The Wolf Of All Streets - Global Market Meltdown - $6.5 Trillion Erased! Is This Just The Beginning?

Episode Date: August 6, 2024

Black Monday 2024 led to massive losses. Is the worst over? Or should we expect markets to fall further? Noelle Acheson will join me in discussing this and more.  Join Noelle's Crypto Is Macro: https://www.cryptoismacro.com/ My friends from The Arch Public, Andrew Parish, and Tillman Holloway, are joining in the second part of the stream to provide an update on the $10K algorithmic portfolio.  Unleash algorithmic trading with The Arch Public: https://thearchpublic.com/  Andrew Parish: https://twitter.com/AP_Abacus  Tillman Holloway: https://twitter.com/texasol61  ►►IS THIS THE END OF THE BULL MARKET? COMMENT HERE!  👉https://roundtable.rtb.io/RTBHOME/posts/95Rb5WmzRS4nTLKmw3Qs?refBy=18206041095800507455 ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEKDAY! 👉https://thewolfden.substack.com/   ►► The Arch Public Unleash algorithmic trading. Discover how algorithms used by hedge-funds are now accessible to traders looking for unparalleled insights and opportunities!  👉https://thearchpublic.com/  ►►OKX SIGN UP FOR AN OKX TRADING ACCOUNT THEN DEPOSIT & TRADE TO UNLOCK MYSTERY BOX REWARDS OF UP TO $60,000!  👉https://www.okx.com/join/SCOTTMELKER  ►►TRADING ALPHA READY TO TRADE LIKE THE PROS? THE BEST TRADERS IN CRYPTO ARE RELYING ON THESE INDICATORS TO MAKE TRADES. Use code 'TENOFFSALE' for a 10% discount. 👉https://tradingalpha.io/?via=scottmelker  ►►NGRAVE This is the coldest hardware wallet in the world and the only one that I personally use. 👉https://www.ngrave.io/?sca_ref=4531319.pgXuTYJlYd  ►►NORD VPN  GET EXCLUSIVE NORDVPN DEAL - 40% DISCOUNT! IT’S RISK-FREE WITH NORD’S 30-DAY MONEY-BACK GUARANTEE. PROTECT YOUR PRIVACY! 👉 https://nordvpn.com/WolfOfAllStreets   Follow Scott Melker: Twitter: https://twitter.com/scottmelker   Web: https://www.thewolfofallstreets.io   Spotify: https://spoti.fi/30N5FDe   Apple podcast: https://apple.co/3FASB2c   #Bitcoin #Crypto #Trading The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

$6.5 trillion was wiped out from the stock market just yesterday, leaving everybody wondering what happened. Is this going to continue? Is this just the beginning of the great unwind that many people have been predicting for a long time? Or was that just one of those really bad days and things will go up and everybody will be euphoric again one week from now? Well, we want to talk about the context of it in macro, of course, but also how it specifically relates to what's happening with Bitcoin and crypto. And have two amazing guests here to unpack it. David Young from Coinbase and, of course, Noel Atchison. On the back half, we're going to have the guys from Arch Public as well. A lot to talk about with some amazing guests. Let's go. Macro Monday, of course, with James, Dave, and Mike. We were really in the thick of it at that moment, but now the dust has settled a bit, at least from day one.

So we can take a look at what happened and what's likely to come next. I've got both Noel and David. I love having more than one guest. Amazing. Amazing having the two of you both here. Noel, let's start with you. I mean, listen, we've got the obvious big numbers, 6.4 trillion stock wipeout, has traders fearing great unwind?

You wrote about it in your amazing newsletter yesterday and sort of how it applies. But maybe you can just sort of set the table here as to what you think happened and now what happens. Unfortunately, this is very much like the tragic example of airplane crashes. It's never just one thing going wrong. A lot has to go wrong at the same time to get the kind of weekend and Monday morning that we had. In part, it is concerns about the U.S. economy after the employment numbers.

In part, it is frustration about rates. In part, it is that in a big part, it is that Japan carried trade unwind, as well as some, you know, repatriation of funds from equity investors in Japan. And also just in part, it's the fact that the Middle East tensions are not exactly getting any better. So there's just a lot going on. This is not even counting the growing understanding that AI hype might finally be getting readjusted, not to mention the valuations of many other of the tech stocks that are perhaps inflated, especially if the US is going to undergo a demand hit in the near term. So a lot went wrong. And that is why we saw what we saw. What's important now is, I guess, what happens next? I'm having technical issues, but I'm not

sure if it's on my end or if it's on yours, because we've had a bit of a hurricane here. But, David, I mean, I guess your thoughts on what you said and what you're thinking right now. I really want to dig into whether this is a one time thing or this is the beginning of something much larger. You get Mike McGlone on here yesterday. He was like, this is the great reset I've been talking about for a long time. It's triggered. Yeah. So we actually wrote about this a few weeks ago. The idea that recessions are coming isn't new, even as much as I would say mid June, early June, I started seeing a lot more on my radar in terms of projections of a recession coming in Q4 or early 2025. And I think that this kind of manifested in the market moves that we saw yesterday to Noelle's point. Now, whether this is actually what's happening, I actually would take issue with that.

I don't necessarily believe that we are at the start of a new market cycle or that a recession is in fact coming. I think that people are kind of looking at the top line numbers for labor data and other indicators. And certainly, I would say a lot of that data does look soft. If you look at ISM, for example, it's been showing that we are dipping into contractionary territory for some time. But if you kind of look through like the headline figures, like what I think is actually happening underlying like the labor data, for example, is that we are seeing AI, for example, start to actually become more relevant here. And I think that that's what's, you know, seeing that AI transition is actually having a secular impact on this. So I'm not terribly concerned about this over the medium term. I think that we will get through it, but I still expect Q3 to be choppy. I think that probably over the next few days, and we're already witnessing right now,

we are seeing a short squeeze in this market. So it's giving you this impression that markets are rebounding. But I would say that people shouldn't be fooled into thinking that the market disruption is over. I think that probably this could continue through the end of Q3 or at least up until the next Fed meeting in September. I don't think an emergency meeting is coming. And then probably we could be more constructive in Q4. Yeah, we have an article literally from you here coinbase analysts suggest short squeeze potential as crypto market experiences slight recovery and they're you're the guy there you are coinbase researcher david young that they're referencing so you think

that that is the sort of the tone of this article was that that was impending you're now saying that this has happened basically yeah there's a phenomenon in markets known as turnaround Tuesday. And, you know, like I tend to not use that term because it's sometimes the day after, which would be a bad Monday and followed by a turnaround Tuesday, or it could be a few days after, but it does happen because you see a buildup of shorts on the other side. And then they start needing to accumulate a position in order to kind of square themselves. And that kind of leads to a short squeeze higher. But I think that these short term movements really shouldn't be confused with

what's happening over the medium to longer term. And I do think that we're still going to be in for a soft patch in Q3. And you know, I, you know, for the most part, I think there's still going to be these concerns about recession fears, they could intensify. But then I think that things should start to settle in as we get into Q4, because I think that what we're actually going to get is a productivity boom. Now, it may not necessarily begin in Q4. But I do think that that has dipped very sharply over the course of the last 15 years. And we're in for a recovery, probably starting later this year, if not next year. Noel, doesn't this just align with the expectations of what would happen

in an election cycle? I mean, if the market's going to go down at some point, it can't happen right at the election. So it needs to happen at some point in the summer so that we can have a little recovery into the election and they've wiped out everything they need to wipe out. And here we are. That's not a tinfoil hat manipulation. I'm just saying that it's not uncommon for us to see a pretty rough summer and then in late September, October, coming into the election, you know, some sort of upside to make sure that the incumbent doesn't lose. I mean, if this continues through November, literally the Democrats can't win, right?

Yeah, and you know, we just simply can't have markets like not obey ironclad rules like that, right? I mean, that just wouldn't work. So I agree with a lot of things. I'm not convinced about the AI productivity gains, at least not for the next few years, because most of the use cases that we've seen so far are in areas where there's not really going to be much of a

revenue or even profit boost. It's in content creation, it's in marketing, and that's just going to make the price of those go down. So I don't personally see any productivity boost yet, and I'm not a huge believer in the potential of AI to bring forth yet, yet the scientific advances that we need, because they just aren't simply the large data sets that they can use for that yet. It doesn't mean yet. The question is when this is going to happen. But also, as we know, new technologies and AI is still a new technology.

These things take so much longer than we think. I mean, all of us working in crypto are very, very familiar with that. I agree that it's going to be choppy all the way through to the end of Q3, but that's pretty typical cycle stuff. I also agree that we're not quite done yet with the correction. I think we have some geopolitical tension that has yet to manifest. I think we haven't seen the end of the unwind of the carry trade from Japan yet. And let's face it, political turmoil in the US is going to weaken some confidence perhaps in US treasuries and the safety of that particular asset. I do think we're not going to, I agree with David totally, we're not going to get an emergency rate cut. I mean, that's just a ridiculous idea, even that's very much, you know,

please, Mr. Fed, please save prices. We've had a 3% drop in the main index. That's really not that big a deal. And sure, the Fed did emergency cuts in 2020. index that's really not that big a deal and sure the the fed did emergency cuts in 2020 but that was to save the economy not to save the stock market i'm optimistic on crypto i haven't read your report yet david but i definitely want to now because i think that's a very interesting theory that i hadn't thought about the short squeeze i'm optimistic because it's fallen far and the long nothing has really changed the fundamentals of crypto have not changed. And the ETFs held up amazingly well, which I think is one of the most bullish signs I've seen in a very

long time. Yeah, I was lucky. I think there was only, I mean, it's a big number, I guess, relative to other days, but a small number relative to reality, right? US spot Bitcoin ETFs saw 168 million in net outflows yesterday. I mean, that's not an alarming number. That's in line with normal days of inflows and outflows being in the 100, 200, 300 million level. So to your point, I mean, I've kind of long said that these ETF buyers are going to be more diamond handed than even the crypto natives because they probably don't even check. I mean, they do on a down day like that, but I think your average person is putting a Bitcoin ETF into their IRA or retirement portfolio

checks and rebalances every three or six months and isn't as on top of these market moves on a daily basis. Now, yesterday's different. People probably looking for something to sell and panic, but these numbers are really strong for her point, right, David? Yeah. It's hard to pinpoint exactly what's going on because we saw some safe haven assets like gold also sell off yesterday. But I do think that what manifested over the course of the weekend was that there was nothing else that you could sell. So you treat a crypto as a proxy hedge against some of your larger concerns and you couldn't sell your equity or you couldn't sell your other assets.

And then we started to see some pick up as the weekend kind of passed. But still, if you look at this on a risk adjusted basis, Bitcoin actually performed rather well compared to what happened in stocks. I mean, everything sold off, but it sold off a little bit less in risk-adjusted terms. Yeah, that makes sense. And we did see that nice bounce. I guess it'll be interesting to see whether that is a short squeeze or not. I'm taking a look just as we're talking at funding rates, and they are negative. So the potential for more shorts to get squeezed is pretty big. When you see all this

green, that means basically people have decided at the lows to get short and are paying for the right to do so with perpetual swaps. So you don't see sustained negative funding rates in crypto for very long generally, right, David? No. I mean, like by, by definition, um, generally you see a convergence in funding rates, uh, because that's how a lot of these exchanges kind of set them up. Um, and in fact, like, because of the disproportionate amount of typical longs that you to kind of go into this, usually see that kind of come back to positive territory on an annualized basis back towards that 10% or so rate. But I think that you do get these kind of unusual periods where the basis rate kind of just breaks. You just see that

there's, you know, too much leverage kind of in the system the other way around. And, you know, I do think that what is interesting about this particular part of the crypto cycle, at least this cycle relative to other cycles, is that we don't see as much leverage in the system as you did previously. And I think that has a lot to do with all of the experience that we've kind of accumulated in the last cycle. But I think we are still seeing these kinds of periods where you can get a short squeeze here and it kind of pushes prices higher. Bridge that we've seen so far is also going to impact what comes next. I mean, one thing that we can't forget is that over the weekend, a large part of the crypto dumps were because of some extraneous selling in the market. We've heard the rumors that jump trading, we're just dumping a lot of shares, which sorry, a lot of tokens, which is extraordinary behavior for one of the key market makers in the industry to do on what is arguably the quietest weekend of the year. So we don't know why, we don't know what's going on there, but we haven't yet heard

of any major collapses. We haven't yet heard of any major funds going, building up, but maybe there's some news yet to come, but there was was more noise than last time we had this kind of a correction because of the leverage a lot of funds were obviously carried out on a very on a very tragic stretcher so we had some crypto structural issues of the weekend that made the crash a lot worse but it doesn't feel like it did in previous cycles when they're a lot more leveraged a lot more damage but that said you know you're scott you're so right. Investors, especially the retail investors, they don't check so much.

ETF investors do tend to be long-term and they understand that crypto is risky. They've read the pamphlets, but they also, you know, knowing that, but also seeing a 30% hit when you wake up on Monday, that's a totally different thing. Yeah, I mean, I'm checking right now. This entire drawdown from 74,000 highs in March peak to trough is

33.57%. In that context, pretty par for the course with previous cycles, although it sort of does start to diminish our narrative of this cycle is a little different. We don't get the big drawdowns. They're very shallow. We're trading in a range. A lot of the narratives myself and others have been discussing maybe were somewhat disproven, I think, yesterday and over the past few days. What I found striking about this is this was our biggest volume. I mean, I was checking on kind of Bitstamp. I haven't checked every exchange, but this was the biggest volume we've seen on Bitcoin in well over a year, maybe longer.

I think it might even go back to November 22, at least on the exchanges that I was looking at. When you see a range low broken and a big downside move and there's that much volume, wouldn't it be somewhat rare for that to just be a bottom, like a one day capitulation and back up? I mean, usually if you're a technical analyst, you see volume matching a breakdown that's a signal that there might be more continuation yeah i think that's that's the case um i i mean like i don't necessarily think that uh it's gonna break through the established floor here um i do think that we're gonna continue trading within this this rather large range at the moment.

But I don't necessarily believe this sell off is completely done. I think that it still warrants taking a more defensive approach for the time being. But, yeah, you know, I think that right now, you know, like there's just too much concern and there's too much leverage in traditional finance. And as Noelle kind of pointed out, we still haven't necessarily unwound it completely. And a carry trade on wine just seems very unusual relative to what we've seen relative to, you know, like global financial crisis or other like large established moves that we've seen of this magnitude. Yeah, I agree. We could have further downside. You know, it's too short to feel over yet. And let's face it, a stock market correction has been coming for some time. So the sooner we get it out of the way, the better. And to be honest, I think it's healthier for markets to have a sharp drop than just a rather bleak, gentle decline for

the next year. So there is a floor that I'm definitely not a technical analyst. I don't know nearly what you know about this, David. But we know that there is a floor and each time it's a higher floor to Bitcoin and Ethereum as well. And this is because of the diversity of narratives. Scott, you've heard me talk about this often before, but David, a question for you. How many people have asked you over the past two, three days, but wasn't Bitcoin supposed to be a safe haven? And that brings the explanation of, well, yes,

it's that as well. It's the diversity of theses that give Bitcoin a very resilient floor. Yeah. I mean, people say it didn't trade like gold. It never does. Literally, never does. Gold doesn't always trade like gold either. Yeah, gold, it's a high beta gold, I guess.

But listen, all correlations go to one in an event like this. The dollar also sold off, right? I mean, people, you look and you say, oh, if the dollar goes down, everything should be going up. Well, this is one of those rare situations where when you look at the DXY, what was happening with the yen was in its own sort of compartment

with the dollar, everything sold off. It matters what happens afterwards when things find a bottom. I think the whole store of value safe haven thing, what was a safe haven? Tech defense stocks because of a war? Lockheed Martin apparently did really well over the weekend, which is understandable but disturbing.

Yeah. So listen, there's an interesting sort of nuance here. A lot of people calling for rate cuts. Jeremy Siegel, who I had at Penn many, many years ago, saying we need to do 75 bips immediately. But he's like the mega bowl of all mega bowls. Minimum. To be fair. Immediately. But doesn't this actually make it less likely that the Fed does anything? Isn't this what the Fed actually wants? I mean, this is a much better situation for the Fed, a slightly softening labor market, which we saw the job

numbers were pretty bad on Friday. We can parse why that is. And the stock market finally coming down. I mean, nothing was probably more frustrating for Powell than stocks only going up. For sure, especially since stock market performance is one of the main drivers of the loose financial conditions that we've all been scratching our heads over. How come with the steepest hiking cycle in the recent memory, we are still at as loose financial conditions as we were before the Fed started hiking? That was very frustrating for us. Those of us waiting for the signs of the slowdown must be especially frustrating for the Fed. So yes, a 3% drop in the leading indices. Maybe if there's another 3% ahead, I'm sure they wouldn't mind too

much. It obviously becomes more of an issue when we're talking about 20% plus and people, you know, companies are starting to close down, people are losing their jobs, you know, homes are being foreclosed, et cetera, et cetera, all because of the sentiment hit from the stock market, right? You were a bit surprised about the job numbers, Noelle, like in reading the newsletter, David kind of, you know, stating it could have to do obviously with AI and some of that uh i think that takes time right but i mean it's clear that the labor market here is softening correct and i mean that is a recession clear ish i mean the job i was surprised by them and i've been saying for a long time and this becomes a chorus even in my household that you know when unemployment starts

moving it moves fast and we saw signs of it moving fast on Friday which is why I was quite stunned at first but then you start picking apart the data and it's not for sure that we're going to see a continued acceleration in August. I have a feeling we probably will but a large part of the increase in unemployment was because of temporary situations and self-classified as temporary and a lot of people were unable to work because of weather, apparently nothing to do with the hurricane, but whatever, weather. And while you can argue that bad weather is now a feature of the financial landscape, it's not a given that that will be repeated in August. So we may be surprised in August again. And that concerns me actually, because if you look at the rate cut expectations now, but yet again,

they're getting it wrong by pricing in almost 100%. Okay, it's 80 something percent of two cuts in September. I do think the Fed is going to continue to be cautious. I think the Fed has to. It has different priorities than most of us. It has a different timeframe than most of us. And it simply can't afford the risk that inflation comes back

and that they have to hike. And this is even before any potential impact to the oil price from a conflict in the Middle East. Yeah, I see a lot of people like pricing in the SOM rule right now. And, you know, it's obviously a different type of indicator for recession. You know, I think most people probably listening and already know what the definition of a technical recession is. But, you know, you would have two straight quarters of negative GDP growth, which means that in order to actually realize a recession or technical recession in Q4, you really need to have the economy contracting right now.

To be honest with you, I still don't see it. I do think that the economy peaked in the second quarter. Don't get me wrong. And at that point, I was looking at the labor data. And Noel, I'm sure you're doing the same and kind of saying, like, listen, the jobs aren't as great as what people think it is. The headline number doesn't belie the fact that all this stuff is coming from the government services and health. Beyond that, it's not as if you're seeing an influx of people getting hired. So, I mean, we already saw that the labor market, labor demand itself was already constrained six months ago. It's just that people are starting to kind of recognize it today. But overall, I mean, like you're looking at these kind of unemployment numbers, and despite the delta,

like the absolute figures themselves aren't terrible, at least not compared to what we've seen in past recessions, for example, which kind of makes me think I don't necessarily believe that we're at the beginning of a recession. And that's kind of my point. Like, it's not that I don't think things are slowing down. I think they could be. And yeah, maybe you're right. Maybe the ai like transition will take a lot longer like i certainly think that it can't be applied to all sectors of the economy um and it's going to be slow going i think that maybe it will take years uh to fully transition but i think that we could be at the start of it right now and already like i think the the tip of that seems to be like where the biggest change starts to happen anyway um So I think that things like that could be like pertinent that that's not being factored in by a lot of people when they're making these projections for recession in Q4. But it's challenging because if the Fed cuts rates,

and let's say they do deliver 50, which I'm skeptical of in September, for example, if the economy isn't doing well at that point, people will still feel reluctant to kind of put money in risk assets. That's just the reality. I, again, don't necessarily believe that's the case, but that is the concern that we have right now when we're looking at the market. That's what Powell wants, though, right? Noel, I mean, this is like the forced slowdown. They got exactly what they want. The stock market goes down.

People feel less wealthy. They spend less money. They buy less what they want. The stock market goes down, people feel less wealthy, they spend less money, they buy less stuff, including risk assets. And there you go. I just find it so intellectually difficult to give Powell's credit for a soft landing. Is that what we're still looking at here? If there's not going to be a recession, did they pull this off? Like landing a fighter jet on the head of a pin. I mean, seriously, I think David's totally right. It's early days on that. You saw the ISM PMIs for services in these sectors came out yesterday, much stronger than expected, especially on the unemployment.

It's now blew past expectations into full expansion, highest since October of last year. Services are 80% of U.S. employment. So, again, we could get some strange data out in August that is just going to confuse everyone even more. And let's not forget, we have the Fed that keeps telling everyone it's data dependent, and the data is confusing. So therefore, the Fed is also going to be somewhat confused. Dependent on whatever lagging data they choose to look at. Whatever data they feel. And also bank lending, the SLUS survey came out yesterday, bank lending, senior offices lending plans,

and they're slightly easier than they were the last time this report came out. Again, the signs of the slowdown, and with David on this, we're not, there's a slowdown, yes, office peak, but the signs of a sharp enough slowdown to warrant a 50 basis point cut in September, let alone an emergency cut before then. They're just not there yet really quickly so then both of you since i have three more minutes does anything that happened this week last week recently change your base case for q4 starting to look good for crypto the good old-fashioned four-year cycle parabolic movement to the upside

has anything changed? Maybe you didn't feel that way in the first place, David. I think you did. I think we've talked about it and that's kind of my case as well. And if it hasn't changed, is there something that could happen here? Another five, 10% in the market that would maybe spook you and make you think that's not likely to happen? David, probably the only thing that's really changed in the last day or so is my conviction level. I'll be honest lower now than it was previously. Like I was pretty adamant that we would see a pretty strong rebound in the

fourth quarter. And I still ascribe to that idea. I would remain constructive, you know, post FOMC in September that things are going to recover, but there's a lot less leverage right now in the system. And, you know, like that doesn't typically characterize a very healthy market, to be honest with you. Like if there's less liquidity, if there's less participation coming from retail institutional investors,

all the stuff definitely will have a lot of impact on how things are going to play out. But based on what I'm seeing in terms of the catalysts in Q4, I still think that things could be fairly positive, particularly for crypto. You know, I think that, yes, there might be more volatility than there might have been previously, or at least than what I previously anticipated. But I still think that for the most part, you do have this demand sink coming from institutional investors because of the ETFs. I still think that retail hasn't really kind of come in and stepped in like en masse quite yet. And now we have headlines, for example, of like Morgan Stanley, like allowing their RAs to actually recommend

this to their clients. So I think things like that are very important. And we just kind of need to get over some of the additional supply overhang that we still have, for example, you still have Genesis kind of offloading Bitcoin and ether, you know, like the carry trade on wind of the Japanese yen, you know, probably has some effect on some of the Mt. Gox creditors. But ultimately, I this stock market correction is what I've been waiting for. I was way early on this. So, you know, timing is definitely off, but I've been waiting for this. And until we get this out of the way, I wasn't very confident on the crypto run. I'm more optimistic because it seems to have started, whatever happens now, it seems to have started.

And I'm very optimistic on the political outlook as well, regulatory outlook in the U.S. Whoever wins the next election, it will be warmer towards the industry than we have had to put up with over the past few years. I agree. You said something so important earlier, which is nothing has changed here. Right. Nothing fundamentally has changed besides the price. Right. And, you know, that comes and goes, as we've seen certainly with this market. But we still have a thawing regulatory legislative and just political environment in general. We have ETFs being approved. We have nothing but tailwinds, in my opinion, right? So when I said that to Mike McGlone last week on a Thursday, he said, yeah, that's when I start looking for puts. It's like everyone's too optimistic.

It's all good news. And he was right in this case. But it really, when you look back, especially six months or a year, there's nothing fundamentally to fear right now, I think, with Bitcoin and crypto that we did before. So to me, it's an extremely positive environment. We just got to get through this. Volatility is a feature, not a bug. that we did before. So to me, it's just an extremely positive environment. We just got to get through this. Yes. Volatility is a feature, not a bug. Traders have been having a great time, I would imagine.

So I guess we'll see if we get any news about any blowups or anyone being liquidated. But otherwise, I think just stay the course and hang out and wait and see what happens next. Noel, David, thank you so much, guys.

You can follow them both on X. Of course, incredible insight from both of you. So always appreciate it. Glad we got both of you. Thanks, Scott. And stay safe out there, everyone. Thank you. Bye, David.

All right. Now moving on. Can't wait to hear what Andrew has to say about this. Big day yesterday, buddy. What's up, man? A lot of things happened. Did you read that? Did you miss that?

There was a tempest in a teapot, as they say, associated with Japan, the yen unwinding, yada, yada, yada. Listen, I'm 49 years old. I've seen a version of this type of narrative to move markets lower probably 10 times since I was 23, 24 years old. that can shake people out of one position or another. But I'm not friends with, but I'm friendly with Josh Brown. He's downtown Josh Brown on X and on Instagram. He's not on X as much anymore, but on Instagram. And him, it is one of his partners to do a podcast called The Compound and Friends. And they really, really focus on wealth management because they are a $4 billion RIA. And he just, they just continue to for years and years and years, they simply just pound the table on nothing is ever as bad as it seems,

or as good as it seems, stay invested, weather the storm. And over the last two days, he just kind of laughed. He's like, the markets in Japan were down 12% and the next day they were up 10.5%. But how does it affect individuals portfolio? How does it affect people that own Bitcoin? And so, yeah, I put out a tweet last night, I think, that said, Bitcoin this morning and then Bitcoin tonight. And Bitcoin in the morning was at 49K and people were losing their minds. And then by the end of the day, it was at 55, 56. And so you simply, you get numb to it. And here, you know, the interesting thing is everybody was like, oh, there's going to be huge outflows

out of Bitcoin ETFs. And there were, yeah, there it is. And there were Bitcoin this morning. I don't think we've quite gotten to the one above, but Point Vuelta is on the right. I mean, that's fairly well represented there. But, you know, Bitcoin, people were concerned that there's going to be big outflows out of the spot Bitcoin ETFs. And there simply weren't. In fact, the biggest Bitcoin ETF, BlackRock,

had zero inflows, zero outflows, net zero. So that goes to the mindset of investors and the investor class being the boomer class. They have been taught, and they have been taught, and they have been taught, and they have been taught to buy and hold, right? And oftentimes when there's a dip, to add a little more to their position. And that played out perfectly over the last 48 hours. I bought this for a reason.

I'm holding it for a reason. By the way, probably most of them bought it and they're up significantly from when they bought it. So what reason do I have to sell when there's volatility in an asset that I expect there to be some volatility in? So while it's interesting to talk about, while it's interesting to watch, and there's a little adrenaline associated with big market moves, at the same time, it wasn't as big a deal as people think that it is. I will say this, and okay, talk in your own book. That's kind of what I'm here to do is talk your own book.

Stop losses are kind of like lawyers. you don't always think that you need them oftentimes if you've got a long-term time horizon you really don't need them because most assets in the stock market and like go up but when you need them you really need them right when you need them you really need them and so you know at arch public 80 of our algorithms have two percent stop loss protection and i'll tell you um our clients you know 99 of our clients um are in that product our gateway product that that has two percent stop loss protection and they love the fact uh that over the past three weeks they haven't participated in any way, shape or form in this downturn. And we're looking at asset prices associated with the S&P 500, the NASDAQ, the Dow

and Bitcoin all being significantly lower over the last 30 days. Frankly, going from, you know, let's call it significantly net positive over the last 90 days to flat to down based on this particular move. You know, and our gateway algorithm is up 17.67% in the last 90 days. And you know, on this show, if you add another month to that, we're talking about another 10% on top of that. So choosing, you know, an additional investment inside of your portfolio that really protects you to the downside. I love that video, by the way, that protects you to the downside. And also part of that protection, by the way, is not just stop loss protection, because as you know, Scottott our algos don't trade every day right so they're also not involved in the market a a large portion of the time on any given month it's only taking two to five or six or seven trades depending on how many algos you're actually trading um you're

out of the market on days like yesterday or over the weekend or previous last week you're simply not involved in patients is performance you know there's real people can feel the performance when your performance is a net zero when all of your buddies sit around the coffee shop just lost 70% of something right um that that's that's a real that's a. Oh, I didn't lose 7%. It feels like I made 7%. So the delta between our gateway algo and what the S&P or NASDAQ has done over the last few days is very, very significant. And it's caused a lot of chatter amongst our customers in a positive way. And it's caused a lot more people to take a look at what we're doing and why we do it and how we do it.

I'm taking a look at what you're doing right now. Yeah. Thearchpublic.com for people who have no idea what the fuck we're talking about right now. You can come check it out and see exactly what we're talking about. But yeah, the results have been absolutely incredible, both back to us and since we started doing it. I mean, still massively up on the $10,000 portfolio while the market jitters. Well, right. So again, think about that. So even though that $10,000 portfolio hasn't moved meaningly from that 27% number over the last couple of weeks.

What has it not done? It has not moved meaningfully downward, right? It hasn't budged, right? That's just as good as a positive trade. And there's, you know, again, I kind of pound the table internally with our team when we're talking to customers about patients' performance. Let me tell you something. Over the last two weeks, we haven't got a lot of emails or messages saying, you know what? It hasn't traded in a couple of weeks. What's the deal? Is there something wrong? We haven't gotten any of those messages. None. Zero. None of those messages.

Thank you for not trading. And you guys, it does short, by the way, but it would be short. Yep. Takes longs and shorts. And yeah, there's value to having coded protection to what you do. And if you think about it, even if it would have taken a trade yesterday or Friday, whatever it happens to be, you would not have participated in the larger scale downturn. Shut it off at 2% and you're out. So that protection is something that people really, really significantly appreciate. And then we get back to, you know, founding principles of what we do like liquidity. So it's one thing to have, you know, a bunch of assets in your IRA and you just got to watch what it does. You can't do anything about it. Well, you know, again, with our with our products, your daily liquid. Right. So you have access to your money 24 seven at all times. You don't have to talk to anybody. You don't have to ask anybody. You don't do anything like that.

Push a button and your money goes wherever you want it to go. So when you add that to stop-loss protection and then the delta of performance between what's happened lately and where we're at, it's meaningful for people. I will tell you it strengthens relationships with everybody that we work with. And that's a really great thing for us. You know, we appreciate the people that we work with and that put the trust in what we do and how we do it. And we build relationships with people and get to know people. And it's nice. I will say this about your audience. Your audience

are adults and real, real actual adults. Yeah. They're, they're, they're great people, man. They're salt of the earth type people. And yeah, it's a, it's a pleasure to, it's a pleasure to work with them. So outside of all of this, do you, anything change for you here with this move this downside sort of this sell-off since the bitcoin conference i mean do you still think well it goes that we get the parabolic sort of upside in the yeah so let's put it in perspective right when the you know maybe a few days before the bitcoin conference started i think we were at like 62 63 or so yeah and we moved to 69 um during just a smidge after the bitcoin conference so you know we're at 54 and change 55 now you know based on where we were before the bitcoin conference you know that's a

five seven percent difference between where we started. I take a long-term look at things. And I will say without giving too much away that Archpublic is a Bitcoin company. We have a Bitcoin algorithm that's coming out on August 15th that not only is going to allow you to DCA into Bitcoin, but also is going to have an intelligence feature to it that if you use that intelligence feature, you will only be DCAing into Bitcoin in the downtrend. It will evaluate what's happening in Bitcoin and it will execute your DCA strategy when Bitcoin is moving lower. So you're getting lower and lower prices. So that being said, I personally bought more Bitcoin at 49. I personally bought more Bitcoin at 51. I personally bought more Bitcoin at 53. I just think that the macro

is still such a net positive for Bitcoin. The Morgan Stanley news was huge last week. You know, I've been mentioning that since April and May, you know, the executives at Morgan Stanley gave me a fake out. It was supposed to happen in May, according to them. Well, it only took an extra several months, but they finally approved it. And both iBit and FBTC, Fidelity and BlackRock's spot Bitcoin ETFs will be available to all customers on Morgan Stanley's platform tomorrow. Interesting that those were the two that were chosen. Again, that goes to risk appetites inside of the wealth management world and how they protect that goose that lays the proverbial golden egg. Most people don't know this, but the likes of Goldman Sachs or Morgan

Stanley or UBS, those used to be huge, massive investment banks that took investment bank-like risks. Well, ever since the financial crisis, they pivoted their business in a huge way. Now, most of them get 60 to 90% of their revenue from just pure wealth management revenue. So they guard that a big way. So they're careful with risk. That being said, Morgan Stanley, again, first here to approve it across the full platform. Wells Fargo will follow. UBS will follow. I put out a fairly long diatribe about that this morning um and so you're gonna you're unlocking trillions another two four five trillion dollars of assets available to be onboarded into those products and for all intents and purposes are are going to be buying bitcoin um over the next several months and several years so

so the thesis remains and let's be you know let's be clear there's really you really have to work hard um to have bought bitcoin at a bad time over the last five to seven years yeah you buy it and you hold it eventually you're higher and you're up on your so nothing's changed for your premise yeah that's a long way to say nope nothing's changed all right guys before i let andrew go of course thearchpublic.com you guys go check it out it's performed incredibly well obviously you've heard the pitch over and over again but i just i can't stress enough that uh it's been beneficial to all our portfolios and, uh, got a lot of happy people here. Andrew, thank you so much.

Any final thoughts? No, that's it for today. Um, appreciate everybody. And, uh, you know, feel free to hit me up on, on X if you have questions. All right, guys, that's AP underscore Abacus. Yes. All right, guys, we will see you on spaces. And then of course, tomorrow, 9am Eastern standard time.us. Yes. All right, guys. We will see you on Spaces. And then, of course, tomorrow, 9 a.m.

Eastern Standard Time. Later. Later. Let's go. Let's go.