The Wolf Of All Streets - Why Now Is The Best Time To Invest | Anthony Scaramucci & Richard Byworth

Episode Date: January 26, 2023

My guests are Anthony Scaramucci (SkyBridge Capital) & Richard Byworth (Syz Capital).  Anthony Scaramucci: https://twitter.com/Scaramucci Richard Byworth: https://twitter.com/RichardByworth ►► JOIN THE FREE WOLF DEN NEWSLETTER https://thewolfden.substack.com/   Follow Scott Melker: Twitter: https://twitter.com/scottmelker  Facebook: https://www.facebook.com/wolfofallstreets   Web: https://www.thewolfofallstreets.io  Spotify: https://spoti.fi/30N5FDe  Apple podcast: https://apple.co/3FASB2c  #Bitcoin #Crypto #trading  Timestamps: 0:00 Intro 1:30 Richard Byworth 5:00 Anthony Scaramucci on SBF & FTX 8:00 Traditional TA does not work for Bitcoin 10:00 Davos 12:00 Bitcoin trust: where are the institutions? 13:00 Slowing down Bitcoin adoption 18:30 When JP Morgan will adapt Bitcoin 20:40 SkyBridge, Fidelity, BlackRock 24:00 Bitcoin will boom 25:30 Inversion of the yield curve 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.

There's one question right now and one question only. Is the bottom in? Well, I guess we'll make it two questions. Is the bottom in and is it time to start buying Bitcoin? Is it time to start buying stocks? Is it time to start buying everything? Or is this yet another bull trap and a series of bull traps on the way to new lows? I have two incredible guests today.

I've got Richard Byworth and Anthony Scaramucci, who is currently dealing with some technical issues, trying to sign on, but hopefully we will get him in here. You guys don't want to miss this one. Let's go. Let's go. here via email with Anthony Scaramucci. As I said, I've got him and Richard Byworth today, seen them on this channel both countless times. And since we are a bit short on time today, I'm going to go ahead and just bring Richard on now and we'll add Anthony when he gets here. What's up, man? How are you?

Hey, buddy. Good. How are you? I'm doing well. Have you orange-pilled any world leaders of late? No, no. I've been busy in my new role, actually, here in Switzerland. But I'm sure I'll get to go on holiday at some point and get cracking on that again. I like that that's what you do on vacation. Not my job, just casually orange-pilling world leaders and bringing them over to Sailor's House

to put the final nail in the coffin, which was rather incredible. We've discussed it here quite a few times. So listen, I'm going to dive right in. We'll hopefully get Anthony in here very soon. But we're going to talk about where we are in the cycle, of course, and whether we think Bitcoin's bottomed and if there's a good time to buy. But you actually, as we were talking before, have a pretty unique view on this last crash and what happened with FTX. So I'd like to hash that out first before we start talking about that. So yes, we've talked about FTX quite a lot here, but quite a bit to parse as to who's to blame and why. Yeah, I think, I mean, a lot of people obviously pointing to Sam and what he did is obviously being just reckless and fraudulent in so many different ways. We often speak about what happened with FTX and the fact that for crypto markets, this is really the Enron stroke Lehman stroke Madoff moment all rolled into one.

I mean, there's all, you know, types of reckless abandon that was experienced in each of those items. remarkable and for the subject of what we're talking about today is the fact that crypto has actually bounced all the way back to where we were from before that happening with no Fed put, no central bank intervention, no protection of markets. But I think to the point, you know, it's very easy to point to the fact that Sam's a fraud and was a fraud from the beginning and was doing things that just in the traditional world would be unthinkable. But I think actually this was a massive failure on the part of regulators. And I give you an example from my own experience. I mean, we were in my former shop. We were an exchange that was doing everything the right way. We'd built and designed the exchange with exactly the type of protections in mind that protected against having a trading book

that was trading against clients. And we, hey Mooch, how you doing? Yeah, he's muted at the moment, but hopefully we'll get him a sound. And there he goes. All right, so keep going. Yeah, so I think think that you know we'd built an exchange with that in mind and to give you an example we i mean we were going for um

oversight with the psa license in singapore uh with the monetary authority there now their specific licensing requirement meant that until we actually got the full license, we weren't allowed to cover Singapore clients. So we weren't allowed to onboard Singapore customers, which meant that all the Singapore customers went and onboarded with people like FTX and Binance. And so unfortunately, for 50% or however many of their citizens that were trading crypto that were using FTX, they've lost all their assets. Because the regulator didn't move fast enough to protect them and actually meant that the good clean players were shut off from covering their domestic market. So I think it was just a classic failure by the regulators in this case.

And that's obviously one example. Not sure if Anthony can hear us, but he looks really cool in the back of that car. Can you hear us, man? Well, should I put the shades on, Milker? Then I'm going to look like the James Bond villain. Yeah, the shades are better. Is that all right? How are you guys?

I'm sorry. I'm in the car. My assistant thought this was a phoner. I didn't realize. My bad. So I apologize.er. I didn't realize. My bad. So I apologize. You look cooler in the car. Melker, you didn't come to Samaritz.

I know. Yeah, we missed you. Maybe I missed the invite. It must have come in the mail to my old house or something. All right. Well, I'll make sure you get one next year. That was a lot of fun. I enjoyed it. I'm to dubai next week for the satoshi roundtable so i'm looking for that uh looking forward to that listen you just kind of hinted anthony that you

put on your shades to look like the villain that everyone thinks you are do you think that the smoke is clearing on that i i feel like that's uh sort of becoming a narrative of the past now oh listen i hope so. Listen, you know, there's only one thing you can do in life is go forward. I mean, I can't go back and redress. Obviously, if I knew what I know now, I would have never partnered up with Sam. That's life. He bought a piece of my business. It didn't affect our business other than his wreckage of the cryptocurrency markets. But a lot of that stuff has come back now.

I do believe that you're right. Three, six, 12 months from now, he'll be in the rearview mirror. He'll probably stay out of jail for a period of time. I think he's made a calculation that he's a young guy. And why not play video games in his mom's basement before he goes to jail. I get that. So instead of going to jail at 30 and spending 30 years in jail and coming out at 60, he'll go to jail at 31 or 32 and come out at 62. But, you know, listen, I mean, there are bad actors, guys. You know that. One thing I'll tell your viewers and listeners,

Scott, if you operate with integrity and i've been on wall street for 35 years i can't tell you the opportunities that are coming our way at skybridge as a result of the fact that we try to do the right thing and we're good guys so the message to your people that listen to your podcast just operate with integrity be honest uh bad things are going to happen honest. Bad things are going to happen to you. Good things are going to happen to you. But you will, by and large, get tons of opportunities if you have high integrity. Well, we definitely talk about the fact that sort of the story for you might be going into the rear view, but also the dip in price is in the rear view, right? I mean, we're now trading higher

on basically everything than before FTX collapsed. So I guess that leads to the next question is, and Richard, I know you have thoughts, where are we in the cycle then? I mean, is this a time to start buying or was it time to start buying at 16 and 17 and now you have to be hesitant? I think if you look at what was happening over the last seven months on chain, it was very clearly a period of accumulation. And I think there were a number of indicators that were starting to flash by. In fact, I think every possible tracker, and I think you discussed it with a friend of mine, Willie Wu, he's got 17 of these macro indicators that were all flashing green as a buy signal in sort of late last year.

And I think a lot of people were ignoring it because so many people in the market were calling for lower levels, 10,000, even below 10,000. And I think this points to another issue that we see in crypto and particularly around Bitcoin is people are using traditional technical analysis for an asset that is the only asset in the world that has finite supply. And you're trying to use traditional technical analysis to call the lowest bottom that this can go to. I think that is extremely dangerous. Obviously, you know, I would hope that people use tight stop limits to trade this. But I think,

yeah, it's obviously called the market wrong. And we're actually now in a period where we're running out of supply. Some big buy orders are coming into the market and running out of supply. It's just pushing things higher because that's the way it needs to go. I mean, Anthony, do you feel like institutions are still as interested as they were before we saw all of this contagion? I think there was a narrative that, you know, so many people got rents to change the perception of the industry. I don't buy that, frankly. I think that people want those dips. But I mean, you're on the front lines of the institutional battle here. Do you see any different narratives, or do you think it's more of the same,

and this is just an opportunity? Well, first of all, I love Richard's predictions, okay, which I had the same predictions. And, unfortunately, it's just going to take a little while longer, Richard, to see those predictions come true. But I left San Maris and went to Davos. And I know Davos is hated by a lot of people, but I've been going for 16 years. I find it to be a wonderful contrary indicator. Davos 07, the world's growing. We go into the global financial crisis.

Davos 2009, the world's coming to an end. Biggest bull market in history. Davos 2016, Hillary Clinton's going to be president. Davos 2020, resounding reelection for Donald Trump. And Davos 2023, let's play a funeral dirge for Bitcoin and all cryptocurrencies. And oh, by the way, you know, Jamie Dimon and God bless him. I think he's one of the smartest guys in finance. But he was insinuating on CNBC that you could create two hundred and ten million bitcoins, that it's not capped at twenty one million and that there'll be a rug pulled on everybody. And he said that it's a decentralized Ponzi scheme. And he said that its use case is a pet rock. OK, so to me, that was the most bullish sign. I haven't seen Woolly

Wool's 18 different macro green light indicators. But when I heard that and I listened to the general consensus of the elites at Davos peeing on cryptocurrency, the blockchain and Bitcoin, I'm telling you guys that is a massive bull sign. And so, you know, and obviously, listen, you can't create 210 million Bitcoin. You guys understand the code as well as I and the consensus mechanism. I mean, they couldn't even create bigger blocks, you know, last year when they were trying to do that. But you get the point I'm making. So I would say the institutions have been scared out of their minds as a result of last year. The Bitcoin trust that was created by BlackRock, we are an investor in that. I'm proud to tell you that because I wanted to send a message to those guys that were in the game with them.

But they have not raised any money yet. So the institutions are still not there. Just imagine if a couple of these institutions pick up this idea that we're all on to. Richard, I just want to say really quick, isn't it also the most bullish signal that they're even talking about this at Davos? Like how worried that the fact that it's gotten so big over the past few years that it's even on their radar? Yeah, I mean, I mean, obviously, Christine Lagarde has been very negative Bitcoin for a long time. And I think that that is just very indicative to your point of how concerned they are about Bitcoin and the threat it poses to the traditional system. But Mooch, I like you, I'm sure, know a lot of people that work with Jamie.

He's a smart guy. There's no way that he's you know he's just deliberately misunderstanding it for the narrative to try and uh trip it up so you think that he's basically yeah go ahead no i don't mind me interrupting what do you think it is then because we both know how smart he is so is that just to help him with the regulators? Why would he take a posture like that? I'm sure it's well calculated. What do you think his thoughts are behind it? I think to your point, I mean, the Davos crowd really do not like Bitcoin and really want to try and undermine it as much as possible, you know, to delay adoption so that they can get whatever CCBDCs out there into the public arena as quickly as possible. Because I do think this

is part of what awaits us over the next three to five years. And slowing down Bitcoin's adoption before that happens is probably one of the key goals, I would suggest. It's interesting because I think you have a bit of a watch what they do and not listen to what they say sort of situation. Because JP Morgan has actually been relatively involved in blockchain and Bitcoin for many years. I mean, I interviewed Stuart Popejoy from Cadena recently, who literally, that project was born of JP Morgan coin and a private blockchain being developed at JP Morgan years ago. And we know that JP Morgan's using the technology. They just trademarked a wallet. So why would they be, I mean, is this a case of the CEO just bowing to the pressure of the clientele and saying, even though I hate it, we need to do this? Or is it literally just, as you said, he's just sort of keeping the brakes on while they

work on their own level of adoption, or I won't say filling their bags, as people are saying in the comments. I don't believe that. Yeah, I'm not sure I believe that. I'm not sure that Jamie Dimon's going into the market on behalf of JP Morgan trying to buy as much Bitcoin as he has. I don't think that's what's happening. I think, yeah, I think that there is a focus on CBDCs.

And I think that that, you know, talked about this with Samson Mao. But the point being that you're not going to be able to buy Bitcoin easily once CBDCs arrive. So the longer that they can delay adoption until that point, then I think that that's probably the key goal here. As for Jamie Dimon, he still keeps saying blockchain, Bitcoin which is weird because he flipped back and forth across that narrative from 2017 back to now 2022 which is like the classic I don't understand Bitcoin statement blockchain not Bitcoin um this uh is interesting that he's gone back to that yeah so you know I just say something about this and I think you guys probably will agree with me because I obviously worked in a large investment bank. There is no upside for them to move in the direction that the three of us are in.

And I'll just give you this example. In November of 2020, I bought my first bitcoins. I think we made a nine-figure investment in Bitcoin across our funds. I then met Richard. I ran into you, Scott. I got involved in the community. And I looked like a genius because those investments went from $17,000 to $69,000. And even though they traded off at the end of the year, I got calls from institutions that yelled at me for buying Bitcoin. And now it's December of 2021. They were calling me saying, thank you for bringing me into the modern world. I'm very grateful to you. And then at the end of this past year, those very

same people were calling me saying, you're a complete and absolute moron. How the hell could you put us into Bitcoin? OK. And so the point I'm making is you have to have a three, five year horizon and you have to have the stomach for the volatility now the one thing that that caught me off guard and it shouldn't because i'm a old wall street hand is the levels of fraud and the levels of leverage you know i didn't i didn't see that coming that's my fault um but you know it was almost as if john merriweather and bernie madoff got together and had a baby and the baby they created is Sam Bankman Freed. OK, I mean, this guy was like levered and fraudulent, you know, you got the three hour situation and all that other stuff. And so despite all that,

Bitcoin really just traded back down to where we were buying it in november october november of 2020 so so so but i look like a horse's ass i'm a goat i was a hero temporarily uh when i announced the deal with sam oh we lost him i think we lost his connection there so uh yeah but to his point i mean everybody is a genius in the bull market and loves you i'm gonna bring you back on we got you back. Yeah, sorry. That was my fault. I pressed the button because I'm moving my hands like a wild Italian.

When I announced the deal with Sam, I was a hero. He was the second largest cryptocurrency exchange, 12.5% of the volume. He was the darling of the political community. He was well-respected. He was speaking, guys, get this. He was speaking at the Goldman Sachs and the J.P. Morgan conferences via Zoom. OK. And so I made that announcement on September 7th. I'm back on CNBC explaining the debacle on November the 11th. I went from hero to goat in lightning speed. Now, again, why would an institution want to subject themselves to that? Why? You know, and the answer for me is I'm willing to do it because I have the guts to do it. And I believe that we're going to be right. And if I'm right, all of the nonsense that I'm dealing with right now will be in the rearview mirror. We'll be looking around Bitcoin, 150,000 guys. I tried

to get you in there as early as I could. OK, and if I'm wrong, JP Morgan goes on to be JP Morgan. And if I'm right, JP Morgan adopts this in 2025. You know, maybe Jamie at that point is in retirement as he's closing in on 70. And they've already got all the infrastructure and apparatus put together because his team's been working on it all the while. So tell me what I got wrong about that analysis, guys. I don't think you got it wrong at all. They don't care if they buy higher than the question becomes. Why are the Fidelities and BlackRock's of the world willing to more publicly support? I mean, BlackRock is so big and it's such a fraction of their business. Maybe that's why. But why are those companies willing to start,

you know, really dipping their toes in the water publicly? So I want to address that first. And Richard have Richard's comment because I've talked to leadership in both places. And I'm very proud to tell you guys that SkyBridge is one of the test pilots for the Fidelity 401k program. And so I have purchased Bitcoin in my 401k profit sharing at SkyBridge through Fidelity. I migrated all of our accounts over to them. In Fidelity's case, they actually believe in the technology. In BlackRock's case, in talking to Larry Fink, I think he's still a skeptic, but he is sensing and feeling a tremendous amount of demand from both institutional and retail clients. And so Larry is an old Wall Street veteran. He does not want to miss

that demand by not having an appropriate product for those people. I'll turn it over to Richard, but that that's what I really think. So he's getting ahead of it and providing the infrastructure just in case. And there's nothing lost

if it doesn't happen, basically. Yeah, I think I think if you look at those two institutions they're actually quite different in their views around bitcoin obviously fidelity you know they got into this space in 2015 when they first started mining bitcoin built a custody platform invested tens of i think even hundreds of millions of dollars into the build out of that custody solution. They're real believers in Bitcoin. BlackRock, like you say, Anthony, they're just moving along with what the current trend is.

And I think what's interesting there, and there is an interesting point here, is that the ESG component, and BlackRock's the biggest player when it comes to ESG focus. The fact that BlackRock are now able to offer products in Bitcoin tells you that the ESG negative tide against Bitcoin is starting to turn. And I think, you know, it's starting to lose credibility. I think Bitcoin clean energy usage in mining is up about 4.7% over the last year. We're now 58% of the network uses clean energy. And obviously, you've got all the work that's now being done in methane mitigation, which is obviously the biggest contributor to greenhouse gases and potentially climate change so 67 of methane production globally can be reduced

by um mining bitcoin i think this is actually starting to make a very strong case for the pro that bitcoin can become a carbon negative industry very soon and the fact that blackrock's starting to offer products in it suggests that they're feeling more comfortable with the ESG component of Bitcoin, which is a big positive for us. Yeah, that's a huge point that I had not considered because that's been the sort of source

of the core FUD for years, right? You could even say that the ESG narrative was part of the major last correction or the catalyst even for it. So that makes a huge, huge difference. So to get back since we only have three minutes, is now the best time to invest? I think everyone, certainly everyone watching thinks, hey, you just kind of buy Bitcoin. And if you like Ethereum, you kind of buy it. And we're just going to wait a few years. Right. We've established that the Fed is sort of driving everything right now.

Is now also a decent time to just start adding on risk across all portfolios? Or do we think we're going to have a miserable recession incoming? Let me go first. But here's what I will say i'll say three things number one uh i would encourage people to listen to the interview this morning with barry sternlick on squawk box it is impossible for the fed if you have 31 trillion dollars of debt on its way to 34 trillion and you've got interest rates rising the federal government is not going to be able to make sense of their budget with a one trillion to one and a half trillion dollar interest rate payment to all the debt holders

so that's number one two i believe that the fed is going to declare victory inflation is going to go down because of technology and they are going to start cutting rates or guiding people to lower rates, which is going to boom the market and boom Bitcoin. And the third point, I think this is the most important point. If I'm wrong about those two scenarios, it's still a great time to buy Bitcoin, because if we go into a recession and the dollar starts weakening or people lose confidence in the dollar, they're heading towards Bitcoin. And again, Ethereum is included in that.

But I think you guys get the gist. I'll turn it over to Richard. Yeah, I think quickly the inversion of the yield curve that you've seen is probably the most extreme that we've seen over the last 20 years. And I think the Fed is between a rock and a hard place. There's just no way that they can continue on the path that they've been on. And so I'd agree completely with you there, Mooj. I think the other point, just to mention a very bullish thing that has been recent FUD is the grayscale situation and the NAV discount that you have on that product because of people being concerned about whether or not that product is backed by the coins.

And I think the point to recognize here is that Coinbase, while they didn't make a strong statement, they went on record and said that they hold all the coins in their custody and I think just again having been a director of a Nasdaq listed company with sec scrutiny you don't say something like that because a you have zero upside if if you're lying about it but B you have significant downside if it's not accurate so I'd say that that discount there is probably just uh you know a function of where we are in the market with concern around genesis and dcg probably quite an interesting trade um for the near term um because that discount you're essentially buying bitcoin today at 12 000 um by buying that product yeah and gbtTC has been arguably the best performing product this year, closing that discount to now from 50-ish percent to mid 30s. So even just that 15%

gap has been massive. I know we got to go, guys. Anthony, thank you so much for making it from the car. You look like a boss, man. You look really cool. Great to be on. OK, I'll be back. Next time you invite me on, I'll be in front of a computer. But by the way, GBTC is going to win that lawsuit. That's my last prediction. I like it. Thanks. All right. And Richard, next time, don't lose my invite to Switzerland.

You better make it out, mate. There's some fondue waiting for you. I'm absolutely ready anytime. Guys, I will be back tomorrow, 9.30 a.m. Eastern Standard Time. Thank you so much for tuning in. Peace. Let Standard Time. Thank you so much for tuning in. Peace.