The Wolf Of All Streets - The Bitcoin Rush Starts Now | Macro Monday

Episode Date: May 26, 2025

A surprising new class of Bitcoin buyers is stepping in – and it might just kick off the next major Bitcoin rush. Who are they, and why now? Join Dave Weisberger, Mike McGlone, and James Lavish as we break it all down in this week’s Macro Monday – from crypto to global markets! Dave Weisberger: https://twitter.com/daveweisberger1 James Lavish: https://twitter.com/jameslavish Mike McGlone: https://twitter.com/mikemcglone11 ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEKDAY! 👉https://thewolfden.substack.com/ ►► Arch Public Unleash algorithmic trading. Discover how algorithms used by hedge-funds are now accessible to traders looking for unparalleled insights and opportunities! 👉https://archpublic.com/ ►►TRADING ALPHA READY TO TRADE LIKE THE PROS? THE BEST TRADERS IN CRYPTO ARE RELYING ON THESE INDICATORS TO MAKE TRADES. Use code '10OFF' for a 10% discount. 👉https://tradingalpha.io/?via=scottmelker Follow Scott Melker: Twitter: https://x.com/scottmelker Web: https://www.thewolfofallstreets.io/ Spotify: https://spoti.fi/30N5FDe Apple podcast: https://apple.co/3FASB2c #Bitcoin #Crypto #MacroMonday The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

The Bitcoin rush starts now, not just from governments or individuals, but very, very heavily from businesses and even very small businesses. They've actually been the largest net buyer, of course, led by MicroStrategy or just Strategy in Bitcoin buying so far this year. We're going to talk about that trend and everything else that's happening in the macro. It's another amazing Macro Monday here with James, Dave, and Mike. Let's go. It is Memorial Day in the United States of America, meaning that markets are not open and most people are barbecuing and drinking beer, but we are so deeply committed to Macro

Monday that all four of us Americans are here in the morning to celebrate Macro Monday. We've got Dave, Mike and James. Good morning, gentlemen. Good morning. No morning meeting today, but that doesn't mean that there's nothing to talk about. Mike had a morning meeting. Mike had a morning meeting with us at 9am Eastern Standard Time. We are the morning, but we all see what happened

came out Sunday last night about Trump pulling back a little bit. It's amazing how he's emboldened for tariffs when stock market goes up and he pulls back when stock market goes down. There's a direct connection there. But the things that struck me that are already not known, knowns on the tape,

I don't think our audience expects us to read the headlines. It's the things they might not know. And that's the headline got off of a Bloomberg this morning, pointed out that China's BYD is offering price discounts of 10% to 34% across 22 car models in response to weakness in both demand and market share. Now, that's a global situation. Remember, the US and some European and Japanese countries are pushing back in BYD, but there's massive deflationary forces there.

And I just want to trickle down some other headlines related. Chinese EB stocks tumble after BYD slashes prices as much as 34%. And Z, Moll's new made in China plan despite US call to rebalance, trying to pick up some more manufacturing in China for more technologically advanced products, which is the exact opposite of what Mr. Trump is trying to do. So some interesting stuff hit the tape this morning that might not be already known, known and priced in the market. But largely what's driving the market at the moment in the immediate is the Trump tariff tantrums, right? So we had a few days ago, basically, he said 50% across the board on Europe, it's going to start, I believe he said June 1, he said that they were not being operating in good

faith, not negotiating. Then he had a meeting with the president of the European Union, I believe, not technically exactly sure what her title is. And then he said, we're going to delay till July. And of course, that was on a Sunday and markets back up Bitcoin bounce even right when that happened, right? Well, what day was it that he said, buy the stock market, it's going up? A couple weeks ago, that was right at the pike of the bottom.

Yeah, literally, literally called the bottom, which I made the bottom. I mean, he created the bottom. He created the bottom and he told his followers and it's like this great wealth transfer effect. If you are a follower of the believe he was going to actually make it true. And so you got you got your face ripped off and you were short. So it's it was actually kind of poetic in a way. I mean, honestly, it's not the kind of thing we really want the leader of the free world to be doing. But it's funny, no matter how you want to slice it. I have a question. He's focused on the stock market.

He's talking about macroeconomics for a second. I just have a question, Mike. So, you know, every once in a while, I like to look at the Baltic dry index to know what's going on in shipping. And I find it, and I'm curious if you guys care, I mean, it looks like, you know, if you do the weekly, it's kind of been in the same range since 2024. You know, it had, obviously obviously during the start of the tariff tantrum, it was well down, but it recovered in there. It doesn't look like anything bad. You

would expect that if global trade was getting crushed, that it would be exactly. So that it would be below this line that Scott has drawn here and I'm just curious because you know it seems to me that what's actually happening is a whole lot of nothing uh lots of posturing lots of screaming you know William Faulkner a sound and a fury signifying nothing I mean that's what it feels like I mean you know are any people really talking about about what's happening in the real economy? Or is this all we're all just trying to anticipate what what's going on? I appreciate the mention of the Baltic Dry Index. It was something Dennis

Gartman was way on top of about a decade ago. It worked, it worked. And then when anybody start watching it stopped working as an indication. Now we all know there's major distortions with costs and prices of shipping goods, partly with wars and things in Europe. I stopped looking at it years ago. It's just not a good leading indicator for me what's happening in commodities. And the macro for commodities is crude oil is going down and gold is going up. So the only reason the Bloomberg commodity index is up maybe 5%, five six percent than the years because the highest weight is gold and gold's up 30 percent this year That's driving everything standard commodities are down crude oil is collapsing and industrial metals are just kind of hanging in there Um, so to me, it's all about the next shoe to drop and we all know what's happening in china

That's why i'm still more in that place. Right? No, I I I understand Just let me rephrase the question because I'm not talking about this leading indicator. It's a coincident indicator. I agree with you. I'm just saying that nothing major is changing yet. No. Right. And maybe you're right.

Maybe it's certain things are down in price and therefore things are down. But at the same time, maybe because oil is down, trade is fine, other than that. So I don't know what to make of it. That's why I was asking. I really don't know. Yeah, another thing that people have been talking about is just the lack of travelers in the United States, but here's the travel index, the TSA checkpoint numbers.

So this is the number of people that's going through the checkpoint in TSA, but look at this versus the five-year. I mean, this is still on a really steep upward trend here. You know? I mean, it did fall off initially in the beginning of the year, but you can see that happens every year. It's initial fall off.

After the end of the year travel, people have already done all their holiday travel, and then it falls off. So this was, you know, not a their holiday travel and then it falls off. So this was not a really big indicator and it's typical. So it's it's it's like Palm Beach International Airport was perfectly full of my flight yesterday was full but you know that doesn't matter. We'll see tomorrow. You know going from airport to airport you know especially someplace like here in Vegas. It'll be a little bit busier with all the Bitcoin people coming in. It's kind of like when CES is here, it's a madhouse. But from city to city, it just depends. It's

hard to tell when it moves by. But if all this is true, then effectively, that to me says that earnings won't be the catastrophe that a lot of people are thinking, which is probably why the market's where it is. And I don't believe these are leading indicators really. I think it's more like, yeah, you know, there's lots of yelling and screaming, but the reason people are asking why, I mean, I've been asked on X so so many times Why do you think the markets holding in here? And I think the reason the markets are holding in here is people aren't experiencing any of the pain

And so they're like well where the hell else do I put my money? I mean that that's what I'm talking about the stock market Bitcoin is a different thing, you know Bitcoin I think we have to get to but you know, it's just But I'm as I said, I'm just curious more than anything else Yeah, and and Mike I can't remember if you maybe you saw this last week too, but Black Rocks, one of their head of fixed income portfolio managers or analysts, I can't remember who it was. Maybe you'll remember I saw it last week, but he was warning, he was on Bloomberg, he was warning the market. He's like, do not, don't fade this. If you think we're going into recession,

we're not seeing those numbers. And we're not seeing the problems in credit that would typically come that are associated with the beginning of a recession. We're just not seeing it yet. And we're not, it's interesting, but maybe it's just because it just continues to have, we continue to have liquidity expansion.

So and that's it. If you have liquidity expansion across the world, it just keeps driving, you know, at least 5% 30-year, I mean, 5% yields on the 30-year isn't at least a slight canary in the coal mine. Yeah, but okay, so if you, but if you read through it read through it, then you, and you think, think about where you've seen term premium rise, right? And so we've seen the rise of term premium. And I'll bring up this, this actually here, I'm going to share this one from, again, from Michael Howell, you know, I love him. He, he's got so many good takes on these things. But here's term premium, right? And this is on the 10-year, which is the benchmark bonds for everywhere. But you can see the US 10-year treasury, it only has, it's not giving you the term premium you should have right now in the market. What he's saying is that we should have

about 50 basis points more of term premium. We should be at 5% on the 10 year because of the issues that people are seeing with the US debt going forward. And just the sheer amount that they expect with the deficit we're still running, and with the tax package and all that, you would expect the tenure to be more like 5%. But the reason it's not Scott is that we're still leaning on the short end of the curve for issuance of new treasuries.

We're still leaning on T-bills. And it's a form of soft QE, basically, because it's kind of like yield curve control. By not issuing bonds longer dated at the the 10 year, 20 year, 30 year, you're artificially holding those rates down. That's the whole point. But I would be interested in what Mike has to say about that because of course, Mike's been a bond investor for decades. Definitely, we're in this one lately, two years, definitely wrong. But what struck me, James, is really what you said last week showing that the credit default swaps in the US running higher than most other anything in the planet that's even comparable.

Double what you get in Canada. That's striking. It's a question of how much worse it gets. And then all the latest debate about what's happening. We all excited about Doge cutting back on potential deficit spending. And you nailed that and Dave nailed that. It's not really happening. Now we're negotiating this big great bill in Congress. The key thing that strikes me about everything there is I see those pretty severe deflationary forces globally,

particularly if you look at like a gold-silver ratio. It's never closed the year above 100. You can compare it to crude oil, but we all know that's going the way of whale oil. And the thing is, and I compared to the rest of the world, the people you pointed out, the bond-driven plants are in full force compared to like you said, CDS prices. You pointed out the term premium is not that high yet, but compared to the rest of the world, we're very high yields, our long end. And you know, we're still the rest of the world selling. But also I think that shows up in what you see.

Okay, the stock market, US stock market unchanged in the year. MSCI, ex-US index is up what, 15%. That's all that money leaving. And the dollar is still down what, 7% in the Bloomberg dollar index. That's not a good sign for a success. So overall, we all point out everything is fine. Rosie backward looking, except a few annual things are fine. But to me, that's where everything is tilted on.

There's complete inordinate burden. You've had this nice sharp drop in US stock markets bounce back up. So who cares about bonds now? It's got to stay up now. And that to me is what kicked in last week. It's all about equity staying higher. And just, I don't want to, you know, we've tilted until later enough, but what's the best leading indicator for all this? Cryptos and Bitcoin. Cryptos and Bitcoin. So I'm good. Bitcoin is pretty high. Yeah. Are you loading a stapler, Dave?

What are you doing? No, I was trying to fix this stupid boom arm because one of the listeners complained that I needed a microphone. It's like, yeah, I have a brand new top end. Ignore sound criticism from the monkey pit around the side because there's always someone who doesn't like the sound. Does mine sound better now? Mine sounds great when you get in there. The most important leading indicator for crypto assets is Bitcoin because that's where things are going.

I think this week's going to be interesting for a couple of reasons. I mean, the first one is I actually wonder, and every previous year when the Bitcoin conference happened and effectively Bitcoin was soft. Why? Because all the people who buy it were in one place, whether it be Nashville or Miami or wherever. I mean, you know, it was, it was a big draw of all the whales. And so there was less people buying, I mean, and markets markets fell. Well, this year, crypto native folks have been selling.

And so I'm really, it's going to be interesting. I mean, and the people were buying are just like in the title are company X, company Y, company Z, company Z asset manager, Y, you know, whatever. It's all people who look like us more than look like the typical Bitcoiner. I think it'll be really interesting. You mean like Scott happens this week. I mean, seriously, I mean, I, I, I, you know, when you, the sellers are all, all in Las Vegas and all of a sudden it's like, why? So I think it could be, it could be interesting. I mean, I know that sounds like a and all of a sudden it's like why? So I think it could be interesting.

I know that sounds like a little bit of a crazy thought, but I actually think it's possible. What's going on here with crypto is very clear. Every time Bitcoin stalls, there's this kind of false start, alt season. And then like this rally this weekend, I mean, all coins have done like nothing. I mean, they're not bad. The charts are just kind of hanging out, but not good. And the thing is, is every time Mike talks about crypto as a leading

indicator, my brain hurts. Now, why does my brain hurt? Because I think that, that, that he's right when it comes to Ethereum and alt and certainly right when it comes to animal spirits and things like memes. And I'm closer to his point of view on the meme coins than I am to the crypto community because, you know, look, people will buy or sell whatever the hell they're going to buy or sell. But the fact is, I don't get the value proposition.

I never will until they're allowed to monetize it. The only one weirdly that I think actually does have a chance to escape that is Doge but that's really dependent on whether Musk does something with Doge inside of X and we don't know that and that's always the persistent rumor but you know the rest I mean I don't get how you monetize a community you know frankly so I guess we'll see. My prediction is as meme coins start to try to monetize their communities, the prices will collapse just like internet stocks did when they first showed revenue and the ones that couldn't actually show a lot.

But we'll see if that's true. But my guess is that's going to be the case. To quote the great Mike McGlone, Hopium is extremely powerful, but it's probably not the best investor strategy. But the reason that I'm on this rant is because Bitcoin, I think, is different than that. I still think Bitcoin is reaching escape velocity towards gold. And Mike asked a question on X, or Y, or was it you, or was it Peter Schiff, or one of the other Bitcoin skeptics that said, well, if Bitcoin is digital, why are central banks not buying it? And the answer is obvious. Ask Caitlin Long to describe how the Federal Reserve officials think of Bitcoin.

Scott, I think you did that in your interview there, right? Yeah. And the answer is because they just don't want to care. I mean, you know, they think that if it's virtual, it can't be that can't have value. Pretend it doesn't exist. Just pretend it doesn't exist. Yeah. So it's a really interesting thing. I mean, it feels like Bitcoin is still in this basing period, in a period of time where funding rates are really low, all the things that generally you would see within a couple of percent of an all-time high, all the indicators that would indicate melt up top or froth or that, none of them exist. And that is a cognitive dissonance that I think resolves. And to me, that's why I am more short-term bullish than I usually am.

Because usually I'm kind of looking at the quiggles and saying, oh, whatever. I know we look at the obviously perpetual cooperates for funding rates, which you've mentioned, indicates that this has been extremely spot-driven, which is true. Just curious how this plays into it. Bitcoin options show bulls on board with open interest at record. So we do have at least on CME, which obviously is not where

we're seeing the bulk of options trading crypto that's on Deribit, but that it is at record high territory with people extremely long. Can someone explain this to me because I traded options for a couple decades Why the hell is options open interest indication of? Bullishness, I mean the headline writer there is is Ignorant and it is just that simple. I mean, you don't know what the strategies are My best guess exactly is that covered calls are being changed. Thank you that covered calls are being hedged. Thank you. And that's what's so important about it. It's not bullish, it's actually what is bullish.

It's not because people are bullish, it's because people think that Bitcoin is, selling the call is good because you're picking up yield. Right. Except for if it rallies, those same people are- Self-fulfilling. Use my language, fuck, I need to buy back the gamma. That's why-

So you end up with a rally. That's why you end up with a rally. That's why you have the pain points and the where we're Max pain. Yeah, the max pain point of any option, exactly. And it typically gravitates right to that pain point. It's just self-fulfilling. The most people who can lose in one spot for sure. Interestingly, the Marcus Thielenielen who's been on the show

from 10x research points out that bearish bets on strategy look alluring, but that's what they bull put spread, I think. Bear put spread, excuse me, with a bear put spread of micro strategy here, because it's diverged with Bitcoin effectively making, you know, coming to new all time highs, but micro strategy is still pretty far down. But to your point, I don't think we need to just discuss that particular strategy, but there are a lot of ways

that this open interest could be affected that are not necessarily everybody like, bull-tardedly long on $400,000, $500,000 option expertise. Yeah, I mean, it's, look, if you leverage in the system, so what are the pieces of leverage? So look, there are four pieces that we all look at, right? We all look at the perpetual swaps. We got that.

They are way cheap, relatively, you know, from an interest rate perspective. It's below prime rate, you know, to fund, to buy, you know, but go long. So, okay, so that's nothing there. There's options, but what is options doing? Well, options at this scale is likely to be a dampener on volatility in the short term, but with potential gamma squeezes in either direction on the other term, but it's kind of neutral. There's the futures premium. I'm looking May to June is, what are we at? Seven hundred and you know, 750 so it's at about a six percent, you know, six and a half percent whatever that's nothing That's around that's less than that's like the funding rate of most people. So that's neutral

and and the fourth is is Strategy and all the other companies that are quote buying on their balance sheet And when you're at max leverage and max leverage driving prices strategy trades at a much higher MNAV than it is now, and it's going up as opposed to going down. People are betting on deleveraging the system. So when you have more people betting on deleveraging in the system, I like being contrarian to the leverage.

That's all I'll say. Yeah, for some context here, this is what people are talking about is that, well, first of all, this is one year of Micro about is that, you know, well, first of all, this is one year of MicroStrategy versus iBit, which is a good, you know, proxy for Bitcoin against something that trades during market hours only, because otherwise you have down periods for the stock. But you can see that this right here is what people's talking about, is this rollover and reversion

to something a little bit maybe more reasonable versus Bitcoin itself, but this is really what people are talking about right here. So you've got I-Bit or Bitcoin going up right here, and this is what MicroStrategy has done. Right, and go back to the bigger chart for a second, because I wanna point something out, is this is really important.

I'm not saying where it's gonna go, but if you look at where MicroStrategy peaked, it's all about, and it's hard to see this in a chart, but you're talking about the difference between velocity and acceleration. Are you talking about the peak here, which was over exuberance or right here, which is just kind of like the-

All of them, all of the above. What you see and what you're looking at, it's hard to train your eyes this way. Look at it from the perspective of not the absolute price level, but how it got there. So you get to 110 the first time via a steep curve up that acceleration. That acceleration, people are buying micro strategy

because they're buying it in order to get leverage. Bitcoin stalls at a price, it's like, oh, why the fuck do I need leverage anymore? And so the premium evaporates. Bitcoin goes up, remember from the 78 where Scott and I both basically called the bottom, that triple bottom here, right, which you basically called the bottom, that triple bottom here, which you see.

We called that triple bottom and Bitcoin starts going up and MicroStrategy starts outperforming. Bitcoin stalls at around the all-time high and once again, it starts rolling over. That actually makes sense because people are buying it for leverage. But it looks, I mean, this chart looks ugly, right? The way you're looking at it. So if you believe Bitcoin is going to stall and stay at these levels for a while or go the It's like if you follow Josh Mann, you know, and others, you know, there's, there's, there's this constant X wars on micro strategy and what's it worth. That's what's happening right here. Yeah. Yeah. I just find it interesting. People are making bets. I mean, if you're a short term trader,

make bets all day long if you're good at it. But if you're long-term and you're just buying and holding stuff, you really want to bet that the guy who owns 10% of the stock is going to do things that are going to hurt the stock price. Right. I mean, like you're smiling because you always make the point about don't bet against the person who has the ammo. Right. I mean, you know, and to me, that's an interesting question. I like, you know, sorry. Mike.

So there's things to buy in bull markets and things to buy in bear markets. So MicroStrategy had a severe premium in a bull market is a horrible risk reward trade is the way I look at it right now. Good luck. We trade it, sure. But that's why I think we gotta talk options here

because we all have an options background. I started in the business three decades ago as options. And that's to me the key thing is what I look at, like we saw, we noticed in GBTC when it was so cheap at a discount. That's what you buy when everything hates it. Now, that's why I look at this is the opposite. So that's the big difference for me and Peter Shipp. I've always been very bullish Bitcoin until just the last year.

I'm like, it's too speculative, excessive, and I tilt over to favoring gold. So far, that's basically working, certainly this year. But the key thing is that's what I want to dig in the optionality of this year. So we've had one little shot across the bowler in the year. Bitcoin drops a third. S&P 500 drops maybe a 15% bond yields all drop 50 base points. And now everything's going back up. Everything's fine.

I look at the optionality of this year now that it's, yes, you're not seeing the backward lessons of recession, but when you're not a commodity guy global, I see nothing but severe deflationary forces. And that's my point is by the end of this year, if we're to say the S&P 500 is up 10%, it's nah, nothing. Big advances 20 to 30%, makes sense. Bond yields go up, it's nothing. It's the optionality of what I see the next big trade is say S&P 500 just gives back 10, 20 percent of that 100 percent rally since 2019, which is historically an aberration in all world is I think sensing weight US assets I'm selling. That's the big trade. That optionality is where I think hedge funds and things have been a little bit early, but a little bit wrong. That's where you make a good big on your position potentially, because somebody priced in all this bullishness. Look at the MicroStrategy premium. That's why I

back off and say, thank you. Let the traders have it. And to me, that's where I'm looking at the big picture. So now this weekend, we've had that little tilt over last year. The stock market bounced and went up. But the key thing, what's the difference the last time the stock market had a correction like we did last time? We had the most significant, this is Q1 2020, significant fiscal monetary stimulus ever. Now we're not getting any of that. And to me it's bounced and everybody's enthusiastic. I still think that's the big trade is,

you've got this year equities, everything falls, yields fall, but like to my point is right now, everything's fine. That means there's like yeah, it's not that exciting You know, um, it's interesting you're saying that Just trying to think through Just the sheer amount of debt that we expect to come from the United States because we are continuing to run these deficits We're looking at this tax package and I mean,

this is not, but we're not getting to a balanced budget anytime soon. So we're gonna continue to have all this debt piled onto the market. It was interesting last week, you heard Jamie Dimon in an interview and he was talking about, he really expects the Fed to revisit the SLR requirements

and why that matters is the supplementary leverage ratio requires the banks to hold The treasuries as risk assets in their calculations, which means that they're not risk-free Which means that there's a limit to what they can own in their balance sheet because it's negatively affecting them on their risk ratios And here's what's funny about that, is that they removed that completely during COVID, right? And then they put it back on.

So the ISDA, the ISDA, and I wrote about this a long time ago, like last year, that they issued a white paper saying that they think that the Fed should just remove that requirement for banks completely. And Jamie Dimon yesterday or last week echoed that and said, I expect there to be some sort of change there to allow banks to, to own more. And what, why this matters is because it just allows the banks to continue to pile on leverage, which is expansionary of the monetary, the money supply.

I mean, it's literally just continued, you know, pile on current collateral, right? So it's just an expansion of liquidity. And that means that you're gonna continue to see the expansion of price in things like gold and Bitcoin, in my opinion. If that, if and when that happens That's gonna be like QE on steroids in my opinion. I

Mean Dave you're a view we lost your mic completely now Yeah, we did here at Your back your back think of what is the full deal We did hear a boom, which was pretty interesting. You're back. You're back. Think of what is Goldilocks for? Goldilocks for Powell is Mike and James are both right. Is that an impossible scenario? No.

If you end up with commodity deflation because of economic forces at the same time as budget deficits need to be financed and putting in liquidity to create financial asset inflation. That's nirvana for the administration. That's what they want. And I'm not saying it's going to happen, but effectively, if you end up with deflationary forces, particularly out of China, particularly around the world, even here from a commodity point of view, at the same time as financial assets boom so as to make treasury yield drop. That is literally the perfect scenario. And, you know, ask yourself the question in that perfect

scenario, what will do best? Well, what will do best is, I hate to say it, and going to the conference, I'm not wearing orange right now, but we'll do best as Bitcoin because it will be unconcerned. That's an area where people will view gold as less safe haven. That's why when the tariff announcement came out this weekend, what happened? Well Bitcoin was at 107. It's now close to 110. Gold is down a few dollars, not a lot. And the S&P, the stock futures are up about a percent. So Bitcoin reacted the most. the Of course it's true, there's no question about that. But the point is, is look,

the notion that Doge was going to cut the deficit was always problematic. When you look at- Dave, I fought on stage with pomp on this at his event. Literally, he was saying, we're gonna get to surplus. And maybe we're not. The only way it could happen, and it could happen, I're not. The only way it could happen, and it could happen I suppose,

but the only way it could happen is if Congress authorizes and actually starts authorizing cuts, like actual cuts. The big beautiful bill stuff, I mean kind of. Dave, okay, I'm gonna respectfully disagree that the only way it happens is that, I don't think that they can even do that. I think the only way it happens is that I don't think that they can even do that. I think the only way it happens is if we get such nominal inflation that GDP rises to the point where we actually balance the budget through massive taxes on fake dollars. Literally, that's the only way we can get there. And it may take five, seven years to do that. I don't think it happens in this administration. I'm not taking the other side of that, James. I'm not. What I'm saying is the only way Doge could actually do any cutting.

OK. Sure. If they cut 25% let's say they cut back to if all discretionary budget was cut back to 2015 levels. That sounds like a great win because we look at where it was. But the problem is most of the budget is not discretionary. Yeah. You're still in deficit. Because of what you're paying in interest of what you're doing on defense of the budget is not discretionary. Yeah, you're still in deficit.

Because of what you're paying in interest or what you're doing on defense because the defense is the sacred cow unless Doge is able to- That's two trillion dollars right there. I'm aware, that's my point. Yeah, exactly. For context for the listeners, that's two trillion dollars between 800 to 900 billion dollars for defense and 1.1 trillion dollars for interest on debt. That's two trillion.

Right. And what's our tax receipts right now? 5.6. So you're basically saying you'd have to cut the rest of the budget almost in half to balance. Pretty close, right? Maybe 40%. I mean, really deep. And but that's when it goes up. like that, you know, that those debt payments are staying static. There are many, many things that Doge found and processes and things that should be implemented and done, but that's

going to require Congress to do it. And we're not going to hear boo about that until after the the budget, whatever the BBB is is passed one way or another. And I'm, we'll see whether they have any stomach for it. I mean, you know, it's, it's, it is what it is. So the notion that that would happen, that was the only really bare case for Bitcoin and gold. And I think that's gone. Right? You know, so if you think that you're going to have liquidity, you're gonna have

liquidity. Now, the question is, what will happen? What? The only disagreement here is not whether it's good for gold, it's whether it's good for gold and Bitcoin. Mike just doesn't... I think we have three of us who kind of think Bitcoin will do what gold does, and we have Mike who thinks it'll go the opposite way. That's really the fundamental disagreement here in all of this. Everybody believes seemingly that we have the same problem.

We believe gold will go up. We all believe gold will go up, correct? Yeah. Kind of an interesting nuance for all the arguments. So that's my main, my base. Well, my base, so what did we do last week? We got a high in the 30 or 5.15, and the same day the Bitcoin made an all-time new high.

That's a great statement for Bitcoin. The thing I think we're kicking on now is the end game of the wealth creation in the US stock market. We had massive fiscal monetary stimulus since this day, well, overall for decades. And we're seeing the limits of that. And Dave points, or James points to that with CDS,

our debt's just too expensive. And to me, that's the, you know, there's only two examples in history where you get this expensive in the stock market, Japan in 89, the US in 1929. And to me, that's why I'm still favorable to gold because I look at that Bitcoin gold ratio and I don't want to fire Dave up too much. I just point out it's been the same for since 2021. And I just look at this year, this year's a down year for the stock market, which I still think it's gonna be, it's gonna be much better for gold than Bitcoin. Let's look at this chart in that context. While you're talking. Look at this chart in that context.

Okay, yeah, sorry. So all I see on this chart, though, Mike, from what you're saying is that you're saying it'll mean revert, but they're still they move in tandem. And this is again against IBIT, so we don't have the strange non-market moves. But this is one year back, and you can just see how Bitcoin is more volatile, but it's following the same trajectory. That's the point that we keep making. I think that- You make that chart, or you can't- Oh, IBIT doesn't go back that far. Yeah, I'll make a new one. It's 2020 for Bitcoin gold.

And again, I don't think I should need to apologize that I'm still bullish gold. It's up before Bitcoin this year. Now, by the end of the year, it'd be a wonderful thing if Bitcoin can catch up. But I think the big theme is let's put it this way. If we end this year, we're down 10% in the equity market. That's the beginning of a massive bear market that we're way overdue for that some of us have seen in history. And that starts the deflationary forces that are just kicking into most of the rest of the world, particularly China. So there's a couple things. Look, there's Bitcoin moves based on two things, based on the adopt, which I just wanted to go back to 20, you know, if you could, but that it's the I've had gold nuts versus Bitcoin over a long time. That's why I was giggling as well. There you go. Yeah, you can't do anything about it.

But remember, I'm just talking about Bitcoin gold ratio. It's a stupid rock beating stocks and bottom. Bitcoin is white here. Gold is blue. So Bitcoin in 21 went in sync. It was bad. This is what you were talking about, right? It's at least by every adoption metric

that I know was, you know, it was up by a huge amount. And so my problem with that is- It's a big time difference, yeah. We probably got back to 2020. Right. So, you know, in 21, it got way ahead of itself in terms of adoption. So Bitcoin, we're basically, Mike is pointing out a fact,

and I think it's a true fact, which is we are right now where Bitcoin Gold got to in 21. Bitcoin, we're basically, Mike is pointing out a fact, and I think it's a true fact, which is we are right now where Bitcoin gold got to in 21. But in 21, Bitcoin's price relative to its network hash rate, relative to the dispersion of wallets, relative to the fact that there were no sovereigns, there were no corporates, there was no way to invest in it from a public point of view, was there. And so looking at that, one can come rationally to the conclusion that 21 was insane. It was a blow off top. It was however you want to call it. It's a bubble or whatever. So that

corrected and now we've been on a much more sustainable set path since then. So if you looked at the chart with that 21 taken out, it's an up and to the right chart that looks just like the Bitcoin hashrate. And I expect that to continue. And the thing that's interesting and most interesting to me will be does it reach critical mass? We in the Bitcoin world think Bitcoin will reach gold, but and people say, well, what does that mean? I think gold continues to go higher, right? Because I think that the denominator, which is fiat, is being printed out of control.

And so the question of when does Bitcoin get toward gold, it might be a decade, but why? It might be two decades, but it might be at a gold price that's dramatically higher than we are today. That's right. And so the ratio of Bitcoin to gold is a question of, are we at fair value? Mike is kind of Bitcoin to gold is a question of are we at fair value but Mike is kind of with your thesis is we're at fair value that

where we are now in this range is sort of at a fair value you're saying well we can go down from there we can bump from there whatever and my thesis is we were a fraction of fair value in which case it's it's they're totally different pieces and that's totally reasonable right you but you you You correct Mike Not when my main thesis is I'm seeing and my main thesis is I'm seeing very un Disconcerting performance in this asset that everybody I sense is the most pile on bullish trade I've ever seen that's just not when I don't join things. I'm sorry. And it's for the last few years,

and I just want to point out there's only been two down years in beta, the stock market since Bitcoin's been launched and it went down a lot. That's my point is we need to see it's get through that. I think all these entities are putting Bitcoin under treasuries now are just adding the systematic risk and they're not realizing they're just doubling down in an asset that everybody is bullish at the wrong time. History doesn't really judge these things well. And I'm just pointing out these facts and these performance I see in the old guard goal that some central banks are buying, a lot of them are buying.

And I'm still very concerned that this is going to be the beginning of the unwind of that great work American Wealth Creation Machine, which I point out is going to pressure all cryptos and Bitcoin has a high correlation there. So far it's been great this year. Let's just point out it's an unchanged stock market and gold's off the charts. So by the end of the year if the stock market's up 10% that's a bad problem for gold. It's probably going to pressure gold. That's my point bias.

Okay, no, we're great for this weekend. It's a normal day weekend. What are we going to be saying by Christmas? And if this is the way we're going, that's great for this weekend. It's a normal day weekend. What are we gonna be saying by Christmas? And if this is the way we're going, that's great. But that's what's happening. The bond market's telling you the trade's over. It can't handle these higher risk assets creating inflation.

The Fed can't ease. And it's just at that end game that I'm worried about. That's what Bitcoin gold's telling me. That's why I'm still just biased towards gold this year. At some point, I might get back towards Bitcoin. But again, that's the key thing is, you want the lower volatility store value versus the highest volatility speculative digital

asset in an environment. The equity market is going to go down. And I still think that's the base case this year. All right, guys, I got to drop for a meeting. But Dave, you can take this one. Yeah, enjoy. See you in Vegas. One of you guys talked about Josh Mandel and he's appeared.

He says, if it glows onto something, you got to pay attention to price action. I don't know if that was Dave or James. Josh actually emailed me that he thinks his call, and Josh, please, if you're around, feel free to comment back either to Scott or to me. His call is not that Bitcoin is going to drop, but that gold is going to absolutely go parabolic. And that Mike may be right and I may be right, meaning that we

may see a parabolic run in gold and Bitcoin lags it, but still outperforms stocks because stocks are tethered to earnings. And that's certainly possible. I mean, look, there's geopolitical reasons to think that a parabolic gold bull run is something that China wants to see happen and Russia wants to see happen. So who knows what will happen there? The real question is, is the dollar being depreciated against hard assets? And if the answer is yes, then the question then becomes is Bitcoin a hard asset or is Bitcoin a speculative beta? And that's where Mike and I tend to disagree on that one. I could easily see gold continuing to rally. I could easily see that. As long as the Federal Reserve and the other central banks in the world are, if anything, positive toward gold or don't want to try to paper trade it to oblivion like they did.

There have been multiple billions of dollars of fines of money that central banks doing so. Gold can continue to do well in this environment where we have to put a fire hose of liquidity in to keep the masses happy. And I'm saying that in a way not just the US I mean whether it's China whether it's Europe whether it's Japan whether it's the United States the the the fact is is Politicians don't get reelected when people are in pain Right and so it feels like the easiest thing to do is spend other people's money and print more of it And if you can do so in a way that doesn't cause consumer inflation, but goes to assets

So be it then your buddies will give you donate more money to you. And so I look at it in that kind of philosophical way. I don't know what will happen. The reason I was pointing out the coincident indicators in the economy are people aren't really in pain per se. There's talking about it. And we have this crazy rhetorical divide in this country. That's just kind of insane. And so, you know, that's what we're looking at. That's that's sort of my base case. I want to ask kind of a pivot question.

We have this title, the Bitcoin rush starts now. The idea here that when we were looking at this, and Mike, I want your opinion because you just said you don't like a trade where everybody's rushing in, right? Obviously, you like to be the counter indicator. Right now we have this businesses are the largest net buyer of Bitcoin so far this year, led by strategy, which makes up 77% of the growth, you can look at on this river, which is a platform of

2000 plus big companies using Bitcoin with river. We had this one yesterday, a small food firm buys 21 Bitcoin. Yeah, it's kind of a nothing mover burger, but it's a food firm. Right. And these are the kinds of trends that we're seeing now. And it seems to be a massive uptick. Every day I see three or four of these stories, some company I've never heard that's buying Bitcoin and adding to their treasury, hopefully not taking on debt to do it. But you know, Mike, is this one of those

things that gives you your makes your spidey senses tingle that it's a top signal? Exactly. That's kind of what you're saying. He's really easy. Or is it like, what if 10,000 more of these come in? You know, like what if exactly so adding gold, you'd think some of these would be adding gold actually.

It's that simple. Gold is expensive, too. It's a bull market. I don't deny it. The difference is one has a history of 80, 70, 80, 90% corrections and every time it makes you know how people saying it's different. And we know which one that is. The key thing I really worried about

is the systematic risk of a business adding this highly volatility, highly correlated asset to the stock market to its treasury is unheard of. The history is not gonna judge as well. Now let's remember exactly what Michael Saylor said. Why, when it was micro strategy, why he paid a little bit of Bitcoin

because he did not see great business opportunities anymore in his business. Now businesses should be running their businesses, making money, and if they're not seeing good business opportunities, they're tilting over the Bitcoin as an upside, that's not gonna end well. I just, when I look at the option male lead in this trade this trade is like, no way, I'll find something else.

And that's why I think we're getting to the point that we have to be very careful of rational investors is the time that we all knew when time to buy Bitcoin is Michael Seio started in 2020 was around 10 grand and a lot of people continue admitting that certainly the current government hated it. Now that everybody loves it and it's taken off, we all know we got to be very careful here.

That's why I look at, okay, what are the signals that and so I look at what you pointed out is this is to me just saying stay away. We've seen this before and I have to admit that when you see this kind of rational enthusiasm, you've seen the pain in the past from this kind of rational enthusiasm. I just say I can't be I'd rather be the guilty one to look back at from 10 years and yeah, I got it wrong. Versus the one who's who kind of warned. Okay, can I make two points? Yeah, I just wanted to say,

Dave, as you jump in, like, I'm just trying to parse legitimately Bitcoin or aside, how professionally you look at, whether it's a catalyst in the beginning of something or some massive top signal, you know, but that was exactly where I was gonna go. So first thing, I'm gonna make two points point number one, before I answer you, what you just said, Scott, because I think you're on to something is that corporations do, you know, are with positive cash flows in have historically cash flows and have historically used that cash flow to buy back their own stock. Right?

So, not an economic thing whatsoever for the business. Zero. So the question, if you're a corporate, if you're a CFO and you have a choice of your positive cash flow, you don't need the money. This is money that's retained earnings for shareholders. What do you do if you're, if you want to help your shareholders? What do you want to do? Money for spending on businesses, money for investing in the business, that's secondary. You're not going to put that in Bitcoin. You're not going to put that in gold. You're not going to buy back your own stock.

You're going to spend it for that. So if you're now in a situation where the only question is, you put it in treasuries or you buy it you buy back your own stock or you buy Bitcoin Well, what they're looking at is they're saying okay I think Bitcoin is 90% cheap I'm gonna do this for the long haul and my investors are gonna reward me for that's that's a decision That's not a leverage decision. That's a rational decision. It's a completely rational decision It's the one that I would make if I were running a corporate treasury where I didn't have where it was either buy back my

own stock, which by the way, has all sorts of connotations to it. You know, yes, you do buy back your own. So it's not you know, I'm not selling someone's stock to buy Bitcoin about a corporate treasurer that is that company was sorry, the food company I was talking about, they were they sold some stock to buy Bitcoin about the corporate treasurer. That company was... Sorry, the food company I was talking about, they sold some stock to buy Bitcoin. Right. So, no, that is an issue. So, no, that's thing number one.

Thing number two is in 1997, I heard exactly the same stuff that Mike was saying from people who were shorting all these companies into what became the biggest internet bubble. They weren't short... This isn't what you were hearing in 2000 shorting all these companies into what became the biggest internet bubble. They weren't short, this isn't what you were hearing in 2000, that's what we're hearing in 1997. I think that yes, you're right.

If there was a lot of leverage in the system, if individuals and people who are invested, by the way, that chart is a little bit misleading, because there's a lot of individuals I know people who sold Bitcoin in order to have the ETFs because that way it was easier for them to hold on to it. So there's some of that going on. Yeah, so it's a little misleading, but the truth is, is there's not a lot of retail enthusiasm. There's not a lot of hype.

None of the hype signals that this price is there. So I agree with you. If you get to 60% of the companies with high cash flows that are buying Bitcoin for their balance sheet, then you're right, Mike, 100%. Then at that point, it's sort of the end. I just don't think we're at the end now. And I think that's kind of the point from Scott.

It's like, we look at this, it's just not there. There's no there, there. These are not stacked. Yeah, it's just not there. There's no there, there. These are, they're not stacked. Yeah, it's kind of like if your cab driver tells you about Bitcoin, maybe you're starting to see a bubble. But if you're a barber, cab driver, and a kid's nanny, I'll tell you about Bitcoin, you know you're there.

So is it one or all three? But let me just piggyback on what you'd said, Dave. To me, that's the biggest problem I've seen since 1999 and 2007 because I see it now. My wife and I have been looking for real estate. Our broker is great, but he's never seen a real recession. What you're talking about, if you don't need the cash now, then you're not doing the iterations of the past where the Fed just did not ease every time the stock market went down through

massive fiscal stimulus. That's the point. The whole human nature of this is the only way this ends ever. When you get this expensive versus the rest of the world in equities is it has to go down. It just, the bubble ends. That's my point is these people who are making decisions are not perceiving of a world where you have a normal recession, where your average unemployment goes to 6%, which it always has, people cannot contribute to the 401k's because they're not working. It's what's, we're the most overdue for this in my lifetime. That's my point. Yes, I've been early,

but I've seen those indications in things like gold and treasury spiking. That's my point is when people say they don't need money because they don't realize what money they're going to need when we have the normal recession. And maybe on a point it doesn't go to 6%, it goes to 10%. But that's my point is, why double down on this risk asset at a time when you can get treasuries at 5%. I just say thank you. If I'm running a corporation, I say, sure, you put a little bit of Bitcoin. This is the human nature here. This is not going to end until it goes down. You're right. Well, two points. First, the unemployment rates. It's like buying back your stock, buying back your stock because we've had the biggest

bull market. Well, what's the thing in the bull market? We've had the biggest bull market since 2009 in most people's history, 2009 versus the rest of the world. The S&P 500 versus the MSCI from 1969 to 2013 was one to one. Now, it pumped up to 2.2 to one, and it's just starting to revert down, and everybody in the planet gets it. I'm overweight US stock market. Good luck.

I just think this is where I stick over to gold and Bitcoin has been great, but at some point treasuries, but that hasn't happened yet. Okay. So the two key points here where we disagree, first one is kind of minimal, but we can't look at 4.1% or whatever unemployment rate we're at at this point as dispositive when the labor force participation rate is so freaking low. The unemployment rate, if people haven't given up out of the workforce, is nowhere near as low as it looks. And that is an issue. So there is some of that going on, there's no doubt. But let's talk about what you just said. I 100% agree that companies will pile in and overspend cash and be in a cash crunch

because they do not anticipate a recession. They don't know what that's like. You're absolutely right. There's no question about that. I just don't think we're there yet. But yes, there's 100%. I agree with that. In terms of equity valuations, that's kind of my point. My point is you're looking at your stocks valuation, valuation. You're looking what's going on You're saying man that we're expensive. Do I really want to buy more? The only reason that companies should be buying back stock now There's only one and that's to sterilize options are given to their employees. That's it Anything else other than that if you're buying back stocks unless you are in a crazy situation

Where you believe you have huge growth potential and you're idiosyncratic, but the majority, as you put it, are overvalued and you'd be enough to do it. So now the next question is, treasuries or Bitcoin? And honestly, I go back to, I don't like his metaphysical stuff, but Michael Saylor's analogy of the melting ice cube, I think that we know that they're going to be printing dollars. We see the deficits, we see all of it. And that's really the question. And it doesn't take a lot of companies, just like it doesn't take a lot of asset managers. I mean, we haven't even seen the push. Just keep this in mind, investment consultants,

mercers, etc., the ones who direct the largest pension plans in the world have still not given Bitcoin the all clear. So we haven't seen asset allocation at scale yet. This is the toe in the water because Bitcoin's size is so small and every piece of analysis that you do ignores that Bitcoin is so small relative to these asset flows and it's a supply and demand economy. If you struck those two things out, Mike, I think we're probably saying similar things. I just think they're going to do everything they can to kick the can down the road. I said before, when we're doing this show in August and September, I may very well be flashing red warning signs in my head, because it's that time of year and things that can

happen. I think that I just think it's early to be saying that. That's really it. But we don't disagree all that much on the warning signs in the economy and people. You're right. I keep seeing people who have no idea of what could happen. You're right. That's true. People don't. But we need to disagree. That's what our audience wants. It's more fun. I think No, no, I understand that I get that part But I always like trying to crystallize in a debate where the disagreement really is Right, you know, I don't disagree that there's the rationality, but we have a financialized economy and that's the main reason Bitcoiners are Bitcoin

That's why you're gonna have a horde of people in Las Vegas saying opt out of the fiat economy. Well, you know, there are crazy people there and there are mainstream people there. And then there are people there saying, well, what's all this stuff about? You know, and the crazies are like, well, you know, we need to rip the whole system down and, you know, go through a fourth turning and have like a civil war and, you know, whatever. But my point of view is incremental change towards sounder money is what we need. And I see Bitcoin as the hope for getting there. And from an investment point of view, I want to profit as we go. But that doesn't mean that I'm embarrassed on gold. I'm not. I own some. And it's basically very straightforward. You know, I'm not as

bullish on gold as I am on Bitcoin. But you know, that's a that's a market. Right. People are going to believe what people believe. Yeah. Yeah. Well, here's my I've said it before. The base case, I think, is I'm afraid we're going to do what history suggests we did in the 1930s. It only came after stock market went down. We went to the Great Depression. The 1990s in Japan, it only came after stock market went down. We went to the Great Depression. The 1990s in Japan, it only came after stock market went down and real estate went down. And so what's happening in China right now, they've been shut off. That to me, the next recession is going to be in the back of one simple little thing. The U.S. stock market just giving back of some of its extraordinary gains of the last decade, certainly since

2009, 100%. To me, that's the recession. If you have to shut off the spending, and I think most big money managers know that's the key risk. If we can just stay here and stabilize, that's wonderful. Bitcoin's a great indication, it's wonderful. And then I just look at all these silly millions of cryptocurrencies are just classic signs of what we saw with internet stocks, classic signs that we read about in 29 and 89 in Japan. We gotta purge that stuff.

Then I think we have a great environment, but that stuff's got to be purged. It's just silly. You got things like Dogecoin, the number eight cryptocurrency. I hate comparing it to Bitcoin gold, but it's the same chart. It just is. And they bottomed at 25, the Bitcoin gold at bottom 25, same time Dogecoin bottomed about 25 billion. Now it's up at 37 billion. I hate to see it, but it's just fact of what's happening in markets. Yeah. I mean, we're going to go ahead and move to rap because it's the holiday obviously, but my, my, I guess my final comment there goes to the same question.

I was asking before is does that bubble pop at a $200,000 Bitcoin or a, does it pop here at a hundred and two? Since Josh is, since Josh is watching four, four, four baby. I've since Josh is since Josh is watching and question or for baby I know I'm laughing. I mean it is in it is farther from impossible than people think but Because markets are always more irrational when they do get frothy than people expect The question is if it gets frothy, that really the question. I personally hope a sustained grind higher climate wallow worry market is what we have.

And there are some indications that could be, but hyperbolic stuff happens all the time. Josh responded, faux faux faux. And so as we wrap it, what's funny is that, Dave, we're going to see all of the excess this week. I think Mike, Dave and I and James obviously lives in Vegas, we'll be able to report back and tell you if 50,000 people really show up to this thing and what the vibe is like, I think we'll have a much better gauge of sentiment because man, I've been at almost all the Bitcoin conferences

and I remember when things were bad and I remember when things were good and when they were somewhat at their peak, even though price was dropping when it was being planned, the one in Miami at the convention center, they had like 30,000 people and felt like Coachella and took you 30 minutes to walk from Airt. It's pretty good tops. It was a pretty good signal at that moment. And so we'll see how this one is. I think it's going to be insane.

It is Vegas after all. Guys, that's all we got for you today. Dave, I'll see you at dinner tomorrow night. Yes, sir. All right. Cool. Another great Macro Monday. Guys, that's all we got for you today. Dave, I'll see you at dinner tomorrow night. Yes, sir. Another great Mac of Monday. Thanks, gentlemen. We will see you soon.