The Wolf Of All Streets - Massive ETH ETF Outflow Hits! Crypto Weakness Spreads | CryptoTownHall

Episode Date: August 19, 2025

Good morning, everyone. Welcome to Crypto Town Hall, 1015 every day, even when there's in the very little happening in the market. You know, here we are. And we're pretty much exactly where we were yesterday at this time when we basically talked about the fact that it's summer and there's not much happening. But the only thing that seems to be going on is more and More people getting hysterical on crypto Twitter about digital asset treasury companies, more talk about MSCR and others as Ponzi schemes despite, you know, fair clarity, you know, a little bit of a freak out because sailor is selling equity in order to tread water while the market isn't moving, et cetera, et cetera, et cetera.

At the same time, Ethereum, you know, had some of the faithful shaken by ETF outflows. And it's lagging a bit here. You know, curious what other people think about. But, you know, my personal thought is that Ethereum had a massive short squeeze rally and it needed to digest. And we're in that digestion phase. And we'll see what happens after that. So, you know, take that for what it's worth. I'm much less of an Ethereum bull than several other people here on stage.

I question its fundamental value. You know, should it be a multi-trillion dollar asset that will, we'll, we'll, find out. But effectively, that's what its price effectively signals that the faithful believe. And we'll see. But, you know, it wasn't as bad as it was a few months ago when it was trading at $1,400. And it isn't as bullish as it is when Tom Lee basically beats the drum and says it's better than Bitcoin. At least that's my personal view. I'm curious others think. I mean, Henrik, you're making, or Hanuk, excuse me, you're reacting. I mean, what of your thoughts?

I think it's, I'll be nice. I think it's a little too early to say that Ethereum is better than Bitcoin when Bitcoin consumes and represents the majority of the entire industry. But God bless everyone monetizing on that opportunity. I have nothing but love for everyone trying to legitimately build in this space and those who are financially benefiting off of statements like that. Yeah, am I bullish on ether? It's an institutional great asset now.

Yeah, of course. But, like, I'm not going to go out and say that it's going to flip Bitcoin any time. So I think it's a, I don't go, man. I just feel like statements like that. You just lose more than you gain. You know what it is? To be fair, didn't he say it's the next Bitcoin? He didn't say it's better.

Right. Oh, I mean, I'm sorry. I missed up. No, no, no. You didn't know. That's kind of what we said. I'm just saying, I think his original, and this was kind of what sparked the entire Ethereum rally was what he went on TV and said, you know, Ethereum's the next Bitcoin.

I think he was speaking of it more as a trade than, you know, like, fundamentally saying it was the same asset, but still, yeah, quite a bold statement. Yeah, and I mean, I think he was talking about it from a potential point of view and in the ETF and whatnot. But that's what Tom Lee said. But Joe Lubin, of course, comes out and says, well, Ethereum is better money than Bitcoin and repeating the tired, you know, arguments about staking and environmental fud and blah, blah, blah. And it's like... Neat it. Ultrasound money. That's the stupidest narrative. It's the... I actually like Eath, but I think that that's maximum...

that's massively minimizing for, like, Bitcoin and for the asset, and you can, you know, and I believe they're completely separate assets and effectively a separate asset class. Exactly. When you talk about ether or any other crypto, quote-unquote, currency as money, you just lose the plot. Yeah, I mean, my view, Scott, is simple is that when you hear those statements, it just pisses people off and it demeans the narrative. There is a narrative for ether. That's not it. and it's annoying to hear it because when you hear it, all you do is you get ridiculous tribalism,

stupidity and lots of things going back and forth, which confuses the hell out of anybody listening. And it's fundamentally a lack of understanding of the economic principles that underlie Bitcoin and that underlie Ethereum. Bitcoin has a fixed supply. Ethereum, even if Ethereum were to have a quote-unquote fixed supply, which obviously it doesn't. Ethereum is an asset class which can be duplicated, and Bitcoin is an asset class which cannot be duplicated. So you can have clones of Ethereum. You have Solana, you have Sui, you have other blockchings which can fulfill the same

fundamental role. Bitcoin is unique. Bitcoin is money. Bitcoin is the unit of account. Because it has such a massive network, it can never be replicated. So, you know, you can fork Bitcoin, and it's never going to gain traction. There is a unique asset class, which is Bitcoin, and then there are all the other asset classes.

And anybody who's saying Ethereum can flip Bitcoin, Ethereum could be the next, you know, the next Bitcoin is a fundamental misunderstanding of how economics work, really. Ethereum can have competition, and Bitcoin cannot have competition. And Ethereum and Bitcoin are not in the same space. doing the same thing. So it's, you know, if you're looking in the short term, of course, Ethereum can always go up faster than Bitcoin in the short run. But in the long run, Ethereum is going to drop to the fundamental economics of how much revenue does it make. Bitcoin will never drop to a fundamental economic level of how much does it make because

it's money. It's unit of account. Well, people who listen to me regularly know that I agree with pretty much all of what you just said. It's just, it's a question of the way it gets characterized. And, you know, when the one thing that is true, the one, it's not a competition, but the one thing that is absolutely ties Bitcoin and Ethereum and other assets together is the way people trade them. So yes, they're on the blockchain, but that's not what I mean. I mean that momentum trading strategies dominate. And so when momentum stalls, you get interesting behaviors and emotional overreactions and people doing kind of dumb things. But that's true across, you could say the same thing about a lot of tech stocks and a lot of

things in NASDAQ. We've seen probably more, quote, irrational exuberance, unquote, on IPOs of crypto companies that are equities than we have in, you know, crypto, large cap coins over the summer, right? So it's not a, this is not a crypto thing. Anyway, Mark, I'm sure you have opinions there. And then Amateo and then Mr. To Will. Hey, Dave. Yeah, thanks. Yeah, Brian, just talking about the, you know, Bitcoin unit of account and each station and digital asset. Absolutely, that's where it is, has been, and that's a long-term view. And Dave, you're talking about August, you know, there's news and it's kind of quiet and we're a funny little spot. So people are just bringing up, you know, old, old narratives about or trying to find problems with things

that have run like Bitcoin Treasury companies. So I just want to talk about sort of the street level, something that we had the short coverings in July, you know, that the meme stocks and all that, that was the driver. And when you said Ethereum's the same asset as it was when it's 1400, it is. And Apple's the same stock when it was down. 20% on the year. Apple's leading all of the Mag 7 now up 12%, still down 7. The next one's Tesla up 7. It's still down 18 in the year. I think August has been just like a portfolio recycling across traditional and digital, and we're waiting for what normal comes out. Kind of along the lines, but Scott, you've been saying about FTT still has a wonderful $300 million of market cap.

even though it's really not worth anything, taking that sort of terminal value that's never able to be squeezed out of a dead cat, August has been a rotation, people looking for the next persistent theme, and that's what I've seen. Sort of like there's a lot of noise. Point is turbulence and noise.

That's all table I'll talk about. Whoops, I'll tell you. Hey, Dave. Hey, Scott. Hey, Mark. Yeah, I think the thing that stands out to me the most in this is that, like, these are old and tired narratives for Ethereum. We've been hearing this for like five, seven plus years.

It's actually what got me into crypto. My first, my first purchase was Eiff. And that was because I bought into this. And it was because I didn't know any better. And so kind of what this shows me is that there's obviously some clear new buyers in the market, and there's institutional buyers who likely don't know any better and are able to be gullible to these wash-up narratives that have been circulating for so long and kind of pile in on them. It's that and or retail being stupid enough to go along with

the trend. I think anyone who thinks Ethereum is going to surpass Bitcoin is just not thinking straight. But I think many of us have had our moments where we had, so you're saying there's a chance. And I think that it's a clear signal that there was new entries into this market looking at this and looking at the people who were shilling this washed up narrative and willing to go along with it. I think it's pretty fascinating to see, actually. Yeah, I think that's probably fair. Speaking of one of those people shilling the narrative on Ethereum for the longest time before there was Tom Lee, there was Mr. 12. So, David, what do you

thinking this morning? Look, I'm not a maxi of any kind. I think it's way too early, but to say, I'll take the other side of the argument, to say that, you know, oil

couldn't flip gold was an idiotic statement, right? Because oil clearly has flipped gold. And so, until you figure out, I mean, not to say that Bitcoin is gold and not to say that ETH is perfectly oil or electricity or any other source of power for that matter. But to make that narrow statement this early in this game, I think that that's a fool's move. And I'm not saying that you'll be

proven wrong. I'm just saying you don't have enough data to make that statement at this point. And so we'll have to wait and see there's a two, they're two very different commodities. They will be used for different things over time, potentially, very different things. And so only time will tell. We are in super duper early innings. And I know you get tired of the narratives. But, you know, sometimes in investing universe, you got to just hang in there for a while. The world doesn't move as quickly as you'd like for the story to develop.

up a lot of things need to go ahead and change in order for the narrative to develop. Yeah, I think you're speaking. There's a lot of wisdom in what you just said, but there's one thing I want to be clear because we don't disagree on a lot. My statement isn't about value. My statement is about the type of asset. Bitcoin's terminal state, if it's successful, is as the barometer for all assets. You know, it may not be successful. It could easily stop at being where gold is, which is representing 15% of assets and being kind of a barometer for money, but stopping short of being the measuring stick for all assets. And Ethereum's ultimate state is being the backbone for an entire new financial system, which, and I say

financial system, understanding that financial system is still needs to be value, you know, how art and music and other things transact so it's not just you know wall street per se but you know that that's its terminal place now i i value those differently admittedly but no it's not a definitive thing because neither one is even close to its potential right and i think is your point i mean the the question i have for you dave is what is the barrier to entry to a competitor for ethereum i mean there's The barrier for entry to Bitcoin at this point, I think, is infinite. There's the network, the hash rate is just too potent for a competitor ever to arise. I think, Brian, I think the bottom line is it's all about network effects, right?

Yeah, exactly. Bitcoin is not, I think that Bitcoin has gotten to where you would say, to where you were saying. but the price of Bitcoin is one-tenth of what it would be if, in fact, the world believe you to be correct. So the world does not believe you and I are correct yet, which I think is a fundamental mispricing that creates a generational opportunity for people. That is true. But you have to acknowledge the fact that it is not priced at that same asset, even to put

it in stark terms, compared to the previous all-time high in the 2021 time period, the hash rate of the Bitcoin network is seven times stronger than that. And the price is barely, you know, basically not quite double where it was, meaning that we have nowhere close to the level of euphoria or optimism before all the various things happened that we know unfolded between 2021 and 2022. I would counter that argument by saying there is a point where a hash rate becomes insurmountable anyway and incremental increases in the hash rate are essentially irrelevant. I mean, you know, whether the hash rate goes up 100 times from here or not, Bitcoin is already unstoppable as far as that asset class was.

Your mouth, the gods here, my friend, that's all I can say. But Ethereum, I mean, anybody can create a blockchain, and everybody that I know is creating a blockchain, right? And these blockchains have, you know, arguably superior capabilities for defy and all of that than Ethereum. So Ethereum runs the perpetual risk of competition. This is where I see fundamentally, Ethereum is a short-term play. It's a mid-term play. Long-term, it will be out-competed.

It certainly will have to compete in the market in a way that Bitcoin doesn't. Well, but keep in mind that Ethereum, that's why I often compare Ethereum to tech investing. When in tech-investing network effects matter too. Does Apple have the best technology? Great question. probably not does it have enormous network effects in its compute system sure it absolutely does both in you know in music in phones and lots of things they do i mean you know pretty much i don't know a human being who you know reviews the tech of telephones and says the iphone's the superior

instrument that's why i want to buy an iphone people do it because it's easy and because there's an ecosystem and there's a network effect right the same is the same and that's why it's a multi-trillion asset. Ethereum, that is the Tom Lee point. The institutions are going to trust it first. And it really is that. Now, I am not a big Ethereum bull. I've said that. Why don't we let others who are talk about it that way? But that is the other side of that argument, right? Right, right. I'm not saying that Ethereum is worthless. I'm just saying it's going to compete in the market with other, you know, you have Apple, you have Google, you have, you know, with Android, you have other, you know, Huawei.

So, but ultimately you have, I hate to use this analogy, but you have gold, which could be a fundamental money, but really there hasn't been a global fundamental money until Bitcoin. So when Bitcoin achieves, I guess that's all I'm trying to ultimately accomplish with this line of reasoning is that Bitcoin is a separate asset class from all of these other blockchains, which are going to be competing with each other, like Apple, Google, you know, meta, whatnot. They're going to have to compete in the market in a way that Bitcoin ultimately dominates.

Carlo, how are you this morning? Good morning, Dave. Good morning, Scott. I'm doing well. Morning. I know it's a slow market day, but I wanted to pivot if I could to something really interesting that happened. Is it Wyoming stable coins or something else? It's both Wyoming Stable Coins, which is huge, that we have the first state chartered approval for a stable coin that's going to be Genius Act compliant. I was hoping Texas was going to run this to the finish line first, but Wyoming has been leading on this for a long time, so it's no surprise. And second, in a brilliant strategic move, Paolo at Tether has brought on Bo Hines as a strategic advisor, which I think positions Tether now to make a very strong. case for entry into the United States stable coin market under the Genius Act. Cannot downplay the significance of that move.

Well played, Paolo. Yeah, and it had already gotten Lutnik on his side, by the way. So this playbook was already being written before when Tether obviously got in bed with Gantir Fitzgerald, ahead of Lutnik becoming Commerce Secretary. So this is just adding another notch on that. Very clear that Tether's going to make a significant push into the United States. Yeah. in a compliant manner.

Yeah, and it just further solidifies my thesis that I think stable coins are going to be the mega play of this cycle. The fact that we now have a state that has chartered their stable coin, which they can use in so many different ways, including state funding and payment rails, just reinforces that this is the future of fiat, and I'm really excited to see where this is going to go. I'm going to tell you had your hand up, I think. I was going to chime in on the traction discussion, so I'll let someone else chime in on what Carlo brought up, because it is topical and interesting. Mark?

Yeah, just on the stable coins, as far as utility, I mean, I think it was too well talking about Ethereum and the utility and how it's oil and all that. stable coins have such a powerful use case and incentive structure for so many players, you know, the banking system that's dying for innovation and margin expansion and share, the federal government, that we almost forget how powerful that is because it's going to take a while. It's going to take, you know, you got to get the uniform commercial code, something I keep bringing up. all 50 states have to align on custody rules. And, you know, it's just going to, it will take a while, but God, there really is nothing that I've seen besides Bitcoin that has such a powerful alignment of interests. And so that's what I think I agree about stablecoins. I don't know what

Mark, I have to 100% agree with you on that. When I first saw the Genius Act and I first fully understood what's going to happen here, I had the same epiphany. I just felt that this was an absolute game changer. And this is something, this is an innovation level that we haven't really seen since the introduction of blockchain technology, because now we're putting Fiat on blockchain in a fully regulated manner. And I just think I have to agree with you, the possibilities are endless. But that, by the way, gives us two fundamentally opposed killer apps for blockchain, which is ironic because Bitcoin is the antithesis of Fiat and the other killer use besides Bitcoin is digitized fiat, which is obviously going to increase the usage speed and proliferation

of the very thing that Bitcoin was created as a hedge against. Okay, wait, whoa. Okay, let me take the other side of that one. Both of them involve the fact that there's this technology called blockchain that allows the world, to use a quote Mark Yusko, the technology of truth versus the technology of trust, which effectively boils down to being able to efficiently transact or transfer value without having to use an intermediary. One of these technologies is limited supply, massive network to be the denominator of value, but isn't necessarily going to be used, in fact, probably will never be used despite, you know, I don't want to say never,

but certainly not going to be in any short term going to replace the native currencies around the world. In fact, the reason Tether is so big is because so many people use it as an on-ramp to Bitcoin and the rest of crypto. But Bitcoin has that value use case as a denominator. Stable coins, on the other hand, are the ultimate expression of being able to transfer value within a currency incredibly fast, incredibly cheaply, because we have this world that is an analog world that is ridiculously slow. So Fiat versus Bitcoin is undeniably a thing. And there's no question that you're right about that. But arguably, you know, stable coins provide the ability

for Fiat to at least be digital. It doesn't change the fact that the government's printing enormous amounts of money, that we have a $37 trillion deficit on the dollar, that Japan has 200 plus percent of debt to GDP, you know, et cetera, and that lots of countries around the world and the entire Fiat system since 71 are pushing harder and harder in terms of monetary debasement to keep their economies afloat. None of that changes, but stablecoins allow at least a velocity of money and an unlock in the banking system. And so it's a bit of difference. So I just, I don't like the oppositional things. So many bit of coiners say, talk shit about. about, you know, the use of stable coins in crypto, and I think that's wrong.

And so many people in crypto, you know, look at it and say, well, Bitcoin is anachronistic and slow, and therefore it can't actually do what it's supposed to do. And I think that's wrong. And I just want to clarify that. Sorry for the rant. Bang on the money. I mean, the argument of, you know, short term versus long term, which is usually where conflicts arise, right?

In the short term, you have digitization of real world assets. And what a perfect asset to digitize. is fiat currency. I mean, that's obviously the first mover to be digitized as a real world asset. Whether fiat currency lasts 100 years or not because of Bitcoin, you know, certainly for the next 5, 10, 15 years,

countries are going to have fiat currency and so as a digitization of real world assets, it's perfect and it makes perfect sense. And my God, you know, what a victory it will be when Visa MasterCard and the banks all ultimately go the way of, you know, the record stores and bookstores. What a victory for humanity.

Well, I don't know. I used to like, you know, going to a bookstore and sitting there. Never mind. Carlo. Yeah, I have to agree with you, Dave, because I think there is a symbiotic relationship between fully regulated stablecoins and Bitcoin. First off, bitcoins are very loath to ever spend their Bitcoin. And I think that is so entrenched.

the mindset of Bitcoiners that where I think the symbiotic relationship will be is that Bitcoiners will leverage their Bitcoin, get credit on their Bitcoin, and then convert that the stable coins, and use that as their payment rail for living their life. I just don't see a scenario anytime soon where anyone's going to be comfortable actually spending their Bitcoin, because it is, again, I liken it to, and I know a lot of people take issue with this, prime Manhattan real estate. why would you liquidate it when you could leverage it? Didn't someone just sell $9 billion of their Bitcoin?

Yeah, look, there's going to be outliers. No question about that. People will spend. I mean, when you get to a certain level and you can borrow, I mean, you know, people are borrowing and they're spending, right? Like a lot of the people that I know that have been in the space since, you know, 2013, 2015, they're hitting levels now that they never... I mean, it's so far beyond what we all thought and how quickly it came, that they are, you know, there are private pools that you can sell your Bitcoin in.

And, you know, it's not, you know, whether people are borrowing and whether or not wherever they live, they've decided to move after all these years and whatever the tax implications are. Like selling, selling is happening. Obviously, they're still wanting to hold as much as humanly possible. But, I mean, if they're selling 20, 30 percent of their stack, it. it's you know people it people want to live they want to be in homes they want to experience these things and a lot of the people that i know started in their 20s or early 30s they're now in their 40s they now have families and they're like maybe i do want that house in hawaii it's so it is happening joe it's there's two points here point number one is everyone who talks about bitcoin being an

inelast inelastic to price you know commodity are just morons right it is it's is completely elastic to price from the perspective of the holders who own it. And that's exactly what you're seeing. So, you know, look, I have a lot of knowledge about the way the 80,000 Bitcoin was sold with minimal impact and why and how and all of that. And we'll be talking about that soon enough. But the reality is that that was a classic example. Inheritors found themselves with $80,000 worth of Bitcoin and would prefer to have,

you know 10 trillion dollars right you know not 10 trillion dollars 10 billion dollars 10 trillion dollars i would definitely sell for 10 trillion yeah i would too uh i keep doing that billion trillion thing it's kind of crazy that just gives an idea of the law of large numbers that's the debasement that's the debasement of fiat is we start talking about trillions you do you do have some information on that you know et cetera but no all kidding aside i mean yeah there's there's clearly everybody has their price at which more will come on the market. That is true from holders. But that doesn't change the fact that the same people who are selling, the ones who are cognizant of it or bought it in the first place,

think it's undervalued. And therefore, they do what they do from a life perspective. That makes sense, right? You know, what's the marginal value of being worth, I don't know, I mean, you pick numbers. And at a certain point, the marginal value is what's more important to me, being able to have a house that my family can live in, being, you know, having, you know, changing my lifestyle completely or not. And people will make those decisions. That's not the argument. The argument is for it to be a free-flowing currency, for people to be willing to spend it for their coffee, their book, their car payment. At that point, you need to think that it's less valuable or the same as the fiat that you could spend instead. And the answer to that is, well, there are a lot

of people who are saving in Bitcoin because they think it's undervalued. Those savers are not going to spend it because the tax implications of doing so were just silly. That's the point. I don't want to get into the argument, but it's like everything else, it's always a question of degree, right? Mark, I'm sure you agree with that. Yeah. And I love how you went billion trillion and someone brought up, you know, the Austin Powers moment there, 10, you know, $1 million. And I want to talk about something that happened in 08, two instances. 2008 that I think are relevant about when shifts in orders of magnitude happen and we're playing catch up right when people were on the steps of the Treasury or the White House right before

the bailout, our team, I was at a hedge fund and our team did some work and we said we think it might be a trillion dollar workout. It's the first time I think I said that word in public, definitely in finance. And I was with a room of pretty senior managers. in the business for a while and they all shook their heads. What do you mean? They said the last bailout was 110 billion or something like that that happened. So it wasn't in our consciousness and it wasn't a trillion. It was 700 odd billion, but it was pretty close. And then the next instance about when things happened fast and we're playing catch up is in October, someone said, remember when Bear Stearns went out of business last year? And we said, no, that was this year. Things were happening so

we couldn't catch up. And again, these are people in the industry for years. And I think we're in that moment now where things are happening. And one thing to bring it back to what we were talking about with spending or saving, money used to be one thing. You know, it was both something that was a medium of exchange and a store of value. And now I'm going to pull from sale or not use go like you did, Dave, and say, you know, money is now two things. There's it's to be spent and it's capital. And Bitcoin is capital.

It's not a, it is not a mean of exchange yet. And it may grow into that or have a layer on top of it. But I think because of the level of debt, it's forced this, you know, currency is no longer those three things. It isn't. It's been, it is not a store of value, the dollar now. So that's my five cents. Is it the analog to 08 is that the 37 trillion in debt has. force the divergence of something that was integral

and the dollar's not integral anymore. It is one thing, not three things. Fair point. Just to hop on some market talk real quick. Yep. You know, it's like you said, it's August, it's quiet, and I think we're just hitting an early sell-off. You know, Jackson Hole, Paula's supposed to speak on Friday.

And I think people are selling into that. You know, it's slated to speak. You know, it's their annual gathering of the central bankers that we all love. And, you know, I think, I really think that he's trying to, you know, hold rates. Like, he's going to signal like a 25 BP cut or no cut. And the market's just reacting, right? It's just a slow little bleed here, middle of the month. You know, all of Europe is on vacation.

And, you know, we're here talking to. about what's happening with Bitcoin. But I think that's it. And he's just, he's being a stickler on it. And I think, you know, he thinks he has his place in history as the, you know, the person that when we look back in 80 years, you know, or our kids or whoever looks back in 80 years and they say, you know, we printed all this money. We printed, you know, triple the amount of money that was in circulation over the course

of one year because of this quote unquote pandemic that happened and this person saved money. I think he wants to be that person, but I just don't think it's going to, I don't think it's going to happen. And I think inflation is just going to keep going. Printing is just going to keep going. There's nothing that he can do to stop it. But I think that that's what's in its head. You know, just to dovetail on that and give sort of the 10,000 foot perspective from people who have been in, or a person at least who's been in from the very beginning, watching these digital assets and Bitcoin right from the genesis. for this to be a slow period and to see Bitcoin just basically, you know, I mean, if you

zoom out on the chart, just treading water compared to all previous cycles where we would probably be down 60% right now. This is phenomenal. The consolidation that's happening here where we're still in trend and, you know, with what? A couple of percent pullback from the all-time high. This is a remarkable cycle. I think we may really be looking at kind of the end of the Bitcoin and really, you know, crypto generally these huge, huge swings. I think we can attribute this to institutional and just general sense that Bitcoin is not going to zero. That's never happening.

The trend is always going to be up. And it's just a question of how rapidly we get to. true price discovery on Bitcoin. And what a different cycle when we're not dealing with days where it's off 20% and then, you know, 50% and just seeing this sea of red and, you know, what is, you know, what's really going to happen? Is this going to completely wash out? Is this going to go to nothing?

And so it's very, I'm, for one, very relieved to see this slow, August where we're not seeing that kind of that kind of price movement. Yeah, I mean, I hesitate to say volatility is gone because it isn't. As soon as I would actually say those words, it would immediately drop 30%, right? Yeah, no, no, I don't mean it that way. But I think that the way to phrase it, Brian, is much more as follows. Bitcoin could well drop 30 to 50%. At the same time, there is a global financial panic or route.

But absent that, the relative volatility of Bitcoin on the downside is definitely less than it used to be. And even its volatility on the upside is less than it used to be as the main flows into and out of Bitcoin are coming from places. that are that kind of have circuit breakers and more methodical things happening now of course things change right you know if there was a i don't want to talk about disaster scenarios that could cause a deployment i don't want to talk about you know the people front running just crazy news such as you know the u.s passes a a strategic reserve bill that forces it to buy and they haven't bought any i mean i don't think either of those scenarios are going to happen so there are things that could cause craziness. But the truth is that rallies that we might say are

face-melting rallies, you know, or people talking about Omega candles, feel unlikely. But that doesn't change the fact that you could have a three-month period that Bitcoin could triple, like Nvidia basically almost did in its most, in its largest period. So it really is a question of, will there be liquidation cascades? You know, will people play the games. It is important for everyone to understand that when Bitcoin as an asset had its price being led by derivatives, where derivatives were five X the volume of spot, the spot books are relatively thin, that you could put on trades that you would get long or short spot versus, you know, perpetuals, and then move the spot to make money in the perpetuals. If you try to do that

today, when the markets are open, you could literally get crushed. What used to be a routinely easy moneymaker, now, by the way, a lot of regulators would say what I just said is illegal, but it doesn't matter. In Bitcoin, no one's been prosecuted for it. But think about what that means. It means that the way it used to trade routinely is now very dangerous and nowhere near as profitable for the people who would try to make that happen. So that doesn't mean that there won't be a liquidation cascade. It just means it won't be, it's left likely to be intentional, which, of course, increases volatility, right? Brilliant. Really, really well summarized. You know, not derivative led. Of course, Bitcoin as an asset can be moved by markets as

other assets move. And, you know, you sell what you can, not what you want to necessarily in a collapse. As you say, there are upside risks that could lead to an omega candle But, yeah, my point well taken, I think, and well summarized that, you know, the volatility has been reduced under natural circumstances, which is a huge relief to me watching this market and saying, you know, I'll take a stable price, a slowly declining price when there's no news in the market and things are soft as opposed to a, well, there's no news in the market. So, you know, we're having a 20% down day. Yeah. Amateo, you've been patient. As always. Yeah. So we saw two kind of headlines in the last 24 hours. Not that significant, but like ARC21 sold 559 Bitcoin worth $64 million.

Black Rock took some profits on Eath for $82 million. And I think what this just shows is we've had this like period of just monumental. We've seen profit-taking, but like monumental inflows net positive from institutions. And naturally, we have to be able to, as a maturing market, digest net selling outflows. And I don't think that that has been fully reached in the market. I don't think the market's fully processed how to digest those things. And I think that we're sort of seeing it now. People don't know whether to panic or just realize that it's a part of doing business, which I think it much more deserves.

And I think what we're saying here is like things are just sort of leveling. And I do agree that the bigger the growth, the bigger the market grows, the less of all that we'll see as a result of it. Black swans will always migrate. They'll show up at some point. But I think that this is really healthy. I kind of go back to all the minor fund of Bitcoin's past five, seven years where people are just saying that Bitcoin will never be able to survive the sheer amount of minor selling and look where it's reached.

So I think all of these things are just growing pains and natural movements. And we're really seeing how this stuff can ingest the sheer volatility inwards and outwards. Yeah, I think that's right. Lissa, I just brought you up, but you had some background noise coming from. Hurry now and look at us at top grade code. Okay, muted that one because there's background noise coming in there. Yeah, I think that it's, look, there's different mechanics at play. And, you know, today is a soft day.

Bitcoin's under 114. ether's under 4200, you know, what does this mean? You know, yada, yada. You can read a lot of things into this. I'll continue to say that the 112 to 12-12-ish range for Bitcoin is intact. Ether is different. Ether had a huge run. And digestion, you know, I don't think technicians would be terribly worried about. I mean, it literally ran from, you know, 2,000 to, you know, 4,800, right? A 50% retracement of a run like that is completely normal, and a 30-some-odd-percent retracement is almost expected. And so people have to understand.

You have to put everything in context. None of that invalidates the narrative. And, you know, Hanak, you agree. I mean, I assume that's how you're looking at it. And so we look at these markets, and people are like, well, what's going to happen next? And the answer is it's going to be something that on Scott's show this morning, the guys from March Public. I don't know if it was Tillman or Andrew that said it, but made the point that, you know, a lot of people are on vacation.

And if you look at the volatility in the stock market, it's almost none. The bond market's like basically not moving. People are on the beach. And they're going to come back in September, you know, towards October and start really rejiggering their portfolios. And that's when we'll see where the trend will establish. Crypto does tend to march to its own drummer because there's so many, well, DGens in the market wanting to gamble. And so it will push and pull around. But the real trend, remember, this entire rally has been spot-led.

And that's true for both Bitcoin and Ethereum, right? So that's the thing to keep in mind. So when the spot buying is sort of like, okay, you don't have a lot of that, but you don't have a lot of selling either, then the derivative traders will do what they're going to do, which is whatever the direction is, play that direction until it proves them wrong, which is another way of saying momentum trade. And the momentum for the last few weeks, or last week or two, is lower until something changes.

Does anybody disagree with that take? It looks like everyone agrees. Nope, that's it. Everyone wants a little bit of a break. I remember a journalist, friend of mine, David, said that August events declined because all the lawyers go on vacation. And you need a lawyer to cause problems and file briefs and functions, which I thought was pretty funny. Yeah, you know, it's funny. I mean, you know, Carlos, you didn't leave yet. Now, you're still there. Yeah. You know, there are some lawyers who are trying to do the right thing, you know, like our friend Paul Atkins at the SEC is saying all the things that we want them to say. But I don't think a lot of people in the crypto world have the patience to actually work through the details that it will take to make them to actually change the markets. That's really the difference, right? You know, what do you think, Carlo? And I know you agree with that sentiment because you deal with it every day. Yeah, I do. I think we went through an incredibly volatile legal landscape in the last administration

that caused a lot of projects to frankly elect to avoid talking to lawyers because they just didn't want to hear the answers they were going to get, and lawyers that were incredibly gun-shy about doing anything because of how it might blow up in their face. So thanks to Paul and now a a desire to have a sandbox approach and roundtables. I'm hoping to make it to the Dallas SCC roundtable. I'm excited to see the possibility of actually being able to have an open door policy and build transparently in the sector. And while I'm kind of in full-on founder mode right now with my Stablecoin consulting venture, I'm still open to advising startups because I still think there's a lot of value that can be added. And I would say this in closing,

I think there's a lot of lawyers who parachute in and out of sectors when they see a lot of interest. And this is not a sector that you could do that. You either understand this stuff and you're either deep in this culture and embedded in how this tech works and the ethos of it. And then you can properly advise or you're not. You can't be a drive-by crypto lawyer. Drive-by-crypto lawyer. That's interesting. Mark. On the point about ball, I don't know if anyone else has taken a note of this. I think it's peculiar.

The move index, which I think is more dispositive in markets than the VIX. It's a strip of the implied vols of the curve or the futures of treasuries. It dipped below 80 for the first time since rates rose in 22. So I don't know if that's because everyone trusts that we're going lower in rates and that'll reduce risks for the Treasury. But if that spikes up again, I would I would say that's temporary. So that's one thing, Dave. I would, I don't know if you looked at it. You thought that might be a seasonal issue of the like what you're talking about with everything going to sleep here in August. But that's one thing that I'm keeping my eye on as far as will it pick up

again when the lawyers come back and everyone starts making, making problems in markets. Well, I mean, look, the Treasury markets are fascinating right now because there's this, it happened, there's a one-time thing when he cut 50 basis points, you know, before the election to try to help get, you know, the Democrats elected. And anyone who thinks disagrees with that statement, fine, make your point. But I think at this point, it's pretty damn clear. you know, what was going on, the long end went up. So it did the exact opposite of what they wanted to do. And there's all sorts of reasons, et cetera. So people have, the average economists think that if they

cut aggressively, you know, you hear certainly all the talking heads outside, you know, and almost all the networks and most of the, most of the financial publications think that the same thing will happen. It's not at all clear. At the same time, people are kind of like frozen. on the long end at the same where we kind of where we are right now and looking at it and so there's a lot of uncertainty in terms of what will happen. I think the one thing that people really believe, and I think I was saying it before, is that Powell's going to basically, or maybe it was you Mark, basically you kind of try to downplay anything violent and say firm hand on the tiller, I'm here and I'm not going anywhere. And we were worried about inflation, which,

by the way, the only worry about inflation is that there's not enough to inflate away the debt and they just don't want to have consumers bear the brunt of it because it makes them look foolish. You know, it's really, it's really funny, right, when you think about it. And there are so many counter narratives, but this one is one that I never hear, and it probably would take me too long to explain the amount of time left in the show, but I cutting rates in the United States on the short end is deflationary these days, we've flipped that script. When we saw that rates were at zero or, you know, effectively negative is when we saw

the lowest inflation. And that's because companies get funded with venture capital. The venture capital subsidizes the products. The products are sold below cost in order to gain market share. and this is where company stocks go up, even though the profit margins go way down. That's what happens these days when the Fed cuts, by keeping interest rates high, they're artificially actually increasing inflation. It's causing less investment in the market.

So companies have to be profitable as opposed to having, in order to get venture capital. And so they're pricing their products higher. It's ironic and essentially flips all. of the economic stuff that I learned when I was in college, but it is empirically true. The thing that I'm keeping my eye on, because the United States obviously is an important market, but if you look at what's happening in the Japanese bond market and the fight that Japan is having to keep their economy solvent, I think that's where we're going to see the most disruption here is when Japan loses control of either their currency or the bond market.

We've got money supply across the globe inflating because China's having a problem, and so, you know, Chinese money printing going off the hook. I think it's all ultimately very positive for crypto, but, you know, the difference between what happens in theory and what happens in practice is, in theory, they're both the same. In practice, who knows when a government loses control or when the bond markets go nuts. But obviously Powell is, you know, doing everything they can to keep interest rates high, which I think personally, what an awful decision for so many reasons, but certainly if inflation is his argument, then he's got it asked backwards.

Yeah, it's funny, Brian. I pointed out, I think, on this show and a couple of others that just a really simple analysis, one that is substantially more valid than looking at one rate cut and seeing what happened, is the fact that of the last 25 years, five years we've had on average real interest rates, positive. Real interest rates being positive, meaning interest rates higher than the stated CPI inflation. Just forget whether you agree with CPI or not. It doesn't matter. It's just five years as positive. The rest of the 25 years was negative. The five years that it was positive was the year preceding the internet bubble popping, the two years before the global financial

crisis and the last two years. Right. That's it. And which were the periods of the, and most of that was a very low inflation scenario, 20 years of negative real interest rates not mattering for consumer inflation. At the same time, by the way, asset inflation was runaway. We've had massive asset inflation. And so, you know, the question is, what do you want? And if what you want is consumer inflation suppressed and asset inflation to run, well, then you want low rates. and right it's really really straightforward and to be blunt that is what the policymakers want they may say other things but that's what they want right right i mean and and it's absolutely mind-boggling that uh that it's so generally accepted that it's the opposite i mean i i can't

wrap my head around it anymore but i guess that's the upside down backwards world we live in yeah we do live in bizarre world in a lot of places i mean the other piece is owner's equivalent in red, by the way, 40% of the CPI is directly correlated to mortgage rates. Absolutely, bonkers and completely a trailing indicator in a, I don't know, it's such a stupid component. Yeah, Mark. Yeah, Dave, you had to throw a line, a throwaway line there about inflation a couple minutes ago where you said, you know, they want the inflation that's low enough.

for the consumer, but high enough to inflate away the debt. That should be a compass for anyone listening to any policy because it's impossible. They're trying to do with tax-free tips. You know, it's about Main Street, not Wall Street, all laudable and, in my opinion, impossible. And that's why there's going to be failure. And they'll lean on exactly what you said, low rates, let the assets go higher. And, you know, credit card rates aren't going to to come lower. They'll go to 30 to 25% maybe. So that's that's why, you know, we're in Bitcoin and and that's why unfortunately the guys are going to fail because that is an, think of that. Think of that needle that they're trying to thread. And it's just tough stuff.

Well, you know, it's, you say that, but that's the needle that was threat. That literally was the dominant policy for 20 years is, is pushing. I mean, you know, when you talk to, to people, they say, well, why are house prices so high? Well, house prices are so high because houses are viewed as assets. And assets have been pumped. You know, the stock market is, you know, assets are pumped. I mean, you know, debt, you know, Mike McGlone always points out that market cap the GDP is well beyond the level it was at, at the top of the roaring 20s before the Great Depression. But that's true. But at the same time, what I point out to him is in the Great Depression, we were on a gold standard. And there was no effing way.

to just inflate the value of assets, you know, willy-nilly, which, of course, we've done by inflating the money supply and inflating what's going on. So comparing epochs is very difficult, but that actually is a needle that's been threat, right? I mean, I don't even call it a needle. I mean, they screwed up in the pandemic. At the time supply chains were, they basically crushed supply chains at the same time they handed money to people to buy shit. You know, what did you think was going to happen? And so that was just moronic. I said it at the time, so I don't feel this is a Monday morning quarterbacking here.

But, you know, other than that, that's what that, take that out, take the pandemic out of the last 25 years, find me a period of time when asset inflation wasn't negatively correlated with relative CPI. You can't. That's Brian's point. Yeah. Yep. Right, Brian? Agreed. Yeah, bang on the money.

I mean, and it's just shocking to me how the public and generally the economists that are the talking heads haven't been able to figure this out or look at the empirical data. I mean, you know, I tried to explain it very summarily, but it's really, you know, quite a, ultimately it's quite a simple principle. If money is cheap, investors will subsidize products to gain market share, and subsidizing products to gain market share means selling products below cost. And so consumers benefit. It brings down inflation and it increases asset prices because the assets become valued. Stocks, you know, companies become valued based on their market share. And eventually companies figure out how to monetize even in a low. low-cost money environment.

So we did see companies becoming profitable with low interest rates and products that we're selling below market. I mean, it's fundamentally a different way of viewing economics than, you know, than what the Fed has for sure. Right. And empirically, as you point out, Dave, you know, this is just the way it's operated over the last 20 years. And you go, as you say, to a prior to prior end.

it's not the same. So this is a shift. But economics, I guess, you know, they're written in stone and they teach the same garbage that they were teaching without realizing that it's a different era and particularly a different era since 71. Yep. There's no doubt. And, you know, while we don't like to go crazy on macro, it's, it obviously affects it. I mean, you know, we're sitting here in the market that is so obviously the doldrums and the people and crypto is selling off more. I I mean, you know, I look at it at the sorts of slow drips are, you know, reminiscent of August past. I mean, in August past, you would see this being set up for a liquidation cascade coming soon. I mean, I don't think that's going to happen, but that's certainly what it felt, what it feels like.

And I think when people start trading on how they feel is when they generally lose money. I tend to. So we'll leave it at that. Any other comments on it? on any of this stuff, because I have a last thing to read before we wrap up. Don't lose money is my comment. Hold tight, August, doldrums. I don't like to give short-term advice on anything, but the money supply suggests that everything is going up

as soon as everybody returns to their desk. That's my last comment. Yeah, I suspect you're right. Anybody else with final comments? before I read this. So, well, hey, folks, a quick disclaimer. This last segment is brought to you by a partner of a crypto town hall.

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