Market MELTDOWN: BTC $102K, Altcoins Getting Crushed | CryptoTownHall
00:00Dave, till Scott comes up, just a question for the group, Cheney dying and Mandami getting elected?Is there any relation? Is that related in any way?I certainly, I don't know. I mean, you know.The cosmic, you know, whisper?No, I mean, Mamdami getting elected is merely the signal of the, of everything, what you sow in terms of monetary policy.policy and policies for decades that prioritized capital over labor and have made the youth ofour country turned their brains to mush.And there's just no other way around it.
00:41I mean, New York is going to suffer.And it's sad because I was literally just there this weekend.And, you know, I'm a New Yorker at heart, even though I'm in Florida.I just don't want to go there.Were you here for the marathon, Dave?Yeah, I was in New York during the marathon.Wasn't that?I was, too.
00:58And it's a great day.And to your point, like, it's still a great city for those events, nothing like it.And then when you sort of pull up the covers, you're right.Mondami, it's manifesting.They ask you to use your phone.Yeah.But, I mean, it's interesting, though, I mean, in terms of, from a Bitcoin perspective, you know, weand Bitcoin are all here.
01:23Matthew, please meet your mic.Matthew, we can hear you talking.Please meet your mic.I can't.Okay, I try it.Go ahead.Jesus, so funny.I was going to say, as Bitcoiners, the vast majority of people who listen to this believe that profligate spending and runaway fiat money has enabled all sorts of really bad things.
01:43Some of those bad things are what people like Mamdami campaigns about, except what he wants to do and what that movement is is the polar opposite of what we want.What he wants is more government, more spending, more everything, make everybody dependent.it. What we want is freedom and the ability to actually restrain government because we allunderstand that absolute power corrupts absolutely. And when you give it all to the government,bad shit happens. By the way, just as a caveat, everyone, apparently in both sides of thegovernment, that is in power wants more spending. But go ahead. And that's not political.Did I say Democrat? No, no, no. I'm just, you know, Mumdani, obviously is a extreme example on one side,but spend, spend, grow our way out of it just means prints our way out of it.
02:25Oh, no doubt. No doubt. I mean, it's not a political thing.Look, at the end of the day, you know, our political system is hosed because we have extremes and extremes, both their status who want the government to run a military, you know, on the military side, there are status who want the government to control the society.And most of what we say is an opt-out.But there is, there are, there are cadres and we could go through that.I don't think that's what we want to talk about today.We want to talk about today is, is there, is this sell-off, is this the capitulation sell-off that,people have been waiting for. And if so, then the bullish divergence of what we're seeingtoday looks like a tradable bottom being formed. And that is important. I've seen all sorts of
03:11stories and I've been trying to ask people, and this is the perfect time to know if anyone'shearing anything, all sorts of stories of liquidations. There's rumors about Wintermute and there'srumors about maxi and then there's you know some stupid shitty stable coin which you know was givingpeople a ton of yield that was a you know a hundredth of the size of terra luna and people talkingabout that one i don't want to glorify it the fact that there are people who are still lookingfor yield without knowing where the yield is coming from at this point you know it you have to bedumb as a rock and or and or ignorant to continue to fall for that crap yeah you should know you playpoker if you can't see who the fish is at the table you're the fish oh yeah absolutely 100% and
03:59and people people are like that and it's crazy but but let's we should dive in here so so here'smy two sets winter mute i don't know anything about the situation i don't know that you knowit was it lawsuit no lawsuit big losses no losses etc what i know is unless somethingreally changed at wintermute there's no fucking way that they were massedmassively long. Now, if they're not massively long, and they were basically hedged, then anyliquidation of assets that they have to do is limited to the loss. Yeah, it seems like that was fun,but just to be clear, I think the claim was that because of automatic de-leveraging, even if theywere properly hedged, that they could have blown up. I'm not saying that did happen at all.
04:43Sure. No, no, but we all know that if you're hedged well, but a platform unwinds yourpermission, you can't be hedged.I get you.And even if that is true, the size of the automatic de-leveraging is what would be the absolutelargest amount they could have been out of balance?I mean, the wallets, they showed the wallet.People were making these claims while also showing the wallets that were only down like,you know, 60.
05:08I don't want to quote the numbers wrong, but it was like maybe a $600 million dollar walletthat was down to like $560.That's not a blow up.Yeah, right.But that's my point.My point is that the total magnitude of the loss is going to be.measured in the millions, not billions.And so measured in the millions loss, and even if you had to unwind the entire company
05:26would not create the kind of selling pressure and waves that we've seen, it's just, it's people,it's others looking at this and saying, oh, oh, my God, this is FTX re, you know, part two,it's the same thing's going to happen and selling.My guess is a lot of short positions have been put on during this period of time,and a lot of people dumped not knowing what the hell's going on.because the magnitude of the size, it just doesn't, the math doesn't add up.And when the math doesn't add up, I always think that you want to be the other side of it.Now, it doesn't mean that it doesn't change sentiment.
05:59It doesn't mean we're not fear, but I will go back to buy when others are fearful,sell when others are greedy every time.So that's winter mute.I mean, but Dave, this is how range is trade.I'll let you go on to Mexie, but I was pretty vocal at 126 when it kind of failed to break that.We had overbought conditions, mass foam on euphoria.straight to 150 that we would probably range 100 to 125.I said it down at this time.
06:23Here we are at 100, and now it's the same sentiment, like always, with humans.If you're at 100 and you're at support, by the way, we just tapped the 50MA on theweekly, which is like a very definitive line in the sand for technical analysts and bounceda little bit.But this is the same sentiment on the other side, which is that you get to support and we've gotto go way down, right?And it's just a range.We're violently in agreement.
06:48agreement. We, we are totally, look, you and I,yes, yes. Unfortunately, we make, we make terrible, you know,terrible podcasts because, you know, we agree with each other. I'm justtrying to point out and debunk Fudd to, on the other side.Yeah, on to Mexe. Right. So, Mexe is an exchange, and that literally prides itself onproof of reserves. And I have seen nothing that suggests that their proof ofreserves are lies. So therefore, yeah, they could, you know, obviously,and the exchange could go down.
07:20But if there are proof of reserves and they have segregated customer spot, then there's noissue there.I've heard lots of fud and lots of accusations that on the derivative side, they may have issues.But once again, people need to remember, derivatives exchanges are balanced.They have just as many buyers as sellers.And yes, there can be slight delinks, but this is not the same thing as taking people's Bitcoinand Ethereum off their exchange and replacing it with Samcoins, which is what FTX was.it's also way smaller. So to basically look at those things and say, okay, that's why it's
07:54falling is a bunch of horseshit. And I think people should understand that. We use the wordfud very, you know, heavily here for fear, uncertainty and doubt people trying to push marketsaround. But honestly, I think what you're seeing is exactly what you got to my punchline first,is exactly what you're saying, Scott. And it just, I find it funny almost how predictable humans arethat, you know, at the top, everyone's crazy and at the bottom, everyone's crazy and in between.And so, you know, I guess we see, you know, I guess we'll see now that the tide is out.But I'm curious. I mean, you know, we've got a bunch of people on the panel.Anybody else heard anything to dispute any of this?
08:32I mean, Mark, you know, you watch this stuff.You've seen a lot of these things.I mean, obviously you, you know, you probably tend to agree with us as well, but I'm curious what you think.And after Mark, J.W. had his hand up.I don't know if you saw that, Dave.But go ahead, Mark.I see the block prop.as a listener. I'm sorry.
08:47No, no, no problem. Just making sure. Yeah, we know.Yeah, I mean,Dave, you said that when you don't see a reason,then you're going to go back to, you know,people are weak or people will sell bottoms and buy tops.And that's true. And then that's also why I'm not a great trader.I'm more of a, I won't say investor,but I risk managed because I traded for a bit.
09:11I wasn't very good at it. I was good to step away.So I keep pressing to say, all right, it's not winter mute.Is it a traditional player that got in recently who said, I'm out?Is there any market structure feedback from any of the folks like digital asset researcher or blast node that has shown unusual behavior?Because if there's not unusual behavior, then I agree with you.Then this is going to persist as long as a negative equity sentiment does.So I do think we could hang out here if equities need a release valve.To your point, if we've exhausted, there's no new player who's dumping, no new Sam, then yes, this is an entry point for sure.
09:55Yeah, and by the way, the S&P on its gap down today and moved to the downside before bouncing, exactly.I pinned it above, but tapped the previous all-time high, like almost to the penny on the SPX.So a lot of, obviously, fear even with the S&P sort of at highs, but simply a support test is not that big a deal.J.W., you're up.Hey, I'm going to repeat one of my moms who's on this show, which is I don't know anything about short-term trading.I think short-term trading in equities is mostly noise.Crypto is even noisier, believer in the Fisher-Black kind of hypothesis of noise trading.But I want to go back to where Dave started, which is the politics and crypto has opt out from the broken nature of government and politics.
10:45I look long-term in crypto.And what I've learned recently is that I need to do a better job of practicing what I preach.God, I wish I could, instead of all the meme coins and dog shit things I invested in because they look cool,I wish I had done more to live up to my belief that it's long term.structure. It's D-Pen. I serve on the Zcash Foundation board, and I didn't do as well in the1000X Zach run-up this year as I could have if I hadn't wasted my money on Pepe and all this dog shit.I'm going to go back and reread Balej's network states. I'm going to go back and reread everythingMasari's ever done on D-Pen. I'm going to think about the projects that'll be here in 10 years,
11:29and I'm going to do more of this strategy of, you know, looking at how many devs are working on theproject, do they make sense in the thesis of Bologi's vision and Nival's vision for the futurecrypto? Does Bissari show a project that works? Okay, I'm going to buy some tokens, put it incold storage, and I'll come back in 10 years and look for a couple of miracles in there.That's all I got. J.W. Don't forget to buy a little Bitcoin while you're at that.Yeah, of course, Bitcoin and E because of the thesis. Yeah, yeah, yeah. But Bitcoin, you know,How many devs are working on the protocol?That's good for Bitcoin and Eith and Salana.
12:07That's good for some D-PEN projects.Some are newer.I still don't know if Filecoin's going to give AWS a run for their money,but I sure hope so, especially after AWS's recent failure.And I'm still betting on Filecoin over the next 10 years,because those devs are very smart, even though the price action has been a dog for a year.I haven't heard the file point in a very long time.It's not great for trading, but the devs are there, the infrastructure is there.
12:32people are still working on.Yeah, I mean, look, the point, someone asked me the point, and J.W., since you're here,I think that you're perfect to actually comment on this.You know, I'd ask someone asked me a point about the Clarity Act and blah, blah, blah,and my point on this is, this is the meta trend, that the meta trend is that there will be ruleswritten that effectively force issuers to explain token economics and, you know, for their tokens,as they're listed, and that those rules will effectively end up, meaning that tokens that dohave value propositions that go to the token holders will shine, and the ones that don't
13:13will be exposed. That's going to take years. It's not going to happen immediately. But that'sbeen my thesis as we enter this time. So anything I buy for the long term, I want to actuallyknow that there's a long-term path to value for the holders. We clearly have not been like that.That has been, that's sort of the antithesis of where crypto was looking back five years or seven years.But I think looking forward five to seven years, that will be the antithesis.I'm curious if you think I'm on drugs or if you believe that what I just said makes sense.Well, and both could be true.But I definitely, I don't know about the first, but the latter, yes, I think it makes sense, Dave.
13:48That's where we're headed for sure.And, you know, it creates opportunities right now because those of us who spend some time with Deepa Lama, with Misarra reports, with that kind of stuff.have an advantage, that advantage is going to wear away as the Mantua disclosure kicks in,hopefully in a reasonable way.I noticed I see your hand out.Yeah, I joined a bit late, but I think it was Mark that was talking about seeing someunusual stuff in the market.I think there's something really unusual going on right now, but it's something that I've
14:23seen over multiple cycles, and that is the privacy coins like Dash and, and, you know,Zcash having these runs.And what that indicates is people are washing their money.Now, previous cycles, when this happened and we saw these privacy coins ripping,it was people washing their money and getting out of the market.Now, I'm not saying that that's what's happening right now,but there is a lot of people that are pumping money into Dash and Zcash and otherprivacy coins right now.
14:54So I'm just curious what your guys' thoughts on that is.My take on it, and this is only from kind of sitting at random dinners and people telling me, and I don't know who, how, but I think, in my opinion, that the Zcash run is a result of a few people with large influence getting together and collectively saying, hey, we can form a narrative and pump this thing, and the Dash and others are following.I don't know that there's something fundamental there. I'm not saying there's anything untoward, but I think that it's moving because of,you know, social media pushing and sentiment more than because something fundamentally is happening,but I'd love to be proven wrong.Well, I don't know the reason either why it's pumping.And you're on the foundation.Yeah, probably some narrative stuff.
15:42I do know some cool stuff we're doing.Probably the thing that's most useful to retail is that, look, this project, the challengewith this project is the devs wanted perfect code, perfect cryptography.To their credit, they wanted Ph.D.unprackable cryptography, and they had shit UX for like seven years.So nobody used it.Finally, we've gotten around to good UX.Zashi Wallet is cool.
16:06It's really easy to use, and it connects to near-intense,so you can pretty easily swap from Zek to other stufffor whatever reason you want to swap into Zek.So Zashi Wall is probably helping us,but I'm not claiming that this is a purely foundational narrative or anything.The pump could be partly, you know,based on what most pumps are about.I don't know.
16:28But Zashi is cool, and we're devin it up over here.Yeah, I would just say, like, when you start to see the whole sector move,I mean, this is how crypto cycles happen, right?You get, we all know, like, yeah, the NFT summer and DFI summer and Metaverse falland all these things.So one of them catches a bid, and then the other ones follow because there's a narrative,and then generally you see a drawdown and we move on to the next hot thing, right?So I'm not saying that there's nothing fundamentally happening.
16:58I'm not making that claim at all.You just don't generally see 10 to 15 X's on accident.Yeah.No, I mean, who knows?That's possible.One thing, though, if a part of the demand surge is people who want privacy in their moving positions, if that's the issue, they need to be careful because you, you know, the only way Zet works for privacy is if you hold for a while, you need some time between going into Zek and going out of Zek.so you don't have time correlation on the front end and the back end, that's still the case.You're shielded while you're shielded, but on the way in and the way out,
17:34you need to make sure there's no correlations, which usually means hold for a while.Has Manero moved?A little bit.But not the same pump right now.I would think that if to Panos's point like this was people washing their money or exiting the market,that we would see major movement on Monero as well.Would you think so?Yeah, I would think so, but didn't Manero just get like 51%?
17:56attacked or attempted wasn't that quite recent that's right that was not that long agosome some funds yeah 51% or something exactly so I think I would agree with you but I thinkpeople probably avoiding Manero because of that and that's why like Zcash and dash are reallylike running I think that's the privacy coin of choice over Manero because there's some issuesthere but who knows and typically what you see as well if people areare doing this to obfuscate their funds or, you know, to do whatever with, take it out orwhatever, what happens is these coins start running and people get greedy. So they'll put in somemoney into it and then they see that, oh, this shit, this is going up. So I'm going to hold my,
18:41I've got to hold my money in here for a month anyway just to really protect myself fromfrom a privacy standpoint. And my money is actually going up in value because people areaping into it. So that's, I think that's what I'm seeing right now. But I just, again,I don't know whether it's people trying to exit or they just want to maybe they're enteringand they want to obfuscate and then pull it out and then go into other assets.I have no idea.But it is interesting seeing these coins like Dash and Zcash making these runs.Sorry, my mic not working particularly well.
19:18So I think we kind of talked that one out.We were talking markets and I don't know that everybody was able to offer their opinion ofof where we're at. I think that's what most people are still kind of eager to hear about at thismoment. We've got Bitcoin at 104-258. It did drop below, like I said, the weekly 50MA. That's somethingthat has only been tested three times since 2023 as support held each and every time throughoutbull markets. And just, I was posting this before, not to scare people, but every time,and Dave will remind us that four data points is not particularly relevant. But there's been four timesin history that Bitcoin has squarely broken below the 50 MA on the weekly. And every single time
20:01it has gone down to touch the 200 MA on the weekly. The 200 MA is currently sitting at 55,000 andrising. So I think ask yourself, do you think that, you know, if Bitcoin drops below 100 andstarts closing candles there, 55K is likely, or maybe if this is probably a tradable bottom,as Dave said. I was showing that kind of to laugh at it. I don't think we're going to 55.I think most people here probably agree.Well, you need to look at what was happening at the times, right?You know, in all cases, there's two points to be made.One, in all the cases before, when it came down off the high to go down there,
20:46it was with velocity and it was...Entering bare market.And it was a euphoric high, right?The high was with significant leverage, with significant, you know, people paying up to get there.Lots of FOMO and the high was, well, significantly higher in terms of percentages of the run.So, and then the second thing you need to do is understand that Bitcoin really is a referendum on its probability of becoming digital gold.And it really is because that's where people are, that is the vast majority of major holders and new,money, that's the narrative they've been sold. And when you look at the fundamentals of what's
21:27been going on, it's dramatically different. Under Biden, everything that happened, and underTrump won, everything that happened was with a government that effectively was saying, yeah,yeah, yeah, yeah, we, you know, there was all the flood, this is going to get banned,this, this, it's going to be that. It's literally the opposite right now. And so, and none of thathas been factored in. It doesn't seem to matter or it does matter. But so you need to make youryour long-term thesis on the basis of what you see. And the evidence is very different now than it wasin those other cases. That doesn't mean that this time is different because I hate that crap.But the notion that this is happening because it's a four-year cycle is literally insane. It's
22:08clinically insane. And because the data and the math just doesn't go there. So you really do needto look at the context. So the other context you need to look at, frankly, is money supply and howwith the fiscal dominance of what's going on. I mean, you know, Lynn Alden's, nothing stopsthis train. Effectively, you need to look back at over the 200 weeks and see, well, whatactually has happened? And the answer is, you know, we have like, in those 200 weeks, we've had,what, 30 to 40 percent increase in the number of dollars in circulation, give or take, which meansthat 55,000, you know, basically that brings you into the 80s to where a reasonable,bottom of the range is if in fact you adjust your chart based on that which i think is probably
22:55the most important thing to adjust your chart based off of i mean you tell me scott am i am i crazyit makes sense context matters and like i even caveat is that uh the few data points you love topoint out uh with statistics are meaningless and the four year cycle itself obviously meaninglessin that context so i agree with you i agree with you and i don't think listen i mean the deep fouryour cycle believers, I think, would be telling you that we topped, right? Because usually the top is betweenOctober 20th and November 20th and, right? I mean, I haven't dug too deeply into it, but that seems likethis would be the time. Yeah, that's true. Look, I think the, you know, we talk about Bitcoin and wealways phrase our conversations about Bitcoin, and you and I both believe that Bitcoin is different
23:39than every other coin out there. And I think when you start talking about Alts, I think you have tofocus in on Ethereum, which is, it looks, you know, it looks rather different, right?You know, for start, you know, not for nothing, you know, Ethereum is, is tracking Bitcointoday, but the dynamics there matter. And, you know, like William was out yesterday,talking about how, how strong the network is. I know today it hit an all-time, you know,transaction rate, I think. And the real question is, is Tom Lee's support enough to keep people fromthe fear and despondency because the technical's there, well, they look a bit different, don't they?Yes, absolutely. I would love to get the panel involved here. You know, I'm talking a lot.
24:26I'm trying to bring up Bitcoin versus Eath to get the panel. Yeah, of course. What do you guys think?So, yeah, Dave, you thought that bone was enough for us to run in the circle and engage.So the East story, why isn't it still engaged or pumping because of the stable,Is that just a legislative slog that doesn't have enough zest for the investment community?That's my main question.I thought that was going to make this thing moon with a persistent bid.Because I do think that the stable coin game is real, that the treasury is behind it,and that it will get to that $2, $3 trillion number in the next couple years.
25:11Once again, Scott and I have the same opinion on this,which is that of all the reasons to buy ETH, stable coins, which will, the issuers willpick what is the most cost-effective platform for them to use is probably not going to, youknow, redound to Eath holders, or at least not in the extent.Great narrative, really.Great narrative by Tom Lee to hook Wall Street early right after the Genius Act, though.I see Doug.And it was a stroke of brilliance.
25:41As one of the guys who got hooked then, can you, can you, can you?you go into it, is it because the, it'll literally be like a lost leader?No.That if you want to play.But it's like anything else.Pick a business.It doesn't matter what the business is.If you're relying on a utility and the utility is switchable, i.e. you don't have to stay.
26:00You know, the cost of switching is relatively low.It makes that utility a commodity price.It doesn't mean you can't make money, but it does mean you're not making economic rent.I mean, you're not making exorbitant profits on it because if ether was too expensive, youswitch to Tron or whatever, or you do what several others are doing, which is build your ownblockchain for it. I mean, unfortunately, commodity underpinnings are never going to make youincredibly rich. I think you can make you money, but they're not going to make you incrediblyrich, right? So that's the difference in mooning and not mooting or, you know, whatever.
26:31I mean, I thought, what was it? Douglas had it was it, no.Yeah, Douglas has a hand up.Someone had their hand up. Yeah, yeah, I did.I think that to go on the Ethereum debate, you know, everyone's talking about how so much, so many stable coins are going on Ethereum, but they're not actually being used in the Dexas, right?Stable coins on Solana.I think that Ethereum has had this traditional sort of view, at least over the last, like, what, five, five years that because the regulators approve of Ethereum, everything should be on Ethereum.And I think that with Galaxy, when they came out and decided they're going to tokenize their NASDAQ shares on Solution.Salana, I think that that sort of points out the problems that Ethereum has.
27:13No one's going to be using an Ethereum-based table coin to transfer $3 from one wallet to another, right?They're going to use it on Salana or something that's much cheaper.And Ethereum's obviously, you know, 15 transactions per second isn't really going to be used by a consumer.It's going to be Salana, where there's maybe $165,000 with the Alton Glow upgrade.So I think that there's been this move into Ethereum, but I think it's really based upon,how Ethereum was viewed maybea couple of years ago where that's all theSEC liked. I mean, we did
27:45an IPO on Ethereum because that's whatthe regulators knew. That's what the SECknew. But now the SEC knowsSolana. And Ithink that the regulators know Solana.And I think that there is going to be a move awayfrom Ethereum towards Solana.And I wrote a piece on it or put out
28:01a podcast on that today. ButI'm convinced that I think that people have runinto Ethereum becauseof regulatoryknowledge and they're not actually looking at the, and how the chain actually performs.There's not a single all coin that value or price reflects its usage or adoption.So to Dave's point about all coins that we were discussing before is either they continue to bea blend of utility and the ones with utility catch a bid and go up, but in my opinion,
28:34still that utility could never justify the current prices or you get a full repriced.pricing of the sector, which I don't think happens. But like there will never be enough quoteunquote usage of Ethereum to justify how far the price has come before that usage was adoptedor most all coins. I'm not even saying that as an indictment. I just like, you can't. If you'regoing to try to value them in the same way, you would value, you know, a stock, there's none of itmakes sense. You know, and momentum and community and things like that, that all makes a lota sense and tail as old as time. There's nothing new there. But yeah, I mean, like, to yourpoint, and Mark, on the stable coin thing, the future, stable coins only work in the future,
29:15in my opinion, if what chain you're on and what coin you're using eventually gets completelyabstracted away. Like, there's got to be people building platforms that make all of themcompletely interoperable. And the user on the front end just hits a button that says, I want to dosomething with USD and behind the curtain. Some stable coin is transacting somewhere onsome chain that the platform has identified is the cheapest and fastest way to do it.But there's no world where we get mass stablecoin adoption, where you as a user have tofigure out if it's USDT on Solana that you're trying to get to USDC on ETH or something.Right.
29:54So it all has to eventually be interoperable and completely abstracted away from the user,in my opinion.And that's what's going to happen.So I think they're commoditized down the road.And that is that is it.Matt, if you're in the room. Yeah, great conversation this morning, guys. Almost as good as the ScottMelker mashup of Sierra Fleetwood Mac and Luda, which I highly significant. No, there are some peoplethat remember, Matt. You know, there are my former life. It's a great mashup. You should go check it out.
30:22And almost as good as your Sailor interview, by the way, flowers on that. But speaking ofSaylor, he did say something the other day. And I kind of wanted to maybe shift the conversation since we gotsome really smart people in here. He was speaking about the big banks offering Bitcoin in 2026.And I'm thinking just since we're in the space, what does that look like?I'm imagining they have to probably do OTC buys.Would they be doing that right now?And then my final question would be, how are they going to custody this?How is Brian Moynihan?
30:47What's his plan for custody?What is the plan for big banks in 2026 to custody Bitcoin?Thanks, guys.I'm happy to try to answer, but I would love somebody else too.Yeah, I was thinking to say, I was thinking the same thing.I mean, the short answer is,custody is just is the is the the the people storming the beach the real juice is financing based off of bitcoin and getting bitcoin to be adopted as pristine collateral by the boswell accounting rules and when that happens met then all bets are off basically what that means is full integration in the financial system in the wall street machine being able to uh being able to support multiple businesses it will massively increase demand it will do the same thingthing in terms of valuations as the 1988 changes and the rules did for equities.
31:40If you want to look at, if basically anybody who looks at historical charts going back in timeforever like, you know, my friend Mike McClone does, if you look before, you know, from thebefore the 90s, you know, and you look at valuations in the stock market compared to postthat, they diverge rather dramatically. And there's a reason. And I would expect Bitcoin to bethe same. So that is a massive price.driver that people aren't talking about. And the signal that they're all getting into it is tellingyou an awful lot about what's going to happen. I'll give one nugget as to why, one simple one,which is right now, if you want to offer, if a bank or a broker wants to offer a swap to an
32:22institutional customers, institutional customers, for the most part, don't want to, they want to paya management fee, they don't want to own physical, they don't want to have to deal with the settlementof anything. So they do a lot. There are a lot of institutions. They do a lot of their investing viaswaps, not perpetual swap, but a swap. And they take the counterparty risk of the institutions,etc. Right now, if you want to offer a non-deliverable forward or a swap on Bitcoin, you have toreserve 100% of the capital on the long side and the short side, which basically means you're usingall your balance sheet and it's not efficient. In other inequities, for example, there'll be a haircut,but more or less, you'll get, if you're long and you're short against it, maybe you're using
33:0520% of the capital.So you get five times more capital efficiency, and it could be more than that.It could be 10 times or 20 times.That allows for significantly increased volumes and significantly increased demand to be satisfied.And so that's one of the reasons we talk about.It's all, it's plumbing, and a lot of the people that are listening don't want to listento all of this or care about it.All you need to know is, as it gets into the financial system, it allows a lot more money
33:30to be put into the asset from people who are constrained about, you know, the notion of custodyor the notion of spot, et cetera.And by the way, that's not a unique to Bitcoin, as I said, it's to all instruments.I hope that helps.Does that make sense to you?Yeah, it does.That's why I love coming to the spaces in Iron Sharp and Zions.So thank you, Dave.
33:48Appreciate that much.Gary.I see Gary.Gary Woods.So we got, we got, we got doing Gary's, but you're the one with your hand up.Yeah.So I put it up in the nest.You can take it back down.
34:03But I did put it in there because you guys were talking when I came up in the space about Ethereum specifically.I think that there are some Catalyst events that happen in the next month or two.I did post them.At least that's what Grotka is for us formalized it saying, you know, Fusuka supposedly is going to reduce the fee drain by L2s.So that's an interesting, you know, maybe sell the news kind of event.and then also the, you know, typical if people look at charts and things like that,then, you know, this Santa Rally at the end of the year, that's something that a lot of peoplehave been looking forward to across all crypto chains.
34:40So I think Ethereum still has a play.You know, I think I also, after being in the space seven years, am more of a Bitcoin personthan ever before.So like the idea of people making their money during a rotation and then rotating back to Bitcoin,I think that that still has a lot of strength and narrative, regardless of the centralization into DATs or into government coffers and things like that.And then the final topic, just, you know, if you do segue to something else, is how many people believe that there is a crypto use case as far as a peer-to-peer when basically free capital in the form of fiat print, Fed print, is really what moves the market as far as price.If you can buy a crypto with a fiat, peso, dollar, euro, doesn't matter, does that actually serve the narrative of it's a people's money or it's a parallel money?I don't really think it does, in my own opinion, just because you can print for free if you're on one side of the class structure and you have to print for interest if you're going to take a loan or leverage or do anything like that, you know, still using fiat to participate in this economy.
35:52So again, first is just the the theorem narrative, and the second is, you know, who's still in the space that is a cypherpun.Anyone?Hey, Gary.This Mark, so your point is the value just coming from the arbitrage of the swap in and out, so therefore it'll never be peer-to-peer, which goes to, you know,The Toshy's opening line or the title of his white paper that hasn't manifest?Is that your point that it's not peer-to-peer?It's just a, not a wash, but money-changing systems and gaining value from the different states it exits and enters?Well, again, it's the free launch.
36:41So the free launch of any crypto project, whether it was Bitcoin or anything that followed,there was a founder, there's a launch, there's code that is put into the public space,than the public can participate.So the public participating early in the daymay have been mining from your laptopor growing miners and things like thatas the technology was necessary to harvesta yield effectively, right, above your cost.
37:07Now that we are all happythat the price is 100,000 or higher,it is partly, you know, a large partbecause Wall Street can get money for effectively free.So can Fed or government.Government can basically take, whether it's fines in all of the cloud of what is an ICO,what is a public launch, and all the Gensler era, you know, they can basically acquire crypto for free as well,through penalties, even CZ's penalty in some ways I see that as a hit on crypto's valuation.
37:39But that is because you can get for free what we all are all trying to buy.And we're trying to buy it through our labor or innovation or invention, you know, as a public participant, you know, in this narrative of what is crypto.But at the end of the day, if you have the Fed, you have a central bank in any government that has a central bank, you can participate, you can basically play for free or close to free or hedged or leveraged.And I just don't believe in the narrative as much about whether it's Bitcoin or anything else that there's a peer-to-peer parallel economy.Totally. You're dead on. And this is a discussion about, and I do believe that Bitcoin is.is a monolith and difficult to managefor a reason, because it's not matureenough to allow
38:26the engagement on layer two'syet. Its valuewill come from staying tight and closedlike an umbrella, and only openingup when it expands and getsbroad enough so that it'struly decentralized.It's, like, Satoshi was wrong
38:42if you take him at his wordwith the first 50 coinmine in 09.It's not a peer-to-peer. It will be,so it's time frame. So I agree with you. All the history of the past 17 years,nope, not peer to peer. It is a money game, money grab, it's fouling up. It's set. It's all those things.It's ugly, but below it, Bitcoin is growing and maybe there's some other tech that lays on it.So I think that's a discussion it's not often had. People are purists and say it is, it's not peer to peer yet.
39:20Dave, I know you got thoughts, but Gary, go ahead.Yeah, Gary, go ahead. Yeah, Gary, jump in.Yeah, I mean, I just, I appreciate anybody that has commentary on those particular topics.Otherwise, I'll just listen in. It's kind of the same story.You know, you can participate in cryptocurrency and call it a different ticker than a stockor than a gold miner or gold in your vault.But at the end of the day, you know, fiat is what's pushing the price and fiat can be produced for free by governments.I mean, look, there are two.
39:50points here and you have to detangle them. One is 100% I'm in agreement with. Look, as long as we have a printing press and the entire Western world has a printing press, there is a need for a financial instrument that is an opt-out. You know, some people argue it's gold, but gold doesn't really work in the digital age without having to trust that, you know, that there's no fraud in the vaults that you're, there's so many different reasons why gold is not particularly appropriate, where Bitcoin is a significant advancement.And so from a Fiat, you know, protection against Fiat point of view, that's the ultimate reason to buy Bitcoin.As far as the peer-to-peer part of Bitcoin, I look at it differently.Frankly, you know, whether we love them or hate them, but Justin Bonds will tell you that the math says that if everyone try to use Bitcoin on their own transferring on the Bitcoin network, there's just no, it just the math doesn't work.It's just, it's too slow.It can't handle that.But for settlement finality, for being able to hold your assets in a portable,way to be able to move someplace in a place where people can't take it from you, it is
40:55unparalleled. And I think that most people don't care about that. Most people care more aboutopting out of Fiat. And so what you're going to see and what is necessary, if you told me fiveyears ago that Bitcoin was going to go to a million, you know, when it was trading, you know, below$10,000, you know, six years ago, whatever it was. I would say that along the way, it needs tobroaden to the point where everybody that matters has some Bitcoin, some way, somehow in thereas a denominator of their finances. And that means that all the long-term holders, the cypherpunks,basically need to go from being the overwhelming majority of Bitcoin holders to a new minorityof very rich Bitcoin holders. But it has to be a significant minority, which means you have to go
41:41through distribution, which means all the things that you're complaining about have to happen. And itliterally would have to because for it to be broadly accepted it has to be broadly part of thesystem and you know this is something that sailor has said many times he he tends to try to softpedal it because he doesn't want to lose his cred within the bitcoin community yet those cracks areshowing but the truth is that it needs to be integrated in the system because the system isn'tgoing anywhere uh and unless we go to a mad max scenario and if we do we probably don't haveelectricity in which case bitcoin's going to be cooked anyway so you need to to to to look atat it in terms of its evolution. That's my view. And I think that what we've seen this year in
42:222025 has been incredibly healthy for the long term and really painful for a lot of peoplewho are looking at Bitcoin as a momentum trading vehicle in the short term. And sadly, it's a hugepart of our audience. The Mad Max, the Mad Max is like my favorite analogy. When Bologiwas saying, you know, Bitcoin goes to a million in the next 90 days, I was like, that's notthe world that I want to live in. If that happens, something is blown up so massively. II think the sailor conversation is actually worth having because I think his evolution is proud.He leads, right?And he was a very hardcore Bitcoin maximalist, obviously from the very beginning.
43:00I would say he still is.But to your point, he's kind of, let's say there's a divide in the Bitcoin community about him right now.A lot of that because of tapping the ATM, you know, below the dab that he had discussed before,which is not something, you know, that is expected or accepted on Wall Street.But if you talk to him, you know, there was a time where he said,Ethereum will never get an ETF, right?He literally said that.Do you remember when the Bitcoin spot ETFs were approved?
43:31He was like, it's a security, it'll never get approved.Well, he's one of those rare intelligent people who has strong opinions loosely heldand when confronted with new compelling evidence changes his two.Right.And so I obviously was with him last week in Vegas, and I made a joke to him about altcoins before we went on.And he said to me, Scott, I think if we sit down and have a conversation about all coins, you'll find that I've changed by tune and that my view is more constructive.And in the first answer that he gave in our talk, which is readily available at Money 2020, he talked about how big the crypto industry would become, not just Bitcoin, talked about the crypto industry.and he mentioned proof of stake and talked about the tokenization of all things.
44:18Those were not a part of his narrative in the past, but he now presented with new informationsays, if this industry is going to 10x, these are the things that's going to drive it,not just buying Bitcoin, right?So he's a leader, as I said, I have a feeling there will be a continued divide in the Bitcoinmaximalist community as there has been with core and knots and big blocks and small blocksand all things of the future, where some will follow that trajectory with himand others will remain sort of ardent Bitcoin-only period, regardless of what the evidenceshows.
44:53But I think he's realized that for him to continue to be successful, and I'm only speakingon what I heard, is that, you know, you have to acknowledge that this is a full industryand not just, and that Bitcoin is not a monolith, and that the products that people are goingto want, you know, we had a 30-minute conversation there.just about digital credit. He wasn't selling Bitcoin. He wasn't selling micro strategy stocks.He was selling 10% yield that adjusted for taxes, the 17% yield that people are going to wantinstead of getting 4% or 5% that's diminishing in a ZERP environment. That's coming. Right?So the narratives are changing across the board, even with the big names that you would not
45:35anticipate would be doing that. Okay, well, we got a few people up. Matt, go ahead.Yeah. I think the ways to frame it, and I've said this for a while, and I've learned this from somebody smarter, probably in one of your spaces, Scott. But when looking at crypto, look at it very similar when we look at metals. We have precious metals and we have industrial metals, and there's use cases for each one. And then we'll have precious crypto and institutional industrial crypto. So each one's going to serve a different use case. Look, copper has a use case, aluminum, steel, et cetera. So I think when you break it down in that way, it helps a little bit, at least it does for me.So you're saying that aluminum is a shit coin.Got it.Exactly.That's exactly the takeaway.Love that.Yeah.
46:16And poor Alcoa is always the first up for earnings, letting people know how shitty it is every year, every quarter.What Sailor is doing, Scott, like you said, on credit, it was.He just explores wherever the opportunity is going.I think he's saying yes and, you know, and as you said, there's an either-or mentality in crypto and Bitcoin for sure.What he's, and being a tradfied guy, what he's doing in credit with the preferreds is mind-blowing and is, you appreciate it, and a lot of people here do, he's building out a credit market and pricing credit from equity to senior secured, and he's basically daring people not to buy a 10% untaxable preferred that has tens of buildings.billions of dollars of support below it. It's wild. Yeah, like you said in the conversation,his worst product is 5x over collateralized and the best product in the rest of the market is3x over collateralized. You have to, an RIA has to have an answer. Because if their clients find
47:27out that there's 10%, I mean, you have a million bucks, you'll get a hundred grand in your pocket.Without taxes. A hundred grand goes to you. Jesus. It's amazing. So I agree. He is, he is.really advancing that blurred, not so blurred line now between, you know, the hash wall betweenBitcoin and then the reality of income that's needed to support people. He's doing a good jobof it. Gary.Yeah, I want to go on what Matt just said also about metals. So like, you know, what I was sayingearlier about fiat being able to participate effectively for free and fiat produced by Fedaround the world for free. It's the same thing that happened.
48:09really with Roosevelt and buying up the gold that was available and then repricing it afterbasically was in the coffers or in the vaults of Fort Knox and during World War II and allthese other things. So it's not like metals are basically the same same situation. Stocks are thesame situation. What I love about cryptocurrency in general is that it is borderless. It does havea low transfer cost. It does have a relatively low security cost as long as you know what you're doingand don't lose it, you know, to your keys and fishing attacks and so forth. But, you know, I thinkthat there's a lot of utility in crypto, specifically in Bitcoin or rap Bitcoin or othernetworks that basically move these things around. And I did want to get maybe some feedback
48:46from Dave, since he does make a lot of these kind of comments that I think are very valid.He said something earlier about collateralization. I think major banks accepting Bitcoin ascollateral, very similar to Basel 3, considering gold as the ultimate layer of settlement foranything and then leveraging on top of that because it really does come down to belief whetherthere's tribal belief whether it's public market you know I think that wall street is smarter than meyou know whatever you want to call it banks are smarter than me because obviously they have thebiggest buildings in every big city that I ever see you know you can call it an insurance policy ifit says hey it's got fdIC insurance well that's still belief in a policy being paid or value being
49:30returned to a loser and as a user I do like that there are you know again a lot of people don'tlike central exchanges, but central exchanges, when they do display that they have more TVL, especiallyin cores, whatever you want to call the cores of crypto, than the user base has in TVL on theirnetwork. I think that that's really the evolution that's going to happen. I don't really believe,even though everyone's known that Dexas have been around for many, many, many years, the participantsthat move the market, just like Comex or just like any other major exchange, is centralized. It'snot decentralized. So, yeah, just commentary about like collateralization or use of Bitcoin incollateral form as, you know, kind of being reinforced by the Tomlies and the sailors and the,
50:16you know, finks of the world. I think that's really the direction we go over the next five years.Dave, I think I was addressed to you. Yeah, I'm just thinking there's, there's so much to unpackthere. I mean, first, you talked about, well, look, the collateral point that I'm making is veryspecific. It's technical. It's essentially creating more access to demand for Bitcoin. That's what Iwas really talking about. But you brought up a whole other can of worms. I mean, the entire notionof deposit insurance, for example, is based upon the notion of fractional reserve banking, whichin, you know, before the internet existed, was 100% necessary. Because if you were a business anywherelocally, the only people you had to talk to, we are local banks. That's it. Because there was no such
51:03thing as geographic reach. So, you know, you need to be able to get a loan and had the localbanks manufacture the ability to borrow or to be able to lend. Well, they took depositsand they said, well, no one's going to come and ask for their deposits back. So basicallyevery loan that they did was backed by, at best, 10%, and probably closer to 5% on the dollarof deposits. So, of course, in the 30s, in the Great Depression, what happened was there wereruns on banks because, after all, if more than 5 or 10% of people want to get their money outbecause they're afraid, then the whole thing goes, boom. So what did we do? The United Statescreated this massive regulatory apparatus to surveil the risks of banks, which of course
51:46has been captured by, you know, it's regulatory captured by the banks themselves who writethe regulations, and they created the FDIC deposit insurance. Well, now we have a new worldthat is emerging. And it's not, this is not Bitcoin related. This is Stablecoin related.of Carl over here, he'd be smiling, where we now realize that today banks, some banks stilldo lend locally, but banks were the largest holders of U.S. Treasuries.Well, if you start scratching your head and you say, well, why the hell are banks holdingtreasury securities and buying mortgage-backed securities and doing all this other crapwith their deposits? Why are they doing that?
52:25It's not the reason that we have it.And the answer is because they can make money at it and the other parts are hard.But with stable coins, all of a sudden, you have the ability to cut out the middleman.And so instead of putting banks and bank deposits, then levering it up, you can go to a fee-for-service model.And that's going to change things because then the regulation is much, much less necessary.The need for deposit insurance effectively goes away, and you have a totally different world.That's where we're headed.It's going to take a long time to get there because the banks, as you say, have all the big buildings in all the country and all the cities for a reason.
53:01Banks used to be a really small part of the S&P of the economy.They're now a very large part of the economy because we've had decades of easy money and decades of what I would call financialization.So that's what's getting unwound here.And so with Bitcoin as a backdrop, Bitcoin becoming collateral is really just an aspect of how the financial system can utilize this.And as these entities are going to need to figure out ways to make money, when they can know.longer get free deposits. I mean, the best estimates are somewhere around 30 billion a year,Gary, 30 billion. That's kind of the number of the implicit subsidy given to the banksby all the regulations where they can pay out 0.5% or less for deposits and then go and buy
53:50treasuries or whatever to create yield. And so, which of course is levered. So it's a prettybig number that they get and that's why they can afford all those buildings. So I don'tknow if that answers your thought, but I think that you're on the right track. I just thinkthere's a lot of changes here, and it's not all Bitcoin-related.Thanks, Dan. I think we covered it, man.Yep, and meanwhile, we're testing the moving, we're getting closer to your test of your 50 MAagain. Again, I guess we will. As is tradition. I will tell you this, my prediction,and this isn't terribly surprising, after two full days of markets going lower.
54:31this time of year, you're going to see ETF outflows today, and that's what you're seeing.So we saw EATF outflows yesterday, Bitcoin and EF, but 70 million of inflows to Salana, interestingly,just because it's the new kid in town, but interesting that we did see outflows on both Bitcoin and Eif.Well, look, markets are markets.I mean, there are people, you might remember Jim Bianco saying that he thought that the ETS would cause,would accelerate crashes because on days like today, people would sell, and days like today people will sell.I mean, at some point, you need a capitulation sell-off.And, you know, the magnitude of that, I don't know, but it'll be more in terms of flows
55:06than you'll see it necessarily in terms of price.But all sorts of things can happen.But we'll see what happens over the next day.I can just tell you that I am buying every price here and down with all the dry powder that I have.Lower would be better because, obviously, I have a long-term view.But operations starting to buy has kicked in pretty hard for me.Well, I think you, I, my suspicion is that it will, when you look back on it, you will think that your operation is a smart operation, but we'll see.And my other prediction is that in like three or four days, somebody will clip me saying that and tell me how stupid I am because price is like $2,000 lower or something.
55:44And I'm telling you, I'm buying it for a decade from now.That's a fact, because people will clip it.And if the price is 110 or 115, they're going to say you're stupid for waiting.to buy and you waste all your drug out or you're going to buy in higher and if the price is in80 they're going to say look you started buying too soon you're an idiot so either way they'regoing to call you an idiot so look forward to that yeah i always look forward to being called an idiotall right everybody thank you so much for joining another crypto town hall uh always greatthis was a uniquely uh good good conversation in my opinion i love uh everybody on the panel
56:21here today really great uh crew um so look forward to chatting with all you guysguys again in the very near future i think we've uh really uh cultivated a great mind trust hereuh on this show and really differentiated from you know the uh degeneracy of the rest of the marketwhich i think is very valuable and uh and you know i continue to come here and ask you guysquestions and listen to sort of formulate my own opinion so so thank you for that and of courseespecially you dave it's great to chat every single day and get youropinions. It helps my market view a lot with your depth of knowledge. So that's all we got for youguys today. Thank you so much. And we will see you all tomorrow later.
57:26Thank you.
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