The Wolf Of All Streets - Crypto Dumps | Stocks Pump | ETF Update | Binance vs SEC | Crypto Town Hall

Episode Date: January 22, 2024

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Testing, testing. Morning, everyone. You're testing. We hear you. Yeah, Nastya, moving forward, just talking to the moderator host, always send me a speaker invite before – I keep forgetting to tell you – before co-hosting me just because it glitches otherwise and then Scott starts complaining.

I'm trying to build a good relationship with – Scott's been improving recently, so it messes it up when there's issues like this and we have to argue off the air. Well, on the air, by the looks of it. Mario. Look, I'm being a responsible moderator and making sure things go smoothly. You just pop up here and things all run. You think they run naturally? No, man.

There's a lot of work that goes behind the scenes, and I'm putting in that work every day. Very intense. Every day. all day. While you do it. Last I spoke to Mario was this morning, two and a half hours ago. And he was literally stepping into a bath full of freezing cold water. Yeah. Well, good to chat to you again. Yes. It's a pleasure.

It's like we never talk and we just have to air it out here you know um i didn't know you're an extrovert by the way even though you seem like it i'm trying to yeah i'm pretty i think i'm pretty extroverted i've been i've been told that i will ask emmy mario tried to describe me as an introvert earlier and i laughed out loud um let's get ran up um because having problems getting peter tear up i don't know what was going on it was rejecting what did you what did you what did you focus on in your show was it back to the etf or markets or what exactly or the coinbase case no sorry we were talking yeah we were talking almost exclusively about uh united states debt um and stock markets hitting new highs right with the

recession that never comes so sort of uh you know obviously we have a pretty diverse panel on mondays uh myself lavish uh mike mcglone and dave weisberger and mike's been beating the great reset drum for a long time and uh you know stocks continue to go up so it's sort of been the debate as to what's going on there okay so what's the i think there's a i want to do the i think there's a big smack coming when it comes to when it comes to uh the inflation narrative because of the hooties i don't know if you guys saw bellagio's tweet where he said uh i can find a few guys so he said unfortunately the hooties are winning how can we tell because costs are elevated volumes have persistently declined all ships are taking the long way around

bombing isn't winning peace and trade is winning big fire can obscure a big loss in places like afghanistan iraq but this time we have hard grafts and pull costs go down and volumes goes up this is the uh This is a military and economic defeat, not just for Europe. This isn't just their problem. This is an economic impact. The economic impact isn't limited there and neither is the political fallout.

Before I respond to that one, because obviously I'm covering it very extensively, Peter, I'd reset your app, Twitter, leave Twitter completely closed, force closed Twitter, reopen it, and then you should be able to come up on stage. I wanted to ask Scott, Ryan, I told you guys last week, I want to do... Ah, perfect. Is that Peter speaking? Yeah, that was Peter. I'm back on. Oh, okay. You sure as a listener to me. So if you glitch out, don't be surprised

and just force close it. I wanted to do like a TLDR of what you guys covered in the show very briefly before we kick off our show. I think it be good kind of like we sum up what you guys discussed on youtube because you do it just before this one and then we kick it off with the panel um i think that model will be really cool um so obviously you talked about the hoothies ran i've gone through your agenda as well scott you talked about equities what's it what's the tldr scott on your end before we go to rank donald rand covered more. I mean, the TLDR is you can't fight the facts. And obviously, Dow, S&P, NASDAQ, all in blue sky breakouts for new all-time highs right now. And I think there's just the endless debate on what's going on with the plumbing when there's so many sort of negative indicators when you look at the actual economy.

And how is the stock market fighting that and continuing to just rise dramatically and seemingly endlessly. But isn't the market just being forward-looking? Don't the markets indicate where investors think the economy is heading and inflation is heading? I mean, to some degree, I think that would be a lot of people's arguments. The question is that the Fed is actually heading there. And we probably have better, I would love to get Peter up here better people than me to talk about that. But I think that there's definitely a debate to be had about when the Fed will pivot and what that means, considering that predictive markets have been wrong this entire cycle as to when the Fed would pivot, how fast, how hard. You know, I'm just starting to get a feeling that it's going to be pretty much more of the same until the election,

and then we'll really see what's happening in 2025 when they take their foot off the manipulative gas, so to speak. And Ryan, I wanted to go to you as well. I know you discussed – Peter, go ahead. Peter, you keep glitching on my end. I'm surprised you're on stage. Interesting. I don't see Peter up, but he can talk. Sorry about that. Last week was interesting because we kind of started pricing less of a Fed pivot. So when you look at the probability of rate cuts, they went down across the board, fewer rate cuts, yields went slightly higher. So what I think was happening is people are starting to price recession off the table. And that kind of makes sense. You can get slightly higher yields. Stocks go up because recessions have been off the table. And that kind of makes sense. You can get slightly higher yields, stocks go up because recessions have been off the table. I think it's premature

to think that because I think the data has been mixed. You know, people are being overly confident about the Michigan consumer confidence. And to me, that's always been kind of a bogus number. It's just a kind of strange one. TSMC, their earnings release and their talk about the forward looking for chips and cell phones. That was very positive. But again, I think the market got ahead of itself. So I think we're pricing in too much. I think the big risk, though, is all the issues that drove the 10 year to 5% last fall are still mostly around. People haven't been addressing. I think you start seeing yields press higher, even if the Fed is going to pivot. That's

going to be a weighing on stocks. And the other thing I really don't like and strikes me as odd is we kind of went back to last year's trade where everyone's just buying a few stocks. Breath has been weak. Russell was down last week. Russell's still down. And what really strikes me as odd is ARK, who I would think should be a high beta version of the NASDAQ, is actually down. So it's just everyone's concentrated on a few bets. And I think people are getting squeezed out of shorts on specific names that they thought were going to sell off. So I'm looking for the sell off to resume. It's gotten way ahead of itself in terms of the economic outlook and what the Fed's doing. And how would you relate? So you're

talking about a sell off when it comes to equities? Are you talking about crypto, Peter? Equities more so. How does that relate to crypto? Again, I think it's not uncommon you're seeing crypto sell off along with something like ARK. I think you're going to break this $40,000, maybe go to $35,000, only because I expected to see more net inflows with the launch of the Bitcoin ETFs. Certainly expect a GPTC to have some big outflows. That's happening. It's ongoing. I just am not seeing kind of this demand

that should be pent up. I'm not seeing RIAs kind of rush into it. They may come in, you know, there's advertising everywhere. But I think right now, a lot of people, Fran ran Bitcoin in particular. And from some of the people

I've been listening to on this, they called 42,000, 40,000 as kind of important stop-loss levels. It feels like we're going to trigger those, break lower, and then we can reset this. But again, I'm just a little bit disappointed. I was hoping for a little bit more pent-up demand on the new Bitcoin. What were you – the total net flow so far is at 1.2 billion, and, Aran, you've covered that as well.

So what were you expecting, Peter? And then, Ran, I'd love to get your thoughts on the ETFs. I was thinking we'd get $2 to $5 billion pretty quickly out of the gate, that there was a lot of money just sitting there waiting for this. And certainly the first week was odd because it started on a Thursday. But we had all last week. And it really hasn't built up the momentum. And Fidelity has, I think, been the most successful.

It's up over a billion. But even there, it seems like more of a trading vehicle right now. And people are trading it around rather than truly just investing. So that's been the disappointment. I'm just not sensing the buzz. I feel like there was all this buzz, all this momentum. Everyone in the crypto space was waiting for Wall Street to latch onto it. And it still sounds like it's all the same voices. I haven't picked up any kind of new voices really saying, hey, this is great. You've obviously got Larry Fink out there, but he's been on this for a little while. That's where I want to see some more buzz and some inflows really to match that.

I thought we should be at $2 billion to $5 billion a week into this, two weeks into this. Ryan, I know you've covered this as well. I know you were also disappointed from the early stages and we had a whole debate about it. What are your thoughts on the new numbers? Well, I mean, I think I'm in the same boat as Peter here. I think net, look, net, net, we are positive. So, so far, so far, like I'm just celebrating the fact

that we have more Bitcoin in ETFs than have left ETFs because it was a big, you know, like it's a big tug of war between Grayscale and others. That said, I think pretty disappointing launch. Maybe not when you compare it to other ETFs, but I think just in general, I was expecting a lot more from the ETF launch. And I think that now, when I look at this market, I don't see any way that we don't tap that 39,600. I don't see any way that we don't tap that 39,600.

I don't see any way that we don't close that CME gap. And it's only a few hundred dollars down now. It's almost a non-events, even if we do, right? Yeah. When you're hitting 40,200, 40,400, whatever it is,

40,000 is just a number. You're talking about a few hundred dollars of price action. Yeah, exactly. So I think that, I i mean i've been calling it for a while you know i've been calling this this i've been i've been tweeting 39,600 for weeks now saying look it's just there's no chance that we don't tap that level problem is if you break below that the next like yeah the next level is 37 so it's 39.6 and then it's 37 37.5 like that's that's the next level what do you think we'll bottom out and why i don't like to call the top but i don't like you

know if you you know the problem is if you try and pick a bottom you know what happens you get shit or a nuke straight through two Two things. No, I don't know. I don't know. Every time I try to pick my bottom, I shoot at my finger, bro. Yeah, but what would you? So, Don, I'm sure you've got a number where you start getting back into the market. What's that number for you? I think it's not a number.

I think it's not a number as much as it's a sentiment. I think right now people aren't scared and there's no panic. And I buy on panic and right now zero panic. I mean, do you feel panic? Are you, are you panicked in any way? Mario?

You don't sound panic to me. So to me, to me, I just not, not a, I'm not, I don't feel panic in this market. That said,

there are a lot of shorts that are piling up at the moment. A lot of shorts are piling up at the moment. So there may be a short squeeze before we get down to the bottom. You may get a quick short squeeze where all these shorts could just get squeezed up. What is funding and what's open interest on the short side? And then also, maybe another question you might not have the answer to because I haven't looked. Have we seen any more branches come from Grayscale to Coinbase today? So every morning there are moves.

The moves today weren't crazy. But every morning there are moves. And what about on the short side? Like you said, shorts are piling up. How big is that? Hard to see. Hard to see. All you see is you see the open interest going up.

You make an assumption that it's longs and shorts. I'm making an assumption that it's shorts based on the fact that the funding rates went negative. And they're not crazy negative. The funding rates aren't crazy negative. That makes sense. They rarely go really deep negative negative so that's meaningful i would say yeah chris what do you think uh market wise i'm sorry do you have another question chris thinks i know i know you need to stop stop avoiding giving your thoughts i want to get your

thoughts on it and then we'll go to chris and then we'll go to the rest of the panel on the other topics your thoughts on the market yeah i mean i i i you know listen i write a newsletter every day and i talk about bitcoin price action so i i have to at least have an analysis or an opinion and i think uh once it wicked up wicked up into that sort of 49 000 area you know that was the 61.8 retracement back up from the all-time high of 69 down to the lows of like 15. And in every pre-having cycle, although this is later in the cycle, we've seen that move back up to the 61.8% before retracement. So we lost the 50 MA on the daily for the first time since I think it was September, October when Bitcoin was trading around 26,000. It's been tested a few times as resistance.

So I'm not saying I'm generally bearish. My opinion was always buy the rumor on the ETF and then buy the dip. If we got one on the news, I still think that. But until GBTC starts selling, there's no reason to think we're going to go up. So I mean, rationally, to me me the chart says a little more downside and uh you know my rational brain says probably a little more downside unless we see a reduction in that gbtc selling which could be happening if mark ran if you said the numbers are lower and short to come in maybe that maybe that is it and maybe 40 000 gets defended totally possible scott i think i don't know if if the selling can continue for a long, long, long time

because in five days they sold 50,000 Bitcoin, 54,000 Bitcoin, right? In that six days. So they're selling 10,000 Bitcoin a day. And if they carry on at this rate, they'll never get to zero. But you've still got at least 60 days of selling if they were continuing at this rate. I think what's more

important is to start seeing buying. You want to see buying. That's the problem. We start seeing buying. You want to see buying. That's the problem. We want to see a wave of fucking buyers come in. But there are inflows. I mean, inflows have outweighed the outflows. So imagine if there was no GBTC pressure. What would the numbers be if there was

no GBTC pressure? It's very hard because we don't know how much of that GBTC and on what lag it's going back into other ETF products. We don't know what percent of it was simply people obviously just trading the discount. It was a trade and they're back out to cash. JP Morgan thought that was about $3 billion, but I have no idea why they make that assumption that that's how much it was. I think it's really hard to know. Clearly, there is demand, but how much is the GBTC that's being sold flowing back in as inflows? So it's really hard to tell.

Yeah, Scott, another bit that I think we all forgot, and maybe someone else covered it, but I missed it, is FTX has got a billion dollars of GBTC. So the strategy of the FTX bankruptcy is to sell immediately as soon as liquidity comes available. So I don't think people factor that one in. And miners have been selling, right? So there's a lot of selling pressure. But yeah, that's a great point. And I've seen a lot of people I think Meltem made a point about the GBTC unwind and how much of it was locked in sort of these creditor and bankruptcy events and, you know, and how much collateral, you know, it could be nice now, if the Mt. Gox liquidator just released a couple 100,000 Bitcoin, that would be nice.

Yeah, I think two other things just again, coming back to this whole size, right? Bitcoin's what about 800 billion, that we're not even approaching 1% of inflow seems pretty weak, right? Like $8 billion would be a tiny number. And in the grand scheme the coins, A, we know a lot were lost and B, that there's just a huge sloth of people that are never selling. Right. So the other thing I'm watching and getting a little bit more nervous is China. I mean, the stock market there continues to go down every day. The real estate. I don't know whether there is at some point going to be China selling as they actually need whatever they've imported into Bitcoin to live. So I'm kind of getting a little bit the precarious nature of China. Again, I'm not sure how much is that's feeding into the Bitcoin, but every day the Chinese stock market's dumping, real estate's supposedly a mess. And clearly China has been a big holder at one level of Bitcoin. I don't know whether they're becoming

forced sellers to raise liquidity or something, but it's something I'm going to start trying to pay a little bit more attention and dig into. Dave Weisberg spoke about that same idea on my show this morning. Actually, Peter, it was the first time I'd really heard about it, but he made the point. He was like, listen, we know that, you know, especially with the state of things in the United States pre-ETF. We know that the liquidity is all offshore. It's all in Asia. There's still excitement over there and watch what's happening in China. So you're not the first person even to say that to me today. So it definitely puts it on my radar.

I want to move to Simon. I don't know if you've got further comments before going on your downshift. We'll go to Simon and Danish just on crypto in general and macro because we've been discussing it for a while. Then I want to go to Chris and Ryan just talking about ALT as well and then probably move to the Binance discussion. Go ahead, Simon. I was just going to say to Ryan, what's the bet that we get a US government Silk Road sale as well? Because do you know how much they've got left from the 50,000?

I could be wrong, but I think they've sold off at half. But I could be wrong. Okay, that's what I was going to say. Carry on, Mario. Just on the China conversation, I have to say this China issue seems to be compounding very quickly. Especially when you put it against the situation in Japan right now. Japan, Japanese markets are now at an all-time high.

We're seeing a rotation in that part of the world. China is in deep trouble. IMF came out last week at Davos and spoke about how China is structurally in trouble. China has never sent more delegates to Davos than they did this year. They are trying to recruit businesses back to China, but because of what they forgot is that none of this is a given. It is all earned. They messed with the US. The US uncoupled our financial markets away from China, and we uncoupled our manufacturing area from China. Expect this to be great tailwinds for Indonesia, for Vietnam, for India. India is the biggest beneficiary of this, and we're going to continue to see this be an issue. The only thing around the connection between China and crypto is that, you know, we don't know. There's been a lot of, you know, there was an article a couple of weeks ago about how a lot of Chinese nationals buy crypto through VPN access. And that is, you know, that that is largely unchecked and unmeasured. And so

I believe that was a Wall Street Journal article, but I was double check. So you know, there seems to be this issue. But actually, I will push back with to Peter's point, I actually think they hold more now. Right? Because if they convert it to one, they literally can't take it out of the country. So this is a, I think we see a major exodus of Chinese nationals out of China. I think China is, if I was going to say a black swan event this year, it's going to, if there is going to be one, which I actually don't know, my probability is very low, which makes it a true black swan event. China is the source of everyone's troubles. A deflationary China, which is where we are right now. And sorry, Peter also mentioned,

I'll double click on it. Chinese equities are at an all time low. This is really scary stuff in China. And I am putting up the red flag that if I was going to say there's one thing about 2024 that we're worried about, it should be China. I will remind everybody, the global financial crisis started from mortgage backed securities for residential real estate in the United States. So I think Chinese equities are low, but I mean, I think with all the stimulus and everything else that's going on it's probably a good time to start binding but there's one thing china is doing that us doesn't do is they're letting their banks go boss they're letting the debt roll out um they're taking the hit now rather than rolling over the ponzi yeah but simon that's the problem they're being stupid that's the that's the good thing that's a stupid. That's the good thing.

That's a good thing for a Bitcoin owner. It's a bad thing for the rest of the world. Yeah, well, of course, short-term bad, long-term good. Yeah, I'm sure your Bitcoin will feel really good to you when there's like fire in the streets. I don't understand. This is like the nihilistic, anarchist side of things. We don't want China to die. We want China to slowly wither away into the ether,

which is what's going to hopefully happen. Right now, I can tell you there's a high likelihood that their stimulus will fail, especially on the residential real estate side. Guys, a lot of capital outflows out of China in residential real estate and in commercial real estate. Chinese people, consumers are not spending. That was the biggest retail sales were down again. This is like all kinds of like awfulness going on in China. Like I said, if there's going to be a black swan event, which again, I will tell you, the probability is low, in my opinion. I think Chinese stimulus hopefully will work as they keep pumping money and keep debasing their country and currency. I will say that I'm hopeful that stimulus will work for all of us,

all of us, not just Chinese folks. They are a large, large economy. We will see India continue to ascend. A couple of quick things I would just add to your points. I agree with most of them. I am buying some Chinese stocks for a trade because I am a contrarian, but separate from that, I think they are going to have an incredible amount of difficulty convincing corporations to do anything in China other than trying to sell into China. We speak to a lot of

corporations. Putting new manufacturing in China is on no one's radar screen whatsoever. I would add Mexico as a potential beneficiary. I think we need to get through our election, but Mexico could do very well. I'm looking for ways to invest in Mexico. India is my favorite place in the world in terms of trying to figure out how to invest. The trick is what's a good investment as an outsider to benefit,

looking at gold and other things. And then I would say the one thing to kind of add to your black swan, in my day job, I wind up working with 18 retired generals and admirals. We do a lot of conversations, asset managers, corporations. We're starting to get asked more and more, does this economic weakness in China force their hand to do something militarily where they get to kind of take everyone's eye off the misery at home, much like Putin did?

I think our answer so far is no. But as the economy continues to grow. But, Chris, Peter, wouldn't that impact the economy continues to be... But Chris, but Peter, wouldn't that impact the economy negatively? I understand the sentiment will be by their side. No, the problem here is deflation. Peter is 100% right. The problem is deflation, not inflation.

They want inflation. And it's always good to beat up on someone. They don't want production. When your people aren't happy, you go beat up on someone. That's what dictators like to do. And you effectively have a dictator running that country. So and remember, they're much more susceptible, I think, to outside influence than they were in the past or even internal influence. Right. They were in COVID

zero until these protests started. And then all of a sudden there was no COVID in China. So he might be a little bit more precarious. Again, that's not our base case right now. But I think we've got to watch this. And I would say a deterioration in China probably is not good for the world in multiple things. And one may be a military threat from them somewhere. So Grayscale just sent another 15,308 Bitcoin to Coinbase Prime. So there's a settlement from Friday or whatever it was. So that's another 15,000. That brings them down to 70,000 Bitcoin that they've now sold,

which is more than 10% of what they had. It's about 13% of what they had. Ran, I have to say, I'm so happy to see that you and I are finally on the same side of history saying that this Bitcoin ETF has been a giant failure. I know I haven't come up here and said it. But when you look at net new inflows, I thought that they were going to be a quadrillion. I mean, the Cardones told me, Scott, that there were going to be a trillion quadrillion folks that were going to come in and put trillions and quadrillions of dollars into the ETF. I mean, a little bit of sputtering, isn't it?

It's a little sad. No, no, no. Hold on. I always said that in the short term, I don't expect anything. I always said in the short term, $2 to $5 billion. And I said that, by the way, in three months. And then I think that this is a much longer term bet. And I don't know if you remember, Danish, but I always said, Scott will remember this very clearly.

I said, as soon as the ETF comes, we're getting that 30% correction. That's long overdue. And the reason why I said we were going to get the correction is I said there's no way that anyone can keep up with the 620,000 Bitcoin that are now becoming unlocked. But that said, I haven't lost my conviction in the asset. And I think what's going to land up happening is the more the price goes down, the more the fund managers are going to say, this is a great time to start fucking entering.

You've not had a, I don't know, 30%, 40% correction. This is when you want to start getting into assets. Can I give you the opposite side of that? Again, for everybody that knows, despite my shitting on crypto, especially cyberpunk crap and NFTs, which make no sense, I am a Bitcoin holder. And now I mentioned to Scott, I will say this publicly also, I am increasing my holding of Bitcoin. Just to be clear, I think this is the right move.

But I will say that your average RIA, your average asset manager, your average advisor is going to be fearful of this. All of this is going to make them more scared to come in. They're not looking for a price for entry. They're looking for it to be moving up so that they feel comfortable. This is a new asset class. So I think it's going to be a bigger, especially with everything that's going on around the world right now, especially before China, we still have this global inflationary pressure. There are talks of recession. There are talks of inflation.

There's all of these other issues around that I think will affect that asset class, and people will be scared to try something new. People are going to revert to a flight to safety and quality. I'm telling you, I think this is going to be not three months or six months, Rand. We're talking about a year or two years before we see any activity that reaches what, what,

you know, the crypto folks. I'll tell you, I'll tell you why I don't think that you're right yet. I think two things happen. Number one, you've got the halving and there's going to be a big halving narrative, and that's happening in a couple of weeks. It's a couple of weeks, probably two, three months from now.

And when that narrative starts to hit the market and people say, you know, the supply has been cut in half and all the stuff that goes around that, a lot of people are going to start buying. Also, just having been around for many, many crypto cycles in the bull market, recoveries are very, very, very quick. And so far in this market showing all the signs of a bull market. I think the average time from the beginning of a correction until the price actually gets back to the highest level is between 30 and 60 days in a bull market. Now, let's just play that out now. So if we look at the highest level that between 30 and 60 days in a bull market now let's just let's just play that out now so if we look at the highest level that bitcoin hit uh was 48 000 that was on thursday

january 11th so you know you could probably say that within 60 days we kind of expect maximum we expect to be back at that 48 000 or above so i mean that's maximum maximum guys we're we're in the seventh day in fact we're in the uh second hour of the seventh day of spot bitcoin utfs even existing for people to put money into so let's you know relax on oh this is this is you know such a disappointment by the end of this week uh the blackrock spot bitcoin etf will have more than two billion dollars in it probably closer to two and a half billion dollars uh three months from now it'll be five billion dollars if you think that there's going to be you know this malaise associated uh with spot bitcoin ets. You know, somebody needs to tell BlackRock,

it's all over their front page. They're printing, you know, marketing materials to send out to anybody and everybody that shows Bitcoin as the alpha asset over the last three, five, 10 years versus everything else. Again, this is the seventh trading day of spot Bitcoin ETF. So a little context. Real quickly, Rand, I'm seeing it as breaking news, but it is on Coindesk now that FTX sold about $1 billion of Grayscale's Bitcoin ETF, explaining bulk of outflow. They've already sold a billion of they've already sold their entire holding

a billion and that's half of the 2 billion that's been sold. Yeah, I mean, that's what you said. You said that's that's that's that's bulk of that. That's not bulk. I mean, they've sold 60 65,000 Bitcoin 65,000 Bitcoin is $3 billion worth of Bitcoin more or less. So maybe 1 billion is the FTX thing. The article is saying two. That's why that's what I was quoting. So it said, yeah, it was one of the two. And just for context, one of the 2 billion was FTX.

We already understand this, but the fee associated with Grayscale's ETF is, I mean, I don't know. It's been talked about, but hasn't been talked about enough. You know, I take a look at it. And the assumption is, you know, if Grayscale's, you know, AUM gets down to 15 billion, that's still 300 million in revenue on an annual basis, just from their spot Bitcoin ETF. That's the only revenue of any kind that exists still at DCG who has enormous bills still to pay based on who they owe and what they owe, right? So they made a calculation. We don't care that our spot Bitcoin ETF fee is five to 10x everybody else's. We know we're going to take a massive hit, but we're okay with it.

We'll still go on CNBC and say, oh, we've got a lot of liquidity. And so that matters, which means nothing. They have a long-term plan associated with keeping DCG afloat. Think about this. Have we all forgot that in their initial plan to pay everybody back, Barry and company put into that plan that they're going to take DCG public in 2025. What revenues are they going to use to make DCG look like a reasonable public company to take public in 2025. Anybody have a guess? I think I probably know. So, you know, there's a long-term thing at play here, which

is nefarious, but they don't care. It's within the rules, right? It's within, you know, the ability to generate that revenue, even though it's gross, it is what it is at this point. And everyone has to take into account that this is going to be part of the story for the next three to six months as more and more GBTC sells off. Let's also, Andrew and me give a lot of shit to DCG, GBTC, that whole thing.

But let's also remember that it was allegedly the comments from Gensler and Co. that it was the court case that tied their hands. And that's the reason why we are. So they won that court case. And, you know, that's something that led to them having to approve everything. Well, the calculation here for DCG, for Barry and his folks is, you know, there's a new narrative that they can grab onto, right? It's the reason why Barry deleted all of his past tweets. This is a brand new start for their group.

And this is the calculus that they've made. We won the court case. We helped everybody. We have a new narrative where we can be the stars of crypto again. And that's what they believe. And that's what they're doing. The reality is, again, they're dumping an enormous amount of Bitcoin onto the market because people don't want to pay a one and a half percent fee. And there's also people that want to have nothing to do with Grayscale and DCG. But at some point that will abate.

And you know, my guess is, is their narrative will work. Andrew, by that narrative that you're talking about, you would expect that the guys that are dumping GBTC to start buying into, what's the name, into other ETFs. So how much do you think? Okay, so we now know that $2 billion of're actually saying actually does make a lot of sense that uh under the assumption that they've sold three billion and two billion is ftx you could say that the one billion just went straight back into blackrock and all that yeah no i i wouldn't it makes perfect sense i would agree with that i

think and i think that there will be ongoing and a slow uptick, you know, a slow uptick in demand as time moves along, as this asset class becomes part of, and I said this last week, this asset class will become part and parcel of asset allocation conversations on a quarter by quarter basis within the wealth management world. It absolutely will simply because of the long-term performance, but that's not going to happen on the eighth day of spot Bitcoin ETFs even existing, right? That's not going to happen. But over time, no doubt it will will happen see if you're if you're um if you're in gbtc at a high cost base and you want to exit uh well everyone everyone that's going to take that tax it wants the price to be as low as possible so the real gbtc wells that are looking to take the tax it and go into another etf um they're probably being quite strategic around it, knowing how they're working. To be fair, those types of whales probably were invested in other DCG stuff, right? That probably has a tax number associated with zero. So the reason why the velocity of the

sale of this stuff probably is significant is because that particular cost base is associated with other losses they've had associated with DCG products, loans and the like. It's probably a net, you know, zero or something around there. I would simply expect the GBTC trade to be problematic for another few months. So just hold on a second. I mean, when the market realizes that two thirds of the selling of GBTC was the liquidators, and then they do the math, they're going to realize that actually the selling hasn't been as intense as we think. I mean, that can cause a bounce, and that bounce could cause a short squeeze.

Just to be clear, Ran, sorry. You may be right that it was $3 billion total, but $1 billion of it was FTX, in case I was confusing. The article was saying $1 billion of the $2 billion total on Coindesk. You're saying it's $3 billion total, not $2 billion total. Sorry. That's the whole position, right, Scott? I think that's, yeah.

You literally said that they have a billion dollars worth of GBTC, and then it was immediately reported that they've sold a billion dollars worth of GBTC. So I'm assuming that that was a full liquidation from FTX of their GBTC holdings. Who else holds, guys, who else holds GBTC that's wrapped up in any of these? Genesis Gemini. That whole Genesis Gemini situation,

I think there's a whole lot of BTC that was locked up there for the arbitrage. Gemini sold a huge position, if not all of their GBTC, like, I don't know, six, nine months ago. Months ago. Yeah, months ago. And so that's gone. That's not coming to market. From a macro standpoint, there's probably a reality where nine, 12 months from now, there's really four, maybe five significant players in the spot, Bitcoin ETF space, 11, that's not going to hold. They may exist because they can just exist and they don't need to fold. But, you know, BlackRock, Fidelity, GBTC, and something

like VanEck or Valkyrie, those types of folks that there's that's where the lion share of assets are going to be. And the grayscale assets are only going to exist at some level of scale because, you know, there's going to be a certain number of people that just don't sell because they're just lazy. So you end up with 10 to 12 billion still left in that particular brand. They're not going to have meaningful inflows at one and a half percent ever. Nobody is going to put money currently into GBT as a spot Bitcoin ETF. Nobody is going to doing that. There are no inflows into GBTC. There won't be four until they change their fee. There's no chance, right? And my guess is the only time they change

their fee is when DCG, Barry and his group, have completely recapitalized their quote-unquote empire. At that point, you will see a reduction in the fee. Because the empire doesn't exist without the GBTC. Correct. Period. Correct. In terms of the bankruptcies, I think there's still some in 3AC. I think BlockFi, they're just arguing with FTX over the Robinhood shares. I don't think they're doing anything with GBTC.

Celsius has got a very small position. So I think FTX was the only major one, and there may be a decent position in 3AC. That makes sense. I wonder, I just don't know how much assets they actually have. But yeah, they were pioneers of that Widowmaker trade. So certainly that's a huge part of it. And by a while, let's call it two months, but everybody on this call knows two months feels like 20 years in crypto. But it just kind of is what it is, right? This bleed is going to happen. Somebody said they were just, whatever the number is that

was sent to Coinbase today based on Friday's numbers. If I'm not mistaken, that's the biggest one day amount that GBTC has sent to Coinbase. Yeah, that'd be over $600 million, right? And what'd you say? $15,000? I think it's closer to $700 million. Yeah, I don't remember exactly the number. I think you said $15,000. So yeah. Right. So like Thursday, Friday, it was like $ like 580. Now we're above that number. So it's not as if this particular trade is slowing, it's accelerating a little bit.

That's going to continue for the next few weeks. And DCA into Bitcoin. In context of that, I'm actually kind of surprised it's still about $4. I would agree. I would agree. That's significant size being moved on the sell side. Significant size. I mean, if you add it all up in the first six trading days, I don't know if anybody's done the math.

It's probably not hard to do. It's a lot. it's a lot so the question is you know where is the strength on the buy side coming from um we'll see yeah is it that is it that same money on delay or is it a unique new demand so it's gonna be hard to shake out and tell I think, well, the point is, are where if anyone actually was short Bitcoin versus GBDC waiting to close out at zero, right, that that should be a net neutral trade. So you're selling the GDP TC, which you'll see those outflows from GBDC. Someone should have if they were doing the arm, and we don't know what percentage of this is been short Bitcoin against that. So they would be buying bitcoin so that would be a net neutral so

i think it probably overstates it to assume all of the gbdc outflows have been net selling a bitcoin i suspect a decent amount has probably been net neutral on bitcoin yeah that makes sense that does make sense, actually. Guys, did you cover the Mt. Gox double spend story? Did that ever get resolved? Do you know that one? I'm not sure I'm even aware of it. Okay, well, Mt. Gox used PayPal as a distribution partner for creditors, and they accidentally paid, I don't know the extent to it because they didn't reveal it, but they accidentally double paid everyone that were distributing through PayPal. A bunch of people withdrew their Bitcoin and one creditor wrote back when the trust basically wrote to everyone saying, please give it back because it's obviously going to dilute other creditors.

I don't know how they're going to solve that one. But one creditor wrote back saying, yeah, I'll give it back to you in 10 years, provided you pass my KYC. Wow. It sounds like the SEC is running their bankruptcy. They're so efficient and well done. Do you remember it wasn't there? Was it crypto.com or blocks?

I think it was crypto.com that accidentally sent the woman $50 million. Like crypto.com or blocked i think it was crypto.com that accidentally sent the woman 50 million dollars like crypto.com and she like in australia or something not the first time we've seen something like this i can't remember specifically i don't want to uh disparage them if it wasn't them but uh there was a story something like that mario should we move on to talking about the market i think uh we were trying to get to chris before um just kind of circling back to what we think is going to happen here with price at 40 000 whether it matters i mean talking about the market. I think we were trying to get to Chris before, just kind of circling back to what we think is going to happen here with price at 40,000, whether it matters. I mean, Chris, what are you looking at? Yeah. So I definitely agree with Andrew. I mean,

basically everything he says, the same thing I've been saying since everybody said GBTC was going to sell off over a year ago. And I said, man, that looks like the bottom. Bitcoin right now. Yeah, I mean, if we break down below 40, you know, my targets are still the same 38 450 35 675 potentially 345 10. That's the weekly pivot. Um, but that's only if that's only if we haven't actually broken down yet. Yes, we're close to it. So I'm very cautious. But until we break down, I mean, you know, if we break out, say here above, oh, let's say probably around 42,000. I'm going to start getting a little cautious about further breakdown. If we continue

up through 43, I don't know 43 600. I'm really going to be cautious about, you know, about the lack of further breakdown. Because at that point, I think we're probably looking at a rally up to around 46,000. And if we're hitting there, the odds are we probably break out higher. And that's just based on the charts. And you know, in the same thing, when we're looking at, you know, somebody's talking about small caps earlier, if we look RTY, which are the uh futures um you know we just finished a fourth wave pullback to the uh to the weekly pivot uh i think we've got a target right now about 22 21 coming in and at that point i believe we'll get our pullback toward the pivot here back down here toward uh oh what is that right there about 1935 or so and as long as that area holds on that pull

back we should be looking for uh for caps, you know, the Russell to break out all new all time highs. And so you know, a while back, I was talking with you guys and said, it looks like, you know, we're going to cycle into these small caps this year. And right now, there's just nothing in the chart saying, you know, really right now that we're not so um, you know, when I'm looking at this, you know, a lot of people are making decisions about what they think price should do based on emotions, based on, you know, narratives and things that they feel should happen.

As you know, I'm very much against that. I just kind of, you know, look at the charts and go, okay, well, you know, what are the charts really kind of saying here? And it doesn't mean that we're going to read them correctly all the time. But I think you know, there's a good chance these charts are going to surprise people continue to surprise people as they've done for the last year. You know, everybody's been fighting for the last year they've been fighting the stocks have been fighting, you know, Bitcoin and crypto rallying. And so now it's hard, you know, now it's really emotional. Now we've been rallying, rallying, rallying. And it's hard to say, Okay, well, it's gonna keep going up. Because everybody's still now they're serious about

looking for that entry. You know, we've had a bit of a you know, we've had a little bit of a pullback here. But for now, a high timeframe structure on Bitcoin is still holding there around that 40,000 area. So, you know, again, until that actually breaks, I think you have to be cautious about shorting because you just might get caught with a deep pullback and then it takes off without you again. Yeah, it could be one of those very quick shorts if it's gonna be successful. I have a feeling if we go much below 40

if we don't see the sustained it could just be one of those crazy wicks and right back up which would catch a lot of people off guard yeah the last thing yeah yeah preston was here to talk about the binance case i know the block put out a piece that 70 uh it's a bloomberg analyst i'm not sure who exactly gets to make a 70 chance of coinbase winning the sec case i think we there's a lot of hype around the coinbase sorry about the win around the coinbase versus sec but the binance sorry finance the corbett there's a lot of hype around the coinbase one we talked a lot about it but tomorrow's binance as well um so we'll be covering this tomorrow preston was here but obviously we got we kind of got carried away with a great discussion i'm not sure if andrew can kind of give us an

overview andrew or simon or you maybe scott on the Binance case, what we're expected to see tomorrow and how important this is. I honestly haven't dug into it at all, just beyond reading the headline that it happens tomorrow. Andrew, do you have any color? The only color that I'd have is that two things probably matter here. Binance is as lawyered up and is as connected from a lawyering as anybody we've ever seen going against the SEC. So their lawyers and the folks that they have involved in this case are former DOJ, former SEC. They talk about bringing some real big guns to this particular fight. At the same time, the question then becomes, and this is a question to the larger group here, there was a settlement with the DOJ, so now we're down at the SEC stage. For all intents and purposes, Binance is out of the U.S.

So what are we really talking about here? Unregistered securities. Yeah. At the same time, though, this is a civil, you know, a civil issue, right? So is this going to be a conversation about what size fine do we, I mean, what are we talking about here? I mean, honestly, it's an interesting, what is the SEC trying to get accomplished, given that they've accomplished most of what they would want to get accomplished? Binance is off, you know, not in the United States. And this isn't, you know, this isn't CZ at another hearing about whether or not he can leave

and how much time he may or may not have to serve. So it feels strange, honestly. What's it about? So essentially how different essentially the same they're in the same position as Coinbase right now but then why is so Coinbase is trying to dismiss the case

but tomorrow is what exactly and how important is the day well that you kind of made the point for me like Coinbase that fight is obvious they're a fight to the death associated with unregistered securities. And they are the United States crypto on board, off board behemoth, right? But Binance isn't. Binance US and Binance overall. I mean, Binance has agreed where the SEC is basically,

you know, going to make breakfast, lunch and dinner in their offices for the next five years. So what is this hearing about? It's really about what is and what is not security. I mean, if you read the summaries at this point, like you said, because the DOJ has neutered part of the case anyway. Yeah, so my guess is that I don't know if we're going to see anything remarkable coming from the going back and forth.

But if there's a lawyer on this call, I'd really love to hear their opinion about it. What's really going on? Yeah, Preston was here earlier. I don't see any of them in the audience. Scott, do you want to hit him up, or just do it tomorrow? I think we'll do it tomorrow. I think we covered it pretty good today.

Can I ask you a completely unrelated question, just because I see someone with a PulseX logo requesting to speak. I remember that PulseX was pumping just a few weeks ago. I'm not an investor. I don't understand the ecosystem. But I do know that we had a whole debate mid-last year.

I think you did a debate on your show as well, Scott. You went deep into it. Despite Richard Hart, we don't know where his location is, and I know he's facing investigation or a lawsuit from the SEC, and the rumors of a DOJ investigation, if I got that right. Why is it pumping? Is there something I don't know? I literally didn't know it was pumping.

And this is not like, I'm not saying this in any derogatory manner. I just don't track it. It's just not. I saw it. Neither are 9,000 other coins. You know, like I said, I have, I think,

somewhat of a fair shake. I want to ask, because Ran was talking about it on his show and showing it on this bubble thing and he's saying that the whole market was down and and uh all the richards coins were the ones outperforming the rest of the market which caught me by surprise i thought they were just dead after the investigation so um well good for you guys because they thought you were dead they're pumping because you thought they were dead. That's when it happens, right? Yeah. All right, cool.

I think this is it. We'll do the Coinbase thing tomorrow. And it was good to have the discussion earlier. Awesome. Thanks, guys. All right. Thanks, everyone. Bye.