The Wolf Of All Streets - Gold Up, Stocks Down, Bitcoin Flat And Uncorrelated | Crypto Town Hall

Episode Date: April 16, 2025

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Good morning, everybody, and welcome to Crypto Town Hall. Every day here on X at 10.15 a.m. Eastern Standard Time, at least every weekday, we have once again a day where the stock market is seemingly under pressure. Mazdaq 100 down roughly 2% last I checked. And Bitcoin once again somewhat shrugging it off flat, doing very little, but clearly not trading in lockstep with what's happening in the markets. Dave, let's start here. What do you make of the price action or lack thereof for Bitcoin?

Well, it's constructive. We talk about this all the time and you and I both know my opinion on the notion of Bitcoin as beta to the stock market is literally absurd. But I think it's really important when you look at today's action to look at two things. First, gold. Gold is as Peter Brandt, who joins us from time to time on this space and is my favorite technical analyst. He sees gold as clearly the showing signs of entering the blow-off top phase of its rally. Gold doesn't go as parabolic as Bitcoin or what

does, but a move in a $20 trillion asset of the size of this is quite material. It is definitely symptomatic of people losing trust in fiat and seeing what's going on there. Mark is here and he can talk about, I think his analysis is spot on in terms of liquidity that's likely coming and you're seeing that in the bond market kind of not doing much but gold going crazy. I think that's very symptomatic of that. At the same time, alts are following the NASDAQ. And that kind of makes sense in a sort of a way. The NASDAQ is down because Nvidia basically told people, hey, listen, these tariffs are going to cost us money.

Whoa, what a surprise. Now, does that change anything in its long-term cash flow? No. But investors are going to take that and say, well, okay, let's slam the stock. And so that's exactly what's happening. You know, it really blows down to a very simple question. Will this trade war prolong itself for a long time? Or is this a lot of posturing and they're going to come to an agreement? And it really is that and we've seen this story before. I think people are starting to become afraid that this time, there won't be an agreement in the next few months and it's going to drag on and it will impact corporate profits.

I mean, I think there was news that Japan was coming to the table for negotiations on a new trade deal, but you could argue that China is really the big elephant in the room and we just went over the top again with a threat of 245% tariffs on certain things. It doesn't seem like China is ready to blink, right? Look, I'm gonna say it again. China is the only country in the world with refining capacity for rare earths. And the reason that's true is because rare earths produce,

refining rare earths produce enormous amounts of toxic waste. And you could say whatever you want about us building our capability, but unless we find some places where people are willing to have thousands of tons of toxic waste, or we figure out a new way to do it in a way that isn't going to damage the environment, we have a problem. And they know it, and so we're more likely to blink than they are but at least that's my

opinion and unless we can figure out another source of that because at the end of the day that is the building blocks for all of Modern technology including by the way green energy because you can't build a windmill or a solar panel without Plus Yeah, I wanted to to go back to the take on gold. I had somebody ask me last week if the Democrats had won the US election, they asked me what I thought the price of Bitcoin would be. And I thought about that a lot, but my answer was that the price of Bitcoin might actually be the same as it is today without that pump to 108k.

And when I was looking at the ratio of Bitcoin to gold as well, I was looking at the ratio in October 2024 to now, and the ratio of Bitcoin to gold is actually relatively the same. So my question to you, Dave, would be, can we kind of make the same argument to gold that Bitcoin actually is performing similarly to gold just in a different pattern due to the speculative nature of basically the election? Well, two things. First, there's no, excuse me, in my humble opinion, there's no fucking way that's true.

I think most of the buying that we've seen in Bitcoin is coming from investors who wouldn't be in Bitcoin were it not for the election because the industry in the United States would have been destroyed by now. If you saw Nick Carter's article from yesterday about what happened to Silicon Valley Bank and how that effectively killed signature, our industry was basically tossed to the curb and four more years of Warren and Gensler would have forced Bitcoin out of the United States. Would it eventually have bubbled up? Yeah, absolutely, but it wasn't going to happen soon because there's a lot of buying that's

coming either in anticipation or from people in the United States who control vast amounts of capital that realize Bitcoin is a strategic asset that it would have been pilloried were that not the case. So that's just a pipe dream. Now that said, your point about gold is well taken. I think Bitcoin, once the price setters move from being the crypto speculators towards those patient investors, at that point, Bitcoin will start to perform more like gold. The only problem with that is it has a lot of catching up to do because Bitcoin is not even close to gold's market cap.

And so you have that dynamic going on. As long as Bitcoin is treated like an asset on its own terms kind of in a vacuum, then you kind of expect this sort of price action. As soon as Bitcoin starts to gain momentum towards being digital gold, at that point, you could see what that's when you start to get those parabolic potential moves, whether it's Josh Mann or Larry Fink or whoever that's talking about how that can happen. But yes, I think that it's what you're seeing is the buyers on the margin for Bitcoin are steadily accumulating.

And that's a lot like gold. The differences in gold, there aren't any, there's no speculative sellers. Zach. Hey, what's up guys? Yeah. Uh, so I wanted to kind of speak to what's going on with kind of Trump's plan for strategic reserves a little bit that came out recently. And then at the same time, there was some interesting news that came out

with China as well. So I don't know if you guys saw this, but there's some speculation that maybe a portion of the revenue in from tariffs could be used to create the Bitcoin stockpile or strategic reserve, which is interesting, right? Because it's new found money. It's not like recycling old money, which I think that could be one of many strategies.

But interestingly enough, at the same time, China is selling seized crypto. Of course, China holds like 194,000 BTC to the United States is like 200,000. I mean, they're basically neck and neck top holders. But it's interesting because on one hand, you got Trump trying to accumulate perhaps by way of tariffs. And then you've got China, according to Reuters, they're using private firms to sell crypto to cash to fund public budgets. I just didn't know if anybody had any thoughts on that.

Is that, am I looking too deep at that or is there something interesting there? I just didn't know if anybody had any thoughts on that. Am I looking too deep at that or is there something interesting there? I just wanted to bring that up. It's a worthy topic, Zach. I think so it was Bo Heinz, obviously, that said that. I haven't seen it really mentioned beyond that level. And I think there's a pretty big consensus that using tariff revenue would be probably better spent to deal with the debt than to buy Bitcoin. But I guess we'll see what happens there. I can't speak to the Chinese selling though. And I hadn't seen evidence of that. So that's really interesting. Also, I think it's important note. We still don't know how much Bitcoin

the United States has. And we're I think 30 to 50 days now over, I think it's 30 days over the timeline that was given for that audit, which we haven't seen, which is a little bit shocking. And also, I think worth noting that even if we do hold about 200,000, half of those clearly belong to Bitfinex, right? Because Bitfinex made all of their investors whole that was hacked and should be returned to them. So I would say that the United States in ways of what they actually have is probably half. Zillian, go ahead.

Yeah, I think the misunderstanding about China here is that China owns historically and still owns assets via its citizens and via companies owned by its citizens. So China might not declare that it has certain amount of crypto held directly by it, but as China demonstrated with Jack Ma, with several instances, China is a state where its citizens, whenever they have companies overseas and they're holding whatever China would see as strategic to it, when it's

time to move on on the assets, they will. And this is what needs to be understood. So the next question would be how many Chinese citizens that are members of the party run the crypto industry? And it's probably 60% of the crypto industry is run by members of the Chinese Communist Party that run the crypto industry. run by members of the Chinese Communist Party that run the crypto industry. They're located all over the world.

They might have second, third citizenships, but they're still members of the parties and their families are members of the party. Their family lives in China and have very tight connection to Chinese. And this is their right. I mean, we cannot remove this from them. They have the right to have allegiance to their mother country. So the fact that China does not hold directly Bitcoin and does not publish that it holds Bitcoin exactly like the US has to do, it's because the US has a lot less reach when it

comes to the personal property of its citizens. The US cannot seize an American citizen just because he's American. China can. So this is one of the misconceptions that we have about China. China is one of those states that its citizens have allegiance to it. Secret allegiance, public allegiance, whatever allegiance, it is there and the link is there and China knows that it has access to all the crypto it wants. So it doesn't have really to hold as

long as China produces very good entrepreneurs that build very good companies in which people hold and deposit Bitcoin. China has control over a lot of the supply of the Bitcoin. That's why you don't see them deploying this as a strategic plan. Anybody else specific thoughts on Bitcoin in China and the United States, or should we talk more generally about China and the United States? Mark just jumped down.

I was gonna ask him this question. Henrik, what do you make of the current status of this trade war? Do you think that either is likely to blink soon? Do you think it's a negotiating tactic? Where do you stand? Oh, coming from Denmark, coming from Europe. It's difficult to say what happens with that. But as I see it, I think we are definitely seeing some kind of a tactical move, trying to negotiate through force or something like that. That's how I see it. And yeah, again, I don't think anybody

will benefit from this in the long run or even the medium run. So I think that there will be some kind of agreement at some point. So that's at least what I'm waiting for. And I can't see this carried on for four months or anything like that. I think it's it will be resolved, but I may be naive. Mark, what do you think? I may be naive. Mark, what do you think? Yeah, I think there's gonna be resolution, but I think the damage is done. The thing, the two areas I point to is first that Atlanta GDP now, which we're all waiting to see if it materializes. But for the team, you know, Dave is talking about gold at the outset here, But for the team, Dave is talking about gold at the outset here. That has landed GDP fat.

People flash the signs if you have seen that number as low as minus 3.8 for Q1, and I think somewhere between like 2.5, 2.3 now. But gold's imports drove that number like 80% of that negative number the largest move that in GDP now's history outside of I think um covid So that's the number one thing that we're gonna have a negative quarter So that's one of two and do we have a recession? The other one is the cost shift to germany and europe that's done. So I think there's a 20 percent inflationary R ratchet caused by tariffs

that will not be rolled back. Even if we get a quote resolution and he says, just kidding, you know, plug in the electrical thing back in like in that movie airplane when they were trying to land it in a crash landing scene. So I think you can't have it back the way it was. We still have an interest expense issue. And that's not going away. How do we get rates down to 3.8%, which is where they have to go in order to have minimal increase in interest expense? No idea how we get that without a recession. And we have pals today. We have pals speaking today at 130, right? Yeah. And so I'm going to say that that is going to be the most innocuous speech that he can give. There's no way he can say we're entertaining unless Scott or anyone here thinks differently. We're entertaining.

Yeah. Yeah. There's no way. Yeah. So that's my thought is, yeah, is that there's gonna be a permanent hurdle or a speed bump in our economy and trade that's gonna be borne by companies and consumers for the foreseeable future after this. And Matteo, I know you had your hand up, go ahead. Hey, yeah, I agree with that sentiment. If you pay attention to social, there's just so many small businesses that are putting out notices that they're being forced to raise

their prices as a result of tariffs and trying to get the inventory off their shelves. This is pretty notable. I mean, this is already starting to be felt. I think it's kind of interesting that we had like the anti war mandate from the Trump administration, then start to leverage a global trade war with like every country, but specifically China for an administration that really prided themselves on like sitting down and talking with people who didn't agree with them. I think it's really important that they resolve the situation with China because this

is these back and forths are getting crazy. There is a report supposedly from Reuters that China local governments sold or planning to sell 15,000 BTC worth about 1.25 billion. I think that anything coming out of China has been continually hard to verify. We always get these posts that say China says, it's like, who says that? I think that this is becoming extremely muddled. So I think something that's really clear signal is very important for the markets at this time, because we're just getting a lot of hearsay, a lot of speculation, and it's really hard to verify. But what we do know is that small businesses and consumers are

feeling the shock, and I think this will only continue. Yeah, and I agree with that. But I think the point here is also that if you look at the greater economy and you look to the housing market, for instance, you'll see actually that there's been a slowdown in the economy for quite some time. And I think that what we see now here with the tariffs coming in as well, they will have us on a single product and the initial impact will be inflationary. But the bigger pressure on the consumer will be that you simply have to shift away from these lower, less expensive products that they can buy from overseas and then into more expensive ones that will

probably be produced in the US. And then the whole bigger macroeconomic picture will simply be then that you have the housing market that hasn't been slowing down for quite some time. And then you'll see also that the demand also for products will be moving down, and there'll be a pressure on the economy. So we are definitely moving into a phase there where the economy will be slowing as a consequence of this. Obviously, we would probably have been moving in that direction either way, even without the tariffs. But I think this is something that can put a fear into consumers and holding back some more, which is absolutely not what we want to see if we want to avoid any kind of economic downturn.

Marcus, you're giving 100. Do you obviously agree there? We go back to the consumer and the comment by, was it Dalio, about the US having 1% unicorns, 10% of the population drafting off of them. That's where all the wealth creation, innovation, and growth is happening. Then you have 50% of the country with a sixth grade education is happening and then you have 50% of the country with a sixth grade education talking about AI and where are we going to go with that? So kind of looking at that from a current standpoint, look at all the credit card balances increasing and increasing in rate. Who's the credit card company that's buying Discovery, Capital One. Their model is like a sausage factory. They're just squeezing people, cutting off when it gets too bad, taking assets.

It's such a wonderful business, but we're not looking at the other end of it. People are finding themselves at a very high rate. So I agree that any price increase, the marginal impact is, the consumer is very sensitive, is my point. And when you look at the Fed data on credit card balances and charge-offs, you're going to see that. Does anyone want to take the other side of the inflation argument with tariffs? Because I've seen some very ardent defenders of this will not be inflationary. Bueller? Anyone? Yeah, man will take it. I'll have a go. Yeah, I mean, look, if you look at the inflation numbers that just came out of the UK

and just came out of Europe, the lower inflation is going lower. So the numbers there seem to indicate that it's going lower. One of the things that Trump and his supporters have said is that the effects of inflation, not necessarily inflation itself, but the effects of inflation could be offset by the reduction in taxes. That's not going to reduce inflation. I agree, but the effects of it are that.

Oil is lower, oil's a big driver of inflation, that's trending lower. The risk of recession, people are delaying purchases and reducing their outgoings. The wealth effect of everyone seeing their 401ks and their stock market portfolios being wiped out means people have less discretionary spending. if they have the money they're not spending it so they're also delaying purchases or not making purchases. There's

a lot out there to say the direction of inflation not going up is a viable path. Gun to my head I would say that, I don't think inflation is going to rip anywhere near like the numbers that people have been saying. I would not be surprised if we see inflation back at 3% by the end of the year, 2% by the end of the year. If you look at true inflation, the tracked inflation, they've been saying the real rate of inflation has been really, really low for a while and that official numbers haven't caught up. So I would definitely take the other side of that.

I will take the other side of that. I think inflation is going to be lower than people are projecting. Yeah, I think that that can go both ways. Jump to the panel. But we can say that inflation has been going down, but the tariffs haven't kicked in and could be inflationary. So I think we can kind of have both sides of that. Henrik, go ahead. No, I definitely agree with Dan there. I think also that it's a misconception to see that this will actually increase inflation. Actually, I think it's hugely deflationary. And

maybe I didn't get that expressed just before. I think that you're seeing that the consumers will be pulling back. And when they pull back, that is actually the real driver of inflation. And absolutely also agree with that in terms of the oil and in terms of you see rent prices and so on. So what we are seeing is that we already had that slowdown on the economy with the housing market. We can look at the housing markets like frozen solid. And at the same time now, there will have people starting to fear that you get inflation. And that will then keep their money in their pockets, which is then decreasing the consumption in level, which is deflationary.

So I'm 100% on Dan's side there saying, I don't think talking about inflation at this point here is looking at the wrong direction. This is deflationary. And I think that the Fed is very much aware of that. And also, when labor market is also starting to cool off, which I think we'll see in the coming months, well, then it will be even more. So definitely also on the more deflation, disinflation, deflationary wagon as I see it here. Dave. I see it here.

Dave. Was that Dave? Yeah. Well, it's the type of inflation that matters. And, you know, there's a lot of crosscurrents. I've had been having these arguments for longer than most of the listeners have been alive. You know, I remember I really distinctly remember in 1983, post-Volcker having discussions with macroeconomic professors about this. The goal of the government is to maximize asset inflation while creating minimized consumer

inflation. The problem with the tariff situation is a shock to the system, which goes directly to consumer inflation first. So things like you were talking about, I mean, that first world problem I know, but like my pool service for my house in New Jersey, tiny little pool, 20 feet long, it went up from $2,400 to $3,300 to service it for a year, for the summer. And that's a huge increase. And it's because of all the pool chemicals and all the other stuff that we import. You know,

that's a major shock to people. And that's going to cause people to pull in their horns because they have to people are going to be making decisions, they'll be able to afford it. That said, it's kind of a one time shock. If you look at the sentiment surveys, consumer sentiment surveys were I think last month or the most recent one was the literal biggest drop that we've seen. And I think that included COVID because the way consumer sentiment was, that is a huge deal because what really drives inflation and what happened in the 70s was inflationary expectations went absolutely crazy. So people who look at this and say, well, this is gonna be like the 70s,

we're gonna get stagflation. I mean, maybe, but not the same because the inflationary expectations in the 70s were huge. People were demanding wage increases, strikes were all over the place. And so that filtered to the economy. That's not happening now. There's like none of that.

People don't expect, people expect higher prices on things they have to buy, but they don't expect that they're going to make more. And so it means that that's why true inflation is showing what it's doing. On the other hand, the government wants to see the long bond go down. They want that consumer inflation expectation to be lower. They want people to buy it. And we know they like to want any inflation that happens to go into assets. Well what's the lever there? It's liquidity. And, you know, Mark, you know, I'm teeing you up now, but you know, you did a little

piece this morning and your hand is up great, so you should talk about it. You know, what's going to happen in terms of liquidity? Because really, if you're listening to Crypto Town Hall, what you really care about is your bags. We all know that. And that, you know, the M2 drivers and the drivers of getting liquidity into the market is what people really care about. So Mark, go for it. Sure. And this is, Pal mentioned it, you know, he in one of his two or three town halls that he's doing, I think it was in Argentina,

we have the tools and then ask what they are. Well, we have them. And I think the SLR, it's been talked a lot. That's one of the easier ones to do where they suspend the leverage ratio and allow banks to purchase it, then it's not really on the Fed's balance sheet per se. So that's one thing. You can't tame the beast in the back end. They can do all they want in the front end, but they're going to have to be buying some

longer dated treasuries. They can't do everything in the front end. The front end is bid. T-bills, one to three year treasury ETFs have seen inflows at multiples more than they took in the prior three, six, 12 months. So the front end is bid, but they still have to do the back end. And if that thing fluctuates, the move index and the 10 year is best since report card. And that guy's competitive.

So expect something regardless of what happens to tariffs to tame. And the other part about inflation, I hear you guys about oil, a tremendous deflationary impact. But even in the UK today, that 7% number on rent is kind of persistent. It's decelerating, but it's increasing and it's 7% in year over year increase. I think that the basket that people have of CPI, of rent and owner's equivalent of 35% is a fraction of the reality. The majority of people are paying 50% in rent. That 7% increase is just two in a way value.

And again, back to credit cards, they don't have any liquidity. So I see two inflationary deflation inflation, and I'll stop there. Thanks guys. As Dave said, since this is Crypto Town Hall, people obviously are concerned with their bags and Dave, as we know, that's highly correlated to this liquidity. So I guess the question, if we all expect that Powell is not going to cut and nobody's anticipating massive QE at the moment, where is that liquidity going to come from? Clinton, you can go ahead and take that one or give whatever comment you are going to.

And you can go ahead and take that one or give whatever comment you were going to. Yes. Thank you very much. You know, we're talking a little bit short range and long range in your conversation. I think long range, I think Trump has a significant tax strategy, which is, uh, shocking. Actually. I mean, when we're talking today is the day after tax day. But, you know, the Secretary of the Treasury is talking about no taxes on incomes under 150,000. Not clear whether that includes Social Security and Medicare. The Secretary of the Treasury is talking about reducing

corporate taxes below 15%, which is radically low and lower than the OECD standards. And which is radically low and lower than the OECD standards. And Eric Trump is talking about eliminating capital gains tax on all cryptocurrencies that are US-based. And all of these things affect us as crypto investors. And I'm trying to pull the threads together, what they're trying to do. I believe what we're gonna see is a lot of proposals next year

from the Republicans about these very topics. And it's going to be an election year topic that you basically, if you vote Republican, you're slashing your income taxes. If you vote Democrat, it'll be more of the same. And I think the pressures that have been discussed on the consumer are going to be all the more acubated next year. It's going to be an extremely compelling argument that the Republicans are going to have to say, if you vote us in, we will slash the income tax. Now, of course, it'll be starting to happen in 2027. When that happens, that's an immediate pay raise for everyone. When that happens, that's an immediate pay raise for everyone. Let's just say your tax rate is 20, let's just say it's 25% for conversation sake, not

to mention federal or state taxes, but you're getting immediate 25% pay raise in your take home pay. Your employer, it doesn't cost him a dime. Everybody's a winner and costs stay low to the consumer. So, this is going to be extremely attractive. I think it's a very compelling political case, but I think it's also going to be a no. Now, the question is, is that inflationary? If you want to have that discussion, I'm not so sure. One of the issues that one of the persons brought up, you know, what's the purpose of government? Well,

One of the issues that one of the persons brought up, you know, what's the purpose of government? Well, I think what this move here about eliminating income tax is basically saying the purpose of government is not to suck off the wealth of the people to feed its existence. And it basically is a pushback on that, putting more money into people's back pockets in a very dramatic and significant way. The moment Congress and the president sign off on reducing income tax, the next week on your paycheck, you're going to have more money. It's very compelling.

When this happens, it's going to be a significant attraction for people from foreign countries to want to move to the United States to work, which coincides with Trump's intention of trying to bring more business to the US. It'll put radical pressure on foreign countries to slash their own tax structures, which are typically taxed higher than the US already. It's going to be... How that affects the economy is going to be incredible, and it's going to be, you know, how that affects the economy is going to be incredible. It's going to be very dramatic. I mean, we're talking about the restructuring of the financial system.

If Trump is successful in these changes he's making. Yeah, Clinton, I think those are great points. But the issue is that Lutnick seems to be out on an island with those ideas and they seem to conflict directly with what Pes percent is saying about these big negotiation tactics and Elon Musk out there saying we need to have free trade with zero tariffs, right? So I think the problem has been the sort of confused messaging from both sides. I don't see a way where they raise enough with these tariffs and that that eliminates true.

I just, I mean, I don't see that. And to be quite frank, we need to worry about the debt. So if anything, and they were trying to raise more money, you would, you would raise taxes and tariffs to, to, to, to service the incredible debt load. So it just doesn't make sense. Maybe it's over my head. Well, the things that Trump has said during the election was basically zero, no tax on this, no tax on that.

And I think he lets the various secretaries say what they want as trial balloons to stimulate people's interest. I think that's, I mean, he's certainly clever enough and a marketer. So I think that's, I mean, he's certainly clever enough and a marketer. So I think that, I think we should accept these as trial balloons.

And they're, I mean, they had floated the idea of the savings from Doge, you know, we'll give everybody a $5,000 stimulus check. You know, you haven't heard that one for a while. I mean, they're floating these test balloons out to see what happens. Yeah, because that's really stupid when you have $36 trillion in debt. Yeah, I would say so. I think it really remains to be seen. In order to make their case

next year in the election, they have to prove that they've slashed immense amount of waste of poorly spent money, which is what the DOJ has been working on, and can slash a significant amount of the employees and the government to reduce the cost of it. I mean, right now, we have roughly a $6 trillion a year budget. We have the IRS brings in, which is the revenue supplier of the government. It only brings in about $5 trillion. So they need to slash $1 trillion just to get balanced. Can they slash more?

Hard to say where the dust settles or where it's going to be next year, but it's going to be a very attractive conversation. I think it puts the whole topic of inflation and I mean, personally, I think if they go with the whole elimination of capital gains, which I don't think they can eliminate capital gains unless they eliminate something for the lower income people, because 75% of all capital gains are for the top 1%. So I think those two kind of go hand in hand. If that does happen, if they do, I mean, come up with a zero capital gains on US-based blockchains,

this is going to be a dramatic effect. It's going to basically every asset in the world is going to get tokenized in the US. Absolutely. And all transactions will happen in the US and US will become the unquestioned ever financial leader of the world. And when that happens, all assets are US. US will then turn into the, it already is the biggest tax haven in the world, but it's going to become the all-time greatest tax haven in the world if they slash income tax, because then they won't tell foreign countries about who's buying and selling in the US. So it will track more business in its tax haven status as a bully.

You could probably also have massive selling of Bitcoin. You know, massive selling of Bitcoin. But yes, I think it'd be dramatic. Yeah, massive. If all of a sudden the capital gains taxes were gone. Dave and then Henrik, then Amiteo. I think there's zero chance of any of that happening because it all has to go, don't go through Congress.

It's not something the president can do. What could happen though is there's some grand bargains out there that people are mumbling about but nothing has really happened yet. That the group and you won't hear any of this until next year. So let's just understand that. Because this year is the year for messy trial balloons getting doing the shit they need to do in terms of Doge with the what's really surprising is he hasn't been able to get Congress to codify any of the Doge stuff

or still dealing with all these federal lawsuits. So that's kind of a big deal. But there is an answer here, and the answer is a grand bargain where they enact, where they cut the capital gains tax rates and maybe have graduated rates depending upon what sorts of assets they are, US versus non-US, et cetera. I don't think blockchain is gonna pass muster for that, for the exact reason that you just said, Clinton, it would be an arbitrage.

Everyone would tokenize an asset just to get it lowered to capital gains rates. I don't think that's gonna happen. But what will happen in all likelihood is they will start taxing loans against appreciated assets at the capital gains rate, and they'll cut the capital gains rate. The net effect of that would be massively revenue positive

and that is decreasing the deficit because the vast majority of capital gains are from billionaires who don't actually sell their stock. And so they can calibrate that to be revenue positive. Or- That was, Ackman floated that, right? We discussed that before, but that was one of

that Acme's tweet storms. He's not alone, though. The point is the people in DC, people in DC are aware of this stuff. And so these are the sorts of policy wonky things that are underneath the surface. The other one is eliminate stepped up basis, and drastically cut the inheritance tax or maybe even get rid of the inheritance tax because of you. And for people who don't know what that means. Right now what happens is if you're a billionaire, you borrow but the inheritance tax or maybe you can get rid of the inheritance tax. And for people who don't know what that means, right now what happens is if you're a billionaire,

you borrow against your stock, you die, the person who gets to inherit your stock now gets it at the cost that it currently is and they can sell it without tax consequences and pay off your debt. That's ridiculous. That is actually the only topic I probably agree with Elizabeth, borrow, die. Buy, borrow, die. I probably agree with Elizabeth Warren on it. Maybe the only one I agree with her on. That is a billionaire tax loophole and that is insane.

But at the same time, the inheritance tax kills family businesses and farms, et cetera, et cetera. And there's definitely an undercurrent in the administration here to that. Now you could do all of that and that would once again be revenue positive and pro-growth. These are the sorts of things that they're going to ultimately settle on, but they need Congress to go along with it. Things like no tax below a certain, basically raising the minimum deduction, no tax on tips, that kind of thing, no tax on overtime, that sort of stuff, those populist notions. My guess is they do propose that and they use some of the revenue from the stuff I'm talking about to get there. You're

not going to hear a damn thing about that until close to a year from now because they want that going into the election. It's a sad fact, but everything matters. They need not to lose Congress because if you lose the Congress and you're the Republicans, you know that nothing, everything draws to a stop because a Democrat Congress will spend their entire time trying to impeach Trump. In fact, they're gonna campaign on it. Their only campaign issues that they have

and have had for the last two years or three years have been fighting Trump and abortion rights. That's it. Of course, if I were in the Republican Party, I would take away both. I would take away abortion rights as a topic too, but that's a topic for another day. They're not gonna do that. So that's the stuff you have to deal with.

And in the meantime, we have this food fight going on in the administration that causes markets to go up and markets to go down based upon who's saying what. I mean, we've seen that, right? But, you know, it really what will actually end up mattering is the tax policy is all this other stuff and the liquidity that will come in. Will the Federal Reserve blink? Will they see economic numbers that allow them to do so? Will the inflation effects in expectations and future expectations be enough for them to inject

liquidity? Cut rates? I actually think they're not going to cut rates, but I do think they're going to pump liquidity, which will be fine from an asset point of view. Henry? Well, I hate to be the boomer here and also maybe not understanding the US quite as intensely as the rest of you guys here just seems like. But again, I think that the whole thing that you will see a new world arise where income tax below a certain level will not be needed, that there will be substantial amounts coming in on tariffs and things like that. I honestly don't believe in that.

First of all, tariffs have shown historically that they will not probably will not generate revenue. So anything that you know, not generate any surplus revenue from what you have seen from the, you know, the system that you had before, if you go back to the, to the whole tariff situation around in the 30s, also, you saw exactly that, that even though there was, you know, a lot of tariffs introduced, you saw actually that the total income to the government was actually declining. So I don't believe in that. And I think also that if you look at the fiscal deficit

that you have in the US at this point, starting to talk about reducing taxes here, you need to be very certain that this doesn't develop into inflation. And the problem is that for a long time, a lot of money has been introduced to the system, into the economy through all the qualitative easings and whatever else we have. And this has put a potential time bomb into the system, into the economy, which means that if you at some point start to also now,

you know, have more fiscal stimulus that like what we had in COVID also, then inflation will become a problem because people are going to spend that money. And the problem is that there is a demand and a supply and if demand goes up and the supply can't follow, and for many reasons, also because of tariffs or because of, you know, maybe less trade in the world, then you have inflation introduced to the system again. So right now, I don't think inflation is a problem, as I said, but if you do start to do and that is a fiscal stimulus, if you reduce taxes like that on lower incomes or something like that, that will trigger inflation as well. There's no free lunches in the world. That means that even if you reduce those taxes, it's not like wealth will fall down. No matter come from sky. That means that people will spend

more, that bigger pressure on the supply chains, which then means that there will be price increases, which is inflation. So I don't think that there is anything new coming to the system here. And I think there are trial balloons going up. Yes. But I think by the end of the day, and maybe I'm a boomer, it will have to be about, you know, a sound solution where, you know, taxes are paid and it's a, you know, and you know, revenue needs to come into the to the to the to the government in some form. Amateo, then Mark. Yeah, it's hard for me to not think that all this tax conversation is just wishful thinking, especially since Congress has to be involved. I don't know. I just hope we get a simplification

of the code. That's all that matters to me because I think everything else is just speculative. I don't think that the Fed has a mandate. They're pretty unwavering towards this mandate. And everything that I've seen of Powell, and we'll see today, but it's pretty clear that they look at tariffs as potentially inflationary. I haven't seen deflationary comments from Powell or the Fed in addressing this, maybe in a little bit of GDP, but not in actual felt inflation and market conditions. and market conditions. But I would say that, you know, I think one of the headline news of the day is Bitcoin dominance just skyrocketing to 64%, 69% if you remove stable coins. I mean, we're getting close to 70% here.

We haven't seen these levels since, I mean, the last time we hit a level like this was six years ago, in 2019. So, I mean, we could still definitely have some room to go here. But I think we're hitting a place where Bitcoin dominance gets a little overextended. It could just lead to a chopping range. Obviously, I don't expect a ton of alt movements unless we get a different liquidity environment. But I think we're getting to a place that in a few months' time, could be setting up for an interesting place in terms of

a trend reversal or market condition change. I don't know exactly what's going to spur that with so much tension being held. But it's fascinating nonetheless to see this performance of Bitcoin dominance. Mark? Yeah, great point on the Bitcoin dominance. And that's a story that I would have gotten this wrong, seen the tape. I would assume Bitcoin would have traded down without a demonstrable pump to liquidity that I think is coming not just from China and Europe, but eventually to the US because of

the main point I'm bringing. I'm going to go back to inflation, deflation for a second. The reason we're going to have the pump is because we're talking about the wealth effects from equities going down. Besant said we can endure this. It's a long-term investment. He's saying don't look at the tape. Don't look at the S&P. We're going to be making changes to our economy to help Main Street. I still don't know how that happens without a deficit. The deficit through the first six months of the fiscal year, March 31, was over $1.3 trillion. Now, I know we get tax receipts this month, but you're still talking about a 6.2%, 2024 deficit. It's got to be at least 7.5% this year. I don't see how any of this

occurs without an increasing deficit, and that's going to be part of the liquidity pump, is just simply the TGA drawing down, pumping in, even if the Fed doesn't back off its $5 trillion or billion of treasury purchases a month that it's still doing. So we're still between a rock and a hard place. Besant needs to get rates down. I don't know how he does that without crashing the economy. And that's his main job. $10 trillion refinanced in the next 12 months. I think he's going to fail. I don't know how he does it. So bags go higher. I agree with the Bitcoin dominance. It's the quiet signal out there that none of us would have expected. I think if some people said, of course I did, God bless you. But I think this is a tremendously constructive signal on their dominance in a down tape. Zain.

Yeah, on the Bitcoin dominance thing, for me, that's a big signal that basically Bitcoin has shifted from being the highest allocation to the lowest allocation because the nature of the holders has changed. Today institutions allocate a very little percentage of their overall portfolio to Bitcoin and new buyers of Bitcoin allocate usually very small proportions of their portfolio where in the previous cycles it was more related obviously to ALT, etc. because most participants were crypto maxis basically and Bitcoin was the highest allocation. So it moved quite a bit.

And it moved quite a bit in bear it moved quite a bit in bear market and people divested in bear market. And there was a little bit more. Now most buyers are in set it and forget it mode. So this is why I see that there is a continuous accumulation of the asset and then the assets is completely decoupling from the alts. The other issue that we have right now,

and I think in previous three cycles we really didn't have, is the high fragmentation of the liquidity. I mean, this time around when it comes to alt, we have a huge fragmentation of liquidity, which means that basically there is a lot less liquidity to go around for many of the other projects. And frankly, they all suffer one common thing. I mean, they suffer user acquisition, user retention, meaningful use cases that will make those users sticky and that will bring participation from a native perspective. So they're all speculation.

A lot of them is speculation game. Even the infrastructure ones, unless you have meme coins or other kind of very kind of side side side applications, they don't have really like meaningful usefulness. So that's that's the issue, basically. And I think Bitcoin is has demonstrated now that they basically graduated from that category. Just one question to specialists here on the US specifically. Do you guys see some type of...

Because the Chinese narrative is we don't care if we lose the 15% or whatever percentage export share that we have with the US. That's the kind of the official narrative. Do you think China will start divesting from US assets at any point? And how would that impact the US economy immediately? Would it be like a quiet divestment or would it be like a silent type of divestment if there is? Dave? I don't think there's a chance in hell of that because it doesn't make sense.

It's not just US consumption, it's also US multinationals that sell globally. Look, global trade is like a pile of spaghetti, and these guys keep talking about pulling one strand at a time and expecting nothing else to move. It's very interconnected. The statement someone made before that this isn't good for anyone, we understand it.

What really, what this administration is trying to do is to encourage investment in new roboticized factories that won't employ as many people as people think, but will employ more than the doomsayers talk about. So it's always a matter of degree. I just want to go back to Bitcoin dominance for a heartbeat because frankly, I think that trying to take the other side of the Bitcoin dominance trade now is catching a falling knife and it's for a reason. Bitcoin is because of the nature of the people buying it. Most of the people buying it are looking at Bitcoin as more correlated to gold and in fact it surpassed gold. that just surpass gold, it literally is a count, it's beta to the stock market is getting lower and lower

and probably will go negative. Altcoins on the other hand are like tech stocks. In fact they are, right? If you believe they're, whether it's their tech platforms or not tech stocks, but most of them, forget memes for a heartbeat, but whoever wins, whether it's Solana or Ethereum or Aptos or SUI or AVAX, it doesn't matter, in the Layer 1 wars,

that's a question of what will be the infrastructure to power the new economy. It's not a terribly different conversation than what will Nvidia get to in terms of its domination of AI, et cetera, et cetera. So on a day that NASDAQ sells off a couple percent, Bitcoin is up a bit and the altcoins are down, that's not surprising.

And don't fight that. Now I'm not saying that that will continue, but it's just you can't, we're in a new paradigm, right? And everybody who's been investing in Bitcoin from the beginning, I don't care who you are, and I'm late to the party, I didn't start until 17 so you know I'm relatively late you know invested in Bitcoin and the notion that at some point Bitcoin will become start to be viewed as sound money and all the crypto you know people and this is this is the whole maxi versus non-maxi which I always think is kind of silly. There are many crypto assets which are going to

get valued like tech stocks and tech stocks are often valued on stories. They're pre-revenue stories or post-revenue stories, they're still stories. And so that's what's playing out here. That actually is one of those logical things that's going on in the market today in my opinion. But it means that looking at Bitcoin dominance so we've looked at it in the basis of cycles,

et cetera, et cetera, doesn't make sense. One last thing, someone asked me yesterday about Ethereum. And they said, well, Ethereum go up or down. And I said, well, will Ethereum win and actually be the world computer that is the dominant platform for, you know, re-automating the financial markets in a, you know, on a blonde blockchain? And the answer is yes, Ethereum will certainly rip higher at some point. If the answer is no, and they don't continue to gain momentum post their merge, Ethereum is still a $200 billion asset. $200 billion asset implies something happening in the future because you can't justify it any other way.

And so it really does matter. And that's the biggest single driver in Bitcoin dominance. The Bitcoin-Ethereum ratio is now well below 0.002. It's at what, 0.0018? Where are we right now on my screen? Yeah, 0.001878. So it keeps dropping and that matters and that's where your Bitcoin dominance is coming from. Gaurav, you joined kinda later. Any thoughts, sir? joined kind of later. Any thoughts here? Not sure he can hear. Gaurav, can you hear? Well, I can't hear him. Can you? Anyone? Oh yeah, I can. I can. I didn't realize when was I promoted to a speaker. I was just here to listen to the banter. I saw you on stage and figured you had requested but we've walked up to the banter.

Seems like there was a link that I clicked. Okay, anyways, what are we talking about, gents? Oh well, we're right at the end anyways so I don't need to throw you into the fire here. Fantastic, yeah. I would be on the side and listen to this time. Usually I'm a loud voice. So save yourself. Love it. Whenever you have the mantra banter, that's when you bring me up at this point. Oh yeah. Well, we'll do that one again maybe in the next couple of days. All right, everybody. Gaurav, thank you. Thank you to our incredible panel. We're going to go ahead and wrap and

come back tomorrow 10, 15 a.m. Eastern Standard Time for another Crypto Town Hall. Give everybody on stage a follow and thank you all for listening. We'll see you tomorrow, bye. Great, thanks all.