Bitcoin CRASHES To $85K As Global Recession Fears Set In! What's Next?

Well, good morning everyone. It's time

for Macro Monday. Bitcoin crashes over the weekend and we are trading exactly where we were a week ago when Mike, James, and I talked last. What's going

to happen next? Well, let's have the conversation. Scott's out today, so it's

conversation. Scott's out today, so it's just the three of us, which means I'm going to try to talk less. And uh let's get going.

That's dope.

>> That's dope.

>> Well, it's it's macro Monday time and as I said, we're trading exactly where we were a week ago, which is kind of funny if you look at it. But, you know, here we had a nice little crash over the

weekend. But before we talk about the

weekend. But before we talk about the crash and uh I let James talk about leverage, uh why don't we see what the hell's going on in the rest of the world, Mike? So, what was going on in

world, Mike? So, what was going on in the morning meeting this morning?

>> Yes. Um thank you, Dave. We'll go there and I I encourage everybody to listen to the interview with James in Scott this week and it was quite good. I really

enjoyed it. Um so, starting with Anna Wong. Um talking about Kevin Hasset, I

Wong. Um talking about Kevin Hasset, I guess he's 70% in poly market. She does

think he will be the next Fed governor.

What she thinks will happen is he'll probably start influencing the Fed and the market starting in January. Um Mr.

Moran's seat will be up. He thinks Hats will initially take that seat and then move into the chairmanship once he's officially um designated and approved and everything. Um she did do an

and everything. Um she did do an interview Donna with Kevin Hasset a couple weeks ago and she said Hassid is expecting investment in productivity boom in coming years similar to what Mr.

Greenspan nailed in the '9s. Um, and

kind of the key things that she's looking he's looking for is signals that Greenspin was able to nail and one of those was declining prices of tele telecom communication goods. So she

thinks hassid's going to be a push for a double shoe and management reform at the Fed maybe, you know, focus on why they missed the transitory um couple years ago. Um, politically obviously he's a

ago. Um, politically obviously he's a bit leaning left or the Fed's a bit leaning left. Cassid will offset that.

leaning left. Cassid will offset that.

Um and then she focused there was a question about Black Friday Mastercard spending is about 2% 2.3% real growth this year compared to 3.5% last year

real growth in Black Friday. Ira Jersey

our um income strategists pointed out that funding markets balance contract for month end to continue. There's a bit of a excess the Fed does not have excess

reserves that we've done in the past but he thinks the long end's still going to remain rangebound. shortened the rally

remain rangebound. shortened the rally more. So, he's still looking for that

more. So, he's still looking for that bullish steepener, but um thinks the Fed's going to be more doubbish than the market expects. Um Michael Casper, our

market expects. Um Michael Casper, our equity strategist, point out all the good things are happening in the stock market. Earnings are running 14.9%

market. Earnings are running 14.9% 95% strong this year. Industrial sector

is the only one that's missing. Getting

a lot of participation out outside the MAG 7. Other the other 493 earnings are

MAG 7. Other the other 493 earnings are running around 11%. Typical signals are still green but less bright than last quarter. And average 13% earning earning

quarter. And average 13% earning earning per share rise expected in 2026. It's

the highest since 2018. So his quote was that could bring in a little bit of volatility. Small cap earnings still

volatility. Small cap earnings still strong. Audrey Chilled Freeman pointed

strong. Audrey Chilled Freeman pointed out dollar starting the month and expects uh that's pretty much on the back of the delvish Fed which is now priced 100% for a cut um next week uh on

the 10th. Sorry, that's not next week.

the 10th. Sorry, that's not next week.

um more dollar weakness expects into 2026 strong and she pointed out there's a strong negative need seasonal um factor in the dollar in December. Eight of the

last 10 years was down this month. Um

and then I pointed out I was been focusing on that Bitcoin to go ratio is one of my key leading indicators. It's

broken down. 25 was the key support. Now

it's at 20. It's a next support. Fair

value is around 13. And I just pointed out why I'm I'm I'm really really frightened about the things I see in the stock market. I'm sorry, in the

stock market. I'm sorry, in the commodity market. And that is gold the

commodity market. And that is gold the velocity of the rally this year in gold is um only happening once or like three times so or so in the last 50 years, but it's never happened with stock market

volatility getting buried like this. So

it might be an indication that Bitcoin is going to be right and it's going to pull stock market down with it and volatility back up. Um so to me that's the key thing I I point out. And then I pointed out crude oil still think the

trend is downward as with the grains and markets are waiting for pops to sell.

Right now it's the time to be light on positioning and you wait for rally to sell into bare markets. Back to you.

>> Yeah. I mean before I before I say anything because we'll we'll we'll let uh as moderator as I promised last week I I I tend to want to talk a little bit

less. The I will say one thing. Um, I I

less. The I will say one thing. Um, I I still think that gold is going to run to 5,000. I've said that on this show

5,000. I've said that on this show multiple times. Uh, I think that the

multiple times. Uh, I think that the liquidity gold is unhindered by some of the idiosyncratic things we're seeing in Bitcoin and that's what's going on. Uh,

it will it's interesting that I think gold is going to lead this the hard asset rally higher, but and I think the hot money is there first and we'll see it pause once we get to that level. Of

course, there'll be a ton of euphoria. I

mean, you just the fact that it, you know, what it did over the last week is is I think pretty interesting. I mean, I assume you agree with that, James. I

mean, yeah, everyone in the world on the trading side thought once it lost 4,000 a couple weeks ago, it was going to stay there and here we are back pushing towards alltime high again.

>> Well, let's talk about just overall macro the macro picture and and uh Mike, thank you for your your nod to my uh to to the interview I had with Scott. We

talked a lot about leverage and you know uh about liquidity and so one of the things that you said is uh dollar strength. I mean if you look

dollar strength. I mean if you look overnight you look at the overnight markets we can't really talk today about macro without bringing up Japan right so um one of the one of the key uh

structural changes that we're seeing in Japan is that they're allowing the 10-year to uh the Japanese 10ear is now trading at 1.87% 87%

uh yield which remable uh it's a remarkable move for Japan. If you look over the course of the last uh decade

you know it Japan's uh tenure has gone from uh about 30 basis points down to basically negative 30 basis points and

now it's up to 1.87%. What does that mean? What does that mean for the macro

mean? What does that mean for the macro world? It means that the structural uh

world? It means that the structural uh availability of free capital in the world is gone. It's over. So, and this is what we talked about either last week

or a couple weeks ago, I think, Mike, is that the era of of borrowing from Japan for nothing is over. And so, part of what you said today is and what what

came out in the meeting is is the expectation of a stronger dollar. Well,

uh I'm sorry, of a weaker dollar. And

part of that is that you're seeing today that the Japanese 10-year yield up means that the the yen is stronger, meaning that the dollar is weaker because one of

the key components of of measuring the DXY is the yen. And so that is happening right now. So now we kind of roll into

right now. So now we kind of roll into what you're talking about, Dave, is um you know, gold and Bitcoin and all the indicators of what's going on in the

macro world. Well,

macro world. Well, I agree with you. I think that that gold structurally is going to go higher from here. I think that because I believe

here. I think that because I believe that we're going to see uh we're going to cons continue to see liquidity. It's

just not going to come out of Japan. And

so uh it's going to be coming out of central banks primarily. The big central bank that we're going to see it come out of is the US central bank. And it has to because it has to support the Treasury.

and when that happens, how that happens.

I think that uh you know some of the faster money got ahead of itself and uh and you're seeing that in overnight prices of Bitcoin. This is nothing new.

We have an un end of the month here.

It's you know now December 1st. So the

last day of the month was yesterday. And

I think that we had some algorithms that that were triggered both month end and just price-wise and risk off sentiment because of what's going on in Japan. And

and I want to make it clear. I don't

think that carry trade is blowing up. I

don't think that we have we have, you know, an implosion somewhere. That's not

what I'm seeing. Uh but you're you are seeing a structural move toward uh or away from free money. And that means that you've got to repric risk. And when

risk is repriced over the weekend, what gets repriced first? Of course. Of

course, Bitcoin does. It trades 247.

It's going to get repriced. Now, here's

where it gets interesting. And here's

what I'll bring up. Um a chart here. And

uh we can we can look at this, Dave, if you know how to do this.

>> Well, I I just tried to Yeah. Okay. So,

hold on.

>> So, if you can >> I see it.

Uh you see my >> I saw your chart. I that was a different one >> there. There it is. Okay. Well, this is

>> there. There it is. Okay. Well, this is this is the this is the 10 year the Japanese 10 year. And so you could see it's just structurally moving moving higher. And this is from 2020, you know,

higher. And this is from 2020, you know, when they were keeping it at at basically zero uh ZRP, zero interest

rate um you know, um uh policy that this all kind of came undone. We all talked about this and you we we've seen this movie here in the end, but this is this

is a long-term move. This is not this is not like a violent move upwards. um this

feels violent but you can see the policy changed. Okay, that's the 10-year the

changed. Okay, that's the 10-year the policy has changed. So that's one thing.

And then if we go to Bitcoin and we look at the liquidations for the last 48 hours, you can see that the liquidations came and let me make this bigger for

everybody. You can see the liquidations

everybody. You can see the liquidations came here when we were we were in the 90s. it. You started seeing shorts being

90s. it. You started seeing shorts being liquidated and then this this riskoff sentiment occurred and boom, we just hit this we it a cascade of liquidity, you

know, and this is the cascade of leverage unwinds and it just continued and continued and then it kind of held its value right into uh early into this

morning and then it hit it again for another wash out here. And these bars are leverage. That's all this is. It was

are leverage. That's all this is. It was

it a massive amount of leverage? No. I

think it was about $700 uh million dollars from what I've what I've read.

Dave, you you probably have a better handle.

>> Very very thin. I mean I mean it almost because of October 10th, he doesn't even show on the liquidation chart. The the

fascinating part about this is one would think that the amount of Bitcoin that is

bought by yen carry trade is tiny. One

one would think that the yen carry trade unwinding off of BOJ news that Bitcoin reacts to we would come in and we would see very different markets.

>> Let's let's talk about that. So really

what I think is happening here in Bitcoin is that you've got leverage longs expecting movement from the Fed a little bit too

soon. Okay. So what is remar what is

soon. Okay. So what is remar what is what is significant about today? Today

QT is ending in in uh for the Fed, right? In December. I don't know if it's

right? In December. I don't know if it's December 1st, December 5th, whatever.

They said December. So if QT is ending today, okay, that's significant enough.

It's $2 billion of liquidity that's not going to be drawn out of the markets, but it's not liquidity coming in yet.

Now, we did hear Powell say and he's reiterated and and other uh officials from the Fed have reiterated that we are going to see liquidity come in

from the Fed for bank reserves. But that

does not mean QE in the traditional sense. It could just mean that we're

sense. It could just mean that we're seeing a a steady flow, a steady stream of liquidity in the short end of the of the curve to just shore up bank

balances. And that means treasuries

balances. And that means treasuries buying tea bills with the expectation that they'll roll off pretty quickly.

Now, we've seen this movie before also back in 2019. We we saw the repo crisis where the Fed came in and said, "This is this is not QE. It's not QE." So, it

became the term of QE not QE, right? or

not QE QE and so that and because it never rolled off and so if essentially it is liquidity but it's not the fire

hose that we saw back in 2008 or 2010 and again in in 2021 2022 it's not the same fire hose but the significance of

it is the era of tightening is over at the Fed we're not tightening anymore that's it now the question is how much liquidity is going to come and when and I think that The markets got ahead of themselves again once again in crypto

and Bitcoin. They got ahead of

and Bitcoin. They got ahead of themselves thinking, "Okay, well QT is over. Here come the fire hoses." No,

over. Here come the fire hoses." No,

it's not quite that simple. And so you we we really need to zoom out. When you

when you're investing in in, you know, a assets that are being adopted like this, you have to zoom out. So to your point about gold, Dave, I think you're right.

I think that gold is going to structurally move higher, but it's going to move higher along with liquidity. And

that liquidity is not going to come in a burst of or a cannon or you know a bazooka today. If it does, it means we

bazooka today. If it does, it means we have some sort of black swan event.

We're going to see a lot lower uh values in all these markets. Allah Mike

Mcloan's uh point of a steep draw down.

Yeah, we would see that and everything would correlate to one and then you'd have the fire hose. But what we saw last night is the realization and the

algorithmic trades and and and uh response to the reality that Japan is letting this go a little bit and they're doing it again. It it doesn't look like

it's it doesn't look like there's um chaos in the markets. Okay.

>> No, that that was actually going to be my point. It looks like it's a

my point. It looks like it's a structural move and they're trying to do this without having a drop from, you

know, a 10th floor 10th 10th uh story floor to the ground. They're trying to take an elevator down and kind of stop into in between floors a little bit

rather than just drop it off a cliff.

And so that's what I think we're seeing.

And I I have not heard of any desks being blown up from this gen this this yen carry trade yet. But I I I do see a

riskoff sentiment. And again, this is a

riskoff sentiment. And again, this is a mathematical end of month, endofear riskoff sentiment that that you're seeing. And it and that's kind of what

seeing. And it and that's kind of what uh from my perspective. I'd love to hear Mike's views on this, but that's kind of what I'm seeing from uh from where I'm sitting and Dave, anything you're seeing and just the sheer amount of leverage

that came out.

>> Well, it wasn't that much leverage.

That's the that's the strange thing. It

was less than a billion. I mean, you know, as I said, I think, you know, Mike, you and I all agree, well, we don't all agree on a lot of things, but one thing we do agree on is Bitcoin does tend because especially on the weekend,

tend to be a leading edge of the spear, unless of course it was complete nonsense. uh and some one it doesn't

nonsense. uh and some one it doesn't take that much to move the Bitcoin market, right? I mean, we saw less than

market, right? I mean, we saw less than a billion dollars in liquidations.

>> Well, when you have leverage like that, it doesn't. It's just sitting there.

it doesn't. It's just sitting there.

It's just sitting ducks just ready to be picked off, >> right? And so, you know, over the

>> right? And so, you know, over the weekend, right before that happened, you know, whatever, James Win famously said, "Okay, I'm not short anymore." Uh, you know, you know, whatever and stay tuned.

And, you know, you have all these people who are like, "Oh, okay. That's probably

and who knows? I mean, maybe many of his followers just went and said, "Oh, if he's not short, let's go leverage long and and and see see this thing go crazy in December." And then, of course,

in December." And then, of course, they're easy sitting ducks to get picked off. The thing that's interesting is is

off. The thing that's interesting is is if you look, I mean, Mike, I I'm I'm sure your bond strategist has said this.

You just look at the 10 years, they pretty much all moved in lock step.

Germany, uh, I mean, everything is five, six, seven basis points among all of them. And that's not, you know, that

them. And that's not, you know, that doesn't look like, you know, the headline saying Bitcoin drop because of the BOJ. Well, then why would bond

the BOJ. Well, then why would bond yields have all kind of moved, you know, fairly muted pretty much in in in tandem? I mean, everywhere else other

tandem? I mean, everywhere else other than Bitcoin, there's no sense that there's an issue in the yen carry trade because the yen carry trade is a very big deal in the bond market, right?

>> That look, we had the yen carry trade blow up in August uh of 2024, right?

we experienced it. It was a lot of fun and uh but that that that put everybody on alert and that was kind of it. And so

I don't I I just don't see the these desks being way over their ski tips on this anymore. It just doesn't it just

this anymore. It just doesn't it just makes no sense to me.

>> Now there might be some hedge funds but there won't be any We're not talking about any professional dealer desks. The

ones that are the systemic >> Exactly. So Exactly.

>> Exactly. So Exactly.

>> Right.

anything on that, Mike? What what what are you thinking?

>> Yeah, I I I'm glad you went there. I

agree with it. And if I can just run through some screens and kind of mimic on it. I obviously my biases is the big

on it. I obviously my biases is the big one. This is way overdue. And yes, I've

one. This is way overdue. And yes, I've been wrong on that one for a while. But

here's just you pointed out global world bond yields. They're all up about six,

bond yields. They're all up about six, seven base points with the exception of China, which is not really a live market anymore. It's very close. But yeah,

anymore. It's very close. But yeah,

they're all up. Europe, Japan's up six base points. US up about seven. But I

base points. US up about seven. But I

want to tilt over to I think what's really going to be mattering and why I'm sticking with this bearish view is first of all this is just you take Bitcoin divided by its 50 month 50we moving

average. It's you know it's at right now

average. It's you know it's at right now at a 15% discount. It's never ever gone down below 50 um week moving average this time of year certainly without S&P

500 following. This is since 2017. To me

500 following. This is since 2017. To me

2017 was the milestone because that's when futures started trading. And then

the next milestone was when um we had ET widely disseminated ETFs which was really 204 24. So the key questions for the end of year is will Bitcoin be the Grinch? And then I like to point out

Grinch? And then I like to point out yeah I think so and one of the key things that really tilted me I just want to show you real quick. It tilted me lower to to get um to give up on a little bit Bitcoin too much last year

was if you look at it versus 50week moving average it's made the same lows and lower highs. It's it's a maturing bull market that's becoming normalized.

But the lows have been the same around a 50% discount. I expect that. But you

50% discount. I expect that. But you

overlay that with what's happening with gold. Gold is rising versus 50month

gold. Gold is rising versus 50month moving average. Bitcoin declining. So

moving average. Bitcoin declining. So

from a leverage standpoint, which is my background, everything's leveraged. You

want to belong to one that's that's increasing relative relatively. And I so that's a big difference. But also I want to show out to me my f favorite leading indicators. Bitcoin to gold has broken

indicators. Bitcoin to gold has broken down. 25 was the key support we looked

down. 25 was the key support we looked at all year. Now it's at 20. Our model

says it should be closer to 13. And the

bottom line for everything what you talk about is why there's not a lot going on and a lot of you know it's just kind of a complacent market is volatility. S&P

500 is buried. It's kind of potentially recovering. This is 120day volatility

recovering. This is 120day volatility potentially recovering from the lowest level since 2021 2020. And we end the year here. It's the lowest in since

year here. It's the lowest in since 2017. So I'll just end with one thing

2017. So I'll just end with one thing that I stick with I'm still worried about. Here's volatility very buried.

about. Here's volatility very buried.

Last five years Bitcoin's inflection point has been around 50,000 when people say look at the chart it's bullish and I say okay well that's normal and that's why I'm worried for going into the end of the year the Grinch might be coming

in here and if we just get a little more trickle down especially with bond yield spiking here this is not good for any risk assets.

>> Yeah. And I look um and we talked a lot about this with with uh Scott and I talked a lot about this which is you know Bitcoin liquidity cycles um Bitcoin

four-year cycle uh its historical performance and and looking at it there's only a few data points and to me as a long-term investor that just means that you're you're you're looking at

something that just does not have enough historical data to um to really um give you comfort.

and and confidence in in trading it. You

know the now that said because of these cycles there is some self-fulfilling prophecy. There's no doubt about it. But

prophecy. There's no doubt about it. But

the reality is that we I just think that the four-year cycle for Bitcoin is over.

And we are in now a we this this is is showing you especially in a day like today. It's showing you that it is the

today. It's showing you that it is the the tip of the liquidity spear. And so

it is showing you what markets expect from liquidity and are reacting to and liquidity in in kind of a a hyperreactive mode. And so it

hyperreactive mode. And so it unfortunately you have to zoom way out to to really um understand how this is

working with Bitcoin because it does have short-term volatility. Um but that means that something like gold is you know that's that's also reacting to

liquidity and that's why I don't think that that gold is is finished and it I think that gold is going to structurally move higher. So, and I believe that Mike

move higher. So, and I believe that Mike because just like you, we you know the market it it on all metrics, forget about Bitcoin, just look at all the

market metrics. It looks overdone unless

market metrics. It looks overdone unless of course you change the denominator. It

it it it doesn't look quite as overdone as it is, but it still is overdone. It's

super concentrated. you have a tremendous amount of risk in just a handful of names that are hinging on this AI um you know new structural

change to not just the market the economy and so um when is that like is that is that going to have a is it going to take a breather and how much of a

breather is it going to take and does that cause a cascade of selling where the Fed has to rush in and uh dump liquidity into the markets rapidly that's really the big question. It's not

the question about whether or not we we can have a breather. Of course, we can and we all agree that this, you know, the the the danger is that it's it's

extremely concentrated and uh and it has gotten ahead of itself. So, but to look at Bitcoin, I think that you really do have to I mean, I know Bitcoin's love

saying the zoom out, zoom out, zoom out, but you really do have to just pull back. You do have to zoom out and you

back. You do have to zoom out and you have to revisit what your what your what your thesis is. If your thesis is that Bitcoin is the hardest money in the

world, that it cannot be uh corrupted by central banks, it cannot be corrupted by the dollar or the yen or the uh euro

systems, that it will swallow them because of exactly what we're talking about and that it can't be just expanded on and devalued and debased like the

other like the other currencies. then

that's your thesis and you you have to zoom out and really understand that hey look this is a volatile asset that's going to continue to be volatile along

its longterm long-term adoption uh you know kind of of um personality but as as something you look in on in the markets

but to just trade it around on fouryear cycles I think at this point is probably a mistake we have to see how the liquidity cycle is playing out. Are we

finished? I don't think we're finished yet. I think that we're we're entering a

yet. I think that we're we're entering a a period where the Treasury is going to do whatever it can with a a government that and an administration that is

likely leaning heavily toward liquidity rather than pulling liquidity, especially as we go into midterm. So,

this does turn political and now you've got a Fed that we're going to see a a regime change in that is going to change

to some a regime that is probably highly uh favorable for the current administration. And when you have that

administration. And when you have that with an administr administration that is hammering for lower rates, hammering for liquidity, well, you're going to see you're probably going to see that next

year. But again, we're still in December

year. But again, we're still in December here. midterms aren't until almost a

here. midterms aren't until almost a year from now. And so there there's time for all of this to to still oscillate

around and play with. And so uh just I do reiterate if you if you have that if you do have a long-term view on Bitcoin,

don't forget it. Like step back, take a breath, take a moment. It doesn't mean that you shouldn't have liquidity sitting there waiting opportunistically

for a trade that Mike is pointing out that you could have a draw down. That

doesn't mean that you should be 120% in on it. You know, I think that Mike would

on it. You know, I think that Mike would would tell you take chips off the table and step back and and be ready for liquidity. Now, in my hedge fund, we're

liquidity. Now, in my hedge fund, we're ready for liquidity because we have different levers we can pull than an individual can. That's a completely

individual can. That's a completely different thing. But, you know, uh it it

different thing. But, you know, uh it it really is it it's determined by your own balance sheet and how you're approaching this. And so, I do I I cannot reiterate

this. And so, I do I I cannot reiterate this again enough. I reiterate the caution around having leverage on something like Bitcoin. It is still

violently volatile and you've got to be aware of that. So, uh, you know, last night, >> it's really important. Look,

>> I personally think that this was idiosyncratic and that people there there's there's a a tweet that I did last week or a post that I made last

week where I I I lamented how in the long run the narrative does tend to fit price, right? Price and narratives do

price, right? Price and narratives do work, right? So, the long run narrative,

work, right? So, the long run narrative, why is gold up? Gold's up because we print more dollars. The denominator

changes. Gold price goes up. Full stop.

End of story. It works.

>> First principles. Just

>> doesn't mean anything different. In the

short run, when there are short-term price moves, people always desperately, it's sort of like the search for religion, search for a reason. What

happened over the weekend? Well, the

answer over the weekend is somebody and and it could very well have been orchestrated looked at what was going on and you you made the point you said words that were important words that I

want to delve into. You said picked off and what what happens is is traders like to make money and big traders have big

bats and can do things. So if for example you have a position where you are long

spot bitcoin on exchanges you are short perpetual swaps. And by the way in the

perpetual swaps. And by the way in the funding rates you can see that that pos that trade is not nearly as expensive as

it would that that trade is is not nearly as as good from a funding perspective as normal. Right? But it has oscillated. We went from negative

oscillated. We went from negative funding rates to now slightly positive.

Slightly po but still below normal. Uh

so that trade cost you a little >> but walk but walk through what that means for people who don't understand that because when the funding rate for people >> right. So when the funding rate is

>> right. So when the funding rate is normal, effectively what that means is you're you're being paid to be, you know, you're being paid to be long.

You're being paid to be short on the futures or on the perpetual swaps slightly enough to offset the cost of the money you borrow to do that. And so

and and when it's when it's when the funding rate is negative, you're actually being paid uh you know to be long and so or paid to be short. And so

when it oscillates back and forth, trading desks, and there are trading desks that do this all day long, they use it, they go they they either have long or short spot positions that

they've borrowed, visav per positions where they can make money. Now, it

obviously costs to borrow spot. Not

nearly as much as it used to, but it still costs. So what happens is traders

still costs. So what happens is traders look at this and their opportunity cost is what they care about. Because if you have a big position that's hedged, the only reason you would have that big

position is well to be quite frankly it's you're moving in and out of it. If

you're going to hold that position, unless you're being paid to hold it, i.e. funding rates are high, you

i.e. funding rates are high, you wouldn't hold it. But you could build it up and then dump spot at an opportune time. What is the most opportune time to

time. What is the most opportune time to dump spot? On the weekend. When on the

dump spot? On the weekend. When on the weekend is the most opportune time to but dumb spot. Generally it's Saturday night. Well, what happened? So, you

night. Well, what happened? So, you

know, if you're asking me probabilities, the probability is a trading firm or firms doesn't wouldn't have taken more than one because it wasn't that big of a

move, saw an opportunity to have a large spot position and dump it at the same time that they were hedged in the per markets and they take their profits at

the bottom of the dump because the spot what you do is at and this is true about every electronic book, but really true in Bitcoin. And really true in crypto

in Bitcoin. And really true in crypto particularly on the weekend is liquidity is concentrated to right at the bid offer. And if you look liquidity down

offer. And if you look liquidity down $5,000 on Bitcoin, it gets less and less. The first $1,000 move in Bitcoin

less. The first $1,000 move in Bitcoin may cost 300 400 million. The next might be a hundred million. The next might be

50 million. The next might be 20

50 million. The next might be 20 million. Right? until people start

million. Right? until people start reacting and putting bids back in the system. And so it always tends to be

system. And so it always tends to be sized as a move uh in sizes that make sense to people. And so you look at it and this looks like I hate to say the

word you know they would call this in in if it were in a regulated market that was US only it would be called manipulation and someone would be getting investigated for it. Now, you

know, in the crypto world, there are no regulations in terms of market manipulation, except the CFTC literally does have authority, and whether they'll ever do this, I don't know. But this is

the sort of thing that is manipulative.

You look at it and you see it. And it to me looks like that again. And we've seen this many times. I've commented I I'll never forget the 29,000 to 26,000 drop,

which was $3,000. It's half the size of this, but it was from a significantly lower level. also in percentage terms

lower level. also in percentage terms was even bigger. We've seen these many many times. And so we all rush to come

many times. And so we all rush to come up with narratives. Why did it drop? Tip

of the spear, liquidity, all this stuff.

Great. Except for nothing else moved, which tells me this was manipulation.

Yes, someone may have looked at a news story that panicked a couple of people.

Boom, down it goes. Now they look and and you know, here we are again. And

that's why I made the the observation that we're literally trading where we were trading a week ago on this show having recovered a little bit and then

there was a rally a few days later. I I

don't think that I'm just not reading a whole lot into this move. I don't think that it really means a whole lot. You

know, it's just that simple. I I I don't think it matters. I I hate to say it, but you know, it matters to traders, but I don't think it it matters within the scope. I think that if we came in and

scope. I think that if we came in and the S&P and the NASDAQ were crashing down this morning, as Mike said, the Grinch started on December 1st. If that

happened, okay, that'd be different, right? But but but that's not what's

right? But but but that's not what's happening. And so that that's why I

happening. And so that that's why I think sometimes people overreact. I

think there are a couple of other stories that we should talk about though, uh, you know, on the macro side.

One one that I really would love to get your opinion on. Mike likes to talk about micro strategy as being the tip of the spear, but I think it is worth noting something. And James, you're in

noting something. And James, you're in the Bitcoin community. So, you know, I'd like to get your comment on this four-year cycle. I I personally think

four-year cycle. I I personally think we're going to play out very much like the four-year cycle, and it is exceedingly bullish. And I and I'll

exceedingly bullish. And I and I'll expand on this narrative later. And and

the reason is because the main driver of the four-year cycle used to be fear when the having happened that mining would would you know fall off a cliff and the network would have a problem and then

within six months or so of them of the network being stable then it rallied to catch up and I I think that we are now in a period we are the most stretched

where mining is still doing extremely well the network is still is it the price of bitcoin is at an all-time low discount. account to the h the total

discount. account to the h the total overall hash rate. And I think that there's geopolitical reasons for that.

There's lots of reasons for that. But to

me, that's a buying opportunity. I've

been saying that for a while. Doesn't

mean it can't stay bad for a while.

Three, four more weeks. It could easily could months even. But the truth is is selling at these levels relative to the to the fundamentals of what's going on in the network is just not a really

smart move. Uh when you zoom out,

smart move. Uh when you zoom out, there's a lot of of infighting. I don't

think we've ever seen more Bitcoin OG people yelling, "Oh man, you know, Black Rockck this and and Fidelity that and Vanguard this and you know, talking

about all the institutions and how it's corrupting the meaning, etc., etc." And so you you're seeing all this stuff play out that's idiosyncratic to Bitcoin. But

it is worth noting this weekend and another reason for my my thesis is on October 10th Bitcoin was one-third of the liquidation and it was not the biggest

this weekend Bitcoin led the liquidations significantly. It was a

liquidations significantly. It was a Bitcoin led and in fact you know that mattered. So inside this is there's a

mattered. So inside this is there's a Bitcoin story going on here and barring you know major dumping from people who are you know who made who who would be

cutting literally hurting themselves to do it. Uh I just don't see this price

do it. Uh I just don't see this price action being all that that destructive.

I think it's actually somewhat constructive if you understand and you and you look back on it. But we could be in a bad macro cycle but we're not seeing it anywhere else.

Right.

>> Yeah. Can I follow up on the bad macro cycle to piggy back?

>> I I was I was trying to trigger you, Mike. So,

Mike. So, >> yeah, I I know you would and and and you know, and I know our audience wants us to disagree, but I mostly agree. The

thing is I want to point out as a year-over-year Bitcoin is down 10%. That

wasn't supposed to happen. That's just a one-year basis to now, you know, after Trump was elected. Before he was obviously elected, it's definitely higher. But the key thing I want to

higher. But the key thing I want to point out is what's changed. Um, number

one is what you said, James, is what the Trump administration wants by stacking the Fed, that endgame is over. First of

all, we've solidified the fact, and I want to show you a quote from here, that inflation is a number one issue in in elections. And if you're the one behind

elections. And if you're the one behind the government creating in somewhat inflation, which is the Republicans right now, you're definitely in elections going to help if you keep inflation up, help the Democrats win.

That's what's shifted. If you want to stack the Fed and keep the stock market strong, great. You're creating net

strong, great. You're creating net inflation. But for the 60% in this

inflation. But for the 60% in this country that are not so much involved in that, you're getting hurt. And one key thing that's changed, I want to show you this. My colleague Andrew Silverman just

this. My colleague Andrew Silverman just published on Friday, the headline is not so much. The first line of this story is

so much. The first line of this story is something I would have never dreamed of a year ago. Under the nation's first crypto billionaire in the Oval Office, then he explains what's going to change.

That's what shifted the whole world. I

remember loving this space when he hated it partly because he didn't get the fact that crypto dollars are investing in treasuries and didn't get that. And now

he's not getting the fact that by the way inflation is the number one way reason to lose in the elections and he's trying to create more inflation. But

good luck with that. It's how the things shift and that's why I want to show you what's changed in markets is the endgame. Now again I show you the same

endgame. Now again I show you the same chart. Bitcoin below its 50we moving

chart. Bitcoin below its 50we moving average. It almost always bottoms at a

average. It almost always bottoms at a 50% discount. It's nowhere near there.

50% discount. It's nowhere near there.

But what's changed is we have Fed funds in one year. They've been hovering at 3% for a few years now. Just bouncing at 3%. A year from now it's going to be 3%.

3%. A year from now it's going to be 3%.

And we're still not there. were still

running around 4%. But my point is this is going to be below 3% a year from now.

This is Fed fund futures in one year and partly because Bitcoin is going to lead the way to I think at least a 50% draw down versus its 50WE moving average.

It's what it's always done. Maybe it's

different this time.

>> Yeah, that's why I pointed out is it's not working. I just want to fill with

not working. I just want to fill with one key thing that's shifted this year is I'm predicting and the market's telling me we're overdue for the third negative year for the S&P 500 since 2008. Hopefully, it's not going to be

2008. Hopefully, it's not going to be this year. That would be a crash. And

this year. That would be a crash. And

that's what I just show you. This is

Bitcoin gold. And you see the red this massive green candle this year by the end of the year. I've been thinking, yeah, it could come back a little bit, but it's very green now, but this candle I think is going to be red next year. So

that's my point is we have to put up with and probably deal with. We're at

the potential endgame where we're overdue for what used to happen, a down year in the stock market. Bitcoin's

frontlining it. Micro Staff is ahead of the game. Um, all the crypto alts are

the game. Um, all the crypto alts are leading that. And now we're getting

leading that. And now we're getting towards the end of the year. So my point is we can just have a little bit of pick up in volatility. It's all pointing that way into year end. It might just be a week that it takes to switch the to flip

the switch like it took one day in cryptos October 10th to flip the switch.

>> Yeah. So part of that is it I think part of your thesis is it's priced in. Part

of it is that it you know we've already seen the liquidity. Um I don't look I agree with you and I wrote all about this on my newsletter this weekend. the

the game is rigged against the little guy and that's just reality. You know,

if you do not own assets in this country, you're going to be left behind.

And it it's not about whether or not the the Fed and the central banks have learned their lesson. They are

mathematically trapped. They must add liquidity or we have don't have money to buy the bonds that we're issuing to pay the debt that we're creating from the deficits that we refuse to give up.

That's the issue. And there's just there's no way to give up the the the deficits without structurally changing the benefit the beneficiaries. And so

are you going to tell all of the the Gen X and boomers that have already paid into social social security that they're going to get a fraction of what they they're already getting a fraction of what they paid in for. Are you going to

tell them that they're not even going to get that? That that would be pretty um

get that? That that would be pretty um that would probably be worse than allowing a extra inflation on a voting perspective. You know, you that would be

perspective. You know, you that would be turning your back on on what you you have promised the the payins for all these years. You're going to turn your

these years. You're going to turn your back on them and say, "Well, sorry.

You're just not going to get social security." No, they're going to print

security." No, they're going to print money and make sure you get social security and your Medicare and your Medicaid. So, the question is, how does

Medicaid. So, the question is, how does it happen and how quickly does it happen, not whether or not it does happen? We they are mathematically

happen? We they are mathematically trapped. They can't get out of this. We

trapped. They can't get out of this. We

are in a debt spiral. It is it is as clear as day to everybody who who studies debt and Mike you studied debt for a long time. You see how it is the

the I just don't think that there's any way and it's not that I don't think you're looking at the numbers. If you

have a way that you think that we could actually balance the budget without destroying the economy without without uh causing a a worsening effect on the

deficits that we have, then I think that you should probably uh you know uh be nominated for part of this cabinet to help them figure it out or the next

cabinet. the the voters if you if you

cabinet. the the voters if you if you lower rates now and remember remember the politicians are on four year cycles. They don't care about they

year cycles. They don't care about they don't care about anything but being reelected. We have we have that has been

reelected. We have we have that has been made a abundantly clear in the last three or four administrations. They do

not care about anything but being reelected. They will talk out of one

reelected. They will talk out of one side of their mouth and deal with the other side all day long. And it doesn't matter which side you're on. Republican,

Democrat, I don't care. If you're in if you're in DC, you're likely in this game. And it's just overwhelming.

game. And it's just overwhelming.

Well, and that's and that's the question is who's going to be who's going to be favorable for the Fed? He wants zero interest rate policy. He wants

liquidity. He wants somebody in that chair that's going to help facilitate that. We're going to see it. The

that. We're going to see it. The

question is when and how much. Pal's

done in May, right? So that it may take some more time to see that. If you see liquidity, you know, front running the

the elections that are in November, you're not going to see the inflation off of that until months or years ahead.

>> Yep.

>> It takes a long time for that growth to get through the BOA. It's not immediate.

So, and that that because you're talking about infl you're talking about printing money, adding liquidity to the markets,

adding liquidity that rises that that makes asset prices rise. And then the derivative of that is eventually consumer inflation. But that's a

consumer inflation. But that's a different thing than asset inflation.

Dave talks about this a lot. And it

takes a while for that to get through that that goat to get through the boa and be digested. And and what once it's in the boa, man, it is hard to stop as

we have seen. We saw when inflation sort of raged to seven, eight, nine% that they admitted to that. It's very

difficult to stop that. And you've got to draw a lot of liquidity out, trillions of dollars out of the markets to stop that. It's not just RA, it's not just raising rates. It's also that QT

where you're literally drawing trillions of dollars out of the market to slow it down. So, but again, and that takes time

down. So, but again, and that takes time to work its way through. So, all of this stuff is on a timeline that that markets understand generally and if you want to

see what's going on, please watch the debt markets. They have an they have a a

debt markets. They have an they have a a finger on this pulse. It's not the equity markets. They don't they they are

equity markets. They don't they they are trading around it in real time and and they they react to things very rapidly

that often are are emotional and they're not what the long long-term structural uh reality is.

>> Well, I mean it yes, that's absolutely true. Although if the equity markets you

true. Although if the equity markets you think react quickly, then the the crypto markets react like you know like ricochet rabbit if for those old enough to remember that cartoon which uh

probably most of our audience has no idea what that is but you know you can look it up uh on TV land or whatever.

You know the it is really really vexing to listen to you know this just the assumption that pulling hurting curbing aggregate demand is what causes is is

about consumer inflation there monetary inflation is very clear I mean you you want to pull you you want assets to go down you suck liquidity out boom you get 2022 assets go down I mean you know

pretty straightforward that's pretty easy but if you want assets to go up and you want consumer inflation to be muted.

Then what you need to do? Well, then you need to get rid of all the choke points.

So what are the two biggest choke points on consumer inflation and the two biggest levers they have? One, energy

by far. The biggest, not even close.

What's the other? Well, the other is supply chains of the stuff that people actually buy. Competition in supply

actually buy. Competition in supply chains, not not not collapsing.

What were the things that we were doing earlier this year on tariffs? You're not

hearing a lot about it anymore, right?

You know, the whole trade war with China. Why is that a big deal? Well,

China. Why is that a big deal? Well,

because most of the stuff we buy comes from there. You know, it you know, you

from there. You know, it you know, you want to drive the price of of people's stuff up. Well, you uh you you tax it

stuff up. Well, you uh you you tax it specifically via tariffs on what they're actually buying. Instead, you want to

actually buying. Instead, you want to encourage domestic production. Well, you

need to do two things. First, you have to make the regulations be make it such that American companies aren't disadvantaged. That's really hard to do.

disadvantaged. That's really hard to do.

Uh, a lot of it is state and local. And

on the federal side, they're trying, but it's hard. What's the other thing you

it's hard. What's the other thing you do? Well, you cut interest rates. Why?

do? Well, you cut interest rates. Why?

Because you want people to be able to invest in new factories and new things.

But as you pointed out, every time we I mention this, James, >> months, years, you know, for that for that to actually impact supply chains, >> right?

>> And so, you know what you're trying to do. You understand that.

do. You understand that.

>> And you know, I just think the Black Friday data is is fascinating, right?

You know, you you started this this with this Mike. You said real growth of of

this Mike. You said real growth of of two something percent. Which, you know, when you saw that it was an all-time high, the nominal increase was significant. So effectively what your

significant. So effectively what your analysts are doing, if I'm not missing you, if I'm not misquing you, is saying there was real growth. So the consumers are still buying stuff and that is

different than we were hearing a few weeks ago. We were hearing a few weeks

weeks ago. We were hearing a few weeks ago that that wasn't going to be the case. It was all going to be inflation,

case. It was all going to be inflation, but a significant amount of inflation in what people are buying. Did I catch that right? Is that is that what you were

right? Is that is that what you were saying this morning in the morning meeting Mike?

>> Yeah. So Anna, it was her Anna Wong pointed out. Yes. the the nominal

pointed out. Yes. the the nominal numbers are good, but the real numbers actually um chalk down from last year from above 3% to a little bit less than 2%ish for Black Friday sales.

>> Well, right. So, but but but let's get that right. It's not lower than last

that right. It's not lower than last year in real terms. It's >> No, it's still up.

>> Oh, yeah. So, it's just less. Yeah.

Yeah. Diminishing returns still up. Oh,

yeah. Growth is positive. Yeah.

>> Right. So, there is there is growth and on a nominal basis there's a lot of growth. Uh, and obviously the

growth. Uh, and obviously the administration would strongly prefer it to be, you know, not to be inflated because when people have to pay more for stuff. I mean, effectively, I saw some

stuff. I mean, effectively, I saw some analysts over the weekend talking about it, saying that, well, you know, Americans are trained to hold off on their purchases until Black Friday so

they don't pay too much because people and and so a lot of what's happening is people effectively pulling backwards or forwards depending on whether you know, however you're looking at it. But

they're trained to buy on Black Friday because that's going to save them money because people don't have as much overall money. That's why looking at

overall money. That's why looking at Black Friday in in a in a vacuum is kind of difficult. It's also important to

of difficult. It's also important to understand whether it's necessities or you know or presents or you know whatever people are buying. And I guess we'll get we'll get a lot more on that

after Cyber Monday which is I guess today yada yada yada. Um right you know but it it feels like you know James is getting away right when I was going to

queue you up. I mean, you wrote about you wrote about this weekend something the game being rigged and you know I do a lot of spaces with uh you know with people who talk about the K-shaped

economy that's become a very popular term. It's stuff we've been talking

term. It's stuff we've been talking about forever by the way uh that is a large reason why people are in Bitcoin and and before you know you go through this is that this one?

>> No it's um it's the monopoly one.

>> Yeah it's the monopoly one. Yeah. But

>> yeah, I do I do want to do my weekly comparison. I'm presenting something so

comparison. I'm presenting something so if our background guy can see it just what what I was talking about before every time Mike when you go through your charts. If you look at the far right of

charts. If you look at the far right of this and this is getting worse by the week the blue line is the Bitcoin hash rate is the is the power of the network and the black line is price. it

continues to get the most extended ever unless if you believe that the that price is going to lead the hash rate down which by the way is the narrative that happens at at points in the having

cycle right before rallies and you can see it at every other time I mean there's smaller moves but you can see it around there if you believe that you

should value Bitcoin completely in a vacuum from the network itself then fine you know And basically you're saying, "Okay, it's an it's an asset." I I still think Bitcoin's an option. And we've

talked about that many times. I don't

want to go down that diet tribe. But

effectively, when you're looking at this, this is telling you the reason I don't agree with your 50,000 call. The

reason I don't think we see these big draw downs are because this blue line, the blue line breaks down. That's a

totally different situation.

>> I want that to be clear.

>> Let me follow up on that because I love that chart. I used it for five years at

that chart. I used it for five years at least every year and I stopped using it last year when I flipped over to gold and riskoff assets. Um, and cuz I thought sometimes we have to try to

determine when the answers have changed.

And to me the answers have changed. Now

we have a president who's a crypto billionaire and a lot of the people got involved in the first place don't want to get involved, don't want to be exposed to that human being. They want

to be away from the system. Gold allows

that. Cryptos don't now. Now you're

dependent on it in cryptos. And we have a president who wants to run it hot despite the fact that inflation is a number one issue and wants to um get the Fed ease despite the fact that inflation is the number one issue in elections.

He's going to get unelected. I mean

sorry this is the way things are working right now. But that's what shifted and I

right now. But that's what shifted and I fully expect now the signals I'm seeing from um commodities are historic. We've

never had gold rally at this velocity with stock market volatility this low with crude oil going down this low.

Never. It's never happened. So maybe

it's just a faint, but I look at it as, okay, it's just predicting now we're going to have a down year in the stock market next year. Big deal. Not a big deal. If we drop 10%, everything

deal. If we drop 10%, everything changes. Bitcoin will probably go down

changes. Bitcoin will probably go down at least at 50,000, maybe 10,000. I have

that outlook. But here's a question I want to ask you is last year at this time, I was way early. I flipped over to completely golden treasuries. Now I

think gold's so expensive. I should only be in treasuries. Fully expecting that next year, you have to be willing to fall behind when risk assets are taking off. But I see risk assets rolling over

off. But I see risk assets rolling over and so critique that view because last year you critiqued hard and overweight gold and that seemed to work out. How

about now?

>> Well, I think first of all risk assets is an interesting is a really interesting definition. Arguably

interesting definition. Arguably everything other than treasury is a risk asset because you're looking to outperform it because treasuries don't get you you basically lose to inflation.

Treasuries are a melting ice cube to use Michael Sailor's stat. So by that definition, if you're talking about just search for yield or search for return, everything is a risk asset, including gold. Two things have changed with gold.

gold. Two things have changed with gold.

Gold, first of all, gold and Bitcoin share one really important thing that people don't talk about. Yes, they're

both provably scarce assets. Although

gold scarcity, you know, kind of changes. There was some some new gold

changes. There was some some new gold discoveries over the over the weekend again, but whatever. I mean, it is what it is. the they're both global assets

it is. the they're both global assets whereas US treasuries yes they are globally used and less and less so over time because people are are sick of it right and you you've seen that in terms

of central bank holdings of gold versus treasuries but they're global assets so it's not only what's happening in the US and outside of the US gold has found a

product market fit as momentum hot money trading and that is new and that does matter matter because I know we've talked about the contract for

differences market but gold and silver I mean silver you know whoops let me undo this let's kill that let's do this let's

do this let's see if we can get it right I mean I mean silver you know is going crazy and you

know silver is a risk asset in the in the precious metals world but it's going it's at it's now at you know record highs And why is it being driven to record highs? Well, I can tell you that it's

highs? Well, I can tell you that it's not physical silver demand in terms of coins in the United States. Uh dealers

are are if you want to sell, you're selling below spot. There would have been many times in the silver market when you want to sell, you're selling above spot. Uh and when you want to buy,

above spot. Uh and when you want to buy, uh you you you would be paying a big premium. That is not the case.

premium. That is not the case.

The silver market is running because the hot ball of money that chases stuff is chasing it. And there are a lot of

chasing it. And there are a lot of people who see silver as as undervalued versus gold and you know, etc. But it really is it does react with more

volatility. And the volatility of silver

volatility. And the volatility of silver is what is it 40% more than gold, Mike?

Double you somewhere between 40. Yeah,

you're muted.

>> Yeah, you're still muted. You have your mute button on.

>> Yeah, sorry. It's two times. It's the

nickname's leverage gold, >> right? Exactly. So, what you're seeing

>> right? Exactly. So, what you're seeing is is there's a lot of of moment.

There's just a lot of m leverage in the system and a lot of people willing to employ it and with contracts for differences. The gold and silver markets

differences. The gold and silver markets are no longer the stately market where you look at and you buy it, you know, right before Diwali when the Indians uh

buy gold and and use it basically as presence for their their investments and then then you're done for the year. You

know, it's like that market doesn't exist anymore. You know, we've had

exist anymore. You know, we've had central banks buying it. We know that.

But we also have had this hot ball of money buying it. And that's my thesis of why I think gold will continue to move higher because frankly where else are you going to put it? The entire world is

printing. Literally every single country

printing. Literally every single country now in the G7 is printing money. They're

all running massive fiscal deficits. So

if you're if you do it in constant fiat, gold or silver probably will continue to go higher. Bitcoin has that narrative.

go higher. Bitcoin has that narrative.

But in the crypto community who are the people who believe that most there's been a lot of four-year cycles talk dumping blah blah blah and so that momentum is ch isn't there. That

momentum can switch on a dime and all the people who keep making these leverage bets like this weekend basically pushing it up to 92 from 86 last week and now back down round trip

back to 86 are just trying to get ahead of itself and frontr run the next quote big move. understand Bitcoin volatility

big move. understand Bitcoin volatility despite it being up is still you know let me let me get this is the other chart that's worth looking at hold on

stop screen let me present this um share screen Bitcoin volatility index right

so if you look can can is this up here yeah you can see it if you look you can see it at 1.93 is where where it's at right down there I don't if you can see that but this has And this is where

Bitcoin used to be in terms of volatility. So, and where it was and you

volatility. So, and where it was and you see where we are now. We are now in the middle almost in the middle of the range.

Still not toward the high end by any means. Middle to low end of the of the

means. Middle to low end of the of the recent range and still low by historical standards. And so, what are you seeing

standards. And so, what are you seeing with this? Well, you're seeing that that

with this? Well, you're seeing that that it's you would say it's a maturing asset. It's it's not a terminal velocity

asset. It's it's not a terminal velocity though. I mean, so but it is still

though. I mean, so but it is still there.

When Bitcoin moves, you'll see a spike and it could be in either direction. The

difference between Bitcoin and the S&P, I'll point out, is some of the biggest moves in the volatility have been on rallies.

>> Whereas in the S&P, when the vol when the VIX goes up, you if if you told me the VIX was at 50 and where are we at now? 18, 19, Mike.

now? 18, 19, Mike.

>> 18.

You know, VIX goes to 25, you're assuming probably a 3 or 4% 5% correction. and VIX goes to 30, you're

correction. and VIX goes to 30, you're going to assume a 10%. VIX goes to 40 or 50, you're assuming a 20% correction.

Bitcoin, there is no such correlation like that. It's both it's birectional.

like that. It's both it's birectional.

And so, it's important to understand that we're still in a compressed volatility environment. What does that

volatility environment. What does that mean? That means that rallies get sold

mean? That means that rallies get sold and and crashes get bought.

And it's generally in that and there's reasons for it there, you know, in terms of who's buying it. Most of the people buying Bitcoin are buying it for the same reason that people buy gold. The

difference is there's no momentum in Bitcoin right now. Zero. You said it.

It's down 10% over the year. You

mentioned you mentioned Trump. Let's

let's be specific. You know, if in the US half the half the population says, "Well, I can't buy Bitcoin because that's going to enrich the Trump family." That's a very real thing. Now,

family." That's a very real thing. Now,

investment managers don't work that way, but that is a real thing. And it does dampen uh it does dampen things. is

>> Dave, you can show the screen that I that I just shared.

>> I don't know how, but I'll I'll stop.

There we go.

>> So, this is the 10-year this is the 10-year yield. Okay, this a US 10-year

10-year yield. Okay, this a US 10-year Treasury yield. You can see what has

Treasury yield. You can see what has happened here. And here's what uh where

happened here. And here's what uh where we differ, Mike, is that this this how is it different this time? Well, it's

different this time. It's not because it's different this time. What is

structurally changed is the market, the world, the the the the investors around the world are waking up to the fact that

zero interest rate prob zero interest rate policy has has put us in a spot where we absolutely must have we must

continue and and we must continue to run deficits and print money to keep this whole charade going. So what Dave just

said is gold is has sniffed this out.

Central banks around the world are buying gold. They're not buying US

buying gold. They're not buying US treasuries like they were before. The

the the demand for them is is structurally down. Okay. One of the

structurally down. Okay. One of the largest buyers in the world is Tether.

Okay. That that there's a reason for that. They're looking for pockets for of

that. They're looking for pockets for of liquidity with this thing. And so you've got pockets of liquidity for people who are on exchanges who can't just sit in

dollars or can't just sit in in a money market. That's the new money market.

market. That's the new money market.

Okay. So that's that's what's happening there. But this red line shows that how

there. But this red line shows that how we have broken. This is the this is the

the structural descent of the yield on on the US 10-year that ended in COVID that that that descent ended in COVID

and it broke through and it broke this long downward trend and now the 10-year is at 4%. So when we say that we expect

lower rates, we expect the Fed to lower rates on the short end. The Fed does not control this. We know that they don't

control this. We know that they don't control it because >> bonds when they want >> what's that?

>> I used to say the same thing, but now I've learned that when they want the yield bond yields to go down, they buy them.

>> Well, they can the only way that they can fix they can the only way they can control this is through yield curve control. And the only way you can do

control. And the only way you can do yield curve control is by printing money. And the only way that you can

money. And the only way that you can print money is by d and the only way you can do that is by dumping. That means QE dumping money into the markets. Okay?

Which is inflationary. So this is not controlled by the Fed unless they print money. It's not by just lowering rates.

money. It's not by just lowering rates.

If they lower rates like they did right before the election last year, okay, then they like they they lowered rates by 50 basis points and the tenure went

up 50 basis points. That's a that's the reason for that is that that investors realize, oh my god, they are going to just continue with this. They're going

to allow inflation to run hot and even though it's nowhere near their 2% so-called target, they're going to allow some sort of range that they can stomach, whether that's three to 5%,

which I believe that's what it is. And

or they can just somehow manipulate it to look like it's not as bad as it really is. But you said it yourself,

really is. But you said it yourself, Mike, this is hurting individual investor individuals, not investors.

there. It's hurting the everyday consumer and they feel it. Whether or

not they the BLS will admit to it, whether or not the government will admit to it, the CPI, the PPI, whatever it is,

it it in in the consumer feels it in their home and insurance and health insurance costs. They're feeling it

insurance costs. They're feeling it everywhere. Right. So, one simple way,

everywhere. Right. So, one simple way, one simple way that chart's going to go from four to three to 3% next year, which is my view is the stock market going down 10% and staying down. Very

simple fact. And you have to remember the key fact is the Trump administration is losing now. Inflation means they're not going to get reelected, which means we're going to get re Democrats. It's

just it's the election's lesson way.

Inflation's the number one issue. And

right now, if the elections now, they would get hammered. And then there's the Trump. That's what's changed. I'm just

Trump. That's what's changed. I'm just

pointing out that chart there. I look at China. Look at Japan. It's going to 2%

China. Look at Japan. It's going to 2% heading towards 2% in my view and next year at this time if we're heading higher. Yeah, Mike McGloin, you're

higher. Yeah, Mike McGloin, you're wrong. But

wrong. But >> we're going to make and and my bet is that the that the is that the US Fed makes up the difference

by adding liquidity from this side >> just like in China.

>> Just like China. So

>> and their rates are 1.8%.

>> And and that is what you're hearing from the gold market too. Yeah, I don't disagree with that, but it's just so stretch. I mean,

stretch. I mean, >> you're hearing it from the bond market and the gold market. The bond market that the chart I just showed tells you that the bond investors are saying uh inflation's going to rage and they're

going to let it rage and it and it's they're going to do whatever they can to allow it and that's what you're seeing in the >> guaranteed not going to get elected. You

just said the number one purpose of a politician having sat on Republican town committees for 20 years is to get reelected. If inflation runs hot,

reelected. If inflation runs hot, they're not going to be elected.

>> They wouldn't I didn't say they wouldn't step in it. They they have short-term views. That's it. We have we have an

views. That's it. We have we have an election coming up. And

>> this administration believes that if they can get the kind of liquidity in the market and they can spur investment that they can run it hot and they can get it to the point where it's not hitting consumer inflation, that's what

they want. I have no idea. I mean,

they want. I have no idea. I mean,

>> do you think, wait, just pause on that, Dave. Do you think, Mike, that handing

Dave. Do you think, Mike, that handing out $2,000 tariff dividends would be inflationary or deflationary? Well, we

know the answer to that. Most all the Republicans push back on the stupidity of that.

>> We're literally talking about buying votes.

>> That's that's that, you know, like that's that's what we're talking about.

>> Whether you do it through whether you do it through illegal immigration, handing out social security and benefits or you do it by handing out checks to everybody, >> I think we should we should delve into this in a few weeks, you know, we when

we get to the end our New Year's predictions, but I think it's a little bit early to worrying about elections.

The only thing we do know is that the administration is going to do what they can to run the economy and improve the job situation and make people feeling better. That's what they're going to try

better. That's what they're going to try to do. And there's a bunch of levers

to do. And there's a bunch of levers that they can pl they can do. But they

can't get anything done if Congress is totally dysfunctional because basically and by the way in if if in fact the midterms go the way Mike says and I think that there's every reason to believe that it could then for two years you're going to have nothing but

impeachment out of Congress and nothing's going to happen.

>> Right. So which means we'll have total gridlock in Washington. By the way, markets >> wait for assassins. Yeah.

>> Markets love gridlock.

>> Markets love gridlock. So you know I'm not saying that's going to happen. I

hope it doesn't as a citizen but markets love it. But anyway, we are way over

love it. But anyway, we are way over time again. It's been fun. I mean, I

time again. It's been fun. I mean, I miss Scott. Hopefully, everything will

miss Scott. Hopefully, everything will go well with him this week and we'll see.

>> We didn't even talk about Micro Strategy uh floating more stock to to shore up their dividends.

>> Down 6% today.

>> You know, Micro Strategy is is what it is. I mean, they have enough cash to pay

is. I mean, they have enough cash to pay their dividends now for quite some time.

And that's that. And

>> well, they they listen like they listened to Wall Street and they said, "You okay? You want us to have some

"You okay? You want us to have some cash? We'll have some cash." And what

cash? We'll have some cash." And what they do, they're they're going to have two years of of dividends sitting there waiting to be paid, >> right? And so once you you have that,

>> right? And so once you you have that, then you ask yourself the question, when is the time? I don't know what the bottom of Micro Strategy versus Bitcoin is, but it's a hell of a lot closer to the bottom now. This might even be the

pico bottom now versus Bitcoin. If

Bitcoin drops to 50, as Mike says, Micro Strategy is going to get cut in half again or more. If Bitcoin goes back to, you know, all-time highs, Micro Strategy is going to perform better than Bitcoin

from here to there. It's just that's the math and you buy it or not.

>> If you believe if you believe Bitcoin is almost bottomed out and you want a little bit of extra juice, then Micro Strategy would likely be the one of the names to hold. But right again, that's again, you got to do your own research

and understand these things, understand how they work. As I said, Bitcoin dropping 25 30% from here, Micro Strategy gets cut in half. I will say those words again so that we don't we

understand. While I think it's quote a

understand. While I think it's quote a buy, I think it is a buy relative to Bitcoin because it's trading at very very low and there's there's juice in the model.

>> That's a better trade than that's a better trade than a leveraged per. So,

>> it's certainly you're not getting liquidated, but you're you're you can afford to have a long-term view just like like Michael have a long-term view.

That's the point.

>> But understand what you're doing because Mike Mclo is correct that if Bitcoin drops, Micro Strategy is going to get is going to drop more.

>> Absolutely. But if you're buying if you're buying a levered Bitcoin ETF, you you could get you could get liquidated on a on a steep draw down in in Bitcoin, too. It's just the way those things

too. It's just the way those things work.

>> That's right.

Well, we're we're at it at 10:10. So, uh

we will we will sign off and we will we'll talk again. You guys both here next week?

>> Yep. Thanks, J.

>> Yep. Me, too. Okay.

>> All right. See you guys.

>> Take care.

>> Cheers.

That's dope.

That's dope.