The Wolf Of All Streets - MACRO ANALYSTS: THE MARKET PIVOTS IN OCTOBER? | Crypto Town Hall

Episode Date: September 15, 2023

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Yo. Good evening. Good morning. How are you, man? Good. Good. Just coming back from Formula 1. Yeah. Because you forgot your damn AirPods, man. Yeah.

I find no pleasure, by the way, in Formula 1. Just a heads up. You're not missing on anything. Yeah, I mean, the cars go... It's the lamest sports. They go fast and then they're gone. And you can't really watch it if you're actually in person, but it's a lot of fun if you get in the paddock and do the pit walks and all that stuff so if you have access it's a pretty fun sport yeah but the the crypto community is obsessed with formula ones like every time someone wants to meet me it's either some

crypto event or formula one and um obviously I've never said yes to Formula One. Or they do. Did you end up going there for a while? No, I was there for like an hour. Tomorrow, I'm going for the qualifying. It should be fun. Was it all worth it? Honestly, was the trip worth it?

Yeah, the trip's been amazing, actually. Like I said, kind of the last few days, it's nice to be reinvigorated and re-energized and sort of re-inspired on everything that's happening because it's easy if you're in the United States to just become exceptionally down on crypto, depressed, think that what's happening there is reflected everywhere else in the world. And then you come here and this conference is twice as big as it was last year, while conferences in the US are a third of the size that they were.

There's a thousand projects being built amazing people who are energized and excited about things so you just don't get that vibe in the united states literally at all but ignore the vibe like i haven't gone to events in a long time ignore the vibe the numbers reflect what's happening in the u.s and that's the numbers globally the amount of money flowing into the space like i think today we've had massive outflows out of crypto i think it was like 55 billion i have to get the number for this month i'll look let me look at the agenda again um but then if you look at i think it's here but and then if you look at we've talked about the vc funding and the ecosystem's just dropped um uh to lows that

haven't been seen since 2008 um so then my thoughts there's $55 billion of crypto outflows in August. So the numbers kind of paint a similar picture to what we're seeing in the West. So how is the East so out of touch? Because we've obviously had Yatsu make this argument a few times on the show. But in your mind, why do you think there is that disconnect? I really don't know, because I was under the impression that all those numbers are correct. And once again, you come out here and you ask people if they're raising and they say, no, I've already raised. We got the money easily.

It took 24 hours. It took 48 hours. The same kind of story that we saw during the bull market. And seemingly all of the VCs out here are deploying pretty heavily. I don't know. I think in the United States, you're pretty limited in what you even could deploy into if you're a VC. And people, I can't tell you where that disconnect is because it doesn't seem like on the ground those numbers are correct. I mean, the outflows, obviously, those are different.

But I don't really buy the VC numbers anymore. Listen, you see a ton of deal flow right i mean you see projects being funded you talk to people every single day it's not like the bull market where 30 you know uh horrid white papers are coming across your desk but you're seeing actual things that are being built that are looking for funding people are deploying i was talking to gorov one of your best friends, obviously. He's like, I did five deals today. Yeah, Gaurav, I don't know what happened with Gaurav.

Gaurav only changed, his whole sentiment changed the last couple of weeks, like from doing nothing to suddenly doing too many a week. It's like every week is higher than the last. Yeah, I think maybe that's the answer. Maybe we're looking at lagging data. When you see VC deploying, you can't really see what's happening today. i think that whether it's fair or not i think there is a sentiment not saying the crowd would be right that you know a year from now things will be great doesn't mean that that's accurate but if people are starting to actually believe that collectively i'm not surprised that they're

starting to buy now thinking that they might be near the bottom okay that's good news um and we've got a pretty pretty killer panel let me see who's up on stage already we've got gareth and mike we're waiting for crown capital to come up as well we just sent them through an invite just to kind of balance it out need someone bullish but mike and gareth are here to kind of tame your bullishness uh scott and uh yeah and let me also go ahead no i'm laughing because actually mike gareth and i having nothing to do with the fact they're on spaces today in uh i guess it'll be a week in a week or starting a new show on thursdays and uh it's gonna depress people i think you're starting a new show youtube show you mean yeah a youtube

show collectively uh called Market Mavericks. We can talk about it. It's going to be like at the daily close of the market on Thursday. Just talk about what happened. But who's – oh, no. Who's going to – Mike is going to be there. Who else? Mike and Gareth and myself.

Yeah, man. No, no. You've got to – no, no, no, no, no, no. Yeah, that's not fair at all. You do have someone. You need someone to balance it out. You need someone to be – we need like a Rand type person to say, no, we're in a raging bull market, and we're very close to hitting all that.

We need someone like that. So you need to balance it out, bro. Well, we'll draw straws each episode, and one of us has to be the bull that episode. I can be the bull. Yeah, but you're not good at it. Like I know you try, but it's not working. I'm not sold. You mean being irrational and emotional isn't my style?

You're too rational right now. But no, Gareth, let's kick it off. Eric is here, so you need someone like Eric on the show, Scott, to balance it out, to talk about the quad witching thing. When you first said it, I thought it was a joke, and then I realized it's actually a thing um but but gareth let's kick it off like we had scott tell us the the good news and by the way while we're going doing this the trailer for the show that we've been talking about for a long time the killer whales show the reality tv show the shark tank it's out so if you want to check it out it's a something a minute and a half just check the pinned tweet above um again you'll see why we've been praising the production for so long.

The trailer speaks for itself. But yeah, Gareth, Eric, I'm sending you an invite. You just dropped out. But Gareth, tell us more. Why? What's your stance? I'm putting words in your mouth. What is your stance? Do you agree with the sentiment in the East or the west oh wow so i mean i mean i think overall the the positive bullish sentiment is that long-term view right so again you know for me i'm a trader so i focus on the near term it's it's being in and out and finding supports and resistances to trade but but ultimately like i've said and we've talked about this in the last week or so is that you know even the grayscale

news and even though that didn't cause a sustainable rally in crypto, and we saw the same thing with the ripple news, it's all fundamentally building. So again, I agree that that in the in the east, you know, things are building thing, this is going places, and this is going to be epically huge, and it's going to continue it. It's just price doesn't always reflect that, right? That's the five year outlook. That That's the 10-year outlook. People right now are saying, oh my goodness, there's less money in my pocket because I've spent it down from COVID and therefore I can't buy into as much Bitcoin as I want. And therefore there's just not as many buyers. It's just, you know, it's really just a law of numbers right now. So again, you'll get the ETFs approved eventually, whether it's

October or later. And eventually Bitcoin, I think, goes a lot higher. It's just in the near term, this is where you can't get scared. You just have to kind of hunker down and have a DCA mentality. And I think the question is not about if, it's more of when. So again, I know you said this before, Dareth, in previous shows. But tell us again, when do you think... So what Rand and Scott talked about a week ago, which I really liked, is that we will see price action

from all the positive news, but we'll all come at once, as you saw in 2020, after the 2018-2019 bear market. So when do you think we will see that price action, in your opinion, Gareth? Wow, that's a great question. So again, to me, it's more of a question of when the Fed starts really aggressively having to lower interest rates and maybe at doing monetary easing again and printing money. So again, the question is,

you know, we all thought early this year that, well, not everyone, but the consensus was that the Fed would later this year start lowering rates. And we know that's off the table now. So, you know, then it was the first couple months of 2024 and that's off the table. And now it's looking like second half. So at some point, the economy cracks. And when that happens and the printing presses are forced to be turned on and they will, I mean, the new right now they're saying 2%. We want 2% inflation, but it's a moving target. I guarantee it is when things get bad enough, they'll be like, oh, three. Okay, that's okay. And that's going to be when it is. And my guess is it's second half of 2024. And the indicators you're looking for are twofold.

Number one is PPI, CPI, which obviously PPI came out yesterday above expectations. And CPI is not looking too good either. We saw the ECB raise rates yesterday or today. So the first one is looking at the inflation data. And then the second one is looking at the economy cracking. So the longer it takes for inflation to tame or for the economy to start showing cracks, the longer it will take for the Fed to start easing. Is that fair? Yeah, very fair. And I think for the economy, for me right now, it's jobs, right? So the jobs numbers have been amazingly strong and they continue to be. People filing for unemployment yesterday was dead at the lows again. So once that cracks, once we see people that go negative, that number go negative on the non-farm payrolls

on a monthly basis, I think that's when you start to see the beginning change in the fed where the fed is totally on the sidelines and then as it gets worse the the chances of them starting to cut at some point increase dramatically let's get mike's thoughts on this and scott feel free to jump in as well but mike um the same questions i asked gareth would love your take. And then we'd love to go to Eric afterwards. This to me is, I like to focus on obviously the macro. And the key thing, my key takeaway from all the data this week is I updated my latest big economic reset outlook. I did one for August. I'm going to do it for September.

I just sent it to editorials. It's going to be coming out tomorrow. And a key focus about what happened with retail sales inflation this week is retail sales in this country, less inflation are negative for the most significant period since the great financial crisis. So that is, it's the distortions of this inflation. It's the distortion of this long-gated period of negative zero interest rates and now this big spike that I think the market is just starting to figure out that this is the train wreck that's coming. So we saw the ECB raise rates last week. And if you look what's happening in Europe, retail sales in Europe,

X inflation are negative at about 2%. The deepest, that's the most significant since around 2009, since the depth of the financial crisis. And they just raised rates right above the peak when they did that in Q3, 4, 2008. And then they had to start cutting right away. So that's a train wreck that if you follow the rules of economics is an issue. And also if you look at in Europe, PMIs are all negative. So I look at the data here in the U.S. and then I look at leading economic indicators. That data goes back 100 years and has a 100% probability of picking out recessions.

And it's still negative. Leading economic indicators are still about minus 8%. And so I look at this as sometimes you get a lot of noise. Sometimes markets can remain irrational. I love this quote from Jesse Livermore reminding me yesterday, the markets will do what it should do, but not always when. And to me, that's what's happening now. So now we're seeing this little spike in crude oil. So look at the price of crude oil right now. It's boosting inflation. It's keeping the Fed vigilant to hike rates. They still have their trigger

figure on hiking rates at the November meeting if you look at Fed fund futures. And someday it will get easy. But the price of crude oil right now was first traded in 2007. If you look at the same period in gold, it's up 150%. So that's a market that only matters when it spikes. It gets everybody excited. And it tilts markets into recession. That's what it did in 2008. It spiked. It got everybody excited. It produced the peak in PPI in 2008 was plus 9.9%. That was in July.

And the low this year is minus 3.1%. Yet the Fed is still hiking. So I see the data this week. I see the stock market rising. It's part of the last gas that you typically get before recession. The stock market usually doesn't start going down until the recession starts. And you don't know that till later. The Fed doesn't start easing until well after that.

In this case, they won't. But the data this week shows what I've been fearful for over a year, the biggest economic reset of a lifetime just kicking in. And I look over cryptos not so much cryptos bitcoin they you know we all know the alts have this major speculation that probably still needs to be purged and all this bullish day that we spoke about early in in bitcoin it should be making it go up but it's not to me that's part of that big picture tilt so i i look at this okay what's going to change this narrative and i don't see how time makes it better because the effect of the rate hikes are still far from really being affected in the market.

And I think it's what Gareth said right at the beginning that is so profound. And what you said, Mario, if more of when, it's less money in my pocket. That's happening on a global basis and a scale that we have never seen as far as the drop in money in people's pockets i mean we had a big pump from all the liquidity pumping and now it's dumping so i look at this every day and i try to really ignore the noise and the nuances as what gary said trader focused after having been there done that and having lost my hair trying to figure it out so that's the macro if you look at what the data we printed this week, you subtract out inflation, it's severely transcending towards recession. The difference is, most central

banks are still hiking in the macro. That's where it is. And the key thing is, will cryptos and Bitcoin provide us a leading indication of money leaving the system and I'm still afraid it will be doing that. So I was having a discussion with my friend danish who co-hosts the finance show and i told him something he's telling me how concerned he is behind the scenes like people are more worried than than what the markets show and you know i won't say what what he told me speak for himself but i did speak to one of my you know close friends and a private equity

investor and he said mario it feels to me like pre-Lehman. So he was very bearish. He said, just the markets don't make sense because everyone's struggling with liquidity and everyone's worried, everyone's pulling out of deals. Eric, maybe you can give us a different take because it does look gloomy after Scott's positive sentiment out of the East.

I would love to get your thoughts on what Gareth talked about and what Mike especially talked about. And then give us your thoughts on the whole quad witching cycle and crypto in general. Sure, yeah. So it's interesting to hear

a lot of this talk about markets making sense and news pieces and whatnot. And one thing that I think you'll learn over time at some point is that markets never make fucking sense. They never do.

You'll realize this is all a game. It's all a damn game. And the news does not drive the price on a day by day basis. It just justifies the reason why something moved, despite the direction for the general public who needs a logical reason as to why something moved. You know, you could have an earnings that exceeds expectations and they get slammed down and then people just justify it that, you know, blah, blah, blah, blah. It was it was bad for some reason. It is not objective. That's my point.

And what is objective is looking at price. That is why, you know, it's the great equalizer and its derivatives. And that's why I use statistics. And what they say are right now with Bitcoin specifically is that we are at the quad witching. That is today that means that uh you have a major expiration for index options uh equity options and then futures and uh and it's and it's yeah can you tell us more about quad witching because i was reading about it i'm telling you right now bro for the last three years oh sorry go ahead all right so the quad witching is this it It is a major expiration, happens four times a year as unable to imply. It means that there are four major expirations happening. That's going to be...

By the way, real quick, Eric, they now call it the triple witching because since 2020, refers to is equity options, futures options, and then futures. And it's equity options, futures options, index options, and then, yeah, that one as well. So, no, it's still quad witching, actually. But anyway. Since I'm the old, just to get the history right. Sorry, guys. I mean, I've been doing this since the 80s when it was triple witching, you know, before it's options on futures, options on stocks, it's futures expiration.

And the one that is weird is options on individual stock futures or individual futures, which comes and goes. That's what you guys are talking over. But, you know, either way, it's been a major feature of financial markets dating back since the 80s, basically. Yes, 100%. And thank you for that, David, or Dave, I should say. Yes, that is today.

So it is a major, it's a major thing. The reason why it's a major thing is because major equity managers, you know. I lost him. Oh, cool. I thought it was me. I thought my headset melted in the sauna again. But while waiting for Eric, Scott, maybe you can tell us more about quad witching until Eric joins because you seem to understand it. Oh, I think Dave gave the proper explanation

and I just saw it in the research group that the triple witching. Yeah, it's worth understanding that the one thing I would say before Eric comes back is... Eric is back. Eric, jump in right after Dave. Go ahead. there's enormous pressure on managers that are using futures to back assets to roll futures, meaning that, okay, September is expiring, I now need to roll to December. And when that variation changes, it causes all sorts of issues. It's why the USO, the oil ETF has underperformed by 90 plus percent since inception oil. It's because it costs a lot of money to roll. And it's why a lot of us are so aggravated with the stupidity of approving futures based Bitcoin ETFs and not spot because you have that roll cost. So all the jiggering that goes on

around expiration affects that roll cost and affects what happens to investors. Anyway, sorry, Eric, please. That was beautiful. That was absolutely beautiful. Thank you, Dave. Yeah, so that is exactly true. And of course, the reason why it's important is because we can actually draw statistics for that. And for Bitcoin specifically, I've measured out all of the past quad witching dates in September from the quad witching to the end of the month. Now, many people think that September is a bad month overall. In general, yeah, it is. It does close down. But what is missed within what's missed as a nuance there is that from that quad witching date to the end of September, that typically does close up as those big money managers do start to switch around and have to do whatever they're going to do. So for Bitcoin specifically, the average return has been a little over about five and a quarter percent from that quad witching

day to the end of the month that put Bitcoin, you know, if it does something like that, somewhere around 27, low 27s, I think kind of best case scenario still in September, and sets it up, you know, for potentially continuation in October. And I have strong opinions about that just yet, but I am waiting on one of my models right now, which is very close to firing off. I think it's Let's hit up for potentially a continuation in October. And I have strong opinions about that just yet. But I am waiting on one of my models right now, which is very close to firing off. I think it's about three days away. So it'll happen maybe on Monday. If Bitcoin does remain above $26,200, it will.

And it will suggest that there's an 80% probability or about an 80% probability of somewhere between about a 25% to 35% move in favor of the upside there. So I would really start to lean heavily into that rally beginning, you know, in the end portion here of September, and then probably continuing into October if that's if that far is off. And the other question I want to ask you is coming from the audience, Eric, is the four-year cycle. Let me read out the question exactly and give a shout out to the person with the handle and i think we've discussed this in yesterday's show that question comes from make the world triple four can i ask the panel if they also see a four-year cycle in crypto down until december march and then the next march and then the next bull run so we'll be going down from till about december to march and then the next bull run so we'll be going down from till about december to march and then the next bull market will start slowly uh personally i it's not something that that i rely on or or

actually care about but um to be fair it hasn't failed yet so if you know my general rules if it hasn't failed then don't discount it just yet and the question i have on there another question is that do we have enough uh data to to come conclusion, like the four-year cycle has only been happening for how many years? How many years has it been? talking to hasib koreshi who's the f you're also obviously all the time is one of the best guests and he literally called it astrology uh when i was sitting with him here in singapore the other day called the four-year cycle astrology but then yes he says it's a complete joke he was like that's the dumbest thing i've ever heard but then but it could be it could be dumb until it's not so what i mean i like the four-year cycle i'm actually a fan of the four-year cycle i agree with eric it's you know why don't try to fix it so talk yeah in a year yeah so so like my thought is that even if it doesn't work like

at the end it could become it is already a self-fulfilling prophecy it's like it's like everyone talks about it so maybe it's not meant to work but we make it work because we believe in it so much been happening so many times so maybe it was coincidence coincidence partly coincidence and now it's just everyone's gonna you, you know, everyone's going to make it happen because we believe it is going to happen. But Mikko and Joa, go ahead guys. Yeah. Just a quick comment on the four-year theory. I think one of the biggest things we need to understand is like in the early days of crypto, right? These communities were very, very small and thought leaders had a large influence on really how these markets were going to play out. And because these communities were so small compared to the grand scheme of

things, theories like the four-year cycle that everyone believed in and everyone looked to as fact had a large influence on the psych of the market. Now, this can still keep going. And I think the speakers made some great points. So far, it's been right. So you can't really discount it. I just think as larger money comes into this asset class, we're going to see this transition where we see crypto trade a lot more like a risk asset because that's how the big money looks at it. I think at the end of the day, markets are really controlled by perception and emotion. And if big money has the perception or the emotion that this asset class should be treated as risk on, I think that will be the kind of driving force behind these markets.

And the four-year cycle will still have influence in the crypto community. But I think that kind of gets washed out by bigger money. You think bigger money doesn't care about the four-year cycle theory? I mean, I'm sure there are people at these institutions that do. It just seems to me at the end of the day, especially when we look at how the markets have been trading, these markets really are being treated as a risk on asset class right now. And I think that's going to take precedent over the four year cycle. So if we went into a really, really bad market, I just don't see any way the larger institutions are going to say, oh, despite the fact that the S&P 500 is down 50% four-year cycle, so we have to start investing in crypto. I think they're going to look at it more as a risk on asset class. And when they flee risky assets, they're also going to flee crypto. Gareth, how did risk assets respond to yesterday's PPI data? Gareth, Mike, or Scott, anyone? Yeah, that was obviously a big update that's the thing about

this week everything was up that's one thing i'm really concerned about even yields were up cryptos are up um crude oil's up stocks up everything's up um and that's the point about this year everything is up together that was down last year except for in every all volatility are down and that's where i'm very concerned that it's all happening together and it's all going to continue happening yeah can i can can yeah gareth i'd like i'm going to add a question to that initial question is that look again i'm i'm the beginner here out of all of you are probably the least uh you know the least knowledgeable when it comes to analyzing price and technical analysis. But one thing I saw during COVID

is that the market started recovering really quickly. And everyone's saying the market is broken, the market is dumb, and the market is just skyrocketing. And everyone's saying, how is the market skyrocketing when we expect a great depression and the world's coming to an end?

And then what happens is that the market went down very quickly when COVID kicked in and when they started getting the data and they started recovering ahead. Again, forward-looking. Could it be that the markets right now are forward-looking? So that means we saw the correction that already factored in the tightening that we've seen around the world and potentially the recession as well. And now we're seeing they're already, so that we're going to be experiencing that soon, but the market is already looking past that and looking at the recovery after that. Is that a possibility, Gareth? Yeah, there's no doubt it's

part of it. But I think right now it's that narrative of people are hearing more and more soft landing or no landing, right? And I think people are also saying, hey, listen, I'm watching a market that since October of 2022 with the stock market has really rallied tremendously. And there was a lot of money on the sidelines, a lot of people off sides. And so it's a chase for alpha or chase for return. And so people don't really, I mean, when it comes to the stock market, the market doesn't focus necessarily always on the ultimate likely outcome. It's what's hot right now, right? NVIDIA was hot for a while and you go back to other sectors. And so I think it's

more emotion-driven in the short term, which is what we're seeing here, where people are like, listen, let's just get into this. Like, good example, right? Oil. I mean, oil stocks have gone parabolic. They were probably way underinvested. Now you're seeing oil rip higher, and everyone's climbing into those oil names and oil itself. And oil right now just hit $91 a barrel. And if you look at 2008, and this is amazing, like go to the chart on 2008, oil ran up to $150 in spite of basically a great recession that occurred. And obviously, once we really got in the weeds, and everyone realized what was happening, then oil had this epic collapse from 150 down. And by the way, when we

were at 150, and Mike, you probably remember this, but I vividly remember we were at like 145 on oil, and Goldman Sachs comes out and upgrades it to $200 a barrel. And that was the top, right? I mean, so it's just showing you again that even these big firms, I don't know if there's ulterior motives, but they're not always right. That's, Garrett, that's classic, what you just said. And it's the lessons of Benjamin Disraeli, what we most anticipate seldom happens. And that's what you typically need at peaks and bottoms. And that's what happened last year

when crude oil was gone from 150. Obviously, I was early. Obviously, I was wrong. The low this year is 63. Yes, so someone was giving me a hard time. That's why I call them for 50. I still think it's going to go to 50 in a normal global recession, which had even started.

But that's where as traders, I really respect your trading instincts. You pick that out and you see the headlines and you realize that these things are clickbait. Every time you see that, that's someone writing a story to get readership because that's what they get. And we just saw a big extreme of that this week. We have managed money net positions in crude oil pretty high, pretty elevated. And we see all these little, you know, the headlines about bouncing crude oil, but it's getting zero endorsement from the most significant metal in terms of industrial production.

Copper is not going up. In fact, it's down, almost down in the year. Corn's not going up. Base metals are not going up. It's showing very similar signals to what you point out 2008. But to show you the significant deflationary forces and commodities that peak was 145. Last year's peak was 130. And right now we're talking about 91. I don't know about you

but in terms of the way I look at markets, that's a bear market that's just keeps lower, lower highs and the low but last in 2020 was minus 46 so you know so i look at that as this is a good sign of you get those little extremes and i i this is why i point out the risk for me crude oils if it keeps going up it's just worse for everybody it takes money out of anybody's pockets it makes central banks tight it's worse it's psychologically really bad and it almost always rotates back down and gets really cheap. It just hasn't gotten really cheap yet. It's getting expensive here. Mike, we keep talking about taking money out of everybody's pocket. Obviously, consumer data when you start to dig in is pretty

brutal. Obviously, credit card debt at extreme highs, savings at extreme lows. You can see the title here, macro analyst, the market pivots in october it's an oddly specific date the reason that that was chosen was because there was a thread about effectively how student loan debt payments are coming back in october and people haven't been having to make student loan payments since uh 2020 obviously since they were uh since since covid and now those student loan payments are coming back is that another you know i love to use your own terminology but is that another a tree in the forest or is this a meaningful no i think it's a big tree in the forest i'm glad you brought that up because and i

garrick garrick brought back memories of i remember seeing retail gasoline hit four dollars a gallon in 2008 and i got so bearish way too early 2007. Like Michael Burry, I read, I mean, I was trading, I had shorts on, and I crushed it 2008. But it was really tough being early and wrong. But then when you see that you see what's happening, and almost always the key thing is remember, remember where you're from. We just start coming in the back of people were flushed with so much money and so much liquidity. There is no precedent for that. And now it's being taken away.

It's still early days. But you see that in retail sales. Like, you know, Dave, I like to point out retail sales. And that is it's negative in terms of inflation. Then you look at PPI. It's still negative. And it's actually in terms of Fed funds. It's well below Fed funds.

I look at what's happening in Europe. It's, it's well below fund funds. I look what happened what's happened in Europe and same thing in China, it's global this time. And the point the big difference is, we're still taking that liquidate away. So I think we're in early days of your typical consumer saying, Oh, I got a problem in the great resignation, it just normal cycles, a great resignation is going to rotate over to darn, I need a job because I just don't have that money I used to. And then bottom line to really take money out of people's pockets

is when, and I didn't say if, the stock market goes down for a typical recession, which is just a matter of time. If you look at what the Fed did and what ECB, they keep hiking rates. They are expecting that recession. They are pricing, they are expecting unemployment to go up. If it doesn't, they just keep hiking rates yeah i think yeah there's a couple points here but they all boil down to a simple thesis and it's one that in the crypto community will resonate uh markets are much more manipulated today than they were for any at any point in my unfortunately fairly long career. Dave, are you talking about crypto or markets in general? Oh, I'm talking about the big markets.

I'm talking about markets with an M, the S&P, Treasuries, oil. I mean, I just dug up a chart this morning, which I think is fascinating. Look at the crude oil, the Strategic Petroleum Reserve, and what you see is this little rally in oil almost perfectly coincides with slight attempts to start trying to buy little bits. It bottomed here and there. It looks like stocks bottomed on July 7th

at $346 million left out of, I mean, it used to be $ be 650, right? Because we all know that this administration's best anti inflation fighting tool isn't the Fed, it was dumping this, it was, you know, the Strategic Petroleum Reserve to bring the price of oil down. And as it's up just like 4 million barrels, or four and a half million barrels, you know, have been bought back since then. And during that same period of time is when we saw this little this little rally in oil price. In general, Mike is right, for sure, in terms of disinflation in, you know, because of technology and commodities.

But it's impossible to ignore the manipulation of the oil market by the use of the strategic petroleum reserve to try to control inflation in this country any more than it's impossible to ignore yield curve control in Japan and what I believe is going on here, although in a slightly less obvious fashion. Because the last piece of information for manipulation is the federal government absolutely cannot afford long rates to go up to be at a typical 1% to 2% above short rates. If we had 7% long rates right now, the federal government deficit, the budget would literally be 100%. You know, you'd have no room for any discretionary spending. I mean, arguably, you don't have room for discretionary spending at all. Now, if you take into account entitlements and spending on this, forget the military,

I mean, literally, no structural way. And that deficit is extremely important when you look at the macro. I want to go to Joa. I'm not sure if you're still on stage, Joa. Get your thoughts on everything that's been talked about so far. And then going back to the original question that I had, is that disconnect between the East and the West and then the metrics that we've seen or been talking about is like because there's some good things we're talking

about all the positive news when it comes to crypto and then we're talking about the VC funding at all-time lows and the outflows and and just the numbers are not adding up when you compare them to the news that we're seeing yeah I mean just to go back to what was originally spoke about about the four-year cycle it's four-year cycles different than the pie cycle, which the pie cycle has always called the top. The four-year cycle does not call the bottom, right? So the statement that, you know, Bitcoin will continue to go down until we have a halving, that's not true. It's the beginning of the halving is never the bottom of the Bitcoin cycle. So it doesn't mean that we're going to keep going down until the halving. If we could go sideways, we could go down, we could go up. And traditionally, as we get closer, it begins to go up, traditionally. This to me feels like 2016, where we were up 100% then, but it was a grind. And everyone was saying that, you know, Bitcoin's done.

And then we had a huge run up to 3000 or 4000 or whatever it was. You know, it's, I think people in the east and the west look at Bitcoin as look at it very, very differently, right? People in the west look at it as pure speculation people in the east um do look at it as speculation but also the fact that you have countries for example in the middle east like you have turkey where 40 of people hold bitcoin um and i know they also hold stables but bitcoin typically stables the way they get in. And Lira I think is the most traded currency on Binance by the way. I read that today. The Turkish Lira.

Yeah. It's huge. The Turkish market is huge and more and more countries that face economic collapse go to the dollar. Other countries that are around those countries begin to speculate on their currency. They know where it's going.

I look at it the same way I looked at Amazon when they were adding millions of users and they went from $120 to $5 while they were still signing up millions of users. Price is the wrong way to look at things. Look at what's being developed. Look at what's being built. And you grind it out until the market turns around. I don't agree with the fact that if we have a recession, this is going to go down. I think the dollar is at its upper limit of where

it could be. Every time the dollar comes down, Bitcoin seems to go up. That's been happening since 2008. If the dollar value starts to drop, I expect a rise in Bitcoin. Can the dollar continue to go up right now? Yes. But is there a lot of room to keep going up? I don't believe there is. And I think if there's a recession, we're also going to have a weaker dollar. And that's going to help Bitcoin. Although traditionally speaking, it doesn't make sense because if you have a recession, there's less money going into a risk on asset. But that's not what i'm seeing everywhere else in the world except us that's why i'm um i have a bit of a different sentiment here by the way just on the news that i mentioned uh scott did you see that that the lira the turkish lira has emerged as the largest

fiat trading pair on binance by a pretty wide margin accounting for 75 share of all fiat volume in early september that doesn't make sense that that that shift started in 2021 yeah it seems very very i'll send you the source right but i can't tell you that um anecdotally you know obviously i'm at a crypto conference i've met with almost every exchange i spent the day at the okx office and interestingly at the okx office i met five different people that came in today who were visiting Coke in 2049 who were some sort of partner there from Turkey. And the prevailing narrative was that I can't tell you at 75% that volumes are up from Turkey massively and to some degree are hoping to carry these exchanges through this low liquidity and low volume time. And I heard that multiple times from multiple people at multiple exchanges.

But I don't think that that's necessarily because people – It's not just Turkey. The source, guys, just quickly, the source is Kaiko Data, just so everyone knows. K-A-I-K-O Data. I've sent it to you, Scott. But that 75% sounds extremely high. Sounds high. I'd be surprised. But we've had CZ say many, many times in the past, actually, that the bulk, not necessarily the bulk of volume,

but certainly the bulk of users on Binance are people in countries that don't necessarily have access to banking systems who are effectively using Binance as their bank account right i'm not saying that that's smart or is a good or a bad idea but he said that you know we have these massive numbers of users but millions of them millions and millions and millions of them are in countries like a turkey or somewhere like that and have you know 10 15 accounts and they're sending each other a couple bucks here and there for jobs

that they're doing and and that's really where a lot of that volume's coming from it has nothing to trade do with trading and nothing to do with derivatives and i think that speaks obviously to the theoretical promise of crypto in general access for people who don't have banks or or underbanked but i'm still i i mean there's just no way that 75 of all spot volume on binance is coming from turkey yeah if anyone anyone that has more information on this please do dm it to me if it's if you think it's right or wrong um but the data you know again i can post it i can post similar web if you want mario which shows the traffic sources to these sites and you'll see turkey turkey's consistently up high

and there's other ones like brazil uh ran i know one of ran's colleagues that's living in in portugal you know same thing you're seeing it in nigeria as well like people are using this as their bank account uh because they're fleeing their their their financial systems um but i can post it in the in the nest if you want me to yeah i'm gonna send you through let me send you through the link again uh joe because that again i know i'm sticking a bit too long on on this particular point but that's just just fascinating we keep talking about the us us us and is but he's turkey so all trading pairs with fiat with fiat as base quote asset so number one is the turkish lira number two is the euro. Obviously, US dollar is not. This is Binance International, I assume.

Number two is the BRL. No, sorry. Number two is euro. Then you have the BRL. What's the BRL? Anyone? Brazilian. Brazilian, yeah.

Brazilian real. Like I was just mentioning Brazil. Exactly. That highlights your point. But it's much lower, though. Brazilian real is below 10%. Euro is below 20%. Brazil and Real. Like I was just mentioning Brazil. Exactly. That highlights your point. But it's much lower though. Brazil and Real is below 10%. Euro is below 20%. And then all remaining, all seven others are at – I don't know, Scott.

Like if you consider that – yeah, look. I mean there is the chance. I mean all of this data seems anecdotal. So I'm yet to see it. We've heard people come on this show repeatedly and say, you know, Binance's share of global spot trading is down from 80% to 30%. I also haven't seen that vetted, and I'm not sure that I necessarily believe that. But if their derivatives volume is still exceptionally high, but they're seeing a massive decrease in spot volume, which the market is in general, then perhaps you're seeing sort of an inflated temporary number, where the Turkish lira is that large percentage. It just seems very

shocking to me. Anything's possible. It just seems... Just a little context of Turkish, Turkey, a major gold culture in Turkey, like India, like China. The Turkish lira in the last 10 years has dropped 93% versus the US dollar. It's one of those classic countries where the currency is melting like most countries and almost always have gold biases for obvious reasons. And what are they doing? They're tilting that over to Bitcoin. It makes complete sense.

But I need to tilt a little bit over to what Jonah said about the dollar upper limit. There's a problem and that's part of the issue with the dollar upper limit. If you look at the US economy versus the other top three countries in the world china japan and germany our five euro our two-year note yields our base rates are about double um and more than four to five times what's happening in japan so that's a huge a huge tail um underpaying for the dollar. And typically what it takes for the dollar to go down is US stock market to go down to underperform the rest of the world. So there's part of

your lose lose risk assets, strong dollars breaking things, everybody's catching up, they have to raise rates or go to gold or something. And what's going to break the dollar, those rates, that's the part it's just shocking, the rates are so much higher than China, we have the spread between China two notes in the US at 300 base points is the most since 2006. And that's just accidents waiting to happen. So what is it usually take? Like I said, you have to have risk assets in the US go down to make a four week dollar. And this question of what's going to lead that. Eric, can I ask you a separate question?

Eric, you there? Just confirming you there. Yeah, what's up? Yeah, how would a recovery look like? How do you think the next bull market is going to compare to the last one and the one before? What do you mean recovery? So when we start hitting all-time highs how do you think the market so what would you say about vc funding and different sectors of crypto when it comes to nfts when it comes to you know gaming projects different narratives the whole meme coin hype and all the the dirty

side we've seen do you think it will be more regulated and then the last two cycles to be honest i don't look at any of that garbage. I'm mostly focused on Bitcoin and the major indices. So I don't know. As far as my opinion on markets, I think that they have already bottomed. As I said a few times ago, we're in a trans market right now. It's going from bear market to bull market. It's not a bull market yet. As far as the timing of that, again, last in august for traditional markets there was a very um very very

important thing that happens uh where we did see the mcclellan oscillator which is a market breadth indicator um basically hit extreme extreme red levels which if you actually go through the data for the past 20 years and i would like to go back further but it's actually unavailable unfortunately but if you go back for the past 20 years and and you go into the middle of August, every time before an election year, there were major negative reads, like extreme, extreme negative reads on the McClellan-Ossweider in August, in that pre-election year, and within about a year from there, new all-time highs were hit. So if I'm going off of that, I'd say that that would, you know, likely indicate that we're probably going to see new all time highs in traditional markets, you know, within the next year. But that doesn't necessarily mean that, you know, it's going to be significantly

new all time highs, it could be like 2007, where it makes marginally new all time highs and then dumps to hell. I don't know. But but that's what I'd be going off of. That is the specific question. Same question, Joe, I'll ask you that same question. How do you think the next market will look like? I know your answer, we and you and ryan have discussed this before but uh be good to hear it again for the audience uh and joe crypto specifically just just to be clear yeah i mean i i think that uh humans are gonna human and that everyone thinks that there will be this muted version of it and And I can't say that perhaps, I don't think Bitcoin will do 17 X's again, like it did in the past.

But I think that people in this market will find a new and creative way to create memes and silly things out of air and vaporware and to pump them a hundred X and make a ton of money. So I think that we'll see very similar behaviors whenever that cycle does start again. And I do think that another massive bull market is inevitable. I'm just hesitant to call the timing for all the reasons that Mike and Gareth and others have pointed out here.

But once again, I keep saying it, but being somewhere like this and seeing how much money is still being poured into these projects. Listen, maybe that's a signal that there's still a lot to be to be cleared out, like Mike sort of hinted at earlier. But I really do think that we're still in the very, very early days of crypto and that things are only going to grow with time. But it's going to take time. But yeah, i think we're going to see a massive massive future cycle and before going to joe just for the audience i've pinned at the top if you go on the top the so the biggest show on crypto is they've put out their trailer and me around the judging there scott will probably be there the next uh the next season um but i think you're gonna be pretty impressed by the production quality of the show.

Spent a lot of money. It's a Shark Tank-like show. So I've pinned their tweet above and I'll retweet it on my account. You can go back to yesterday's tweets on my account. You can see it there if you're going to check later. But make sure you check it out. I think you'll find the trailer very entertaining.

Joe, as we wrap up the show, you did send me a screenshot showing the traffic to Binance and you said Turkey's part of the top three. Fair point. But then again, it's only at 5%. Russia's at 6.9 so seven percent argentina is about 6.5 turkey's about five so while it's saying it's in the top three is good um it's also a very small percentage to account to 75 it's pretty pretty wild i'm not saying it's not accurate i'm sure

they move to the app though mario like guy is the source. They moved to the app though, Mario. Going to the actual site, directly to the homepage, which is what you can measure, is typically a portion of that gets converted into accounts. Going into your account or going into the app

is not counted there. So you won't see. So the fact that they're constantly in the top three for two years now shows how many people they're getting from Turkey. It doesn't show how many Turkish people are using it as active users. So there's going to be a difference there. Cool, man. And then asking you the last question, and as I wrap up the show, I just want to tell the audience, if you do want to come on um should probably bring up the uh

the uh the the logo the crypto town hall logo no one joined today but if you do want to join the show as a sponsor we're going to be accepting sponsors again or partners again next week um when scott and rana back back to the us and we also have uh you know very soon we're going to be launching our own shark tank show and me rand scott and scaramucci and which will be virtual so if you want to bring your project in pitch, hit us up as well, just DM me, Scott, or Ran, and we can organize it for you. But Joe, I just got a final question for you. How do you see the next bull market, my friend?

Yeah, it's going to sound weird coming from someone who's typically bullish here, which is, I think we're going to have the first bull market in a recession, bull market in crypto during a recession. I don't think we're going to have the first bull market in a recession for bull marketing crypto during a recession. I don't think we break 100. I think we get close because of that. I think it'll be driven a lot by other countries. I think institutions will take up a lot of it.

But I don't think we're going to have, you know, like like Scott was saying, we're not going to have this crazy run-up like we've had in the past i don't see it i i don't think that comes until the fact institutions are in and things start to become very real um although i'm bullish i don't see us breaking i think we stopped getting the huge moves on all coins when the things become real to be quite honest yeah it's not real yet that people can continue to run it up in the way that they do for better or for worse and then scott's frantic account blow up as he posts more uh foot picks that's how the the bull market the bull market would be scott expanding from foot picks to all picks if If you get enough keys, you get a pick of anything.

You know, get 10 keys, I'll give you anything you like. Knees, knees, knees. Do you think we break 100, Scott, your opinion? Yeah. But, you know, if you do the math on previous cycles, you have to be thinking that Bitcoin is going to mid twos, threes, fours, fives, right? I mean, March 2020, if you're considering that sort of the bottom of that cycle, given it was COVID, Bitcoin went sub 4000 and ended up at 69K, right?

It's a 17X. If we call 15 here the bottom, I'm not saying it will or won't be, but, you know, we think 15 is the bottom. Start doing that math. You're well up into the twos and 300s. I think it's more of a 120, 150 type thing if all goes well. So I'd be really happy with that. I hate making predictions. The good news is these are far enough out that maybe people won't dig up Twitter spaces and dunk on me in a year when we're sitting at like 60,000.

But yeah, I think it's very possible that we still go above 100. I mean, just think even if we just get the ETF. But yeah, I think it's very possible that we still go above 100. I mean, just think, even if we just get the ETF. But take COVID out of it. Take COVID out of it. Yeah, but COVID's irrelevant. The low of that cycle was still that low, if you remember, right?

You had the lows of the previous year. Yeah, we revisited the low. Correct. So the low is still, in that case, and this is something we saw in the other four-year cycle four years before, but the low was 32-ish, right? It ran all the way up to 14 and then revisited sub-4,000 at like 38 it you do eventually get that and you know ben cowan comes and talks about it quite a lot but you do generally get that one more big shake up right make a higher low and head all the way up that's something we've seen in every cycle

not saying it has to happen i think that you know 25 could be that right um and so uh yeah i think that uh from here we'll still shop around it'll be probably very boring and if I had to guess just based on what we've seen in a year we're starting to talk about higher prices and in 2025 we're completely irrationally exuberant and talking about a million dollars again right before everything crashes and we wait

two and a half more years on that point I think it's a great show appreciate you all doing it Scott I appreciate you sneaking it in I know you were at the Grand Prix and we'll see you all again on Monday

10.15am and make sure you check out the trailer pinned above and I've tweeted it out as well enjoy the trailer and we'll see you all again soon thanks everyone

thanks for the panel bye guys