybody's pocket at the SEC. So the fact of the matter is, is there's no meaningful risk to the SEC continuing to be hyper-aggressive, which means there's no meaningful impetus for them to slow down and slow up. I've been saying for over a year that Gensler will continue on a proverbial warpath here. And you've got to think, if you really pull back the curtain from on a political side of things, right? So they backed off on the Bitcoin ETFs. But all of the commentary, all of the actions, you bring those things together. Since that has happened, basically is a no-go for any and all other projects, anything in crypto when it comes to regulatory.

They are being aggressive in their actions and aggressive in their words. So even though we don't like to hear that, even though we think that's all wrong, we probably should act as if that is the reality as well. So, no, there's no slowing down with these folks. Cool. Let me get Simon up quickly, actually. We'll start wrapping up. Scott, I'm sure the back channel is looking at Scott's messages. Anyone in Dubai on the way to Dubai, you're in for a surprise. A lot of people stuck in the airport and no one's able to move right now.

So Dubai is pretty much flooded. Simon, any quick thoughts on the discussion so far before we wrap up? You might want to move on. I didn't catch it. I just jumped in. Oh, good. No, we're just wrapping. I was just talking to Scott in in the background the back channel he's he's landing in dubai now and um and just booked a hotel room inside the airport so everyone's stuck in the airport but um no on that point is it uh it's flooded i know it's a desert it's fine i don't know if the airport is stuck but uh he just messaged me literally last two minutes he just booked a a hotel inside the

airport for the day and i got a message from bob who's part of my team my team's all landing in dubai and he said mario it's fucked that's all he sent me so uh yeah anyone coming to dubai to talk in 2049 and it's not going to be very pleasant today um but on that point i'm in my hotel room comfortable or my home comfortable so i'm all good anyone in dubai enjoy the the floods and for the panel really appreciate you coming on we'll uh we'll see you again tomorrow about the same time thanks a lot everyone