The Wolf Of All Streets - Pain continues, BTC largest 3-day slide since FTX | Crypto Town Hall

Episode Date: February 27, 2025

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Good morning, everybody. Happy Thursday 10 15 a.m. Eastern Standard Time, technically 10 19 right now. Crypto Town Hall, which is every single weekday right here on X on the Crypto Town. X account. Hope that you're all having a wonderful day and surviving because that is the name of the game when we're in a drop like this. Honestly, until I started digging in this morning, I didn't realize just how meaningful this drop has been. I think you become somewhat immune and numb to Bitcoin price action if you've been here for a long time. As we know, these drops are pretty par for the course, even in a Bitcoin bull market.

But just some interesting data. Obviously, we had the largest day on Tuesday ever of outflows from Bitcoin spot ETFs. And that was following one of the largest weeks already before that. So over $2 billion in aggregate, and that's not including today, which we know is likely to be a reflection

of yesterday's price action. So historic outflows from the Bitcoin spot ETFs. Also, as you can see in the title, I didn't even realize that this is, according to CoinDesk, Bitcoin renters biggest three day price slide since FTX debacle. Obviously pretty shocking considering prices had already been dropping and we don't have an FTX type black swan at the moment in the market. Really pretty historic price action here. Right now Bitcoin trading at about $85,300. A lot of people calling for $74,000. Talking about the fact that there's basically no support on the chart from the current area all the way down to

there because of how fast price rose. I think for a lot of people also, obviously, the shock is coming in the form of altcoins. For example, Solana was trading just under $300 all-time high just about a month ago, five weeks ago, and you're trading at $137, obviously, way off that roughly $300 high. And I know that most people who listen to this show probably are pretty exposed to altcoins. A lot happening. Dave, I loved that you did a market video yesterday. Love that you're doing that.

We're going to do a lot more of that together. But you basically broke down the market route from yesterday, so still very relevant today. Maybe you can give us some context as to what you think is happening here. Yeah, I mean, look, it's hard. I've been trying to look at the open interest data to understand what's happening. The problem is the way they take it into account. Look, the most important factor post Arthur Hayes, and I think you had a conversation with him, didn't you? I think that's how I actually saw it, made his call for 70,000 Bitcoin was based upon what would happen on tomorrow morning.

Now, for those who don't know what happens tomorrow morning, tomorrow morning the February CME futures expire. If you had a position of long ETFs or long spot, or excuse me, yeah, long ETFs or long spot and short futures, which you would have put on as part of what the so-called basis trade. I mean, look, I used to run an index art book for years and we take these things for granted. Effectively, what you're doing is the futures trade

at a premium that's significantly larger than the risk-free rate where you borrow capital if you're a broker or if you're a hedge fund. And what that number of capital is somewhere between five and six percent, maybe seven, and it is true that the average annual interest rate that you were getting paid to do this trade was double digits. So it was a profitable trade and people levered it up as well. So there was substantial amount of long spot or long ETFs, short futures. Now if the theory is that you were going to sell all of that in the one hour period when the futures expiration happens in order to get flat, then it would have been a market cataclysm on

Friday. Here's what happened however However Starting earlier this week the futures started trading at a discount like right now. They're trading flat Actually slightly up the the offer is is well above The bid is right around where the bid price is so right now It's not as easy to do but yesterday and the day before and Monday, you were able to sell futures at, or excuse me, buy the futures back at a discount to the spot. So the ability to sell ETFs or spot and get out of the trade early at a better price than you would at expiration presented itself. During that entire time

When that was what was available where you could buy futures the offer in the futures market right now the offer in the futures market Is a hundred dollars above the bid is right on the markets It's a really widespread, but when the offer was well below you were able to take that trade off So if you were taking that trade off, what does that mean you were doing? it means you were selling ETFs. And so you had huge ETF outflows. And so as long as that offer was there in the futures market,

it was going to facilitate dumping spot. And we saw a lot of that. Now, have we seen enough of it such that tomorrow morning, there will be no natural selling when these expire? Well, there are other factors to consider. Were people able to roll, meaning no longer be, no longer the current, the February futures, but rolled to March?

Well, March is trading right now at 86, about five or 600 bucks. It's right around the risk-free rate. It's kind of at around fair value. So if you wanna postpone the pain, you could have done that on the hopes that this premium will come back. In the video, I talk about why,

but the reason why there was this premium is because of something that I've talked about many times on this space. All the broker dealers in the United States have not been allowed to trade spot Bitcoin. And if they're not allowed to trade spot Bitcoin and they wanna offer products to their customers, they had to use the futures or the ETFs.

And so the net result is, is there was a lot of demand. And I've told, I said it on the space two months ago, once Trump got elected, that that demand's gonna disappear because they're gonna be allowed to trade spot, which is actually net long-term bullish. But in the short run, we're getting this kind of auditing. That's probably more than you want to hear from me right now. No, it's not. And we've got a smaller panel today. So I think it's really interesting to dive into it. So what does that mean? I mean, obviously, we also, I

jokingly pulled up the Walter Bloomberg Delta One account to see what was on their macro headlines and it was just tariff, tariff, tariff, tariff, tariff, tariff, tariff. How much does what's happening in Bitcoin outside of those mechanics have to do with this general uncertainty in markets? Well, I mean, obviously, people sell Bitcoin as a risk asset when uncertain markets are happening, but look at the markets. I mean, look at what's going on. The Dow is up, the S&P is flat, the NASDAQ is flat, the Russell is down a little smidge.

That's not... If the stock markets aren't moving, No one gives a crap about tariffs for Bitcoin Well, the one story that really should be mattering to Bitcoin is the fact that that they just passed a budget That is likely to increase deficits meaning more money printing and if you believe in the the the printer is coming narrative Because of the the pull down the reserve repo and all the things we talked about on macro Monday I think that you know, Larry LaParde this week did a pretty good job of explaining what's what's coming You know that print, you know that at printing is going to be very very good for Bitcoin So honestly the macro scenario from a Bitcoin perspective is pretty positive pretty constructive. What's not constructive?

Is the fact that the entire crypto sphere has gone from, oh my God, I'm losing money in meme coins and I'm getting my Bitcoin taken from me because it's getting called away because I've used it as collateral to, oh my God, I'm terrified. I need to get the hell out of here. And when you look at the greed and fear indexes and all the other stuff, it tells you that people are afraid and they're dumping. These things shall end. And I just got through telling you that everyone is now worried about what's going to happen

tomorrow between Terabit options, which I didn't talk about, and the futures. What is that setting up for me? It tells me that if we hold these prices that the bottom reformation is happening. And if tomorrow come midday US time when the futures have expired, whatever that price level is, I think the overhead supply is gone. If there's no new narrative, you're going to start to see an uptrend resume. That's why I don't subscribe to the 70,000 fill the gap kind of nonsense. That said, could we get a massive candle in an hour if everyone decides to dump tomorrow?

Of course, anything can happen. I'm not in that trade. But it's eerily reminiscent of markets that have had this sort of dynamic before. I mentioned to you before personally, the Japanese futures and stock markets in the 90s, although that was on its way down as well as on its way up. The fact is, it was the same sort of thing where there was different liquidity at different time periods, and a lot of people made a lot of money trading it. I'm tagging some...

That's not the right one, but I was trying to post a couple tweets above just to give people perspective on this bull market correction if you see it's just it's something I posted actually in March. But looking at the 2017 correction on the run up to twenty thousand we had forty one thirty eight twenty nine thirty four forty one forty and twenty seven percent corrections. So this correction right now from top to bottom at one oh nine down to the bottom eighty one, depending on stage, about 25% wouldn't have even made the list of the top seven corrections in the bull market in 2017. And you can scroll to the next tweet, they were in 21 on the run up to 69,000 21%,

17%, 31 26, 5525. So in mind, maybe with the median of corrections from the last bull market, that all to say that there's nothing new under the sun here. I mean, a 25% correction in Bitcoin in the middle of the bull market is a nothing burger and very reminiscent of 2021. And I want to talk to Joe about this when Dave, when you are and I are done. But when you know, those who were here in 21, we remember it as this incredible year for Bitcoin and altcoins, which it was. But there was a phase when bitcoin dominance was up above 65% and altcoins got destroyed first.

Yeah. I mean, look, anytime people think that this time is different, everything rhymes, right? And you see a lot of this stuff. I mean, I just want to point out a tweet from Frank Chaparro because I think it's very, it's very along the lines of your show with Matt Hogan earlier this week, where Matt made the same point.

Every single data point tells me that the median age of people who are becoming the newest converts to Bitcoin, and they happen to be people with a lot more money are older people. They, Frank tweeted that the average age is probably 55. At some Bitcoin meetup he went to or some crypto meetup he went to in New York.

This is not a trivial thing. What are you actually hearing here? The reason is that patient buyers are still bidding and buying Bitcoin from people who are panic sellers. And that's why it's a shallower correction than it would have been. If that wasn't the case, Bitcoin clearly would have already done

its typical 30 to 40% retracement, and you would have seen the gap filled down into the low 70s or below. But it hasn't because there are people who have been buying it. And you can't ignore that. I mean, at the end of the day, supply and demand is what drives price. Joe, let's jump in then to sort of the altcoin view right now.

Obviously, you guys are very deep in this on LunaCrush, always looking at sentiment, always looking at what's happening. Do you see what's happening now is different from previous cycles or do you think that what's happening is consistent and potentially like we're sort of in that peak fear phase? Yeah, morning. Yeah, no, I think even the panel today is indicative of the sentiment the market just got we got three people here. It's the same. It's Dave and it's me. It's you. It's Simon. When things are moving, there's about 10 people up here and we're all bantering back and forth on everything. But I did just pin a post up there. As you guys were talking, I went back and looked at the last one year

of sentiment for Bitcoin. And so this is looking at 30 to 40 million posts an hour across X and TikTok, Reddit and YouTube, looking at are people very bearish to very bullish in that time period. And if you see in the last year, in the last six months ago, roughly a little bit further, August 5th was when Bitcoin... If you remember, we were kind of ranging 70, 71, and then kind of the low there was like 53, 54. And so today, we are seeing the lowest sentiment that we've seen for Bitcoin since that date, which was August 5th when Bitcoin hit low 50s. By the way, that was the last time that daily RSI was oversold, which happened yesterday. Right.

So these indicators are all starting to click. Obviously, we're extremely biased towards social data, but we say it's one piece of the puzzle. You got to be looking at it. But if you're seeing something, technicals are seeing something, social is kind of telling you one thing, you know, we might be oversold here. And then this is Bitcoin, which has held up extremely well, I think compared, and which it should against the altcoin market. You know, alt have been destroyed.

There's no secret there. And people were really kind of not paying attention to, I would say, some of the outside of Solana, like some of the, I would say, very high quality layer one, layer two projects that have a lot of traction, whether it's someone like Avalanche with gaming, whether it's someone like Stacks that just sold out another 2000 Bitcoin into SBTC in a day.

A lot of these projects have a lot of traction. They've got a lot of builders, but these projects were really overlooked when it came to the last year. I mean, we were talking, I was going back looking at, I mean, we were talking last year, memes were going crazy in February and March of last year, right? And then we just had this, like I would call, a flare up again, once this new administration got in and everyone's like, oh, Trump can launch a meme coin. I guess we can too. But it just, we didn't have the same market dynamics as we had last year with Bitcoin really

running. And so, you know, we're, we're looking at a market now that's just really deflated. But I would say like, Oh my gosh, are there opportunities? Right? Like, you know, personally, I called it wrong. I was a couple of weeks ago, I was starting to kind of push chips in, you know, personally, I called it wrong. I was a couple of weeks ago, I was starting to kind of push chips in. And, you know, I'm down 50 percent in three weeks. Right. And that's pushing chips in just a little early. But, yeah, I think we're I think we're almost a full capitulation mode now.

You know, obviously, there's just a lot of uncertainty, like you said about tariffs. You know, I think if you voted, you know, for Donald Trump, hey,, hey, I just made a post about this, it's kind of like when you hire someone to do a job, you can't then micromanage them and say, hey, here's how you go do your job. You basically give them an outcome. You tell them the role, you tell them the mission of what you want to do, and then smart people kind of find their way to it. The president and that administration is hired by the American people. And the outcomes that they campaigned on

were what got voted them in. And then it's kind of like, you kind of have to let them go do the job and you can't micromanage it, but you might not like the way that they do the job. But we'll see. Obviously there's gonna be pushback on a lot of these things,

but like Trump's kind of a wild card when it comes to decision making. And I think markets naturally, you know, until they can kind of figure that out, I would say don't like that as much. But I think things are settling. And also, you got this kind of overlay of like AI and chips and a lot of kind of, I would say, like the Robinhood class investor that potentially might have been investing in some of these higher quality cryptocurrencies that are listed on exchanges like that, were paying attention to Nvidia.

They were paying attention to Tesla. They're paying attention to this AI race. Cryptocurrencies have gotten, I would say, overlooked because everyone was like, oh man, the alpha is already leaked over there. There's a Bitcoin ETF. what possibly could I have missed? I got burnt super hard in the last FTX crash. I'm going to stray away. But like Dave said, it doesn't mean that anything is going away.

These projects still have billions of dollars that they're using to invest in their infrastructure. They have huge communities. And as soon as there's a couple of pieces of good news, like we're going to see this thing fly and everyone's going to be left in the dust. And so if you're here today and you're listening to this, like I would say, you're in a very good position to take some, you know, not financial advice, but to really look at the market and say, Hey, what, what's going to be around

for a long time? What has a quality community that's been there through all of this? What do I, like in my gut feel like is a quality community? The people I talk to do your research, but man, does it feel like, you know, we are at full capitulation mode here. Yeah, it feels that way to me as well.

Amateo, any thoughts? Yeah, good morning, Scott. Good morning, Scott. Good morning, Amitayu. I think that with the nature of this pullback, one of the things that a lot of people realized was that there just wasn't as much liquidity circulating across the entire market as many, I think, believed or thought. Obviously, we see that with the QT and the tightening of rates and rates being still very high. But we got this world where institutions

were buying Bitcoin, people were buying Bitcoin, everything was really solid, Bitcoin dominance was skyrocketing. And then this meme coin craze gave the illusion that there was just this free flowing of capital that was just willing to dive into anything that hit the market. And that was not necessarily true, right? The tide pulled back on that. The emperor wears no clothes. And there was all of these rackets and cabals, which have been talked about pretty consistently here, but that were manipulating the markets. And then as a result, as the tide

pulled back, realized that there just isn't as much liquidity to handle the actual dilutive environment of how many coins have been hitting the market. As we all know, we hit that 11 million mark, which was crazy and very different than 2021 in terms of actual dilution. But I think to Dave's point, not very different. I remember in 2021, it was just like, oh my God, will these bags ever go up?

It was just like what, because I had made a trade early on cycling Bitcoin, looking to stack more Bitcoin and I just got smoked for a very long time until things turned around. I think things will turn around but it took a while. I don't know if you saw this yesterday Scott in the subcommittee but the one thing that gave me a little bit of a head scratcher, I looked at a summary of it, I don't know if this was actually verified but that the focus really is on stable coins which I think is great but it may take

a while until we actually get a proposed market structure while I think they're close. I think everyone's eager to get that defined. And I don't know if it's as close as maybe the market's hoping for when it comes to the rest of the market. So I still think we're still getting great adoption. We're still getting the rails being built. But I don't think we're getting the regulatory clarity in short order for the rest of the market structure that we're really hoping for. Yeah, stablecoins is definitely going to be the focus and the thing that they talked about the most yesterday was clearly like a bunch of word salad as we're pretty used to. Right.

But it is nice to have sort of bipartisan commitment to getting something done. I just don't have the highest hopes of when they'll do it or what it will actually look like. Joe, how are you framing the market at this point? Obviously, this massive drawdown and all point to where Bitcoin is sitting. Yeah, look, at 107, I made a post saying, I'm selling and I'll buy back, staggering from 92 to 86. Then we had a pullback and went down to 90, went back up to 86. At 86, I have another post saying, get your leverage off of Bitcoin, off of exchanges, you're going to be liquidated.

And I even showed the map. And yesterday I posted showing all leverage at 25x plus was liquidated on Bitcoin. This is normal. We typically hit the center line of the power law retract anywhere from 20% to 25%, which is what we're at right now is 25%. And then we begin to take off. We've been in many cycles. I don't think this is the bottom. I do think this has taken longer than normal, but I think it's been taken longer than normal because all the meme coins were very extractive of capital that entered the market. But I still think capital is entering the market. I think this kind of scare people and I think it'll

take a little longer than normal. But I still think4 we'll, we'll hit a new top and this will look like another honey blip in the market. Like they always do when we look at your bet, when we look one year later. Um, I don't see a big difference. Yeah, I think I was just looking through the news. I saw this is also the worst month, uh worst February ever, maybe for Bitcoin and the worst month since June 22, just to keep putting this in context. That was usually guys mean, it's a buying opportunity and a mean reversion. I know as bad as it sounds, unless you believe something is fundamentally

changed, it feels like we're irrationally oversold both in actual price and perception here. I mean, some of the data that we have here is pretty crazy in context of what's actually happening. I mean, we have the SEC dropping cases just this week against Gemini, Uniswap and Robinhood Coinbase last week. I mean, we should be all systems go when you look at what's fundamentally happening and price just isn't reflecting it right now. Do you guys think that a lot of this does have to do with the buy-bit hack?

Go ahead, Joe. We do need a liquidity event there. Like we do need some government regulation or some new capital to get everyone to change their sentiment. I think that's what everyone's kind of waiting for. I think there's some decisions coming up in the next month or two that will probably stimulate that to be honest. Yeah I want to make two points.

One Scott you've heard me make before. Every time we look at the history of Bitcoin and the very small number of data points that we have and we make determinations like, well, oh my God, this is wildly different. Based on month of the year, seasonality, that kind of stuff, It always makes me cringe. I think Joe's point of however, which you know, he talked about the power law, but look, the reality is if you look at the fundamentals, if you look at the hash rates and you look at the network growth and you understand what's going on and the number of people who believe that Bitcoin should demonetize gold and as gold has been rallying, Bitcoin hasn't

and that means that's the coiling spring in terms of valuation. So there's lots of reasons to look at this as a buying opportunity. I think Matt Hogan summed it up really well. He just tweeted that on a risk adjusted basis, this is the most bullish adjustment, the most bullish he's ever been. I tend to agree as far as Bitcoin is concerned. As a result of that, I disagree with the notion that we quote need a catalyst.

I think the best catalyst for Bitcoin, I know it sounds, it's one of your favorites, Scott, it's when the price goes up. Right, so what will cause the price to go up? Well bull markets climb a wall of worry, so we have all this worry now, and when it stops going down, and people can't sell it down, then people will creep back in. Now what's interesting about leverage is no serious professional, and I don't care who they are, no serious

professional uses more than 20 times leverage. In fact, very few use more than 10, although there are certainly if they're using more than 10, it's an hedge portfolio of some kind. People forget FTX didn't even allow 20 more than 20 times leverage. So when you're talking about the average of 25 times leverage that Joe was pointing to, those are the purest punters who always get wiped out in every single move, the ones that were wrong and the ones that were right, they make money. That's not what's going to be better. Funny stat I did some some copy looks like 95% of 50 50 x and up get wiped out so if you're doing a 50 x 50 50 x leverage you have a 90% chance that you're going to get wiped out. So there's a 95% chance you lose, that's 95% chance of liquidation I bet.

That's right. That's right. So effectively what people are doing is it's lottery tickets. So they'll take a portion of their portfolio, they'll stick it on 95% on 50 times leverage, hope that they win. If they win, they make money. And if they lose, they lose the whole thing. It's no different than a lottery ticket. It is not surprising that in the pre-, from the mid-1800s to in there were there was a proliferation in the

US of things called bucket shops which allowed 98% leverage which curiously is 50 times. And so you had the same exact phenomenon in the United States and people looked at this and you know what surprisingly 95% of them lost money. So what did they do when they regulated in the post-crash environment? They banned it They said nope You can't have that kind of leverage anymore and then they went way too far in the other direction and created You know reg T which said you could have no more than you know point five times leverage You know 50% in in margins and of course and they created portfolio Margining and futures and all sorts of other things that to start loosening up on that as we got closer to the modern day

But this sort of cycle has happened before futures and all sorts of other things to start loosening up on that as we got closer to the modern day. But this sort of cycle has happened before. It is a very clear point that people use that excessive leverage or buying lottery tickets. There is a way where you could do so that's not crazy, but it requires an enormous amount of sophistication. Most people are just taking flyers. But the point that I'm making, Joe, is those are not the marginal price setters. The marginal price setters are the professionals or the people with reasonable amounts of money, and

they're not using leverage that big. They're the ones who are out of the market now, who are not buying on leverage, who are waiting for a bottom, et cetera, et cetera, the famous meme that talks about that way. When that changes, that's when you'll see a quick price reversal. Do I expect a quick price reversal? I actually hope no. The best markets are the ones that climb a wall of worry with kind of multi-percent gains, but not 50%, one, two, three, four percent gains for lots of days in a row before eventually people panic and say, okay, they

get FOMO and then there's no supply and that's when you see it really go parabolic. But you need to see that sort of a gain, kind of methodology before you're going to get a net another major bull run most of the time. Now Bitcoin, that's not been the case. The history of Bitcoin has been 10 days a year makes up all the gains. So I guess we'll see. And Scott, that was great, Dave. And I think we were actually almost there.

Like you mentioned Bybit. Like I actually I think there was a day or two where things did start to kind of feel like it was going. Like we had our first couple multi percent gain multiple days in a row for alt coins that we've had a long time. It started to feel like there was a sentiment change. And then it was just like a little like leg kick at the end, you know, from Bybit to like

shake everyone to say, oh, maybe we're not there yet. Right. And so I think that those those pieces of news, you know, whether it's going to have a long term impact, like definitely not. Right. Like, yes, it was a large it was a large hack. large hack, but if you look in the history, I think Bank of America has paid 85 bybit hacks worth of fraud payments in the last 20 years. These are actually small numbers when you really look at what's out there,

but it can rattle a rally, which is already hanging on by a thread. But I think we were close. I think that this has created even a better buying opportunity for people. Obviously, if you're a long-term investor, you're loving what's happening right now. You're loving that we're not at 125.

You were looking at it at 105, 108, saying, I missed it, I missed it. And now you're scared shitless at 85. Like, how does that work? Right? So I think it's like, look at yourself, like psychologically understand why you're feeling that way. And, you know, have some sets of rules for yourself. Like I only buy on red days. Like, why wouldn't, like, why wouldn't that be a rule? Right? Like only buy when things aren't going well. You know, if you're trying to manage a stack. If you're a trader, you don't need my advice. Right? You're out there.

You've got your own tactics. You've got your own strategies. What we're telling you today, though, is that there are some pretty significant metrics that are triggering saying that this could be it. So always fingers crossed. this could be it. So, you know, always fingers crossed. Yeah, I think that we are, the more I listen to people and read things and look at fear and greed and look at your data and look at RSI, it just seems like we're ripe for a major balance

and that people probably don't get the bottom that they want. Dave, there was a topic you and I kind of discussed yesterday that is probably worth unpacking a bit. We have obviously the SEC dropping its case against Gemini, which is great news. But then I think it was Cameron. Yeah, I believe it was Cameron. One of the Winklevii basically went on a rant, which is something we've talked about quite a few times is, yeah, but what about all the money we spent? I mean, spending hundreds of millions of dollars to defend yourself against basically a fraudulent claim that should have never been brought.

Where's the payback? What do you get for having suffered through that under the past three days? Well, look, I have often said the SEC has operated their enforcement division like a protection racket. And look, I still have friends down there. I have enormous respect for Hester Perce, for Paul Atkins, who's not there yet, and

hopefully the Senate will do their job and he'll get there soon. I don't even think his hearing's been scheduled yet. I don't know when it's going to be. I don't know Mark, but I, you know, everything about him from what I can see tells me I would respect him as well. But there has been a history in the enforcement division of walking into firms and saying, nice business you have here, you know, it would be a shame if something happened to it. And, you know, like I participated when I was at Citi and at other places in what can only be described as shakedowns. It's been the process forever. I don't know how other regulators work, but my guess is it's fairly similar.

It just takes much more money to defend than it's worth pursuing. Most of the time, Wall Street firms just cop to something and and basically say yeah yeah sure whatever and pay a fine because it's cheaper than paying the legal bills. But in crypto that was not an option. The SEC did not give that option to people. They treated with crack and they paid 30 million dollars and then six months later what did they do? They sued them again. Asked Jesse about this. I mean, I haven't talked to him directly about that issue,

but I know if effectively he found out firsthand that Elizabeth Warren basically had given them the order to where we wanna fight them to extinction. Now, so when you have a mafioso type organization who has the ability to run a protection racket, change to want to destroy your business, what do you get? Well, you get that. So Cameron's rant, I thought, was spot on.

And the only way this changes is if Congress passes a law, because it can't be executive action. I mean, Trump could do it for his administration, but then whoever's the next president could undo it. There needs to be something to the Administrative Procedures Act, the APA, which basically says that the agencies, that the people who run the agencies have personal liability if they step over lines, and the agencies themselves attract liability if they step over the line. And that's the only way to create a disincentive for that sort of action.

Because when you give people's power and you don't have any checks on that power and there's no personal responsibility, then who cares? So a gents lawyer can get another job, right? But what if he couldn't? What if the lawyers that were in the debt box scandal got disbarred. Then all of a sudden now all the enforcement attorneys realize that if they do something that goes over the line, it can be proven they lose their job, all of a sudden now you might not see that anymore.

And that's really what Cameron was saying. And I don't think there's an American, I think it would be overwhelmingly popular to say that real negligence, real malevolence should cost you more than just a slap on the wrist and you get to do something else. And that was really his point. Anyone else thoughts on that? I mean, it's pretty absurd how much money the industry had to spend to defend itself

with no recourse. Where and like where'd that money come from? Right? Well, we know what we know the number because it was calculated. The number was 400, some $1 million across the industry, collectively across the industry. It was collectively, that was just legal fees. But that was calculated last year, we saw it, I remember what the Yeah, and then calculating actual losses based on like inability for customers to sign up, loss of confidence, et cetera. And it's not what Calco's got, but we know that's in the billions.

And who's paying the salaries of the people that are doing this, that are going after these companies too? It's us, it's taxpayers. It's literally, we are the ones paying to go after these companies for literally no reason. It's a wild scenario. Yeah. I mean, just to put a bow on it, I've made the point that a very simple bill that the enforcement divisions have to prove allegation of harm, have to actually have provable harm before they can bring a case.

That anything else should be procedural and they should have some sort of negotiation about it, but that there should be no fines and no massive legal fees if there cannot prove harm. That would be a very easy thing to pass, a very easy thing to write. Then what will happen is all the armies of attorneys will say, yeah, but what's the point? We spent all this time making laws and if they don't agree with them and we can't prove that the law benefited anybody,

then we won't be able to enforce it, that will be horrible. And I just kind of look at them and try to ask, can you look at yourself in the fucking mirror and understand that what you're basically saying is you think lawyers should be able to write rules that don't protect anybody, that don't do any good, and that you should be able to enforce against those with no benefit to the world.

That is literally the antithesis of what the APA, the Administrative Procedures Act, says rules should do. There's supposed to be a cost benefit on every single one of these. But yet I get these conversations with lawyers, and it's too bad that some of the lawyers who are there aren't on this call today. I mean, you know, I'm not going to name them, but it's literally, I mean, John Reed Stark, an insane defend, an indefensible position if you get to first principles, but yet that's what they say.

Simon. Yeah. So to wrap a few thoughts together around everything we've been discussing today, you know, the way, the way that I look at the market right now and what people So to wrap a few thoughts together around everything we've been discussing today, the way that I look at the market right now and what people should learn from it and really think about it is we're going through a global re-collaboration type thing. The macro and geopolitical environment was, look, we got this close to World War Three, and we're still not out of the woodwork yet. And so, you know, America is going through a shift, which I

think is having lots of lots of different impacts globally. It was a recognition that the old economy was based upon propping up a dollar based upon war and violence globally and a retreat because, you know, China was investing in their own country, their own people, their own infrastructure, their own technology. And we found ourselves in an AI race that's probably going to take five to 10 years to settle. that's probably going to take five to ten years to settle. And if America does not retreat and focus on America first, focus on American people, focus on American infrastructure, focus on friends rather than foes, then it was about to lose that battle. So just like that, you know, you look at these scenarios and you look at what's happened and you ask yourself, what have I got to re-collaborate? What lessons have I learned? What things have I got to change?

For me, the one time that I violated all of my rules and principles and decided not to sell my Bitcoin and borrow against it, I ended up in a two-year process with the Celsius bankruptcy that is still happening to this day with value being extracted by lawyers and middlemen and just complete crony capitalism. You end up spending millions just to get in a position when you're spending more than you actually had on the line, all because I decided to borrow against my Bitcoin. And so you look at all these lessons, and if you're not taking the lessons from it, recognizing that everybody seems to be driven into this degenerate bad habits, and these degenerate bad habits in the long term tend to cost.

habits in the long term tend to cost. So if you look at what's happening with rampant corruption within regulatory enforcement and covert operations like Operation Chokepoint in order to protect vested interest, well you can opt out of that. You can use the exchanges to onboard and offboard, but don't use them for any other thing. And you don't really need to worry about these things. You get the level of freedom that Bitcoin gave you. Exchange hacks, we just had the largest hack that our industry has ever experienced, and we only got a 25% correction. That's pretty remarkable from the things. But what are you going to learn from that? We're already halfway into that correction, to be fair.

Yeah. Right. So not even as bad. Yeah. Yeah. There you go. So what are you going to learn from that? Well, you know, don't have your crypto on the exchange.

We all know that thing. But why do you have your crypto on the exchange? It's because you're levering up. You're trying to get rich faster and you're doing things which lead to combining this perfect pristine asset Bitcoin with leverage, which is the crocks of the fiat currency system. The fiat currency system relies upon debt and you're taking your Bitcoin and you're coupling it up with debt, which is a Ponzi scheme that's causing all this issue, that's causing all this type of thing, and you end up with rampant liquidations and the potential of no Bitcoin. Essentially, when you're subject to a

price crash, it's probably because you're over trading, you're worried about the price, you're not investing, you're not seeing it as an opportunity to end up with more Bitcoin from your fiat currency. And you've got too many shitcoins, it's just the crux of it. So I'm sorry to say things, but everyone needs to look back at these habits and ask themselves, what are you going to do differently next time? Because it will come again. And we've seen this time and time again. And we will, you know, everyone has to learn their lesson through experience.

Indeed. We're going to move towards wrapping. Amateo, maybe you could give us some final words to close us out. Yeah. I mean, I will say this has been a great chat today. I do think we're getting close and the risk adjusted on the chart is getting really good. We're hitting fair market value of Bitcoin. We're signaling a lot of things. And I think overall,

it's looking quite good that we should be able to either put in a support here or find it a little bit below, just kind of summarize what everyone has been saying. I will just say to Simon's thoughts, I don't think the BlockFi, the Celsius, the Voyager would have survived the legal pursuit of the SEC during the bear market with where they were capitalized and what they had on the books and what we saw. And so I think if they weren't over leveraged in the lending book, then they wouldn't have survived the legal battle. So how this actually shakes out, does the government and the SEC actually bear some kind of responsibility for the actual incursion of costs and the slowness of growth and how it affected the industry and its major good acting players? I think that remains to be seen. But overall, it's really exciting

that we're in an environment that is creating the framework and opportunity to do things the right way. And we're still seeing some of the limitations of our technology with the Bybit hack, et cetera. But as we get through here, we get into greener pastures. So there's my little summary, Scott. That's a great summary, great way to conclude. Guys, everybody out there, follow our amazing guests.

And of course, we'll be back tomorrow, 10, 15 a.m. Eastern Standard Time for another edition of Crypto Town Hall. It'll be interesting to see where price is sitting by tomorrow and if we are, in fact, starting to bottom here. All right, thanks everybody. See you tomorrow, bye.