The Wolf Of All Streets - Crypto Crashes - When Will It Stop? (When To Buy The Dip)

Episode Date: January 23, 2024

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Crypto is crashing. When will it stop? Yeah, I had to say it in a very excited voice. I would say that crypto is actually in more of an orderly sell-off, but it gets more clicks if we say that it's crashing. But obviously, Bitcoin dropping below $39,000 today. Just yesterday, people were wondering if it would break $40,000 as it had held for so long as support. What's going on here? When will the bleeding end? And when should we start thinking about buying a dip? I'm going to talk about that myself. And of course, I'm joined by an amazing guest today, David Young from Coinbase, the head of institutional research. I have a lot of questions actually about the mechanics of the ETFs and Coinbase's involvement. So I'm really excited to have him here and to get all the insight that he always shares. You don't want to miss this one,

guys. Let's go. What is up, everybody? I'm Scott Melker, also known as the Wolf of Wall Street. Before we get started, please subscribe to the channel and hit that like button. Bitcoin currently trading at $38,674-ish dollars. Chex price, bad price, as we say. A little lower, I think, than a lot of people expected when we anticipated the $10,000, $20,000, $30,000 god candle to the upside on the approval of the spot ETFs? What's going on? Where is that bull market that we were promised? Or is this just the normal dip in the bull market? That's what I think, by the way. Let me go ahead and spoil it. But I'm going to get David on here and we're going to talk about it. You were not happy. Crypto crashes, right? Not a crash. Well, like you, I don't really assign that word to it. I do

not subscribe to that headline that you're posting for this video. So how would you identify it? I said orderly sell-off. Is that appropriate? Yeah. I mean, first of all, I can barely admit that I thought that this would be by the rumor, by the news, and certainly that's not what's materialized here. And it kind of makes sense because we knew that a lot of the inflows wouldn't happen till much later. So that's a big part of it. But I think there's three things going on. And one is actually what a lot of people identified already.

There's just a lot of rebalancing that's going on right now. People moving from less efficient vehicles to more efficient vehicles. So you're moving away from, let's say, micro strategy or other things that you play as a proxy for Bitcoin because you couldn't get access to the real thing. Now you're kind of seeing it into that. But of course, there are also outflows from other pre-existing vehicles that are now kind of being moved. But there are other important parts that have to do with the

mechanics of the ETF itself that I think are far more important. And that that have to do with the mechanics of the ETF itself that I think are far more important. And that actually has to do with the authorized participants and what they have to do with the issuers. Because typically what happens with this, because the SEC forced upon us cash creations and cash redemptions, which means that you do not have the efficiency of actually doing the in-kind cash creations and redemptions, this is important because if you're an authorized participant, basically you're taking in these buy orders, sell orders for these ETFs. You need to protect yourself because when you have it, you're sitting on like settlement times of T plus one, T plus two, before you can get that to the actual issuer itself. And you need to hedge yourself by getting access to long bitcoin

theoretically if you're directional because right now imagine most of these are creations and not redemptions but of course like i said it's not for everyone they're redemptions you know and you're talking about grayscale and won't say it guys okay go ahead i i i know i'm very sensitive to these names. And effectively, once the issuer creates the shares, you give those shares to the AP and then you're done. But what if, in anticipation of the fact that the SEC approved cash creations and cash redemptions, a lot of them said, crap, you know what? I need to get access to some spot to protect myself intraday. And maybe I'll, you know, do that by actually going long spot and short the futures because it's a nice, you know, tidy way to kind of do this. And if I'm wrong about this and they don't approve that instead, they allow like in-kind creations doesn't matter because i'm still up so it's win-win yeah so i think that what we're

seeing right now and this is just purely speculative it's it's a theory that i'm kind of operating with but it makes sense relative to all the volumes and flows that i'm seeing is that there's a carryover of these like long spot positions going into it from the aps who are now kind of whittling down their supply. So I think that this is kind of offsetting some of the positive hoons we might other get in addition to the rebalancing flows and the fact that, you know, we let's keep in mind here, we are hitting some important liquidation levels on the way down. You know, like we saw that at the 46,500 level level. We saw that again closer to like the forty two thousand level.

And, you know, yeah, forty thousand was a very big level. The good thing about this, though, is we're starting to kind of get to the bottom of that. And it doesn't seem like there's as much position like the bids at forty thousand were pretty great, actually, in terms of like the magnitude. But there aren't as many below this. I think that it's much slower at this point. So we're getting closer to the bottom. There's a couple of things I heard there quietly that you didn't say that I want to say because you won't agree. I always make the tweet, I when in doubt, just blame SPF. So we can once again, partially blame SPF, which is my favorite thing to do when things go down.

FTX sold about 1 billion of Grayscale's Bitcoin ETF, explaining much of outflows. You said this is part of the story, obviously, not the FTX part specifically, but we know that it's been 500 to 800 million-ish a day being transferred from Grayscale to Coinbase. Also, as you said, the mechanics of the underlying, right? Someone sells their GBTC shares. Grayscale then has to send BTC somewhere to sell to match

the AUM of the actual underlying fund. So that makes sense. We just found out, though, that about a billion of the 2.7, 2.8 so far that we've seen was directly from FTX. Also, you talked about the authorized participants. And so in my mind, I also get to blame Jamie Dimon because JP Morgan is one of the largest authorized participants of BlackRock and these other funds. So in my mind, I get to blame SPF and Jamie Dimon for the sell-off. I know I'm- Yeah, I know I won't include any four-letter words in that, but as he clearly will.

But yeah, I think that that's an important part. You know, and this is kind of creating strange dynamics in this market. Right. Because actually, if you're an authorized participant, but you're a broker dealer, you know, like part of the reason why the SEC wanted you to be able to only do cash raising redemptions is because you wouldn't actually be able to touch the real stuff. Right. You couldn't touch the spot Bitcoin. So these guys have to hedge themselves going long CME futures, which of course are inefficient and then closing it out at the end of the day. But this is kind of creating weird dynamics within the market. I mean, it's not any major risk. It's just like, it's kind of obfuscating like where the flows are going. It's interesting though, because we've had the narratives of major unlocks and impending selling from different entities over time, and they never seem to materialize. This time it's pretty straightforward. I guess with the level of transparency that we have, but when you see

$500 billion to a billion dollars every day being effectively sent to the open market to sell, price really can't go up during that period. It would take such incredible demand to do it. I mean, if you look at these ETFs in a vacuum and you eliminate GBTC from it, and keep in mind in past ETF launches of other asset classes, you didn't have an overhang of $27 billion already existing on the market, right? In a vacuum, they've done exceptionally well, some of the most successful ETF launches of all time, but it's just been so much selling pressure. Yeah. What I suspect is also happening too, and I think this cuts directly to some of the APs who have model portfolios that haven't yet been included in this. We've heard from ARK,

for example, who's taken out their holdings of Grayscale, for example, and then replaced it with their ARK21 shares ETF, which makes perfect sense. But you haven't seen a lot of other funds starting to include it yet. And you really need to see that for the real inflows to show up. And I think that if you're some of the APs, what you're doing right now is just waiting to see that for the real inflows to kind of show up. And I think that if you're some of the APs, what you're doing right now is just waiting to see where the liquidity is ultimately accruing to, because that's what you want when you put that into your model portfolio. So I think there's a bit of that going on. I think there's a bit of the fact that for some of the authorized participants as well, I mean, like they're also trying to say like, hey, you know what, like,

is there any arbitrage we can do? Because right now there's certain like premiums discounts that are occurring in the market. Whenever there's that deviation from price to NAV, you also see that they're putting in like maybe fewer, you know, creation basket creation shares and would otherwise, you know, have been from the orders they actually received in order to kind of take advantage of that. So, you know, there's a lot of dynamics at play right now that's kind of hard to trace back to the point where we can say the ultimate impact on price is this. Yeah, I don't think it was easy to anticipate what would happen when all of a sudden, you know, 10 or 11 of these things hit the market at the exact same time. It seems always so obvious in hindsight. Shouldn't we have known that literally everybody was going to start selling their GBTC, A, because of the 1.5% fee, B, because they've been locked in there for so long, and C, because there were a ton of people who have no interest in Bitcoin and were just trading that discount to NAVBET, right? So you have these three entities that were effectively guaranteed

to leave GBTC. Maybe we just didn't understand the numbers. I think it begs the question, since we have great hindsight, what does it mean looking forward? How long can this keep going? People keep saying to me they have 23 billion left. So at 500 million a day, that's 46 days. It's not going to zero. GBTC is not going to zero, right?

That's a nonsensical math that people are trying to do. There's going to be a point where this settles in. They kept it at a 1.5% fee for a reason, right? Like, I don't think that if they really thought that this was going to zero, I don't think they would say like, hey, let's be completely uncompetitive with all the other ETFs out there. They definitely did the math, or at least I would imagine they did. Kind of saying like, all right, who are the people who could leave this? Or they're probably going to be people who are going to be fee sensitive, who are maybe

in tax advantage accounts, who actually can leave us. But there's going to be a lot of people who actually probably can't because the tax implications of actually leaving this fund are greater than actually just kind of staying in here. 20, 25%, whatever it is, your capital gains taxes on your gains from that discount trade. And just to gain a percent of fee difference, you can't unless you're intending to hold for the 20 or 25 years that it's going to take to make up that difference. Yeah. I mean, I don't like, I think that's why people were kind of too critical of grayscale

to be quite honest with you i i think that what they did was in some ways kind of smart i mean they're trying to optimize for themselves if they if they if they put their fees at 0.2 percent they're they're finished right i mean grace they they need this business it's the cash cow for dcg for it to exist i think they really had to do this to make enough money. I think there's some irony here that obviously everybody's pointing out. Grayscale led the fight for Bitcoin ETFs. Now its fund is bleeding billions. That's the truth is that Grayscale had the most to lose by the conversion, but really had to be the champion of it if others were going to convert. And the very fact that they

went to court, spent their money and their resources to do it and beat the SEC is the only reason we have these. It's such a strange sort of bipolar situation. Yeah. And, you know, like, that's what I find it odd now because people say like, well, didn't they like aren't they the architects of their own demise? Because by allowing the conversion to an etf they've suddenly allowed these outflows i'm like and what was your alternative to never allow people to get out everybody else get an etf and you never let people out of your trust yeah it doesn't so it doesn't compute in my mind like i understand the argument but it's just like that's that's not how the world works i mean like we operate on trust this is what crypto

is about like we're trying to like create a trustless environment but like they're these are still vehicles that we need to kind of keep in mind that you know like you need to get people you need to create an exit for people so uh just for some clarity and not because you're at coinbase but we obviously see that uh the btc is going from Grayscale to Coinbase in these large amounts. What are the mechanics of that being sold off? Does it literally hit the order books? Is there an OTC desk that handles some of that? And to be clear, this is completely segregated from custody, which I've seen some bad takes about. Yeah, I think also I can't say much about the processes, to be quite honest with you.

At least I'm not allowed to. So unfortunately, I got to kind of leave that off. But I think that for most people, they don't really recognize that this has to kind of, the sourcing of this stuff has to come from somewhere. And this has kind of all been lined up already. I think that there was a lot of speculation of like, where of where is this Bitcoin coming from, from the issuer side, because it can't come from the authorized participant side of things. That has all been kind of, at least for the eight funds that Coinbase is a custodian partner for, that's already being managed. So that's what I can say on that side.

So it sounds like we can blame SBF. I can blame Jamie diamond. And I can also blame Gary Gensler for giving us this cash, create a structure and not allowing it to be in kind. I get to blame all my favorite people. It's a bit of a burden. I mean, of course we have the headlines right now too.

We're getting like the, the Mount Gox head overnight and we know that that's coming out and that's, that's important. But like, yeah, you know, like the the mount gox head uh overnight and we know that that's coming out and that's that's important but like yeah you know like the the idea of the cash creation cash redemptions it's actually significant as far as the impacts that we're seeing but i mean overall i think that the flows that we're going to get over the medium term and long term too it's highly dependent on the due diligence that a lot of these banks broker broker dealers need to do. They haven't conducted yet. Like not at least not all of them. Some of them are in the process. Some of them actually come fairly early. But still, overall, like these guys have

restraints on the amount of liquidity that needs to be available, the amount of performance that you need to see before they can actually recommend this to their clients thresholds in terms of how long these ETFs need to be around for as well. So I think you got to kind of keep this in mind because I think this is the first phase of the flows and it's unreliable. Like I think the day-to-day headlines we're getting right now in terms of like grayscale, like kind of getting this much in redemptions versus as much like other funds getting this much in, you know, it much like other funds getting this much in uh you

know it's not even the full data it's not even the full data i mean these guys will be the first to tell you right i mean here's james safer and obviously everybody just follows eric baltunis and james safer from bloomberg now to understand this wolf bad day for bitcoin etfs overall in the coin tucky derby gbtc is over 640 million flow out today. Outflows aren't slowing. They're picking up. There's the largest outflow yet for GBTC. Total out so far is 3.45 billion. Don't have BlackRock data yet. And then he'll openly go on when you read it. He's like, yeah, we don't really have the full BlackRock data.

We don't really know. So you get the headline and then you get the admission that you can't really analyze this data. But we do know exactly how much GBTC is being sold and how much Bitcoin is being sent from Grayscale. Those are the pretty fixed numbers we can see. Yeah, but those are the numbers we can see. I mean, the most critical number we want to understand performance really is what's the available Bitcoin supply being held by the APs right now? What are they holding in order to hedge themselves on an intraday basis? Because I think that we're getting to the end of that and we're going to start seeing the other side,

which would be the supply crunch. And that's going to be hugely performative for Bitcoin in the weeks ahead. But I think what we're going to see is that's going to hit. We're going to get back to the other side and we're not going to have enough supply of Bitcoin in order to kind of meet that demand. And then Bitcoin is going to be ripping and then people will be like, well, why is this

happening? But I don't really care because Bitcoin is going up. But like, you know, like this is going to be the conversation that would help you understand that. But I think that there are a few who are trying to get to that figure right now. So how can we attempt to quantify when this selling might end? You did mention, which is and I brought it up, breaking Mt. Gox confirms creditors' Bitcoin addresses for repayment, chance of 200,000 Bitcoin hit the market over the next two months. What's another 200,000? First of all, this is not right. I believe Mt. Gox has 137,000 Bitcoin, not 200,000. So take that with a grain of salt. 147, yeah. Yeah, somewhere in the-

Maybe you're right. I know it's less than 150 and it's not 200. Yeah. And the experts I've seen, like Alex Thorne from Galaxy, quickly jumped in and said he can't imagine that you would see any of this selling until at least summer. So the two-month timeline seems... Sources, I made it up.

But we've been hearing about Mt. Gox selling since literally the day I bought my first Bitcoin, I was going to say, but bought my first Bitcoin. No, you already bought your first Bitcoin. Forgive me for being desensitized to Mt. Gox FUD here, but this would be another form of significant selling pressure. But listen, literally, we just saw nearly this amount or at least half of it hit the market in five or six days. And you can't even assume that these people are going to sell. I think most of these people hold it. Yeah. I mean, a lot of them actually sold their position to a third party, for example. And their indication we've gotten so far is that they're not going to be selling. We know 20%

of that Bitcoin is already spoken for by one of those entities, for example, who already said, we're not doing that. We're not going to dump the Bitcoin onto the market. So it's actually far less than even the numbers that we're quoting right now. And this takes time as well. This isn't going to be like,

they've had to delay this multiple times because it was hard to align everyone's payment instructions, for example, which exchange is going to- Did you see that they double paid people on PayPal? No, I didn't see that, really. This was quietly news and somebody told us about it on Spaces. I haven't looked it up, but apparently, I will say, but apparently for a reliable source that they accidentally double paid the creditors they were paying out on paypal and have asked them to send the money back my mom guy was like clearly there's a story that he was like no come and get it you know for my for my uh cold dead bare hands cold dead hands whatever but yeah

they already believe this process to which i j joked, it must have been like, you know, the SEC interns that were handling their, or Cointelegraph interns, maybe handling the distribution, but it's unbelievable. So apparently they've already have blown that. And now there might be less money for these other creditors. You're pretty savage today, Scott. You know, it's Tuesday. I woke up now.

I don't know. I still can't get over the way that these ETFs were rolled out and the SEC hack of their tweet. And it almost, I'm not a conspiracy theorist. I don't think this is true, but they really managed with the process to dampen any excitement that was there and to basically just take all the volatility that was going to be there for the launch out in the days and weeks before. Yeah, yeah. I mean, in some ways,

what we saw in terms of the purges that occurred due to the weird bungled kind of launch, or at least the bungled approval rather, kind of made me feel at least like the market was somewhat cleared out. Yeah, I liked that. The week before on the Matrixport report that for some reason everybody took this gospel,

I mean, that cleared the market. I think it was 500 million in open interest in 10 minutes. It was the biggest liquidation event I think we'd had effectively since FTX. So it needed it, to your point. Yeah, I still can't, I still can't say for sure that that was the- Oh, that was not the reason.

I think that was the final nail in the coffin, but that wasn't the trigger per se, because I mean, it was getting stupid. People were buying perps at like higher and higher levels. I mean, we saw to start the year that like, you know, like the funding rate on buying perps at higher and higher levels. I mean, we saw to start the year that the funding rate on those perps were like 35% to 40%. I mean, they were nuts. The longs were just way too expensive. So I feel like clearing that out, I mean, it just gave people a reason to, but I don't think it was why. You saw on crypto Twitter, everyone was like,

what information do you have to base this idea on that they're not going to approve it? Because Democrats, man. Yeah. It made for a really entertaining time on Twitter though. It was great, great commentary. But yeah, to your point, we always see an excuse sort of attributed to any market move in hindsight, right? It had already started moving. It was a liquidation cascade. It was the highest funding rates I think we'd seen literally ever or close. And the largest open interest wipe, that was just somebody literally triggering a liquidation

cascade and making a hell of a lot of money. And then everyone searched for what could be the bad news of the day. Nobody read the matrix port report. There was nothing factual in there that said that it was going to get rejected. It took all of a week for it to get approved. It's just hilarious how this market operates. And now I will say though, on this drop, I think we do have a more solid narrative. I'm still trying to dig in on when this might stop. I think I sort of asked, but we didn't get there. A lot of people saying 35,000. A lot of people saying we go to 30, 32. I don't think any of it matters.

Do you think that any of those numbers break the idea that this is a normal retracement in a bull market? No, I don't think so. I think that we are seeing this as a complete... I think the floor, first of all, is probably above some of the levels you've mentioned. But I think that we are going to see a retracement here. Like, for the reasons I've

kind of stated, right? I think that if my theory is correct, there's going to be some supply exhaustion at some certain point and that's where things are going to come up. And then they're going to come up huge. And I don't say this because, you know, like... Because people are buying the ETF. It works both directions. Yeah.

Like you, you've been on the show before where I've said I've had directionally like negative views as well. Like I am very much of the mind that like this is going to be a positive move up. And it's going to like climb above the levels like we've seen like last week and the week before. Like there's no doubt in my mind. And I think that, you know, there are certain challenges on the macro side of the equation. But right now, things are lining up positive on that side as well. Like, I mean, you're seeing how the move in tech stocks is going, like, all the news is kind of suggesting that the economy is doing well, at least in the US, you know, and like,

why not take advantage of that? I think that you're going to see people want to move further down the risk curve. Yeah, I agree. And I was just trying to pull up the article, but China is going burr right now. Right. I mean, talking about stimulus and money coming in, I think it's like a $300 billion package. Of course, we're not reacting to it. But it's interesting that people always complain when we're correlated to other markets for temporary periods of time. And now the same people are dying for a correlation as stocks make new all time highs across the board. I mean, we only make as human beings, we only have

so many things to make like this our decisions on, you know, unless Yeah, like, we want to tell all of our like fans, like, hey, you know, there's a secular reason for you to own Bitcoin. And by the way, it's going to be great for your portfolio because it's going to diversify it. So even if it does go down, it's going to offset some of your other positions, all this kind of stuff. But really, when people make these things, these decisions on what to buy and what to sell and what to put in their portfolio, you know, you're doing it on the same kind of information that you do anything else. And a lot of that has to do with how your sentiment is. What's your macro view?

What's your idea about how wealthy you feel? Those things are kind of what matter. The wealth effect. Yeah. Mike McGlone, who's obviously always exceptionally bearish on Mondays, that's his sort of base case is it's still the wealth effect. As long as people still feel rich, there's really no problems out there. They'll just keep spending themselves into a massive hole. But it is interesting to see how completely detached from macro we've become. And it's been for quite a long time. People are pointing to it now, but I mean, Bitcoin has not traded with macro. It's

been like a year, at least eight or nine months. Yeah. I mean, I would say that of course, a big part of that has to do with the, you know, secular stories around, or rather the ETF story itself. And, you know, like right now, I think the technicals are probably more important than the fundamentals somewhat because understanding the mechanics of like the APs and the issuers and what has to be done and how, like how this is impacting like the CME futures market, the purpose market and the spot market and how those things are intertwined. It's probably more important itself than trying to say like, what is the correlation between Bitcoin and I don't know, tech stocks, you know, like it's, it's not the key driver at the moment.

So is there anything else I missed before I let you go that we should be watching? I mean, ETH probably, like. I think that's the big one. Thank you. Can you tell us why? I mean, I've been beating the ETH drum, it's like six months. Ever since it started bottoming here, I've been saying, that is not an indictment, it's an opportunity. And the more people call me dumb, the more convinced I get that I'm on the right side of this one. But why do you think we should be watching ETH? Well, I mean, we've kind of overlooked E. But why? Why do you think we should be watching ETH? Well, I mean, we've kind of overlooked ETH, right? If you're a crypto native, for example, and you missed the boat on Bitcoin in the second half of last year for various reasons, right?

It's probably not entirely their fault. Like Q2 was kind of rough. Q3 was worse. And then you were kind of under position. And then you said, oh, crap, Grayscale won their case. BlackRock's got an ETF application. I need exposure to that, but I'm a little bit behind the curve. So you went ahead, you jumped ETH and you went into altcoins to kind of capture your alpha. Well, now we're getting into 2024 where you say spot Bitcoin ETFs fully approved. That means crypto as an asset

class is formalized, which means there's a benchmark. And whether you like it or not, that benchmark has two key assets. One of them is Bitcoin and the other one is Ether. They're the ones that the two tokens that make up the bulk of the market cap. So right now, if you own Solana and it performs, it doesn't perform. Well, you know, it can kind of hurt you in some ways. If it performs, it's like, oh, that's great. You know, like, and that's wonderful for my portfolio.

But if I don't own any ETH and ETH starts to do well, my boss comes to me and says like, hey, you got to do two things. You got to buy Bitcoin. You got to buy ETH to meet that benchmark. Why aren't you doing that? That is career risk. And I think that that's what's going on right now. And of course, yeah, we have the spot ETH ETF possibly coming towards like the third week of May,

for example, and that's hugely important. And that's a big factor to kind of watch out for. But I really think that because of this under positioning that people did, like you're starting to see that rebalancing occur like from the whole like, oh man, I might've been over-indexed to altcoins. I got to pull it back and start being there because that's what people are watching me

for. I got to hit my benchmark, which is Bitcoin and Ether. The first thing Larry Fink said after the Bitcoin spot approval wasn't, I'm so excited for the Bitcoin spot approval. It was, we should have an Ethereum spot ETF approved. He started beating this drum within 24 hours of the approval. He had already moved on from, I guess, what he knew was a foregone conclusion of the Bitcoin spot ETF. And that was only part of it. And by the way, anyone who is trading a GBTC discount, EFE, which is their comparable product at Grayscale for Ethereum, was trading at a 55.9% discount. So obviously people have been taking that trade, but it's still at a 14.74% discount, which means that if you do believe in Ethereum spot ETF will get approved that you can effectively

buy Ethereum at a 14% discount right now by taking the same trade. It's just all, it doesn't have to repeat, but we have the same roadmap. We just saw it, right? And also, the more people told me that Solana was replacing ETH and ETH's dead and we don't need it anymore. When just last summer, the merge was the huge event. It just seems like it's the forgotten, you know, the baby being thrown out with the bathwater to some degree. And I'm glad that you brought that up because it gives me a chance to smile because I really do think that it's going to be the next big narrative and the next big trade. As for Bitcoin, I agree with you. I think we'll go back up into the 40s. But now since the ETF trade is done, I'm going to tell people, I think my base case as I'm formulating it is a lot of chop until after the summer in a big range.

But I think now we go on to the normal halving cycle assumptions and trades, which means boring summer. And then you start going up in August, September and October through 2025. Maybe I'm wrong. I think we can recover sooner than that. Oh, I think we're going to recover.

I'm saying before we start breaking 69,000, you know, new all time highs and such. That's fair. I mean, the timing of this is going to be tricky because there's, you know, there are things that come out of the word work and uh we forget about them sometimes

like i even talked about mountain gox and my crypto market outlook and i was just like oh that's right like got like those headlines you know like so it's hard to anticipate but yeah we've got the uh having coming up as well and i think that that's context dependent but that's going to be important. Um, the macro situation, whether like there's another banking crisis, you know, like we saw that CalSTRS or, and, uh, you know, ask for a $30 billion like, uh, liquidity because they have to deal with a $52 billion commercial real estate

portfolio. So the real estate, like, you know, uh, regional banking issues that we've dealt with last year aren't fully resolved. It's all coming around. Yeah. Yeah. We were talking about that yesterday. Nobody's talking about commercial real estate anymore because it just, like, didn't crash the week they expected. So it must have gone away.

Right. It hasn't. It hasn't at all. Yep. All right. Well, David, man, thank you so much for joining. I love having you on. Always so much great insight. We got to get you back on hopefully more regularly. And now you have an actual Twitter account so people can a lot of pressure. I was like, come on, man.

I got to be able to tag you. It can't be like D to the double D, whatever the name was before. What was it? It was something like that, right? I went DD, that's three Ds. I mean, it's super simple to remember, right? DD, that's three Ds. I mean, I remember the gist of it.

And I have ADHD. So I'll consider that a win for you guys. Follow David, please. Thank you very much. See you hopefully very soon. Thanks. Thanks for having me, Scott. Yeah, man.

All right. So I think we all understand at this point why things are dumping for once, which is good news. I'm going to try to open up a few charts. Wick is not going to be here today, but that gives me an excuse to show you a few things that I am looking at and what I'm interested in. So first of all, we have kind of one of those nightmare scenarios right now. This is Bitcoin dominance. We love when Bitcoin dominance goes down because that means that altcoins are outperforming Bitcoin. But you know what we don't love? When Bitcoin's going down and Bitcoin dominance is going up because that means that Bitcoin's price is going down and your altcoins are going down more. Stinks. It stinks. We don't want to see

that. But is that a problem or is it an opportunity? Let's first take a quick look at Bitcoin. This is the Bitcoin halving chart that I've showed you guys a million times, plays out almost every single time, almost exactly the same. First of all, i might have pointed out to you guys but we did have bearish divergence with overbought rsi on the weekly chart they're not uh the best news now what you're looking for we had a million top signals kind of uh on the way up here uh but what we do generally see my kind of base case for that sidewaysness is if you guys look this having the last having was in may kind of chopped sideways a little up and then came back. And it really took until September, October. You guys might remember, actually, it was like October 1st or something. The market went absolutely parabolic. It went straight to

the upside. So you had from May until October of basically sideways action. Previous halvings, you actually had a huge dump after the halving, a big move up into it. But once again, that was in July. And we can say that it kind of broke these highs right here and started its up move in January. So another six-ish months of kind of sideways shop after the halving before that up move. That happens for a reason, guys. People get really excited about the halving, but this supply shock that comes with the halving takes a really, really long time, much like ETF buying, to start to affect the market. So that's why it's kind of becoming my base case. I mean, we talk about, there's obviously Trading Alpha. If Wick was here,

he'd tell you about this. But if you were watching Trading Alpha, you've seen that it turned to red dots. This indicator is down in the description, guys. This is my go-to at this point. Wick comes on and shows you why every week. Lost the track line, turned to red dots up here. This literally gave you the sell signal at 47,000. I was not paying attention because I'm done. Broke the track line, still on the way down. No indication that this is going back up at the exact moment. Now you really probably want to wait

until you see the red dots stop and break back above this sort of 41,000 unless the track line continues to come down. I mean, take a look at it on the line chart, which I always like to do. We do have potential bullish divergence forming on the four hour, six hour as well, but we need to see a very clear elbow up in RSI here, right? This is not bullish divergence yet, but it is good to see that we're finally oversold on the four hour and the six hour. The problem is we're not oversold yet on the daily. And I may have told you guys, it's not on this chart, but I have it. If you guys were following the newsletter,

I got pretty bearish last week. I was a little late, but this is massive bearish divergence here. Massive bearish divergence here. Both overbought RSI. So now dropping, we have RSI at 33. I'm looking, we always go from overbought to oversold and back. So we're going to round trip that at some point. Jumping in here on the weekly, this is really coming in. There's that bearish divergence that I've been sharing in the newsletter. RSI already back down to 57, but this is a big zone for me. You guys might remember, I've kind of 38,600. This area right here as a line, not as an area, was the area that I was looking at as main resistance on the way up. You guys might remember, this is where we broke down

from Luna. So when we were on the way up, we were screaming, this is the key resistance, going to be really strong. You saw one, two, three, it took four weeks of tapping that area for it to even break through. That was where the sell-off from Luna started. So hitting that back through on the way up was a big deal. It was never tested as support, guys. This is totally normal for us to come back down here and test this area as support. Also on the weekly chart, something I showed people mostly in the newsletter, because I don't do many charts here, but every single halving cycle, you have a move at some point back up to the golden pocket.

For those of you who don't know what the golden pocket is, it's the 61.8% Fibonacci retracement up to around 65%. That's not a Fibonacci level, but that area, 61.8% to 65% is considered the golden pocket in all markets. If you take the drop from 69,000 down to the lows at 15,460, that golden pocket brought you between 48.5 and 50,261. Also with this key resistance from back here in March, that's where we were rejected. Hideous weekly candle right here, and then continuing on the way down at 38.2, looking pretty inviting right here around 36,000, to be honest with you, as I look at this. So yeah, that was also another clear signal. I mean, this is a terrible candle with the wake up, tombstone, graveyard, gravestone, tombstone, brains, gravestone doji heading back down.

Right. So a lot of signals. The one that I laugh at is that people were yelling about this golden cross. And I always laugh at golden cross on the weekly. They never play out the way you want. This was a death cross. Price went up. Here's your golden cross. Price went always laugh at golden cross on the weekly. They never play out the way you want. This was a death cross price went up. Here's your golden cross price went down. If you longed the golden cross, you literally longed almost the dead top. So don't play golden crosses. Uh, cause yeah, it's, it's pretty dumb anyways, but what am I watching as a result of all this? So first of all, I am starting to be interested in buying the dips down in this area. I have bids here and I will be bidding all the way down to 32,000. I think that this is our normal 30% retracement in a bull market. No big deal. I want to buy it. But there are other things

that I'm also looking at. Obviously, as I've said, still looking at ETH. Showed you guys. Against Bitcoin, we have four times in history it's ever been oversold. All of those were huge, big, massive bottoms. This was oversold with bullish divergence. RSI has broken out. And of course, now rejection right here at this resistance. I would expect that we kind of dwindle down and eventually make that break up. Ethereum starts to outperform Bitcoin. That means other altcoins are probably going to go too. I had Mike Alford on the show. People got super freaking pissed off at us when he was saying, I said, it might get to 135. He was on the show right here and he said, I'm shorting the hell out of Solana. 120 to 130 is an absolute gift to short this thing. It's going way, way, way, way, way down.

Now I'm actually curious to pull the Fibonacci levels on this. So the 61.8, it didn't even get up to the 61.8 on Solana. But I've been saying for weeks, and people yell in my face every time. To be frank, I think it could go lower. But it might not get there. But $77 to $75, I have bid sitting on Solana. This was a huge area. I would even almost pull this to here to make it. Yeah. And we're in it to give it this top here. This is the last support before you

get down to like 50 bucks. I mean, maybe these two candles right here offer some support, but it's by here. So I'm bidding literally down to $48 on Solana because I want to own more Solana going into the bull market. And it's now at a discount. It was trading up to $127 last month. Last month. So, hey, let's go ahead and just bid and hope it fills. Now that I extended that zone, I might go just start buying today.

It did tap that zone. I think $80. I don't want to get greedy at 77. I'm going to buy some Solana too. Go ahead, tell you guys that. And I'm ready to continue buying down to 50 bucks, by the way. I think this rages in the next bull market.

And this is about as big of a discount on an asset you like that you can possibly anticipate and expect. That's all I'm really watching right now, guys. I know I'm boring. I don't do the shows where I go next 27,000% gem by yesterday in September of 2019. It'll hit. Not my thing, but I will tell you, I've got some news that i'm working on this is not finalized i'm not supposed to say anything but fuck it man you're my friends uh you guys might know that i do crypto town hall with mario knoffel and ran nooner ran obviously has a significant youtube presence but mario and i are working on a partnership right now, effectively, where he will

become a half partner in my company. I'll become a significant partner in his company where we can massively expand my YouTube channel and potentially new YouTube channels and Twitter spaces with me transitioning a bit into the mainstream, which means we're going to be theoretically doing up to four shows a day on this channel. I've obviously been doing the 9 a.m. Eastern Standard Time slot. I'm probably going to add my own show, which will be more trading heavy between 3 and 3.30. Market Mavericks on Thursdays has been really successful for us. And so I think that's great and shows that we can do numbers at 9am and 3pm. If you guys are wondering, the algorithm hates channels that do more than one show a day. So you have to give it like a six hour gap. I'm giving you all the secrets now, at least like a

six hour gap in between, or else it crushes your first video of the day before you get to that second video. Right. And so we're looking at maybe doing shows at like 9 00 a.m 3ish p.m 9 p.m and then one in the middle of the night for people in other places that's not all going to be me obviously so getting more hosts uh getting more alpha you'll get more of those shows potentially where they do really dig deeper than i can into all coins and things like that but i really want to expand this channel. As always, I get really itchy at whatever level I'm at that I need to be doing more. And so working with his team all this time, it's been really great.

They're absolute machines. And I think with Misha and I here and them, I think we can expand massively. I'm also exploring the idea of an entire macro channel based on Macro Monday to separate sort of the crypto from the macro, which I think would be pretty sweet. But yeah, we're going to be expanding a lot. There's going to be a lot of new content, but still, this will always be the anchor show, the anchor hour as far as I'm concerned. Guys, we've got to do something now. I'm going to bring on Misha. You're going to have to turn your camera concerned. Guys, we've got to do something now. I'm going to bring on... Misha, you're going to have to turn your camera on.

Guys, we forgot. Yesterday, we had Macro Monday, but we've got to give money away, right? Especially because now you're all poor. I don't know if I can afford to give you guys the $100 today, but we're going to do it. Did you do your hair? I did.

I mean, a little bit, yeah, man. Fixed it, you know? And those wine bottles in the back? Did you drink all those wine bottles today? I drank three of them in the last few days. Okay, perfect. Well, you know, I guess if you sit in prison in Louisiana for long enough, it's justified for you to have a couple extra drinks. Definitely. Yeah, definitely. Yeah, definitely. All right. So,

Hey, what was our, what was our question today? And guys, so just so you remember, we asked a question, Misha picks his favorite comment. Uh, he picks his favorite comment and then you email Mike at the wolf of all

streets.io. Misha is Mike. Misha is Mike. And, uh, then he, he sends you money, my money,

but, uh, he sends it to you. He sends you my money. They, he sends you money. My money. But he sends it to you. He sends you my money. They like your hair. I can see a lot of comments. Ooh, that hair. The hair of champions. Jeff called you the Geico caveman.

Did you remember the Geico caveman? Do you remember that? You weren't in America, but there were these famous commercials where Geico had a caveman. Easy enough that a caveman can do it, I think was the slogan, you know, to get your insurance. Okay, so anyways, what was our question? Do you want to ask it? What was the most... Guys, so the question is, what was the most or is the most stupid thing you ever bought with crypto? What's the stupidest thing that you ever bought with crypto? It doesn't have to be true. Just make him laugh and we're going to give it a little more time for you guys to give an answer okay so you have to answer this question what's the stupidest thing you ever bought with crypto we can expand that to what's the stupidest thing you ever saw anyone buy with crypto that would work um i can share what i was the stupidest thing i bought with yeah you while

they're doing this and you're reading them why don't you tell me what the stupidest thing you ever bought was it was my rv i bought a toy Dolphin, like 30-year-old Toyota Dolphin RV. And actually, it was the reason why I bought it because I asked the guy if he will accept the crypto. He said yes. And I said, like, cool. Yeah. And then we figured it out.

I bought it. And since I was in prison and I had to sell it, I sold it to the same guy for crypto. And for less? No, a little bit more. Is that situation, like, can you share that story publicly? By the way, I'm looking at your answers. Gary Gensler's used underwear as an inflatable dartboard. Inflatable dartboard, that's's hilarious uh birthday present a vasectomy

that's that's the best thing you could literally ever buy just gonna be honest stadium oh that's funny uh sdf uh xbox subscription uh it's not the stupidest thing i bought but it's stupid i did is trust voyager with my money welcome to the club buddy uh i bought a condom full of jim cramer semen in hopes of becoming a trading genius how that where he's actually been nailing this move guys marijuana that's the best thing i mean that's stupid i mean that's stupid i mean it's great uh a blowjob from elizabeth warren honeymoon that's a good one i'm gonna tell your wife you said. Invested into my friend's business and then she scammed me. You should have never given Caroline Ellis in your money. Pornhub.

Also, don't blame you. But that was with XVG, right? What else have we got? BlockFi Yield. Yeah, man. Bad. Diamond necklace for my mother-in-law. That's nice.

Good points. Hyperinflation. Mario's used socks. Yeah, you should not buy those. Those are not worth it. SPF sample hair follicles. Some of you guys are just weird, but I'm here for it. I'm going to be honest, man.

This one actually made me laugh out loud. An inflatable dartboard. Because, you know, if you throw darts at something inflated, it's going to pop. Okay, let's keep going. That one's close for me, but hey, a knight with a stripper. Don't blame me on McLaren cap. Picture of a monkey. That is crypto still.

What do you think, man? Are you seeing one that stands out? Because you're going to have to bring it up. If they get buried, this guy thinks he bought a blowjob for me and it's Richard Hart. Yeah, I got nothing on that. Didn't happen. Didn't happen, guys.

New comments. Doge oven mitt. I bought that, but not with crypto. Beanie babies. What else do we got? All right, man. We got to make a choice i leave it to you caroline and sbf tape i like it um i think the first one you picked was actually pretty good vasectomy oh god good luck finding him yeah i will need to scroll back a lot but okay vasectectomy guy, I'm scrolling back. This is the problem.

You got to keep the names queued if you like one in the back. Guys, you can tell we are, oh, here it is. Charlie Painter of vasectomy. Charlie Painter wins for getting a vasectomy. The greatest gift of modern medical science. Mike at thewolfofallstreets.io. Mike at the wolf of all streets.io, Mike at the wolf of all streets.io. He will ask you to prove who you are.

So a bunch of you guys don't start emailing and trying to see. I will need a proof of a vasectomy also. You'll need proof. Send the proof of your vasectomy and that you actually bought it with crypto and we'll give you a hundred dollars. Congratulations guys. That's all we got for you today. Uh, man, this is fun.

This is worth the $100 every single time. We'll be back. What do we got tomorrow? Is Mooch tomorrow? Yep. Anthony Scaramucci. Yeah, tomorrow we got Anthony Scaramucci, guys. And of course, Texas West Capital, Christopher Ings will be joining to share some charts and trades.

And he'll do it better than I probably did today. I'm really, really watching Solana there, man. So no, feels good. Feels good. Maybe it goes lower. I don't care. Anyways, that's all we got, Misha. Great to have you here. Everybody else, great to have you here. David Young, great to have you here. He always offers such great insight. And I always try to ask him questions that I know he's going to be uncomfortable because he works at Coinbase that he's not going to answer, but I want to see if we can just get that little bit of inside information out of him and he never cracks ever. All right, guys, that's all we got. We will see you tomorrow. Later, guys. Let's go.