The Wolf Of All Streets - CPI Numbers Are Out! What’s Next For Crypto? | Crypto Town Hall

Episode Date: April 10, 2024

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Hey guys, we're going to kick this off shortly and then we get Matthew up. Christopher, good to have you. How are you, man? I'm doing good, man. A little reaction this morning, but nothing's really changing. Yeah, so the CPI numbers came in hotter than expected. We've got Kobasi summarizing it. While CPI inflation is at 3.5%, inflation is much higher in basic necessities. Car insurance, 22.2%. Transportation inflation, sorryities. Car insurance, 22.2%. Transportation inflation, sorry, car insurance inflation, 22.2%.

Transportation is at 10.7%. Car repair inflation is 8.2%. It goes through the list. Both core CPI and headline CPI came in hotter than expectations. This is the fourth straight month with both readings being hotter than expected. We now have all major inflation metrics back on the rise and all prices are million dollars. Affordability is still getting worse. It's a long-term metric we should pay attention to.

We've got here, Sins is on. We've got Matthew on. Sins, Matthew, have you been watching? Christopher as well. Have you been watching the CPI numbers? Yeah, it was pretty interesting to see. Definitely a little bit of bump in the wrong direction. Market definitely reacted a little bit, but, you know, I see a little bit of a drop here and there, and it just looks like a day to go buy some tokens. So not any particular worries.

And maybe give us a quick update on the macro, the macro performance, how the equity is doing. And how much of an impact do you think that would have on Bitcoin, especially as we get closer to the halving? As market participants, just to give you an idea, the optimism in the markets has dropped after these numbers came in. So I'm just going through some of the notes. But yeah, the concern that they have is they got Matt Hogan,

which is one of our speakers, said the following in one of his tweets. I don't believe this move fading the higher than expected CPI. Whether the Fed cuts rates by 25 basis points in June or not isn't the long-term driver of Bitcoin prices right now. It's a marginal factor. So you've got on one side, you've got obviously equities. S&P futures all nearly 90 points in minutes. Of CPM fresh rise to 3.5%.

Yeah, obviously equities didn't respond too well. But Matt Hogan is saying that it isn't going to have a major role. It's not going to be marginal. It's going to be a marginal factor in the markets, in the crypto market. ETF flows plus rising deficits matter more. And they are lining up very well for Bitcoin. Would love your thoughts on this, Matthew. Yeah, I think we need to remember that when rates go higher, they turn off the drinks at the party, right?

So as rates go lower, there's room for riskier assets. And because crypto and Bitcoin are at the riskier end of the spectrum, we tend to see moves in that direction from a correlated perspective. But on the long haul, Bitcoin itself is an uncorrelated asset with the general traditional U.S. market in many, many instances. So I would be more concerned from a macro perspective on the general U.S. market, saying that, you know, we might not get as many rate cuts this year. I don't know that we're necessarily going to get a rate increase. These numbers were not certainly in the right direction. But from a crypto perspective, I think Matt Haugen is totally right. It's a small shock in an otherwise, you know, other, I don't say like alternate market, basically. So Christopher, this is the first time we see a two-month increase in CPI inflation this year or since September last year. How do you think the market's reacted? If you look at

the charts, how does it look to you today? And, you know, what should we watch out for? Well, I mean, you know, as with any, you know, especially these government number releases, you know, there's always the knee jerk reaction. And, you know, that's what we're seeing this morning. And we're already getting a bounce off that as it is. So, you know, it may be it may be done for what it is. I don't think the market really, generally speaking is is you know overall like giving a lot of thought to this i think it's just the the people that are trying to um to guess the direction when the numbers are released the other numbers come out those are what we're seeing but i think

generally expect i think the markets just want to continue pushing higher overall let me make sure his mic is connected We'll get his thoughts on this as well. Let me go to Sins. I'm just going through some of the responses on Twitter here, on crypto Twitter. But just for the audience that just came in while waiting for Waheed from FaithTrump to connect.

So the CPI data came out. It's harder than expected. Bitcoin dropped pretty quickly. I just woke up not long before this space. The Russell Lincoln pattern screwed up. so i'm literally catching up on the news with you guys and so it did come out and we've got the uh inflation is at 3.5 so cpr inflation is at 3.5 um but necessities is much higher at kobasi kind of give us a breakdown of um of inflation for various sectors we've also got the outlook. Let me see.

I've got a tweet here from Stock Money. I'm going to read that out. I think it's interesting. Essentially says, CPI data are higher than expected, only a couple of percent, but this changed the rather optimistic market outlook of market participants.

And the brackets, likely no rate cuts soon, which is interesting because we've been talking for a while on this show on how important rate cuts, and by the way, we're a faith tribal heed. If it's not connecting for you, you just got to leave the space and come back, and then it should work.

But we've been talking for, yes, glitching for you. We've been talking for a while how much of an impact it's going to have. So we've got here, Stock Money Lizard says, our trend indicator shows BTC got rejected on the upper white line, 72k. And Chris, it would be good to get your comments on this in your area of expertise. The trend broke and now

it looks like we are headed towards the lower trend line, which coincides with the yellow moving average. So that's according to the first chart. I'm going to put the tweet out there right after I read the kind of summary here. Short-term outlook is bearish with two potential levels shown in the chart. If BTC trends up, a likely strong resistance is in the middle of 68k. Conclusion, bearish short-term trend and the broader running flat correction pattern. So far, it's not worrisome since the greater trend is still intact we'll update more soon she did a

bit of a chart analysis here it says essentially it's going to be a favorite of resistance at the 68.6 k range um would love to get your thoughts chris where the resistance is and what's the level of support i think the brand was saying in the show that 66 is a key level of support. I think 66 point something. 66.5 is a key area of support here. We'd love to get your thoughts, Christopher, a bit of an analysis. Yeah. So, I mean, for me, nothing's changed. You know, it's the same thing. We've been range bound here since, yeah, since about the beginning of March there.

So just over a month, really. Ultimately, I'm not worried. I mean, I don't even really consider this a pullback right now. We can because we're just in this sideways chop for a month. If we were to break down below, depending what chart you're looking at, around fifty nine thousand two hundred or so. That was the last macro um higher low so that would uh potentially break that bullish market structure coming off the uh you know the the bear market swing low but um so until then i mean i to me it's just it's just chop it's just sideways uh right now we're fine we dipped right here just below the hourly pivot and we like i said a minute ago you know we've kind of uh we're catching a

bounce and we pull back up above it um let me see here as far as the daily goes we're on that daily pivot uh so again not even worried about for me if i was to zoom out to the daily um if we were to continue breaking down today um the next uh support that i would look at is right around 64.5 and then 62.385. But that still keeps us, you know, well above that 59.200 area. So, yeah. And let me go back to a bit of a macro discussion again. We do have Waheed on stage. Waheed, is your mic working?

I think so. You can hear me? It is. Yeah, we can hear you, man. We'd love to get your thoughts on the numbers we just came out and more the impacts having on the traditional markets, the equities, etc. One yields and then kind of shifting slowly to crypto. Well, obviously not good. OK, but let me put this in real context.

We came in obviously hotter. So no longer is the January and then, quote unquote, February just a bump in the road. Three in a row is concerning, especially since we really only had four months of disinflation last year. So four super hot CPI, then four months of disinflation, now three months of inflation not going the direction they want. Point number two, commodities, all the, you know, leading indicators are pointing up, right? A mix of SPR, wind down, strategic petroleum reserve. So we're rock bottom level slash geopolitics slash, you know, just natural GDP. I really do feel commodity markets and especially oil, which is the biggest, most sensitive thing for headline inflation. I think that's just working its way

upward. So I don't think that is going the Fed's favor. Now, funny enough, in the last year, they did all kinds of alphabet soup, sort of different ways of looking at inflation, X this, X that, X everything. Yeah, whatever, right? So they came up with a super, super core, which takes out rents, food, energy, pretty much everything. That came super hot. That reached like almost a one-year high today. So, you know, we look back in December and when they pivoted, just suddenly they were

like saying we're nowhere near raising, you know, we look back in December and when they pivoted just suddenly, they were like saying we're nowhere near raising, you know, lowering rates. And then two weeks later, we talked a lot about politics and what have you. And then in the other show, we had Robert Wolf, who I really, really respected. He was talking about what he did. It's really not about politics. And, you know, and he's and he's he's not very partisan when it comes to finance. But that's neither near nor there. They pivoted out of nowhere in December. Everyone was sort of scratching their heads. And now, yet again, they're looking pretty foolish.

Because with 3.8% unemployment, you look 100 years, and that is in the lowest percentiles of unemployment, OK? You look at where inflation is today. You look at GDP, which is pretty strong, 2% to 3%, again, very much buoyed by inflation in my view, right? All those things suggest that they should be raising rates, not thinking about cutting. Now, I don't think they're going to raise because that's just way too political. They're not going to do that. But the reality is it's not going their way. And risk assets are probably too expensive right here, fundamentally. And then how do you expect this to impact crypto moving forward for the year?

I know you've been listening to a lot of these cryptos. Yeah. So I'll tell you, crypto has two very big fundamentals, right? One is obviously macro, inflation, interest rates, et cetera. But the second is the following, right? Well, actually three. The second is if they are naturally nudging the world to accept 3% inflation, right? No longer their mandate of two to two and a half. So like I said, you know, the Fed ought to be raising rates. You look at the Taylor rule. You look at all these things where you measure what rates should be. Rates should be going up. And yet they're sort of jawboning rates down. Okay.

And so in a way, gold doesn't surprise me that gold is, you know, 2,350 plus, right? Doesn't surprise me that, you know, platinum and silver have ripped. It doesn't surprise me that copper has gone up. It doesn't surprise me that Bitcoin has gone up. So I think the second very big thing with crypto is they are probably sniffing out structural inflation and, you know, debasement of fiat, which we've been talking about a lot. And then last but not least, the be all end all structural shift. And I'm not talking about halving and all those idiosyncratic things that are very specific to crypto. I'm just talking about the ballooning deficits. We're at a trillion increase of debt every 90 days. We're going to go from 1.1 trillion to 1.6, 1.7 trillion in interest

expense by December. I mean, how the F are we going to be paying that down? I sound like a broken record. So I think the third thing is very fundamental for why crypto keeps just sort of levitating upwards and why I think there is a very strong structural defense on those prices. So, Maxwell stinks,

and then the other two things are driving crypto. Did you listen to Dynasty Space earlier? I'm trying to get him on this stage here to find us. Yeah, I was there. I was there. Okay. Can you go back to Robert Wolf? Because you mentioned he was on there as well, yeah?

Yeah, yeah, yeah. I mean, he, you know, Robert Wolf, who we love dearly here, and we like him a lot. And he's, you know, he's a Democrat, a very proud Democrat. I really respect them because he said, you know what, the data, they should not be lowering rates. He said the rates should stay where they are, right? That's not what you hear from sort of Democrat-friendly pundits. So I applaud him, and I even asked him. I was like, you know, you are a guru in finance, obviously, former chairman of UBS, very iconic, very well-followed individual.

But he's also a very strong Democrat and a voice of reason. And he says, when it comes to this, I am not partisan. And then I asked him point blank, Robert, I've been dying to ask you, please, for the sake of this audience, tell us behind the scenes, what exactly does Yellen tell Powell? Does she whisper? Does she nudge? Does she shake? What happens behind the scenes? What exactly does Yellen tell Powell? Does she whisper? Does she nudge? Does she shake? What happens behind the scenes?

And he was pretty adamant that we are not – we're overthinking this and it's actually less political than we all think. Now, anyway, I'll take that with a little bit of grain of salt, but I do respect Robert and he makes a lot of sense. So let's see. I appreciate it. They have no excuses, Mario. There's no bloody way they could be guiding on interest rate cuts anymore. I mean, this is becoming really silly. David Darcy has tweeted a fair bit, including quote tweeting Merlin Capital.

He put out a tweet saying, FDIC chief, US is ready if big Wall Street bank ever failed. Weird, totally normal thing to say as markets are falling uh do they know of any another over leveraged bank too deep in bond losses i was under the impression so i wasn't too deep in the financial spaces for a while now i was under the impression that you know that worry is kind of kind of behind us now um but do you disagree with that well you look you look at, uh, I was going to David, I was restraining his treat and I'll go back to you in a

bit as well to get your, you covered heaven, David. Yeah. Well, I mean, that's not something you need to come out and say if there isn't, you know, something that could happen, right. You know, uh, it just, you know, it's, it's great to have that assurance, but like we assume that already, you know, it just, you know, it's great to have that assurance. But like we assume that already, you know, making a statement about it is not something that you typically do unless there is a concern or a rumor going around. You know, I've been in the camp higher for longer, no rate cuts, you know, since March of 22. You don't break, you know, 40 year relative strength and price downtrends and yields, and only have assets go up that entire time. And, you know, it's affecting areas of the market that

that really are, you know, short, shorter term finance, like commercial real estate. And, you know, it's, it's going to trickle through other assets, you know, over time. So, you know, I'm not surprised if you look at the Dallas Fed survey and the Richmond survey, the only thing that went up on those two surveys was wages and inflation prices paid. Those are the only things that went up on those two surveys. So this isn't surprising to me that we're seeing inflation get embedded. So it's to be expected in my belief. David, we'd love to get your thoughts. I'm sure you were on the space earlier. Yeah, I was on the space earlier. I'm not one to freak out over any particular print, certainly ones that miss by 0.1%. But at the end of the

day, it seems to be that inflation is more difficult to get rid of. I believe that we will be in a higher rate environment for longer. The folks that heard me earlier today, please don't hold it against me if I'm repeating myself. But, you know, I think I still think we will get a rate cut this year. I think Biden will force it because he wants it in order to get reelected. I think we will have the market will become more sober after the election. I think we will start to see a lot of talk, both in the press and amongst investors, about the reality that assets are overpriced, especially ones that are tied to interest rates like high yield, corporate debt, like real estate, and others, I think there'll be a cooling off of risk on assets after the election as well, because it'll become clear that we will be, the equilibrium for purposes of, you know, treasury rates is going to be somewhere between

five, and I don't know, call it six and a half, seven percent for an extended period of time. And maybe that's the healthy rate that we should be at, you know, permanently. The unemployment rate, I think, is the hardest part of this, frankly, to get right. I think there might need to be a readjustment in terms of what we think of as a normalized unemployment rate. This is really, you know, this is outstanding in historical context. And it's been, you know, it's been sticking to, you know, around this number between three and 4% for an extended period of time. And that's not particularly good when it comes to inflation. And so I think,

you know, the last part, you know, another way to tell the tale, the last part of the landing that the Fed needs to do may take a protracted period of time. I'm okay with that. I don't think that there's going to be some major fallout that happens from this. I just think that there's going to be a difficulty. As Jay of Special Situations said when we spoke earlier this morning, he's not on this space now, but he said the market is self-correcting. I think that that's generally the case for things. We don't need to go ahead and rocket rates things. We don't need to go ahead and rocket rates higher. We don't need to go ahead and trigger a recession. I think what will happen is we will go ahead and we'll have a sell-off and we'll have a correction. And some asset prices

need to be corrected. They're really out of whack for an extended period of time now. And so therefore, they need to come more in line. And so, you know, that leaves me with, I don't think today is the day to go ahead and make a judgment about what the next 6, 12, 18 months is going to be like. I think you need to see, you know, what happens in the wake of today's print, and then, you know, see how much the Fed's talk starts to change, and then really how this sets us up in the United States for a post-election environment. I think that that's when the rubber starts to hit the road in terms of coming to reality. I don't think we've come to reality before that. It's just not in the candidate's best interests, especially Biden, to go ahead

and have a reckoning and a realistic talk about where we are in terms of the economy and the US balance sheet. I do want to go to Waheed and David's thoughts on these comments. But before doing so, since I just want to give you a heads up, I want to go to you afterwards and discuss things that, you know, moving away from the CPI data as things that you've been talking about, as well as the ETF outflows as well, get your thoughts on that. But Waheed and David would love your, David Nikoski would love your responses to David Turiel. Yeah, no, nothing to argue.

To piggyback on what you said about you know why they're worrying about banks is reserves the reserves are very low they're they've they've been winding down and uh that's kind of why the fed is talking about um tapering quantitative tightening and slowing that down uh probably get some guidance uh June. You know what I think is going to happen? I think what they're going to do is they're going to back out of rate cuts. They're going to push that out to the end of the year. They're going to do the quantitative tightening, tapering, because they are worried about reserves.

So they're going to be a little bit hawkish on rates, I think, but they're going to be friendly towards bank liquidity, I really think. David Nikoski? Yeah. You know, I think that, you know, you do have to take it, you know, a short period of time, we're not breaking any substantial, you know, major uptrends. But you know, there's definitely, you know, some areas of the market that I'm more concerned about. You know, regional banks are not acting very well. They're holding at support levels.

You know, I'm a technician by trade. You know, I believe in we've shifted kind of our views of the market over the last two months. You know, you want to own the things that are going up in price, right? That's your infledge, your hedge against inflation. So, you know, energy materials, you know, that's how we're viewing the market overall. I get less into, you know, what the Fed does. I look at more behavioral price actions in the market. And that dictates, you know, where, where I'm looking for relative strength. Since I wanted to go to you,

you did put out a few posts on one piece of news that has kind of gone on noticed and that's a Hong Kong's potential approval of a Bitcoin spot ETF. I want you to go through that news and why it's so important. You've been posting very heavily about it and also take us through the ETF flows in the last few days. They just don't look as good as they did earlier. Sure. Thanks for reminding me, guys. First time here. So, yeah, I put out a tweet researching what's going on in China in general

and the investor sentiment and the predicament that they're in right now, trying to find a life raft and linking that to hong kong's potential approval of the bitcoin spot atf that sounds to me as one of the most significant events right now given that the uh general flow of capital from the us market is has kind of stabilized uh right now so less exciting events are going on there um about that specific news we heard today from reuters that um hong kong authorities are your mic is so since your mic is going in and out for some reason like it's muffled gets perfect because my phone gets better not sure why how's that now much better thank you okay so today this morning we heard from reuters that hong kong is set to

approve its first spot bitcoin etfs in april anonymous sources but that another chinese Another Chinese outlet also confirms this. So it sounds not 100% in the bag, but close. Essentially, what has been going on in China is that they're right now in a major crisis that is partly due to the property market slump. But it is more structural. They have been fueling their economic growth for decades through debt. And now debt has reached really unsustainable levels, 288% of the GDP. That's the total debt in China right now. And they've been growing pretty fast by attracting capital and expanding credit. Right now, it appears that one of the biggest drivers of their economy, which has been the property market, has stopped performing as much as before.

So when you invest years in a market that doesn't return to support the credit expansion, you begin to experience deleveraging. A lot of their top developers are in serious trouble. They can't pay the debt back. A couple of the top ones have gone bankrupt. So this pushes the whole economy to sort of press the brakes and the Chinese authorities are not necessarily pumping the market as much as, for example, we in the U.S. would. So their strategy is sort of a managed

decline, allowing the credit to slow down, but also control and contain it. That's what they're going for. But it's definitely going in the wrong direction and the investors are seeing it. So a lot of them are trying to move capital out. But there's one big problem. It's very difficult to move capital out of China. So they're flocking, they're flooding into any kind of ETF or any kind of vehicle that allows them exposure to anything outside China. So if you look at some of the premium levels on ETFs that allow exposure to the U.S. or Japan, they've gone crazy. Some people have bought them, and a couple of weeks back,

people were buying them at 20% premium relative to now. So, essentially, it's essentially a Bitcoin ETF in Hong Kong. I know there's still just rumors, but if that does materialize, it will allow the ability for capital outflows out of China, out of Hong Kong

to assets that are not correlated with their economy. And that could lead to massive inflows into the crypto ecosystem. Is that a face-to-face situation? Absolutely. I mean, one kind of exaggerated view of it is, you know, you have a stadium and a bomb goes off.

People are trying to, you know, they're rushing for the exits, but the exits are closed, right? The first thing that allows this money to go out will attract significant amount of capital. But given how big this could be, we are also expecting a lot of pushback and a lot of concern from China about capital flight. So if they are really allowing this thing to go forward, it would be in a restricted fashion. Nevertheless, given the amount of appetite to run away from Chinese markets, this could be very, very significant. And I want to go back to another tweet you put out about the ETF outflows as well. What are your thoughts on the recent data? Listen, this ETF launch has been the best launch in the ETF history, according to Larry Fink. And we have been a little bit spoiled

seeing these crazy numbers. They have in total attracted 12 billion. And some of it also has been dampened by the bankruptcy, the forced selling that comes out of GBTC. Nevertheless, the net is 12 billion, which is an amazing number for three months. That said, we initially had a really good run. In the last four weeks back, we had 2.5 billion weekly flow, which was the best week. Right after that, we had the worst week uh negative 800 million uh outflow then since then

we've been kind of stabilizing one a couple of positive weeks and last week was a negative one so uh actually this week sorry it has been not uh generally an out week. So it appears to me that that initial excitement and the burst of new capital flowing in has slowed down, but that's exactly what we expected, you know, in the first month or in the first few weeks, right? So this is still much better than anyone would have thought, but it wouldn't be out of, it wouldn't be surprising to see that those massive flows have kind of stabilized.

And then from now on, we will be seeing a steady flow of capital, partly out of the other Bitcoin vehicles, partly out of GBTC, but also in general from Wall Street investors into Bitcoin in a more subdued fashion. Particularly, we are also hearing that a lot of other institutions are getting ready to approve listing ETFs and allowing their investors and clients access. So that's one potential catalyst. And then I'm also thinking in the next couple of months, we will be seeing a wave of spot Bitcoin ETF approvals around the world because they get cues. They get their cues from the SEC.

Once the U.S. markets have approved something, it becomes a lot easier for other jurisdictions to go along. David? David, to you? sustained, especially with institutional investors, they don't go ahead and buy all at once. They're going to leg into this asset class over a very extended period of time. They're not in any rush. It's not like a retail trader looking at their book saying, or even, frankly, an asset manager looking at their book and saying, I need to reach certain hurdles for the year in terms of returns, the institutions that are now contemplating entering into this asset class

are doing it for permanence. They're going to be permanently allocated to crypto, to Bitcoin for forever. And it's just a question of how much. And so even if they start to go ahead and buy in, they're okay to miss out on the next even 100% rise of Bitcoin. Because if they believe they're going to be in this for 20, 30, 40, 50 years, they are not looking at the next 12 to 18 to 24 months. It's just not what their mandate is. Their mandate is with a much, much longer timeframe. And so two things to keep in mind, their evaluation process is longer. And even once their evaluation process is over and complete and approve the asset, they

will then go ahead. They have soft and hard restrictions in terms of how much buying they can be of the market on any given day. They will only be a certain amount, certain percentage. So if you're talking about, again, the biggest investors around the world, the pension funds around the world of sovereign states, then you've got private pension funds. Then you've got municipalities, you've got endowments, you've got foundations and so forth. Their allocation to this asset class is going to be a very slow and steady rise. And I think there will be fits and starts. Certainly there'll be frenzies around pieces of information that are really important,

but you should be mindful of the fact that on down days, that's when those institutions are generally looking to go ahead and continue to allocate at a slow and steady pace. So I know people have been accustomed to very quick rises in cryptocurrency. And it's not to say that it's the end of quick rises. I think we will certainly have those. But I think at the same time, it's now in a different phase of maturity where the build is going to be so much more powerful but it's going to be over a more protracted and frankly more subtle um you know period of time and rise um and final question i want to kind of wrap up with because that's something he's always asked

in the comments and um i'll go through the comments if there's any other good questions so just for the audience put in the bottom right corner uh but we're gonna start with david david uh nikoski just a general question and what do you expect to see next in the markets and i'm talking about crypto here over the next uh what are we now april so over the next uh let's say six six eight months david nikoski yeah i'm sorry i i look at crypto but you know my clients don't pay me to look at crypto. There's a lot of other people that are well-versed in it. Maybe then I'll rephrase the question. If you look at just general markets, what can we see over the next eight months?

And then we could try to speculate how that would impact crypto. Yeah, well, crypto can be considered, I think, can be considered, you know, I think by some people, but it's safe haven. You know, what's interesting today, you know, even gold is up in the face of a strong dollar. You know, that's telling us something. And that's been telling us something for a while. I think investors are going to gravitate to, you know, to the big cryptos. You know, my view on the whole crypto space is, you know, there's

9,500 of them trading, you know, some of them tell you right on the website, this is only for entertainment purposes. You know, many people look at the market and say, you know, we're not like, you know, back at 2000 type of persona. But in reality, when you add in, you know, these other 9480 cryptos that are probably worth nothing and not going to do anything, you know, add that into your speculation category because it literally says it on their website. So, you know, I think the market, in my opinion, is way overextended. You know, when I see a lot of stocks, you know, 20, 25 percent above the 200 day, that makes me a little leery of sending new money into those places. You know, we've we've hit a lot of the areas of the market that have been very solid. We've rotated into energy and materials the last two months, certainly the better performing area of the market. And that's where we're sitting right now. So I hope that's helpful.

It is. And before we go to David Tawil, and then we'll get Matthew's thoughts on the CPI data and just the markets over the next eight months. So yeah, so I want to point out two things with regard to crypto. To me, the most exciting announcement over the past couple of months post the Bitcoin ETFs was BlackRock's tokenization of the fund. non-educated crypto investors that, you know, outside of Bitcoin, there are layer one tokens that actually generate revenue, that do have a business model, that do things other than being a store of value. I know people that are native to crypto and trade it every day. Well, that's, of course, it goes without saying that, you know, layer ones perform other functionalities. I think, at least certainly in my experience talking to people, it is a surprise to them. And to see, I know it's the first move by BlackRock, but if the tokenization of the fund, up being a smooth, be a profit generator, i.e. cutting down on costs, cutting down on paperwork, red tape, risk security and so forth. valuable because it will raise the profile of what crypto can do and begin to start a broader

conversation with people that frankly don't care to know anything about crypto, that they have no choice but to go ahead and make themselves aware of what's going on in crypto. The other thing to me that's also important to watch is to watch how crypto generally and Bitcoin specifically reacts in the face of, you know, data of the like and sentiment of the like that we're seeing today. Right. Is Bitcoin, you know, a flight to safety asset? Is it going to be treated, you know, more like gold? One of the opinions that we heard very hard this morning, and it's just one opinion of Danish, he was like, look, you know, balance sheets around the world are falling apart. They're over levered. They don't know what they're doing. They're driving into a brick wall. There's no growth left.

And they're going to have to reckon with those balance sheets. And his comment was, I got to go ahead and buy Bitcoin because it's not sovereign tied. It's not fiat. And so therefore, it is a safe haven. Now, I understand the logic behind the argument. Don't get me wrong. I don't think everybody is running there. But it does make a lot of sense. If we had Simon Dixon up on the panel, I'm sure he'd go ahead and preach, you know, for

as long as we give him time to go ahead and preach. But the truth of the matter is, is that we may see, you know, considerable growth out of crypto and particularly Bitcoin. And this dovetails back to Hong Kong, China, people looking for a safe haven to go ahead and, you know, get their money untied to the sovereign economies that seemingly have bad management and have bad balance sheets because of that. And so to watch those developments, again, it's not the election in the United States is a real turning point for worldwide economic thought. And so, you know, to me, watching how the asset class reacts on the basis of macro issues and state related issues is going to be very important. I just feel like David and we'll go to Sins right after, just looking at the markets as well,

we just saw all the losses kind of trace back up. So we were at, before the CPI data came in, we were at 68.7,.8, and now we're back up 68.729, almost at the same levels. So just some good news there.

But David, like I just see, and Cesar, you can comment on it afterwards, but on a more general structural change in the perception of crypto and specifically, obviously, Bitcoin, essentially what we're seeing is just a gradual change from Bitcoin being perceived as a risk asset to Bitcoin being perceived as a store of value. It's really that simple based on all the developments we're seeing yeah would you agree with that kind of high-level statements I'm gonna go further I think it's seen as both you know and

and to me that's that's the best part of the asset that there's really the case for both and you know I mean... But how can it be, sorry, how can it be both? How can it be a store of value and a risk asset? Because it's a technology and it's going ahead and bringing efficiencies to a world, to a currently inefficient system, right? If we were talking about, again, I know this has been repeated over and over again, but I get dinged with it every day, being the CEO of a public company, in part, you know,

wiring fees are ridiculous, ridiculous. You know, every time I want to send a wire from TD Bank in Canada to another, you know, bank in Canada, I get charged $100. It's ridiculous. And to go ahead and say, it could just as easily be done via crypto instantaneously. By the way, that's a big deal for me, right? I have to wait time. What the hell am I waiting time for? Everyone's on an email chain. Everyone has the reference number. Everyone's got every, I could give you screenshots of every account on both sides of the transaction, but still it can't happen. It takes time to settle. Those two things and the fact that there needs to be people involved in the process,

that's payroll, systems that have to support them. The amount of money that's literally wasted on transferring money, transferring value is ridiculous. And so I see it as very much an area of technology and of growth on the one hand. But yes, on the other hand, you've got that entire story and narrative about the fact that it is stateless and permissionless, which is very much a flight to quality type narrative. So I think it's the best of both worlds. I know I'm sounding super evangelistic at this point, right? And it's not going to act that way every day. But truth be told, you really can't quibble with both of those storylines. And for that reason, out of any asset class

that I have in my portfolio, and I am a diversified holder of positions out of any asset class in my portfolio. I am more bullish about this than anything else. Vince? Just going to piggyback on what David said, the wonderful thoughts. I loved it. Listen, Bitcoin is probably the only asset in the world that is a combination of a safety as well as a risk asset. Essentially, the risk part of it is clear to a lot of people, right? It's a technology. It works like a tech stock. But it also benefits from significant network effects adoption. It is kind of a base layer of the economy, which is money. And that is benefiting the most from network effects and multiplicative adoption.

Everything needs money, right? As we observe an asset come monetize and attract economic capital, this is probably going to be the fastest growing of the technologies. On the other hand, it is the safety aspect of it where it provides a vehicle to transact permissionlessly. If you're using Lightning, for example, free, David was mentioning how much money we waste in transfer of money, which is crazy. We live in a world that is still primitive in many ways in terms of finance. Every country has its own currency, and the only reason, the only logic for that is because they want control over the exchange rates. But that's not a strong reason to me to be putting yourself in a position of bartering all these currencies across economies and dealing with so much hassle of exchange rate volatility. And all the economic actors in those economies have to watch the daily fluctuations of their imports and exports.

And effectively, we are bordering these currencies. There is a need for something common. There is a need for a benchmark. And right now, it is the dollar, right? But a lot of the and that's why it's the most traded side of the Forex market. But also there's quite a bit of dissatisfaction with access to the dollar in the world. And it comes with all the costs and limitations and all kinds of things. So there is still significant room for something else that fills the void.

So that's one. The other one is the fact that it's kind of outside any country's jurisdiction. It also offers some level of safety, some level of, you know, ability to kind of bet on the world economy, tie yourself to the world economy rather than your local economy. And that provides the safety aspect of it. Last year, when the U.S. was in the banking crisis, as someone who invests and analyzes Bitcoin for many years, I personally couldn't go as far as saying that Bitcoin would surge in a U.S. banking crisis. But it did. Clearly, people saw the value of Bitcoin in that kind of crisis, and we expect that to keep expanding moving forward, especially at one of the biggest risks to it, which was regulators banning it has been effectively removed by the approval of ETFs. Matthew?

Yeah, I agree with everything that was said there and previously as well by David. I think that it is obviously an emerging asset class, crypto in general. And I think it's evolving and Bitcoin itself is evolving. So obviously it started initially very much as a risk asset and it's evolving gradually into that store of value safe haven asset, digital gold. And I think that will come more and more to the fore as potentially the US economy and the dollar gets into trouble. I don't think that's happening immediately. As we said, it's election year, they're going to do all they can to support the US economy. And even the kind of knee jerk reaction that we've seen today over these CPI

figures, they're not, yes, it's crept up slightly. They're not horrendous when you look at the, you know, the CPI chart. We were down at zero. We went up to about 9%. We're down at 3.5% now. Yes, it's above target. Jerome Powell, the Fed, they're not stupid, as we've said. I still think that they obviously know what's going on. They must know what's going on. The fact they've been talking about still potentially lowering rates, maybe, and I know that's been put back and put back. But, you know, again, if you look at the charts, we're still below CPI of what it was back in September, August, September last year. And it's not going up in a straight line or anything like that. So I still think that it's probably still well anchored

despite that knee-jerk reaction, what everybody's saying today. And there was a knee-jerk reaction across risk assets, but that is coming back as been mentioned. So I think that we'll actually see, and I look at things from a technical perspective, I look at crypto, and you're asking, what's the outlook for crypto? Well, I think that this is just a very short-term corrective pullback at the moment. And I think we're very quickly going to advance to new all-time highs on Bitcoin and other assets will follow in that direction, other crypto assets. So I do think when crisis really does hit, that Bitcoin and all these, which are still deemed as risk assets, well, even Bitcoin deemed as a risk asset, will fall with the market. As

I've said before, I think Bitcoin will rise out of the ashes. And whilst the rest of the economy is in a mess, and they'll be printing money like crazy yet again, devaluing the ashes. And whilst the rest of the economy is in a mess and they'll be printing money like crazy yet again, devaluing the dollar. But I mean, it doesn't really devalue when the whole world's in a mess. Everyone's printing and there's no real necessarily devaluation there. But it just shows that fiat is effectively will not be a place to hold your money. And people want to go into Bitcoin where there's that limited supply. And it will rise from the ashes and become true digital gold. And that is where people will want to hold. And even stock to flow ratio for Bitcoin is going to be better than that of gold after this, you know, halving that's coming up in a few days time. So I think the outlook for Bitcoin in particular is extremely bright in the sort of medium term. But slightly longer term, probably later this

year, I think we're going to see a crisis, a financial crisis, whether it's spawned by geopolitical issues or macroeconomic issues, whatever it is, I think that, you know, in the depths of that, I think we're going to see people piling into Bitcoin like they did in the recent banking crisis. So just to summarize, I think the outlook for crypto, in particular Bitcoin. But as David said, actually, again, we need to differentiate between the different cryptocurrencies, those layer ones that actually produce some real value, Bitcoin, which is a kind of store of value. And then all of those cryptos, which have no real value.

And that's, I think we need to all go back to, well, in general, education is going to be key because it is an emerging asset class. There are areas of value there, but we need to actually be educated and understand. Last thing I want to ask you, we can wrap up the space and just get the thoughts, I'll read through the comments. One thing, a comment to just put out your thoughts on the halving. You mentioned it very briefly,

how much of an impact will it have on crypto in this cycle versus others? I'm actually different to most people. I actually think the halving is irrelevant and if anything, it's already priced in. I actually looked at the halving. I put the halving lines on an S&P chart, and it looks pretty well the same as against Bitcoin. I think it's irrelevant because either it's, well, it's basically it's priced in anyway, and it probably becomes less and less of a factor as each halving takes place. So personally, I don't think there's any particular correlation. It's just been that the halving takes place in a rising Bitcoin market that rose from nothing to 70,000. And you put your

halving lines in there. And it's, you know, I actually don't think there's any correlation at all, to be honest. Predictions for the rest of the year, Matthew? We've never heard that from you. I certainly think we're going to see above 80,000. And I don't think that's very far away at all. We've seen retail adoption 0 to 69,000, I think, now that we have institutional access to the market. But I do think that it's going to be held hostage to the wider market, risk assets in particular, it's going to be held hostage to those markets. So I think we're going to see a new all time high again to the 80,000 area. And I think that we're going to see quite a big pullback across all risk assets. And I think crypto and

Bitcoin will follow it. But as I say, when that happens, at some point, Bitcoin will rise from the ashes. So I think right now, crypto is a great investment. I think Bitcoin is a great investment. I think we're going to see above 80,000 and we're 68,000 or whatever right now. So there's still potential, good potential upside there. From a technical perspective, the move back we've had is, I think, very clearly corrective. The impulsive direction is to the upside. And I think next target, 82,000 and could go well beyond that.

But that's my next target for Bitcoin. Let's do it. Since a quick prediction, price predictions for Bitcoin for the rest of you and Christopher and David Nagoski, I'd say the predictions for Bitcoin. I appreciate your outlook on the macro market and having you on stage today, especially with the discussion on the CPI data. But since we'd love your predictions on Bitcoin and crypto for the rest of the year. And then Christopher.

Well, if we're talking at the end of the year, I'd say definitely close to 100,000 range, but definitely not going to be a straight line. As Matthew was saying, that double-sided aspect of Bitcoin will cause it to react negatively when the economy is down. But nevertheless, the fundamental trend and the fundamental adoption pattern that we are seeing is very, very positive at the moment. Christopher? Yeah, so, you know, actually my next local target here is 82,000 as well. So I've got that. But honestly, I mean, I don't think 100,000 is difficult at all. I think and maybe even rallying up here over the next, you know, the next couple of months.

I don't even think it has to be that far out to do it. But I think I think there's a really significant chance that we break 100 and, you know, 115,000 even before the end of the year. I appreciate that. I was going through the comments here as well. Just everyone's expectations are six figures before the end of the year. It's a lot of bullishness. But I think we've covered things well. We've covered the CPI data, covered some news that was not looked at. We didn't have it on our radar either.

It's about the potential, the rumors of a Hong Kong spot ETF. I think CNBC was reporting on that. Was it CNBC since that was reporting on that? Reuters. Re that? Reuters. Reuters, Reuters. Which are pretty exciting rumors. But obviously most of it was a macro discussion and then had some new voices on stage as well. But I appreciate everyone for joining.

I will see you again. I will see you all again tomorrow. Scott will be back with us and I think Grant as well as they're back from Paris Blockchain Week. Anyone in Dubai hit us up. My whole team is coming to talk in 2049, about 10 team members. And I'm sure Scott is going to be here. I actually had a dream about Scott, I haven't told him yet. And he was like three, I'm a pretty tall guy.

He's like three times my size. But it's the dream we met for the first time. Cause we haven't met in person. He'll be in Dubai and I think Ryan will be here as well. So he can meet all of us there. Otherwise, thanks a lot for joining. Thanks a lot for the first time, because we haven't met in person. He'll be in Dubai and I think Rana will be here as well. So you can meet all of us there. Otherwise, thanks a lot for joining. Thanks a lot for the panel and we'll see you again tomorrow. Bye everyone.