Unchained - Bits + Bips: Why Traders Are Sanguine Before Trump’s Big Tariff Day - Ep. 806

Episode Date: March 26, 2025

Investors are still licking their wounds from this month’s corrections. But just as Trump’s tariffs are about to move into full-force, our experts are seeing silver linings and causes for optimism. With conflicting signals coming from all corners of the map, hosts Noelle Acheson, Ram Ahluwalia, Alex Kruger, and Felix Jauvin break down: What to expect from Trump on April 2nd Takeaways from last week’s FOMC meeting If the White House and Powell are actually on the same page  Why tech stocks are taking off again Why BlackRock is bullish on bitcoin during bear markets If ether is about to get its groove back Sponsors: Bitwise Hosts: Alex Kruger, Founder of Asgard Ram Ahluwalia, CFA, CEO and Founder of Lumida Noelle Acheson, Author of the “Crypto Is Macro Now” Newsletter  Felix Jauvin, Director and Host - Forward Guidance Links Incoming Trump Tariffs Bloomberg: Trump Plans His Tariff ‘Liberation Day’ With More Targeted Push WSJ: White House Narrows April 2 Tariffs FOMC Meeting Unchained: Bitcoin Drops as Fed Leaves Rates Unchanged, as Expected NYTimes: Citing Tariffs and Uncertainty, Fed Sees Higher Inflation and Lower Growth Animal Spirits Return Barron’s: Don’t Count Out the Mag 7. They Could Lead a U.S. Stock Comeback. CNBC: ‘Magnificent 7’ has a notable up day after struggling for 3 months BlackRock Decrypt: BlackRock Digital Assets Head Criticizes Narrative of Bitcoin as a Risk-On Asset Bloomberg: BlackRock to List Bitcoin Exchange-Traded Product in Europe Fidelity Tokenization CoinDesk: Fidelity Files for Onchain U.S. Treasury Fund, Joining the Asset Tokenization Race Timestamps: 👋 0:00 Intro 📉 2:16 Why investors are nervous about April 2nd 🌎 4:40 Two ways to think about tariffs ☯️ 6:56 The difference between retail and professional traders 🏦 8:44 Why the Fed is predicting a worst-case scenario 📈 12:08 Why the correction is largely done 💰 19:20 How the Mag7 got its groove back 🏛️ 20:42 Are Bessent and Powell more aligned than thought? 🚀 22:54 BlackRock says a recession is good for bitcoin? 🥇 24:54 Altcoin ETF race about to start? 🎌 28:41 Why Japan is irrelevant right now 🐂 30:42 Why animal spirits are back ⛓️ 35:03 The great financial unshackling 📈 38:02 Is ether ready for a comeback? ✅ 42:09 Why Fidelity is tokenizing on Ethereum 📈📉 44:32 Are pump and dumps over? 🇪🇺 49:32 Dumb money coming to Europe? 🐙 52:35 Why Kraken made a smart buy this week Learn more about your ad choices. Visit megaphone.fm/adchoices

We haven't seen this short interest in the last five years. We're at the 98th percent, 99th percentile of short interest. Everyone hedged and then kept hedging. And then right when they're not supposed to hedge, they just hedged them more. And what you saw in markets today, Monday morning, strong gap-up openings, MSDR, gap-up, and running. I have a basket I call Twitter momentum stocks. They're all up strongly. So the headline is animal spirits are back.

And crypto and Bitcoin are part of animal spirits. Hi, everyone. Welcome to bits and bibs, exploring how crypto and macro collide one basis point at a time. I'm your host, Noel Acheson. I seeer and keeper of the Crypto is macro now newsletter. I'm here with Alex Kruger, Kruger Macro of Haus Asgard, Protector of the Realm, and Ram Alualia, Meister Hope Wealth, leader of Lumida. Hi, guys.

How's going? Hi, everyone. Today we are joined by Felix Jovan, the Golden Voice of the Forward Guidance podcast. Hi Felix, thanks so much for joining us today. Hey, everybody, super excited to be here. I'm a big fan of this show, and so it felt wildly overdue to be on the show and be with you guys. So yeah, super excited to dig in. We're so glad you're here and I'm sure that many of our listeners are also

fans of your show, and if not, they should definitely check it out. Now, we're here to discuss the latest stories in the worlds of Crypto, and macro, just remember that nothing we say. Here's investment advice. Do you please check unchainedcropto.com bit slash bits and bits for more disclosures. Crypto moves fast. It's why Bitwise launched the weekly CIO memo,

a jargon-free summary of what's moving crypto markets written by one of the best in the business, CIO Matt Hogan. Get up to speed in five minutes or less. Check it out at bitwiseinvestments.com slash CIO memo. carefully consider the extreme risks associated with crypto before investing. Now with that, let's dive in. There's so much to get through and things are changing at breakneck speed.

We have to open with the macro story of the week. And we're recording this on Monday, so things are in flux. But the word of the week is tariffs. Trump has been referring to April 2nd as Liberation Day. The day the U.S. gets to apply reciprocal tariffs to any nation who has to have has dared to apply tariffs on U.S. goods. Now, there has been little detail, the forthcoming on what that means, and the idea of matching tariff for tariff around the world sounds like an administrative nightmare.

But the uncertainty and the potential magnitude of the move has been enough to get investors nervous. Trump has also said April 2nd was the day sectoral tariffs on automobiles, pharmaceuticals, and semiconductors and probably some other sectors, would also kick in, adding further confusion. Nobody knows, would these be added on to the reciprocal tariffs, or would they be incorporated? No one seems to have had an answer. However, to add to the confusion,

yesterday reports emerged that Trump is changing his mind again, and that sectoral tariffs will come later. The day he repeated that a couple of times, he said that automobile tariffs would be coming, and he said very shortly, his words, and that new pharmaceutical tariffs would be coming at some point in the not too distant future. Again, his words. And we're recording this on Monday.

Wednesday might, by the time this comes out, might be a totally different story. But the markets are liking the relief, which shows just how worried the market was, because reciprocal alone sounds pretty bad. Now, stocks are up, crypto is up. But this seems like the confusion has ratcheted up, and confusion is never. good for markets. Who wants to jump in on this first? We'll see this Bloomberg article that went around Twitter. This is what really stoked markets today, right?

The wave of tariffs is poised to be more targeted than the barrage. He has occasionally threatened. I love the use of the word barrage that that Bloomberg writer put in there. Interesting word choice. Probably not a big fan of tariffs, but this is it. This is what lifted markets, right? Tariffs started the correction from elevated vulnerable conditions and then tariffs also are ending the correction. Yeah. Do you think this is the tariffs, the pivot and the mood that is ending the correction or might there be something else at work here? Felix, what's your take? Yeah, so the way I think about tariffs is in two ways. So one, one angle or one side of the blade of this whole tariff thing

is that they want to lower tax rates, they want to lower spending. And one of the ways that they want to bridge that gap is to bring forth tariff revenue, which is, you know, a form of a tax, really. It's just, you know, taxing a different base, really. But, you know, for them to go about doing their fiscal goals without blowing out the deficit, some version or another of increased tariff revenue have to fill that gap, unless they want to run wider deficits, et cetera. So there's that side of things, which is, you know, more so what I feel like Scott Batson talks about in many interviews where, you know, there's this idea of this replacement.

Then on the other side of things, there's this discussion of tariffs as used as a negotiation tactic for two major goals to, you know, on net, you know, we've seen a major shift towards, you know, reciprocal tariffs as opposed to just outright, you know, tin for tat. So with that idea in mind, perhaps there's this goal to use it as a negotiation tactic to get to a point where there's actually less on net tariffs than when we started this whole mess. But the issue with that is that if we end up with actually less tariffs, let alone more tariffs, that goes against this premise that I first mentioned, which is filling that that gap for fiscal revenues. So it's really difficult to square those two things. And I think putting those two things at the end of just the distribution of outcomes is why I think volatility. remains so high right now. Alex, do your thoughts on that? I mean, I agree with what Felix is saying.

That's what, how to put it. That's the way the Trump admin looks at things, right? Now, in the meantime, these measures, and especially the way they have been communicated, which has been, like, insanely all over the place with a very constant back and forth across items and across countries, This brought, as we all know, volatility to some of sort levels that we see rarely on market crashes with the big hitting 30 briefly, which is a lot, right?

Something interesting, I think, that we are seeing is that on the, we have two crowds. We have the trading crowd, the markets guys, you know, the traders, sales guys, the guys sitting on the trading floor, what we call the front office. And we have the research guys, economists, and the fundamentalists, and the guys who focus on valuations, for example. And there is some sort of disconnect there. The view on the economy derived from what Trump and his administration had been pushing is extremely negative. And everybody has already put their estimates on earnest growth and the economy. sharply lower. I just put up on the screen a chart that I saw in Bloomberg the other day about the number

of times tariffs is being mentioned in earnings calls and investor presentations. And we've got Q1 earnings reports coming up soon. So we're bound to hear it even more. Yeah. So my point there is that economists are extremely pessimist. However, this is already, the way I think about it, this is already in the price. Everybody has already lowered their forecast on the economy from like 2.8% for this year to somewhere between 2.2 to 1.8%. This is already in the price.

So I think traders who are actually looking for bad hard data to drive the market, they're going to be surprised because what really moves the market is not really the data being lower. It's basically how the data comes in versus the forecast. and the forecast already been dramatic a lower, sorry for being repetitive. Something very interesting that I'm not sure many people caught is that the forecasts from the Fed that the Fed published on its class of OMC last Wednesday, that they're very bad. They include worst case scenario. Our explicitly said that the forecast that the Fed published, they are. are basically, they include max retaliation from their trading partners. So that's a silver lining that basically it takes very little for things to turn around like we just saw in the last 24 hours.

We had a good headline on noon on Friday from Trump. Then we have those comments from White Hat advisor, the asset. there was a I think it's the same Bloomberg article you're talking about yeah that's the one I came out on

came out on on Sunday around noon as well and that's what's driving the market exactly what's going to happen on tariffs we don't really know I don't know I'm trying to figure out

and trying to see what's priced in what I do know is that the street is literally lower the place with some people calling for like doomsday and some people not. And very aggressive tariffs are priced team. Like let's put it this way. And with this I pass it on. I don't want to talk too long. It's it's like the base case scenario. It's basically tariffs going up to basically 10% on imports on the second, on April 2nd. That would be. be very aggressive. That's in the price, supposedly. That's what I'm gathering right now. It's like

to be more precise. I'm not there yet. Not in my head and kind of fully agree with all the comments here. Look at GM. GM is up 3% today. Hasn't been this high since January 28th, which is before the tariff talk. So tariffs are priced in. I agree. And on the economic data, the soft data has been weak. The hard data has been strong, the soft data are the surveys, but the hard data non-farm payrolls is fine. Initial claims are fine. We talked about this last Monday. Like, there is no recession. We don't see any evidence of that. Earnings are fine. They're going to beat. They're going to do really well in April because, to your point, Alex, the expectations have been lowered. And it's, we're back to risk on. Correction is done more than done. You can put it for

Hopefully. Hopefully. What did you guys, what did you guys think of the FOMC meeting last week and Powell's dodging around the idea of tariffs? Yeah, I think it's an, it's an interesting circumstance. Like this is why, you know, I'm not going to go as far as saying that this is a stagnationary situation. I think there's stackflationary vibes, which is that there's a downside risk to the growth outlook and upside risk to core PC, which is basically the main takeaway I had from their SAP data. You know, they see growth risk, but they also see PCE remaining. high. And what does that net out to is, you know, a maintainance of where they're at in terms of cuts priced in. So, you know, one to two cuts, maybe. I think that creates a quite a difficult situation for risk assets. I agree the correction is largely done. I totally agree that, you know, the economic data isn't bad enough to be worried about recession. But that leaves a difficult spot for both the Fed and then therefore Trump investment to be in now where it's like, okay, well, if we threw a 10% equity correction and all we got was, you know, 50 bips off the 10-year bond yield,

that's a pretty expensive trade-off, you know. And so if they're focused on trying to get the 10-year lower, like we've seen bonds sell off pretty significantly today as equities rallied. As that continues, what does that do to the reaction function of Trump and Besson? And based on that reaction function, what does the Fed do? The Fed probably does nothing. So, you know, when you look at the outlook, I think, I think risk assets are somewhat done money, but at the same time, I don't see much more downside deterioration, especially when you bring forth the economic data that we've seen,

which is mostly fine. Mostly fine is the key, though. We got the PMIs, the preliminary PMIs today, which show that the price is paid index is up at its highest in two years. So this is going to feed through to Fed decisions as well. I am parenally optimistic. I mean, my friends always laugh at me about how optimistic I am. So I find myself in the usual situation of actually being the most pessimistic in this group

when it comes to is the correction over. I'm afraid that we, I have a feeling we do have more because the valuations have been unrealistic for such a long time that to justify them, we're going to need earnings to grow a lot over the next year. And I just don't see that happening. I seriously hope I'm wrong. I can tell you, my team and I look at a lot of data. We do a lot of studies. You know, funny thing, last week we saw all those studies,

saying the comparable changes and the variables we look at is similar to COVID and yet we're not in COVID. This is one, two, two, I'm not trying to make the case of corrections done. I think it's definitively behind us. That doesn't mean that this Tuesday we don't get a natural kind of pullback and then rally from here. But I think Felix's questions right on the mark, which is, what do you do if you're best in in in Trump? You were maybe hoping for a 10 year to go lower to reinvigorate the mortgage market. Now it's not happening. And it didn't respond in the way that it in September when you had a deeper growth scare now because you got a competing assets like European bonds. I think it's a real question. Now, the other, Felix, one approach to that answer might be

if you're Besson, you lean into capital markets and lending, right, Besson wants banks to lend. If you've got trillions in low five-year, low interest rate, five-year money debt to refinance, then let capital markets soar, let banks back to lending, which doesn't help the U.S. government refinances debt, but it can certainly support tax revenue and growth. So that actually is the other approach. And it makes a lot of sense, right? If you're concerned about commercial real estate debt on balance sheet, let companies refinance through capital markets and bank lending rather than try to lower the tenure in a way

that might help the US government but hurt the private sector. And if the private sector to weaken, that actually would increase the deficit if you actually had economic weakness. Yeah. I want to say something quickly. Just just quick comment, but pass it on to you, Felix, after it's, On the correction being over, I don't know if maybe that came across us that I think that way. I don't think that way.

For me, unfortunately, I don't know. And I will know on, I hope to know on the second if that was it or we see another let go. Aren't we going to front run the second? Aren't markets going to anticipate? Markets are front running off the Bloomberg. Well, yeah, but we can't anticipate. The worst is we can't anticipate Trump. He's been flip-flopping very aggressively.

Like today, it's quickly here, it's very easy and actually it's hard to stop being bullish. It's hard to fight this bullish sentiment, especially when one is long and has a long bias after such a massive rally, you know? But the rally was driven by headlines, and things could easily flop on the second. And the last thing here is I do think that if we hit worst case scenario, And unfortunately, things go bad and we end up having 15% in tariffs in aggregates in the US rather than 10, which is the base case, supposedly. This is like a two-week correction. It's fast and furious. And in two weeks, that's your bottom worst-case scenario, I think. Good case scenario, a basic scenario, bottom is already in. And we did get the good news from QT being pretty much over last week.

Yeah, I was just going to say, I have a slightly different outlook on how tariffs get digested by risk assets. I think if we get certainty on what the tariffs will actually be, risk markets can digest it, move forward. The issue is that we don't have that certainty, and it keeps changing. So I think, you know, yes, there's an air pocket where right now we're pricing in marginally good news in terms of tariff outcomes on April 2nd. And if we start to see more headlines in the lead up that are negative, yes, that could lead to some lower equity prices. But I think if we get to April 2nd and we understand a tangible framework for the specific subsections that they're going to tariff, I think the equity market can move forward from that. Ball can come off.

And just from ball coming off, we can see that marginal return to bid. I totally hear you where you're saying about, you know, valuations are expensive. And, you know, I do take a bit more of a flows-based approach where, you know, you've seen a lot of money, like, totally 180 into rest of world assets recently over the last few weeks, like here. etc. At the same time that people have just been dumping their mag seven, the same time that people have been, you know, going, you know, they've had some like target date funds have been doing pretty well in terms of their long bond side of their trade and now they need to rebalance and get more into equity and sell some bonds. And so I see that happening right now at the month end. And it feels like some of these flows can offset it. But I think the biggest thing is if we can

just get some sort of certain tone of what's going to happen, risk assets can start to at least digest that. Maybe that means a few percentage points lower. I don't think it means like another time. I would agree with that. I would say, by the way, the correction actually ended like on March 13th. It doesn't feel like that. But if you look at leaders in the various sectors, you know, they've bottomed some time ago. Look at the data center theme.

Stock like Powell, look at Google, look at Navidia. They've already bought them. Look at even micro strategy. It broke out today. So the correction already bought them. It's already in the rear view. The other part is terrorists can be avoided. Trump is going to get a deal done with Mexico.

He needs a strong neighbor in Mexico to stop illegal immigration. to stop fentanyl and to ensure that drug cartels don't run the country. That's really the only analysis needs to be done. If that's the case, then you can avoid terrorists by shifting production to Mexico. And so I think that's likely going to happen. And there's the potential boost from a ceasefire agreement in Ukraine, which Trump has said he wants in place by April 20th, which would make Easter certainly something to celebrate.

But it's also looking ambitious since Putin doesn't seem to be in any hurry. However, you know, that's a very complex issue. But imagine if they do get something like that. There's positive news like that. And to your point on the Fed, the Fed put us back. The Fed capitulated in their dot plot. They said we expect lower growth, higher inflation, and we're going to cut rates anyway. Yeah, 100%.

But they need the certainty from Trump invested to act on it. So if that takes too long, that can create an air pocket where they're slow to react. And then suddenly those two cuts could become four, but they could be parish cuts. That's the left-tail-a-risk I'm worried about. What do you think the market is expecting around the relationship between Trump and Powell? Today Trump was saying should have cut interest rates, whereas the last FOMC, Trump was actually supporting the decision. So does the market care about this? I originally thought that Powell and Besson, you know, there's this, it's become well known that, you know, the Treasury Secretary and the Chair of the FOMC meet every week for lunch and, you know, discuss different policies.

And I noticed a few different cross currents that got me really interested. Suddenly out of nowhere in the last two months, we've seen a lot of talk from both sides about this SLR exemption being exempted in the next couple months. And that's a complete 180 from where Bank, you know, Basel 3 endgame regulate. was headed over the last couple of years. So it's really interesting to see that would that sort of you know, perk my ears up a little bit to think but okay, well, perhaps Bessent and power actually a lot more aligned than what a lot of people think. I think the wrench is what you refer to, which is Trump, you know, randomly tweeting, hey, you know, Powell should have cut rates. But I think, you know, that's the issue with Trump is sometimes he will just say something that is off what everybody else agrees and then there has to be this catch-up game. But I think overall, there is this agreement that, you know, when you think about what Powell's had to do,

deal with for the last three or four years. Why has inflation not returned to 2%? I think because of high stock prices and fiscal deficits has created that bid. So if they're focused on marginally bringing lower equity prices to give a long bond rally, at the same time they're trying to cut down deficits, that takes a lot of boxes for Powell achieving his 2% goal. So I do think there's more alignment than what it's expected, but at the same time, there can be these off-the-cuff tweets looking for That must be one hell of a breakfast they get every Monday. Who serve the food? I hear they have waffles.

The waffles, sugar, carbs? I want them on a high-protein, low-sugar diet with a double espresso. Yeah, Kennedy on the case. No cream, yes. So basically getting inflation down then to carry on with your third Felix would be slowing down economic growth, basically, through lower fiscal spending or any other means. check the boxes. And that would, of course, add to uncertainty because we have part of the administration such as Besant and Trump saying, yes, there is going to be short-term pain. And then we have other parts of the administration, such as I flew up on the screen earlier, the likely head of the

economic advisors for Trump saying, no, we don't see any economic pain from tariffs should just be, you know, blink, nothing else. So there's even confusion, it seems, within the administration, partly because this is new territory. Lutnik is talking about launching next week the external revenue service, so that obviously does position tariffs not just as strategic, but also as a revenue driver. And should we get that economic slowdown? I don't know if any of you saw the interview with Black Rock's head of digital assets,

who is talking about a recession being good for Bitcoin. Robbie Mitch Nick was saying that a recession could actually end up being a catalyst. Let me get this up on the screen. I won't... Talking about tokenizing I theorem, if I recall as well, right? I mean, if I recession is good for Bitcoin, I'm Jane Fonda. You know, I don't know.

I mean, maybe on the other side of things, after it's down another percent, it would be good because QE comes back or whatever, you know, rates are back at zero. But, yeah, there's a lot of pain in the interim. That's a 3D chess answer, right? After it goes down, it will go up.

Where I think he's coming from is BlackRock has always positioned Bitcoin as a store of value. They're the digital gold camp 100%. And they've actually been out there saying, no, it is not a risk asset, which I found very annoying because it's not up to them. If the market sees the risk asset, it's a risk asset. However, they're pushing the digital gold narrative,

and that's maybe what he's talking about. When things get hairy, you go for your digital gold and your real gold or whatever, perhaps. I mean, I think in that same vein, it's only on the other side of the leg, because if you actually get a recession, Like if you just look at every, you know, gross care slash recession since 2006, like the velocity keeps increasing.

And the velocity keeps increasing because we have more leverage. We have more margin calls. We have quicker, you know, Vardy grossing. So, you know, every, every gross care, even gold gets sold. Like everything other than key bills and cash gets sold. So I'm not a big believer of that narrative. Yeah, I totally agree. Now, we don't have James here to talk us through the latest in the.

the ETFs, but one growth driver that I was talking to someone about earlier today is the potential flurry of approvals that we will get when the SEC chair is confirmed. And his confirmation hearing is on Thursday. It's not expected to be controversial. So do we think ETF approvals will be a driver for any, or do we think there's really not that much institutional demand for a Seoul ETF, for instance? Do you have a view on Solana? I think Sol is an exception. the only exception, actually. I'm also hoping that is a case, to be honest. All the other ones, they seem to be more of like a marketing stand to get people to tweet about it and get price action to price to react. Yeah, I'm not, it's, it's ETFs are becoming commoditized,

unfortunately, too many of them. That's my view. Yeah, I mean, I totally agree. Like it doesn't caught James, I'm sure, you know, explain this first. further, but there's not much cost for them to just throw ETS against the wall. And then, you know, if they, if they don't perform three months, six months later, they can they can just delist them. The same way that, like, centralized exchanges will list a token when it's hot. And then three months later, they'll delist it. Like, I've seen a few meme points start to get delisted.

Nobody really taught. They all talk about the listing, but nobody really talks about the delisting that much. So, yeah, I think it's just throwing things at the wall and getting attention. You know, I think the biggest driver for EPS has still been fast money, you know, pod shops and stuff for any basis trades. There's been a little bit of small allocators. There's been, you know, obviously a lot of people that were holding Bitcoin on chain or something for that and wanted to rotate it into a tax sheltered account.

I think that's been a big driver. But yeah, overall, I don't see anything too exciting other than maybe Solano, like Alex said. I agree there could be some interesting adoption there. So here's the numbers they got operating an ETF. So cost of operating an ETF is around 200k a year. So if you have 25 bibs on fees that you're charging your bias, your holders, you need 80 million an AUM to break even. Now, shitcoin with all due respect,

shitcoin ETFs, I'm pretty sure they have higher fees, management fees. So they're breaking in, it would be lower, but it's still not that easy to get to, let's say, 30 million in AUM for like marginal, like, fringe coins. Like, we saw like the Pengu ETF just announced. I was like, sorry, who cares about Pengu's and Tratfi, you know? And what you'd need to pay the market makers to actually make a market for you in something as illiquid as that. They would charge for taking on that risk. Hey, everyone, Matt Hogan here, the chief investment officer for,

Bitwise asset management. In this week's CIO memo, I tackled a great derisking of Bitcoin and why I think this is the single best time in history to buy Bitcoin on a risk-adjusted basis. Find out why at bitwiseinvestments.com slash CIO memo. That's bitwiseinvestments.com slash CIO memo. And thanks. Carefully consider the extreme risks associated with crypto before investing. I want to show you this tweet by Michael Van de Poppa and get your views on what he says. I thought it was one of the more interesting ones I've seen on the recent market mood shift, especially as it comes to crypto. Michael Van de Popper says, I think that there's a significantly higher chance that will be trending upwards on Bitcoin and Ethereum than downwards. Panic is gone surrounding terror, so as we were just saying,

Japan didn't hike, we haven't talked about that, massive downwards move on the dollar. The environment changes and price usually moves in opposite of sentiment. But? Like this is an interesting thing. It's like the focus on Japan. Like, Japan doesn't matter right now. Let's put it that way. It's people and crypto are overly focused on Japan. This is a, this is a, this is, and it's kind of sucks to be harsh

in people that I don't know. But if you're talking about Japan in 2025, it's basically you have a carry trade PTSD from August 2024. And it happened to a lot of people. And I get a lot of questions on every VOJ meeting. It's like, what's the POJ going to do? And the answer is it doesn't matter because the carry trade mostly unwound. And it doesn't matter anymore.

So the world is already complex enough. Let's try to focus on the few things that do matter. So that's what I think. And I hope he's right on Bitcoin and Eath. It looks in that way. I'm being repetitive. Maybe, okay, let me change it quickly here for you guys. What happens?

What do you think? happen with the S&P, if Chinese tariffs, if Trump delivers what he promised in the election, during the elections, which was basically 60% tariffs for China. What if Trump basically rolls back on that and Mexico and Canada end up with 25% tariffs across the board? So, Alex, you're right, it would be risk off significantly, but it's not probable. It's not probable. That can happen. I'll share the screen with you here, which shows the short interest in markets, which reflects a lot of the bear sentiment. We haven't seen this short interest in the last five years.

We're at the 99th percentile of short interest. Everyone hedged and then kept hedging. And then right when they're not supposed to hedge, they just hedged some more. And what you saw in markets today, Monday morning, strong gap up openings, MSTR, gap up, and running. I have a basket I call Twitter momentum stocks. They're all up strongly. So the headline is animal spirits are back. And crypto and Bitcoin are part of animal spirits. The IPO, ETF, unprofitful tech companies, part of animal spirits. So they, you know, they are back. I wouldn't be surprised to see some backing and filling tomorrow, just like we had last week, Friday strong,

Monday strong, Tuesday backfill, and then rally from there. But, you know, we are, we are, We're now back on risk out. Look at Palantir. I mean, these are bubble stocks. Palantir, it doesn't matter, though. Palantir up 6%, right? Not long Palantir, so it doesn't matter. Yeah, that's also the defense story in play, though. It's more than Palantir.

Look at Hymns. I could send you many, many tickers. I'll share my screen on here to show what I mean as Twitter momentum, but this is, you know, I think as important as like the beta factor. It's the animal spirit It's like Tesla Tesla up 11% 12% in a day Right

It was getting thrashed down 50% Robin Hood I think this is I think this is the pod shop monkeys Piling back in again Short covering also So pod shop monkeys Animal Spirits Reddit

Look at everything up in Animal Spirits Up 5.4% After getting destroyed You know It was down 17% Now it's down 12% Once you have back today's gain, right? But so, you know, I think that's it. Animal Spirits are back. Now,

would you deploy today, Ron? Like, let's say you have, you have a, like today, but today, like right now. This morning with my last deployment at the open, right at the open. But at the close of today, I bought SQQQQ. So the little tactical, a little tech. So I do think you get back in in Philly, actually. This is why we always get given so much. crap about being called flip-floppy is because we're trading different time rises you're allocating so yeah you're also shorting a tactical trade right at the close 355 p.m. I did the same thing Monday of last week and it worked out and it's just a tactical. It's perfect if I understand it's just the eyes like the audiences we know it's they get you get upset about a flip

us flip-flopping and yeah we flip-flop you know it's that's that's the idea. I'll totally get $24 to $48. Yeah. The way I think about like tariffs being priced in is currency, so I'll just try to share my screen here. But just looking at like the U.S. Canadian dollar and Mexican peso, you know, so there you can see the tariff headlines on these chart, right? It's just like, you know, we've been in this range where, you know, some version of it is priced in and then, oh, no tariffs. And we see the relief and then the opposite when we get the tariff headlines. So, you know, it's interesting.

that the U.S.-Canadian U.S. D-CAD remains range-bound, but we do see that Mexican peso whaling over a little bit. So perhaps to your point, there is, you know, marginal pricing in of a better resolution for Mexico right now. But I think overall there is a decent point that there is, I think, still some complacency in terms of what's present in the tariffs. But in the same vein, you know, when I see the back and forth where it just feels like constantly, as soon as we get to the X-state, the next one being April 2nd, we start to see a lot more positive news coming out of it. So I do feel like this pricing in is quite rational, but it does create that left-tail risk.

I do it. What other markets? What do you guys think? Question for you guys. What do you think of the following? This is a view of some people in the market is basically long equity short crypto, you know, beta-adjusted, right? But it's-

Oh, man, I'm doing the opposite. Yeah. Yeah. And three months, that's a good idea. I think, I mean, that's wrong. This is risk gone. This is global risk on. So I think it's like the wrong concept.

What I would do is short Brazil, EWZ. On a stronger dollar, I think the timing of my short in Brazil now is actually very good. We're short Brazil as of this morning. And I think you're going to see money rotate back in from China, Europe, to the United States, which is happening now. Alex, that's such an interesting idea because I've been playing around with the opposite of short QQQQ-Long BTC, and this is why.

If you look at what's going on in the rest of the world, fiscal, I call it fiscal enshackling is happening. You have Europe that's looking to go pretty large in size, you know, 500 billion dollars investment, taking off the debt break. You have China starting to finally move on the fiscal side of things. So the way I think about it is if I think that U.S. equities are still, you know, even though I think, like, again, the Pachat Monkey bounce trade is in play right now, I do feel like it's somewhat limited and upside. So if I'm, if I'm like you say, beta adjusted or ball adjusted short Q's

law on PTC, if I believe that BTC is a global asset that's still, you know, obviously it's largely driven by US macro liquidity. But if I think it's powerful enough in the rest of the world, at the same time that on the US side of things, they're attempting some version of austerity, I think that's basically, it's like a money printer trade. You know, it's like it's like long rest of world money printer, short fiscal. austerity in the U.S. So I'm on the, I'm on the opposite side.

Long BTC. Isn't it a short bond? Like, all the economic data came in strong. Where they? Our economic data came in strong.

Inflation is still higher and stickier than people expected. You're going to have good earnings next month. I'm not saying actually going on short bonds, but I'm just saying that

in terms of what a lag. I would say it's bonds. Yeah, I think you're right. It just comes down to like how it sits within your portfolio. Like I own some bonds, but, you know, it's 70% of the size that I had a month ago, and it's just as a hedge.

So, yeah, it just, it's contextual. But that is another good way to express it. Alex, what's the justification for the short crypto position at this stage, the longstocks short crypto? What reason is you're doing? It's just people are bearish. It's the usual. I mean, I presume that the answer was not, not, I mean, we're self-selecting here, right? but the view is that there's no demand for on-chain activity

and that institutional demand for crypto for basically putting real world assets on chain doesn't really accrue value to the blockchains like what actually drives to the blockchain assets, right, the souls of the world, the ease of the world. And those are mostly retail-driven speculative assets that basically is monkey on, monkey off. I mean, some people are fundamentally pessimistic on most crypto assets.

And to be honest, I feel the same way, but I would never short crypto for more than a few days because I think it's suicidal. It's just not how I operate. Yeah, unlimited downside. And also, as Felix was saying, in the... macro economic and geopolitical shifts. I mean, longer term, they're global assets and they're not going to be buffeted by economic concerns. Risk concerns, but not economic concerns. But segueing into what's going on between Bitcoin and ETH, we talked about that many times on the show before.

ETH is unloved. ETH is overlooked, but I'm sensing, amongst all of you, a shift in expectations of ETH, a bit more hope that it could rally from here. Quickly from me, I think, I mean, it's, probabilistically speaking, it's either, so best case scenario, it rallies a lot. Base case scenario, I think it rallies. Worst case scenario starts rallying in like, say, mid-April or like, you know, third week of April. So from a directional perspective, I think is a good time.

The question for ETH is not if it rallies or doesn't rally is, how does it trade against other crypto assets? That's the problem. That's what everybody is so upset about. and yeah what do you guys think yeah it's still hard for me to leave and decide to leave bitcoin and go anywhere else right now for the most part i think it's an important point it's yeah east can rally but it's just yeah relatively speaking i think the only real upside tailwinds i can see for ethereum right now is one that in most like delta neutral trades when you talk to like good funds and stuff

a lot of them their their short leg is ethereum and then they'll long something else. So perhaps if they get squeezed on that short position for one reason or another, that can be a, I think that is mostly why, you know, you always see at the end of these rotational shifts that the last phase of it is doing really well, relatively speaking, and then we fall down lower. And I think it's because a lot of those funding legs of the shorts are closing. So that's one. And then I think the other potential tailwind is just, as, you know, I was at the Digital Assummon Summit last week, and just talking to a lot of institutions and that sort of capital, a lot of them are talking about wanting to allocate,

and I think it's a lot safer for these bigger institutions to allocate to Ethereum, even if you might say that the technology is more innovative or whatever on salon or whatever other chain, it just doesn't have the same time tracker, and that's really important for institutions. It's the same way why everybody will be excited about a new hedge fund that launches, but nobody's going to invest until they have at least a couple years of track record. So that really matters in that world. So you could see this, and we have seen this.

I think I saw a headline this week about Fidelity launching something on Ethereum. So I do think they will simply allocate because of the track record that Ethereum has. Fidelity are going to be tokenizing. So go ahead, Alex. Let me flip-flop again. So a silver lining for ETH. Compared to Seoul, the keyman risk is considerably lower. Seoul has two very, very powerful founders in the sense that they drive the chain.

He doesn't have that, which has been, I think, one of the many reasons for its underperformance, but you turn it upside down and it's actually also something positive. It's like you could say that, yeah, you eliminate the Keman risk, as simple as that. I'm going to read out, speaking of the institutions at Das. BlackRock's head of digital assets, Robert Benchnake, is back, and he was saying this at the conference about Ethereum. Quoting here, the negativity around Ethereum is very overdone. There is a lot to be optimistic about.

There was no question that the blockchain we would start our tokenization on would be Ethereum, and that's not just a BlackRock thing. That's the natural default answer. That's really important. Clients have clearly made the choice that they really do value decentralization, credibility, and security, and that is a great advantage that Ethereum continues to have. I continue, ETH is a bet on blockchain, adoption, and innovation. Toer to your point, Alex.

And continuing, finally, ETH is a bet on tokenization, stable coin adoption, and decentralized finance, end quote. ETH is a natural... Taylor, DECDLIS. ...of decentralized exchange. And it's got the community. And, yeah, as you were pointing out, Felix Fidelity, are going to be tokenizing a money market fund and issuing a new class of shares, which will be on Ethereum, which is actually interesting.

It's not harnessing the full efficiencies because regulations still, they will be maintaining the ownership ledger and traditional style, but it's a start, baby style. Do they contribute? So, though, that's so cool. Like, it's amazing to see them actually, like, you know, the idea of tokenized treasuries and stable points. That whole interplay with Tradfi, that's the thing I'm just like, by far. I agree.

I mean, policy should be very constructive for Ethereum, right? And the new SEC chair regulates securities, not commodities like Bitcoin. So Ethereum's got a lot of the policy upside potential. You know, we know Solana and the Bitcoin community gave generously to the Trump campaign. What about the Ethereum crowd, though? Did they? Do they do enough? I don't know.

But I agree with your point, Felix, as well. It's the funding leg. You know, Ethereum was up something like 20% in the last two weeks. it's kind of a no man's land where we stand right now, but we'll see. It's difficult. I agree with your point, too, like, you know, stick with the leaders is a pretty reasonable strategy like Bitcoin at this point. And there's just so much that isn't priced in yet. In terms of regulation, I mean, stable corn regulation is going to be first out, first out

the stable, and that's, no pun intended, and that's going to be soon. I mean, possibly within the next three months' research. And then right after that, they've already got several drafts of an updated fit proposal, which is going to be classifying the assets. And that is going to also incorporate what I'm hearing some clarification on what kind of defy services are allowed. And once we have regulation around defy, then we're going to have tradfai institutions playing with defy apps.

And many of them are going to, if not be built on Ethereum, they're going to be connected to Ethereum somehow because that is, for now, where the market is. And you also have the interoperability services, which will bring Solana. apps into the fold as well. Solana I with Alex on this very much depends what happens to the mean coins, which brings us to the final segue into, I know we're tired of talking about mean coins because they go up, they come down, but Trump mean coin is doing well because of the power of a tweet from the sitting president of the United States of America.

Any thoughts on when, any thoughts on when we will finally see the end of the mean coin pumps and dumps? if that's not too harsh your time. I think a version of it is over, but I don't think you can ever kill speculation in crypto. It's just reinvents itself in another version. You know, 2021 was NFDs. The cycle has been meme coins.

I do think that, you know, there's been a lot of grave dancing on meme coins, which I do think if we do get another, all-coin rally could send those pretty significantly and piss a lot of people off. But I think ideologically and the idea of, you know, just long pump fun and that idea, I do think it's over. I think now it's just mostly these rotational trades.

And, you know, after enough, people think that shorting meme coins is a free trade, then we squeeze them all. But I do think the idea of it is long dead. That's refreshing. They'll be very refreshing. However, one final question I have for all of you, and then we can start to wrap up. Meme coin rally or Minkcoin enthusiasm. A lot of that has been attributed to the lack of interesting movements elsewhere in crypto.

In other words, if crypto is not moving, let's pile into something. I'm not saying I believe this is what I'm hearing. Let's pile into something that does move. So the speculative money has been concentrated in a relatively small corner of the market. When that changes, when we do enter the next leg of the bull run and altcoins start to move, do meme coins get speculative again or does the speculative money flow into altcoins? I think fool me one shame on you, fool me twice shame on me when it comes to meme coins. People have burned.

They're going to be reluctant to come back. But to the extent that there is a pump there, it'll be in the leaders. Yeah. I just don't think there's a lot of great options for retail right now. Like all coins are just a mess. Like if you want along those things, you need to get in front of four-year unlocks, just nonstop, you know. So I think I saw something going into 2025. There's about $32 billion of unlocks for all.

for this year. Like that is just you just can't get you can't get in front of that. So if that cuts off that amount of the crypto industry and then you have meme coins which are just rotational up and dumps. And then that's why I'm mostly just hiding out in Bitcoin. I think the L1 narrative is being tested right now in terms of value accrual. So I don't I don't think it's as meaningful to hide out in there. So you know, I think a lot of the reason why we haven't seen such interesting innovations in terms of token structure has been the regulatory thing. And that only ended like a couple months ago. If you can even make the argument it ended.

So I think it'll take time. I'm paying attention to the new token structures that get introduced to the market in the future. But as it stands, whatever exists today, I'm pretty pessimistic. I just wanted to point out on unlocks, which is very important. Most of these, I mean, Alcoins have massive unlocks. on like regularly. One coin that stands out positively, ironically on that front is sold specifically. The largest unlocks, they're just finished.

We have still large unlocks relatively on April and then they go down by 95% May relative to March and then go down another 50% from June, from June, from, July onwards, becomes very manageable in relative terms. I think the one lesson from this meme coin drama is retail investors organizing, investing like a tribe. So I just share my screen here if you can light that up. It's an article from the Financial Times today. And it says it's called Retail Investors Take On Hedge funds in Europe's answer to

meme stock mania. So it's now in Europe. A handful of European stocks have become a battleground for retail traders taking on hedge fund short sellers. They're organizing on Reddit, like Wall Street bets. They're identifying stocks that are heavily shorted. We talk about how you had 99th percentile short interest. And those hedge funds are short, those kinds of names and other names also. They're targeting hedge funds like Marshall Waste and Millennium.

And European defense shares have soared. But I think this is the main lesson from the whole mean coin drama. It's retail investing has transformed markets post-COVID. Robin has transformed it. Coinbase has transformed it. Social media has transformed it. I think it's permanent too. I think what people mistake is they think that's a zero interest rate phenomenon.

I think it's just a change in psychology. I agree. I agree. you know, markets bottomed in October 22 at elevated PE ratios versus the norm. You know, generally didn't bottom at where we concluded that. And anyway, well, why are valuations elevated today? I would say it's because of this. You know, something I've been trying to sort out is, do you have a 19% correction like Q418

when you had Trump 1.0 trade war and you had a growth scare? We've only had a 10% correction. The bear case is there's more to go because valuations are frothy and earnings growth is slower. But this is the other side of it. We're now post-QE, post-trillion dollar stimulus, and retail investors are a sizable bid. It's not everywhere, but it's in those stocks. It's in those Twitter momentum stocks where they're creating the bid or they're creating, you know, a short squeeze. So I agree it's a permanent shift.

It's a psychological shift. Rom, have you looked into looking at hedging positioning and inputs comparing like Q4-2018 to right now? Because my simple framework is people are too hedged for it to go down like that. And I'm just curious if you've looked at the data from that Q4-20-18. I love it. You've got to join the show more often, man. More possible question. I know.

By the way, forward guidance is also my regular rotation. It's a terrific podcast. You really enjoy it. Yeah. We got some good interplay between both our shows. I love it. That's right. So the answer is there was significant hedging demand and buying and put options in 2018.

In fact, in the three days leading up to the bottom, which took place December 26th, on December 25th, Trump, I think it was like Christmas Eve or Christmas said, something to be equivalent to go out and buy stocks are cheap. So that marked the bottom. So, but yeah, there was significant put buying. and markets were heading lower despite the aggressive put buying, which we saw in this correction too, right? We saw like the put-call ratios peaked like two weeks ago, then the dip kept dipping. By the other phenomenal podcast with the interview with Charlie McGilliot,

who's from Numura, the head of options. You probably wonder. Yeah, listen to that. I wish you got him on this show too. But he was interviewed on the Odd Lots podcast. But the conclusion from all of this is that the derivatives market's leading the spot market. So that aggressive put-guiling, put-buying behavior can force, not can it will force dealers to Delta Hedge by selling short futures. And it's really the sellers of volatility that are helping to equilibrate markets.

So I think it's a really interesting concept to unpack. We should bring on Charlie on the show here and really double-click into that. It's also interesting from the market infrastructure point of view. You saw that Bloomberg reported, I think it was yesterday or today, that Coinbase is in advanced talks to buy Deribet. And the last reported valuation of Deribut was between $4 and $5 billion. I mean, that makes Krakens acquisition of Rebibate. derivatives platform last week for 1.5, the biggest until then, it makes it seem, you know, nothing in comparison. I mean, these are big numbers and the volumes, the potential volumes

must be astronomical. I think that's such a good buy, though. Like, derivative is just phenomenal because I'm, I'm, I used to trade options a lot more than I do now. Now I mostly just use them as like long-term, like, leap calls is pretty much the only thing. But whenever I would look at on-chain options, the spreads were just so horrendous. I'm just like, nobody can, there's no way anybody's actually trading these things. They're terrible. But the only exception was Derbit. It wasn't on chain. But there was a lot of really good tight volume there, tight spreads. And, you know, so much of the crypto industry is used to just trading perps. I think to whoever can capture that Deribut and bring it to retail. Because I think it's still a lot of

more sophisticated money on Deribit than, you know, retail is still punting in Perks. I think that's a really smart move for them to go after it. I agree. I can't speak to the price, but it's great. And, you know, look, zero D.T options have been all the rage the last two years. It's all part of the same concept. Going back to animal spirits, retail investors taking control of the trading. There's an app called Dub,

which is a copy trading app. It's growing quickly, mostly organically. What's the name again? I think it's called Dub. And that's, you know, those products are going quickly. So this is 2021 vibes for me.

2021 similar kind of setup. You know, you had February and back here. And bringing in new markets, I mean, bringing in the kind of investor that wants all of their trading under one platform, which is something they get, often in traditional finance, but in crypto, it's not been that common. So when does the party end? I mean, I would look at like Palantir and names like that as like a clock. Palantir was down 40% from the high. Now it's down 20%. Again, in the last two weeks, significant rally.

I think these retail investors are, they're smart, they're trade. They have a sense of what's going on. I don't think Palantir gets to the new old-time highs. And I just pick that one as an example across many. You could think another one like Hymns. Perhaps even Bitcoin, by the way. But I do think you get another rally higher. This rally is moving very, very quickly, though. So it might not mark out in time, like to the summer.

It might mark out in price. Yeah. One thing that's really interesting today is, I believe, yeah. So the EZU, the Eurozone ETF, was red today. And we've seen like the last two months has been this huge rotational flow into Europe. I've been pretty excited about it. But the trade has gone too far too fast. Like they're literally there's like a Forbes magazine cover about longing rest of world equity. And I was like, oh, like crap, the trade's already over. And so to see that red on the day like mag seven was so well bid,

I think there's this huge repositioning again of like I, I keep saying pod show up monkeys because I just read like shrub stack's article all about it and he used that nomenclature. And it's just such a great way of putting it. But yeah, I think they're, they're piling up in that MagS7, you know, tech trade again. And the fact that it was read on today, I think, is the signal. You know, one of Millennium's top holdings in the 13F filing was Reddit.

Was Reddit. Yeah. Can you imagine Reddit becoming like the meme stuff of this title? That would be epic. That would be so meta. That would be absolutely brilliant. Speaking of which, and to wrap up here, Have any of you seen the movie, Dumb Money?

Nope. No. It's excellent. It's the movie about the GameStop saga. It's really well. It's really well done. I don't know if it's on streaming yet. I saw it on an airplane, but it was much, much better than I expected.

And I think it is going to have a strong cultural influence once it hits streaming. The weirdest thing was just having Seth Rogen be a hedge fund manager. I just couldn't take him seriously in it. I was like, this is Seth Rogen. He smokes weed. He's not a hedge fund manager. I think that's also the kind of the point of the movie. True.

Yeah, fair point. Anyways, we got through a lot today. I thank you all very much for being here. Felix, thank you for joining us. We've got to get you back on. And Ram and Alex, thank you so much for being here also. Thanks all of you for listening. We'll be back in one week to discuss more about how the worlds of crypto and macro are colliding.

Until then, everyone.