Bitcoin To $140K? MicroStrategy's Bold Play & Crypto-Friendly Treasury Chief! | Macro Monday
54:28 Share

Hello everyone, and welcome to the wall streets mro monday the really awake among you will have not just that I am not Scott milker. He is stuck in bahamas, the poor guy, but without, uh, internet so I am stepping in. I have not prepared for this, but more sively enjoying by three very talented individuals who need no preparation, they're be able to guide the conversation to very interesting places. You know, the crowd already, but we are joined today by Lawrence lepardo. Lawrence, thank you so much for joining us.

Thanks for help me on the show.

Appreciate IT not really excited about this. Hi dave. Hi mike. How are you doing?

hello? Anything interesting .

going on in the world that means anything? Something IT is fascinating of news regarding market activity has just taken off last few weeks. I was talking with someone earlier this morning about how we kind of miss focusing on stable coin growth and CBDC because big going did really not very much for a big jungle this year.

But now um now there is so much to talk about, the change is happening at with flash speed. And i'm going to ask each of you what you think the really big deal driving Prices today is and in Lawrence, your new here, let's start with you. O well.

um I think there is a growing awareness that we really are in a sovereign currency crisis. Um the debt problem is unsolved and uh you can see IT um in the charts um the two most important charts I think in the world of the comparison of um uh gold to the to the long bond U S long bond and the comparison a bit going to the us. Long bond.

I just do the presentation and orleans which you can find in my twitter fee um I I show that chart and basically um golden and you know golden big corner are crushing the long bond and are becoming the new long term stores of value and that's because fiscal dominance in the U. S. Experiment is just totally out of control.

And so um you know to me that kind of the story, um you know I just I wake to find that sales bought another fifty five thousand bitcoin. You guys a ike and uh uh you know to me it's it's pretty simple. Um you know obviously trump coming along uh and the doge committee, they will try to cut expenses. That point I also made my presentation is eighty percent of the expenses are pretty well locked in, is only a twenty percent piece that can go attack unless they want to attack medicare, source, security, interest or defense. So you know, the notion that we're gonna take two trillion and out of the budget, baLance the budget, that's a that's a fantasy.

So you certain ly agree.

but picture the big pictures I see yeah not legally .

and very well put. But even even twenty percent is something that would boost expectations of U. S. Economic growth perhaps, which would be not only good for investment in the emerging industries but also the dollar day. What's your take?

Well, I mean, i'm a little bit more optimistic, but a lot uh, I think that the they're doing IT the right way in so far as you know, the deck has been studying this for two years, uh, understanding you know how to go about IT. I think that the world most of the economists are dramatically underestimate the how much productivity is being held back by excessive pollution. I really do.

Um I think we in the cypher industry see this extremely well because if you look at the way cyp po has evolved without regulation, uh compare IT to traditional markets, uh, you see some extraordinary differences. So with crypto, you get immediate liquidity with their traditional markets. It's billions dollars.

And in probably bench market over a year from the time someone wants to raise money, they can they can raise money from the public and and get liquidity. Meanwhile, all of that access function cost to the, to the, the issue is made by enormous amount money made from B, C, to P, E, to investment banks at sea. Uh, that's a very big deal.

Uh, crypt was figured I had a reward. Open source, uh, developers as well as users uh of networks and and products. Uh, and that's another force multiply.

And we've seen IT and we saw exactly what what what you would expect, which is dramatic growth in in industries is throughout asia and of the places the U. S. Languages, because U.

S. Regulate structures, said you can do that, not you can do that because we want to protect investors because Frankly, they didn't protect investors. We saw F T X boy geta all happened in the U.

S. watch. What we saw was when you try to protect the investors, you actually you hurt them. And you know we now have very, very specific uh, examples and administration that's extremely uh bias towards uh, understanding these facts and we can go into that.

So I do think that i'm a little bit more optimistic because I think that hyper growth in the era of A I and what's going on in terms of of a ri industry is possible. But I mean that there is an the likelihood of money printing stopping anytime soon is new. And so we're going to see, uh, more currency debasement.

We are going we have administration is what to see financial, uh, inflation and hopefully you know something to all offset consumer inflation that the terrorists and other things they want to do will cause. So it's a situation almost a perfect storm for most of the value propositions that are real through recruit T T O. No, i'm not saying that needs anything for you know your favorite dog or cat, me and i'm talking about things that actually create value.

But there that's important. And as far as bitcoin is concerned, look, I think we've reached a scape kilos ity and bicol is done. What is done with the treasury secretary who border line hate IT, with the head of the city finances committee, basically good portion out J.

V, diamond saying, you know, ban IT. And now we have a treasury secretary who says, embrace IT and the S, C, C will embrace IT and a president who is basically said, embrace IT. And people are saying, well, why isn't you done? Is a strategic preserve a he's not president yet.

And b graders are smart traders. Know we sailor just told us he he bought a thousand bit cool. We know his policy. We have no idea what these federal governments going to do. But I strongly suspect you're going to hear very little except for out of out of the senate with allama bill maybe, but you're going to hear very level for administration.

And one day we're gona wake up and it's going to league out or they're going to say, well, you know, we've been to as we bought two percent of the bitcoin, the market, you'll only know the Price has been gently going up. You won't know who was buying because why would they tell anyone to let them front be front from the traders? Aren't that done? So you know and you don't think that is going to be this switch moment in the next few weeks.

It's gonna, do you that no, that's not gonna happen. What you're going to see is in the first quarter, my suspicion is by the executive order, you may very well see the us. Government buying and you won't know it's any more than we knew when the U.

S. Government ego plunge protection team was buying S A P. Futures or which bonds were being bought as part of Q E when we really didn't know because they they don't do not know. I mean, they may be reckless at times, but they're not done.

Have a question, as a european, would they be under an obligation to tell us if they are using public funds to do so or converting .

the goal certificate? Look, we've down since the crash of eighty seven. Mike is old enough and and .

I are out of involved.

And I was, yeah, I was sure we know, we know from the crash of eighty seven that they establish what what has been logally called the industry, the plunge protection team. This is actually, uh, a fancy named for IT. But the fact is they gave themselves an emergency authority zone to intervene in financial markets, full stop.

There has been as a result, every time there has been a major issue in the market instance, including in the financial Prices, they were always new conversations. This is, this predated T. E.

Conversations at all. U. S. Government is buying, and I can let that go down the further. And so we had these two things going at the fed, put where the fed was going, you know how people? And we had the plunge protection team.

Nobody to this day, unless you have been part of IT, know is exactly the scope of the dates. And what was bot other enough leaks to know that you so IT people who think that our government is transparent? I mean, maybe this government will be more transparent, but somehow I be surprised .

that's encouraging upside. Mike t is there anything in there you disagree with how we do confident here?

But if I agree with that, all I have no value to the conversation. So played devils event in a little bit. And first of i'll start with, yeah, I get what we just pointed, our known known unstopped deficit spending.

Look at japan, yellow, one point one percent in ten note yield um china actually worse there, tiny node IOS two percent point zero six percent. R is four point three percent. So you can say a lot of that Price ready.

You take the top five average, the average ten or deals the top five countries in the world, which includes in outside U. S. The averages.

Or can you note fields are a hundred basic points below the U S. So yeah unstopped that suspending um there's one key progress was IT here. We have to remember the last two years the S M P five hours up almost the thirty over year.

We just haven't had a Normal ten percent correction. To put that in context, if a when we do that six trillion dollars, that's about the money and we hear in in um and that's in my market that's doubled. Um you know that market cap is double GDP now.

So it's kind of silly for the fed to think inflation to go down with stock market going up that first, I think that's the key thing for everything is as long gest stock market keeps going up. And point out this morning, there are morning meeting in my our colleague, my college gene Martino ams, who has been spot on for years as point out a major, major issues with the stock market and proof the incentives to tilting downward. So overall, i'll point out i'm a common in sky and overall common es.

We see severe global deflationary forces, which is Normal after to get inflation like that, like cruel down on a year over year basis, almost ten percent. Iron north down about twenty percent. Goals, the only major community going up about thirty percent.

And and the number one that matters is covers up about seven percent and looks like it's just starting a ticket trick down, ticket down, a trickle down and look at for a month basis since you know we had this um partition of president trumping reelected, which I V is good for cyp dos, the hanging index is down five percent. That has to go up. Chinese are actually buying IT through etf like japan's been doing three years and has to go up.

But it's not one yara declines from a global basis, commodities icc deflation. And there's one simple little thing that would kill that over to severe deflation is just a Normal ten percent correction. The U S.

Star park and and this doesn't go right back up. So I I want to tilt over to, i've been saying for quite a while, there's an inordinate N U S. Stark mark has to go up to keep this whole world elevated.

Yet we see china's already in deflation, europe's halting there, and they are going to face major restraint on their major from their major exports. Source us. You're going to be terrified. Just a question of time. Um and then I have to tilt over the bitcoin and the bit coin in is reached good threshold around hundred Green.

Question is how long is going to ask? Is that just going to go through IT? And now that everybody is so blish just those lessons you learn from Benjamin israel, what we anticipate selling makers, which is be careful at these levels and markets are so laughter and expections are so bolshy in what they said about all the government, is gna buy bitcoin.

That's just silly first, or worth the money going to come from, and we're going to go in the more depth spending to buy bitcoin. And then the risk of water, that is just kind of slate the moment, the first thing you do when your southern wealth fun, you have revenue like most countries that have a lot of oil revenue. And we don't right now, we have to get that self first and looks like they're going to try to work on that. But we'll see how that plays out.

And so many the threads I want to pull on there want to come back to topps. But before I dive into the strategic bitcoin reserve, because there are something ones is there, what do you think mike, would trigger such a stock market correction?

Oh high Prices really there. Um this takes its always, always happened eighty seven crash. What happened first of the crashed after options expire on friday um and market was just up too much was just a Normal version that year the S P five hours up two percent was a nothing here just went up too much.

Now we're at the stage now this is usually how IT happens, where such excessive animal spirits, where two times GDP, where the highest ever verses the rest of the world, the U. S. Know so many different things we can point to um I like to point in just a simple measure versus a hundred week move on average, it's twenty five percent above that level.

Always goes back. There are just a question when and how you manage your money in between. And when IT gets this expensive, you want to look for alternative b coins spent a tremens alternative certainly since trump um flipped in enjoy at the um bitcoin um thing I think was nature that's been significant.

But now it's about um typically IT just takes first. So now we also had a point we have a point where we have we're up so much, we have to expect some Normal acid rebounds ing back towards the bonds little because bonds are and many scales relatively globally. U S.

Bonds are very um underPriced as um launch mentioned, certainly versus gold bonds are very much or under Price um but in this question, where we go from there. So the key thing is we have so much lofty expectations from this new present. First is going in the warn ukrainian a day we're going to a strategic bitcoin reserve.

The economy, anal spirits, reduced regulation. I get all that. But to some extent love is Price .

in interesting. And I totally get about doing some resets of the day on the valuations, on Price book Price sales and on the cape ratio. We are back at two thousand levels, which has got to be sending some kind of a second.

Of course, this time could be different. And now let's go over to some of the policies that the incoming administration have been talking about, such as the strategic bitcoin reserve law. What is your take on that? I think we know days. And mike s.

so I don't be able to. Senator lamas introduced ed to build and and you know they have the republican house republican um um senate. So but you know the other side has a fillip ster and you know it's it's a little unclear where the authority lies. Um whether IT actually is a legislature matter is just a treasury matter. I mean, if you're call in the thirties rossett just kind of unattended grab the gold and repressed IT.

So a one could argue that it's you know that you don't even need legislation to do IT, although I be a pretty balls y move to do without h without getting the legislation through um and I don't know how to hand a cap, I think uh paly market has you know forty percent chance of that happening. Um you know to your point, mike, where where the money come from them, that's no problem. You just print IT ready printing printing anyway OK, you know I mean, why not turn when I turn the U S.

Government and you know in the microstrip gy, right we print money, we buy bitcoin. Um you know obviously that will hate on the demise of the dollar. Uh and I think that um you know there will be people who recognize that and therefore probably at a congressional ate level, the I don't read as super high hos are getting through.

I guess that might take i'd be less than piling market in terms of percentage chance that they do IT. Um there would be a very intelligent thing to do, although arguing in the bit can I will mention this kind of a split there. There are the people who know actually want to see the currency fails so that the government fails, so that we go to a more to central system.

And you know I was accused by Peter shift this weekend to be a states uh for one in the U. S. Government to uh to buy bitcoin um you know and strength of the government. So there there are two sides of that big one thing I see the way, reading his fingers so you they want you way. And on that.

I mean, Peter, Peter reminds me of of age simpson from the, from the sims all bank cloud. You know, i've been reading his missives for over a decade. And most of what he talks about in terms of with respect gold and with respect to government deficits, inflation, I actually am very sensitive. I am.

He literally got a bugg up lizard that something virtual can have value and everything he says, a bitcoin has to do with gun that up and IT IT makes no sense, like he actually posted this morning that was so unbelievably done that if you were high school economics class, you would say, what the hell you do in, you literally wrote, U. S. Government shouldn't kick winners and losers.

So since they're now picking bitcoin, that means it's guaranteed to be a loser, ignoring the fact that they pick bitcoin to be a loser for the left four years by effectively being openly hostile to bitcoin and crypto. Which means if you were right, that the reversion alone would be, you know the next big leg of the really but you take Peter stupidity and pushed up the side. And by the way, you could tell him I would happen debate anytime, anywhere, and have have .

actually, you know, tried to get .

engaged. I've done IT it's a brick wall. I the end the actual core of Peters reasoning is that bitcoin can have value because it's not really that he has two arguments really.

One, if it's not physical, IT can't be money, which is wrong. Money always been a argument is the bitcoin is infinitely repeatable because anyone can create .

a gypo currency. You lunch, no, how are you gonna get a decentralized protocol that gains critical mass without a control from A V C. Or this, or that know the problem.

The thing about bickle in, I often make the joke that that for those still that that know so, I doc moto is the modern age is Harry seldom for those who have red foundation, yeah you are predicting the hearts of what's gonna en look, we don't know who or or you know IT is if if in fact IT is a single person, I I stand to think it's more of a group. But whatever will say in any case, to get back to the argument, the the the thing about a bit of special and there's unofficial reserves. If you buy an asset that goes up in value to strengthens your ballot y that is supportive of the currency that your baLance is is dominated IT.

Think about the second. So if you're a good trader, if you go in and you will force you, you telegraph, if you're gna buy back in a strategic reserve and before you buy at the Price set up a thousand and fifty fifty thousand dollars, you buy IT. You push up from two fifty to two sixty, and then you get the inevitable correction down to one fifty or one twenty year, whatever they are gna correct.

You now was the U. S. Government looks like the baLance. He looks like absolute s and that would just be a done thing to do. So yes, I do. I agree with you, they're not going to do IT that student lely. If on the other hand, you quietly accumulated as a treasury asset as part of your Normal Operations, you don't let people know you buy your first year or tool.

If you have sitting on the baLance, eat slowly as the market that hasn't got any and then you announce IT and the the market says, oh my god, and every other sovereign und in all the other play people, the world side to play catch. And so your average purchase Prices somewhere around one twenty and IT goes to two fifty at that point. Well, that's a totally different method.

Now you made IT of money on your baLancer. You know, you as government has the priority position they are for those. I want to mention a name that you guys are, get both life. Remember then introduction to to front to legal front running. And then they decided was ileal dan.

For those who don't know when the end, touch stocks on what was the precursor to C, N, B, C and IT was fairly famous and then got in deep due to for buying some of those stocks. Before he tell they went up course you made money 啊。 Imagine, you know, you imagine if if cramer, you know, these days said.

What he was gonna before we bought IT but have actually uh, soul before he bought you. The inverse cme is a imagine how much money you can make that. I am joking about that, but the U.

S. Government could do that, and I strongly suspect they will do that because this is a logical thing to do given the fact that they they do buy assets in the treasury. They do buy assets Better reserve and we will see where IT comes from.

But anyway, that that's just my conservative theory. Honestly, my bitcoin bullcott has nothing to do with the U. S. Government necessarily announcing a strategic reserve. I believe that people are going to see bitcoin for what IT is.

And game theory says you don't need to hold on whether its state governments putting on their baLance sheet, whether it's other sovereign, whether it's corporate, basically any major large, any large one. You know we talk about sailor s to the global economy. Microstrip gy is tiny, a relatively speaking, right?

Well, you know there's a great chart also in my presentation, bitcoin right now, two trillion dollar market. It's point two percent of global financial assets. If you include real state, take real estate out in this point four because real states about half. If you kind of consider the wealth, you investing wealth, which defined as cash, stocks, bonds and real eesti gold, you know goes only sixteen trillion. So bitcoins, two, so bitcoin can go u p 8 x from where IT is right now， just equal the size ago, which doesn't seem incredible and impossible to me.

especially given the financial engineering that we're in from the likes of sailor and others are also experience really .

what he's what he's doing and what he's developed is really kind of amazing. It's um he's got a fly whilst here .

for the vision. But speaking of the government, being intelligent is save like to say let's move on to some of their picks uh especially most noticeably the recent one of choosing scope as treasury salary. And my god, like to get your take on that. Is that bullish for the economy? And what's your take on the potential impact on big?

I I will just mention just look at today for now, number one of relief for seeing the relief really most notable, this drop in ten o dios, almost about fifteen days, points down four point two nine. Plant and go because know it's less safe. But when I thought what happened this weekend about to announce my first someone here at day to say.

I look, I I love the pic. I for for so many reasons, uh, you know, I know the pic because of demonstrated confidence.

I love the pic because of what he talks about, a treasury secretary that actually aligned with the philosophy of limited government getting regulations, that the way, understanding the interplay between export and import economy y's understanding, you know what IT means, so you just listen to the man and no IT just see, makes a lot of sense, and you understand answers, tradeoffs involved, right? You know, we need to talk about terror tradeoffs, other things, but at its core he also understands the the value proposition of where of a bitcoin. He understands how a supporting U S.

Dollar based, uh, stable coins is incredibly supportive of of the icon you know, well, he's not a dollar hawker, say, I mean, you know it's people said we want dollar week and that's actually not what he's said. What he's talking about is overall equalizing the competitive you know competed production in the world, which is not the same thing, right? And so I am very happy about that.

I also, to be blunt, uh, i'm happy because is I hate identity politics. We all know that, but i'm so tired of listening to certain people calling trump of fascist in a big get. So when you look at his picks, which you have the highest percent till women, the first openly gay senior cabinet position, you know, being filmed, uh, I personally think that's a very good thing uh, to me shut up some of the absolute stupidity. That's the level of against them. So I do like IT for that reason but to be blood it's because of his confidence somebody saying that's .

the way I look at any potential impact on tariff policy.

Course, the whole market said this many times. I mean, the entire administration is aligned to fix what they considered to be the hollowing out of the american windle class, the american ability produce. And I personally think that what they're actually trying to do and whether whether the bluster is going to be be something different.

And I think that a large part of IT is that equalizing policies. And and what I mean by that is IT is much more expensive to producing that states because we do things like don't allow child labor. We do things like protecting workers.

We do things like that you can't dump p your toxic ways next door. You know, some people do in get in trouble for what you can do IT. No of those things exist in a lot about the countries and countries who do allow those things to. The only way we can influence that policy is by placing terrors on, and is impossible for me to look at the world and say that if we have those hundreds, we shouldn't want them to be global. We shouldn't try to equal a large part of what's go along with terrace is not what the bluster is, but IT is a large part of what's actually Lawrence.

What do you think this could do to rate expectations in the U.

S? Well, it's unclear. Um I like day. I I I applaud the choice um you know he's an intelligent adult in the room um and you know one of the other choices was a former band salesmen and um even though that I was a big supporter of bitcoin, um you know this is I mean this is brain surgery. I in the U S.

Financial condition is really in deep shit um and so it's gonna take somebody who's really smart to figure out how to play these cards correctly and therefore um in favor of this guy doing IT um I you know I don't know where he stands on the dark I know is a gold bull and I think he fully understands the fiscal dominance problem we have and I think he's very aware of um referens to lima so all of those you know that level of knowledge, I mean think about compared that to yelling as an example, our existing treasure secretary. I mean, you're just talk in a different order magnetite of skill here now how to play these cards it's gonna tRicky um in luggin has said they should they should devalue the dollar and do a reset very, very early on. Take the pain kind of the way a company would take the pain, you know have the bad quarter right up front because the voters are going to win again in two years and then they're onna win on j vance's.

Four years. And so if there's pain that's coming, you might as well take IT sooner. So the things start getting Better by the time the voters way in again. Um like mike mentioned earlier, I think the big elephant in the room, I think the stock market is an unbelievable bubble and I think is right on the cusp braking um IT wouldn't surprise me at all if actually some of the parties involved have incentive to make IT break to make trump look bad.

And so I think one of things trump s going have to do is, is going to have a very specifically message that whatever happens in the first six months, that's all on the prior administration, not him. Um and because I couldn't to see, you know, we get this harder inflation principle, cc pal, starting to increase rates, stop decreasing them and talking tough and maybe go back to a great increasing would that do to the about the stock market right now? I mean, right thank you about .

you will be staying here.

I get take back a little because I think you're spotted on layer with with sick of history looking this from the future human nature your trump, its historic real election. You have A A pretty much of Manda significant monday. And we all know things.

Those of I remember complaining with clients and being an trading a hedge fund decades ago. And so you know this trade deficit thing. But the rest world wants free trades lungs. They can have a surplus. The U. S.

It's gonna stop at some point we just sit the cabin and I think having read that book, um no free trade by Robert light hazers if i'm this group, get the pain over right away. Think, worry about IT two years ago, but I would say right away, start out ten percent tips across the board, sixty print cents in china or by the way, then I would start no negotiating. That's a key point that Robert lights are made IT.

Every time they went to the meeting, the the other people had all countries had all these surpluses with us. So they had the upper hand. I think start out with, here's what is going to be come up your solution, you know and I think exactly.

So it's about a one trillion dollars a year, which on a global G D. P. Basis is not alone. It's like one percent. But for the U.

S, is basically ten percent of our economy that you know it's net that were transfering wealth to the rest country. But look at china in europe, it's almost twenty percent of their economies that they need to export most lovely to the U. S. And I know I like he said IT get her over with right now. And the week of .

dollar certainly help exports from europe and many other economies. But like let's say, they're thinking on the same lines that you are all that we all are really here and we do get the pain wrote forward and we do have an all night he correction the start market before the inauguration ation even. What does that do to well.

that's a big test i've been talking about forever. dave. No, dave loves mess with me for that. Rightly so. I just we haven't seen that big now.

We've had one almost ten percent correction, and I think the point drop thirty percent, obviously, that was before we had the of the cyp to president and credit to mr. Trump member, five, six years ago, crypto were a scam. Now he's completely flipped, got a given credit for becoming the knows out like a convert. He's converted. And now it's taking a lot of other people.

But that to me is the number one thing is we can only write this bubble for so long and everybody knows that always is different this time, but there's alternatives and that's why would just get the ten percent anyway and then ten percent used to happen um which again I point out is a massive part of the global economy because there are two times GDP the most one hundred years and see what happens and then you recess until until then i'm i'm still thinking the next in big trade i've been wrong. Still might be U S. Treasury long ones because if we get that correction in stark k and interest days down for a couple years, that severe deflation um just because of that wealth fix the most ever.

I mean there's no comparison even to one thousand hundred and twenty nine is the most ever the wealth effects from equities and housing and and you know the the wealth that we have just just a boomers, but the stock market alone. So to me, that's the big sore thun. I think initially obviously all know that probably be a pressure factor and bitcoin, but IT might give IT be what be the more likely acid to buy in the dip, probably bitcoin.

especially in awareness that we've been .

probably a one trade here, but it's nickles in front of steam role. You can overstay that trade. Um I I think that what happens under under a lot of different scenarios is things get messy fast.

The bond market has trouble, the stock market has trouble, the economy has trouble. And then we get into quote, quote, the big print and that's for the fed baLance sheet. And they take they change all the policies, I mean, you know, way.

Arguably, this is why I think power could theoretically increase rates to trigger a bursting bubble, which would then allow him to do what he really knows he needs to do and wants to do, which is go back to serpent Q E. Um and so my my model for what happens this year, and it's just a model, is you know the market breaks, then the market breaks and everything starts going down. We get widespread panic, the big print arrives and everything goes other way.

But in the interim, as you were asking, well, bit get hit hard because it's still not a safe and also it's still a risk on actually driven adec proxy asset. Um and you know not as hard not as hard as I would have in the past. But I mean, hard doesn't maybe down twenty percent and gold gets IT to everything gets hit.

I know, let's face IT, if we go into a risk of environment, you know, everyone's going to be scrambling. And so people sell what they can, not what they always want to. Having said that, I remember march twenty very clearly and know when power comes back with the mario drug, imitate whatever IT takes the ships going to the moon. You know, we're going to on the other side of the big print, you know big coins going to a million and goals going to ten thousand and in my opinion, over a few year periods.

Can I just add one thing to that? One thing that's changed from twenty and certain the last thirty years, we've all traded as we have the lessons of too much liquidity and inflation in the past tense. Now we saw what happened.

We created too much, create the inflation. And I worried that I was in a conference crossroads conference last week. I was on a panel in both um my fellow panel is kept in the same thing, all inflation of problem relations, a problem we have to be concerned, careful about when humans doing that.

Um regent, uh recently biased and we're all biased to what happened just the last time they pumped and they pump ed only after markets went down. And that was a great opportunity. What happens at some point is, number one thing, what has to be recorded.

You have to have that deflation in rigas a source before you get the pump. Now obviously are creating too much, you know, seven percent deficit spending. A great reason for markets go up.

It's unstable. Some point maybe that might be curtailed with us, I doubt. But typically what's the first is usually have to have reset to go down. And people complain IT. No, I can't just buy my G, I O is come for grip.

Another another thing .

could be not be different is not only is we've like lessons and it's a different microeconomic, it's a different to the political world as well. But the capital markets are very different. We have a different market structure.

We have E, T, S. We even have a much more developed, the vatican. So do you think that could have an impact, dave, on the evolution of crypto going forward?

Well, I mean, every time you you allow people to do what they want to do, uh, easier, they will. It's like water. We will see soil level ah in the rest of the world.

Uh there's been crypto options on darbi and OTC and this all inverse perpetual swap which we all kind of understand that outside the U S. Is five acts of volume is part so people like to play uh on leverage. The united states, uh the the futures are really an institutional product.

Futures are much more expensive to trade than inverse than the perpetual swap products. The but in the U S, what you've seen is even in the S M P, you've seen enormous growth and options volume and options are are a multi variant uh, use cases. You know there are a lots of very interesting things that you know financial that you can do with options you can do.

That's not just pure. I want to get along on leverage, but a huge percentage of options volume driven by punters who are just talking to get long and short. The net result of IT is and and you see this with the popularity of si called zero day options, which has no use of the speculation, right? So yes, IT IT is likely to attract a more leverage to both, uh, which will likely increased volatility there. Now there is a piece of options that will decrease volatility, which are new people who are writing calls to get yell and people who are selling puts to time their entry。 And yet that becomes availability decrease.

But the overwhelming pressure uh that options can create means that when we get formal and we have seen nothing resembling formal in this, this is the struck the internal structure of this ball run from, you know that where we broke the fifty to seventy trading range we have for eight months is is incredibly orderly and feels more like climbing a wall of worry to meet formal, formal 用 noit 事业。 And when you see IT, IT will look very different. That will be outside the U.

S. You will see dramatic Spikes of in funding rates. You'll see lot of air pockets. Uh, etta and you seen bitten start to IT.

But right now, despite the fact that bitcoins raly know what you know how you depending where you, you pick the time from, from fifty thousand and ninety thousand eight, from seventy, that whatever whatever you pick, you've seen more liquidations as much on the long side. Realize you have on the short side. That is not what formal looks like.

Formal looks like short side. Liquidations and and vero para olet bill, we've not seen anything like that options allows that to happen in the united states. If you look at the game stop, me just remember that now game stop is obviously smaller than bitcoin.

But IT was triggered red by lots and lots of of retail call buying, which caused the ghana's is in game stop. But we all saw what that did and a percentage terms were talking about what was at twenty times, you know from the, you know from the where are gaining critical mass toward the toward where the low of top was. We haven't seen anything like that.

So the one thing that derivative can do is when formal gets moving, IT can cause a lot top on the other thing in formal stops and you go start going in the direction, you're going to see more of voltige ity in that direction too. And so IT IT is definitely a volatility in crease uh, as IT gets ruled out now, remember, it's not fully ruled out right now. Right now, there are a limits in terms of how many options people can buy and sell, which is limiting its institutions.

So be very careful. This is just the the, the, the the tip of the iceberg. What will you seem so far?

Can I just push back on that a little bit, David? I think we have to be careful comparing formal and bitcoin from two, three, five years ago to formal now. Member, we have massive participation.

You talk about options. Options won't get listed until there's different decent liquidity in the underline. The future started listed in two thousand and seventeen. There's so much are.

But now in this most widely traded twenty four seven acid on the planet that I think we're seeing, what's happening and should be happening in bitcoin is the migration towards value that's more similar and more in to what you see in gold and S P. Five hundred right now. Still three times of our tilly.

Typically to me, this was pretty extreme fun. Would certainly from my site, in in, in, in my spaces, the questions, particularly from the media, I mean, every there was just all the questions. Now I remember like two thousand and seventeen, then I really cared.

Most people are in the space. And I member, listen the pod test and you're talking about islands in bahaman by buying islands. And my O, K, let's extreme to me, that's the key. They think so. This is anytime we talk about listed options as an EXO option trader you all been to this is just adding more liquidity, adding more tips patients and to be questionable in making more difficult for those ten axes in five years, these allowing .

more sophistication of Price expectations and the expression of your of where you think this is going. I did think of the numbers this morning. Turns out that today, seventy percent over seventy percent of bitcoin addresses hold. Bitcoin have held bitcoin for at least a year and this could have some kind of um impact.

I don't know about the number of B T, C in these addressers, but this could have some kind of impact to the downside should or slash win markets turn as you are same like now I don't want to do bring up tester. We can't not talk about tester and the relationship with cantera t. Cherwell, who is LED by the united state's new commerce secretary, should that get approved?

Dave, you, I know you like your conspiracy theory here. What do you think this means for the outlook for stable coin using the U. S.

And tether tell more specifically? I didn't notice that since the election, the through the tether market cap has gone up by something like nine trillion. See, this is for to trading purposes, but still significant.

Well, ten market cap and the best academic studies and the show IT legs, you it's not the cause of of crypto going up. It's the exist the leg basically, when tethers been in a premium like IT is right now, it's said a three basis point premium to the dollar. It's basically indicative of people who are using tether to buy coins, whether it's bitcoin or all coins.

It's just general buying pressure because it's dramatically easier, uh, many more pairs trade against either worldwide than they try against the dollar. And the crypto market is fully global. So either is a proxy for demand for trading typically on the bay side, but not exclusively because you can use tether as colleran to trade uh, derivatives on the potential swap uh, on a lot of exchanges as well.

So that's why you see that. So people talk about all the quality spring um and it's not true uh, the fact that that bitcoin dollar and versus bitcoin tether when the bitcoin dollars at a premium, it's because generally went teller is a premium. And in fact, that what you seeing right now, but what what does does do for me, my libertarian hat um I think that what you are seeing is A A quick race to get policy that will allow for stable coins not necessarily required to be run by the banking industry and not A C B D C.

I think that that this this move is is very constructive uh for that. And having private competing stable coins that are defined as fully asset back is important. And i've always hated the idea that people could call something a stable coin and not be fully back uh at at the same time as ones that are.

And I think that what you're seeing with tether is, look, it's it's the pang gorilla is one of the larger trade as a private company. I think that maybe the largest private holder, uh, U S. treasuries.

And I think that it's going to be more legitimize I mean, if I remember the rules, I think that power, either as to put all this is assets instructor, sell them. But you know, I don't know what the exact rule is. He, after someone who is that much value, but kind of its general, is a partner together.

And I think that having him there legitimizes IT and that's to be that a good thing uh, whether or not the individual, which individual stable coins will win IT doesn't matter. I got the show is saying is something that P. N.

I agree with completely for for years, which is if you want the U. S. Dollar to be dominant in the emerging digital economy that we want to encourage with my crypt or whether ten. And I think that that's absolutely sure, and I think that this leadership team gets that. So what stops?

Um we seen the year that I was in the trading pit in chicago. I started the eighties and the number one trading trading pit was a bond future chicago board trading. And then the year hours still are thunder. What's going to stop from crypto hours being traded in futures and drives? And I see the volume on tea right now one hundred and fifty four billion verses bitcoin fifty five billion its man bitcoin only a third that i'm not even near the most willey traded so this is the key thing i'm finally is delighted see mister trump faure out um and by administration was way far behind and is this technology is overwhelming is overwhelmingly adopted the dollar and if you're american, probably not smart to push back and but key thing is what's what's next is toga ization of of the dollars gives us crypto dollars how about toga ization from I heard from other people's treasury's and other assets.

which is which are already seeing a lot of and is is occasionally being used as something that looks specially like money. So is the chance that is going to change the definition of money. And now it's what sir take to you think we will have tether legally trading in the united states within the next year or so. Do you think IT is going to be dominated by the banks?

You you're muted.

Sorry about that. Yes, I do. Ah they want tether to succeed. I mean tether tether buys you know a boatload of the treasury security and I get a lot of security to sell.

So uh, you know I think I think it's as simple as that um they're going to find a way um you know usdt, I think they probably prefer there was a time when klin was saying that they were trying to you know they had some things that we're kind of the killed tedder move and and so forth. I mean you know that is I mean that there is still little difficult to deal the fact that they're offshore and not as transparent as we would like. But um in general, I I grew with both these guys.

We we need these stable coins to to make um to make the crypto universe more univerSally applicable in in lots of industries. So and and this turns out these guys actually buy a lot of treasures. The numbers now are small and in the total scheme of things. But you know flex the big coin Price up a lot and the numbers are going .

to be so small anymore doesn't even take into account the other Prices can also push a .

demand for stable. I'm a maxi, so I don't tend to put much creditor value and all the other uh um coins, I really think bitcoin is really kind of the only one that matters. But but that's just me.

So come on and learn what do you think a couple of the year how the future .

of view things like .

doge .

coin and SHE belan about Peter com, right? I mean, that's really that's really what we got going on here. I think this is the everything bubble and know the remains of in many, many places.

I mean, you ve got at the P. E world. I mean, some, these P. E guys are trying to take huge mark down.

You ve got at the commercial real state world in has been so much capital misallocated as a result of urban QE. And in a crazy world we live. And I mean, the three of us are enough to remember what a bear market is.

Now I mean.

I guess you probably half your listeners to the no thank .

you for that.

I half your last probably have never seen a Better market. I have if you weren't here before away you haven't seen one. So um you know and i'm here to say that they they occur and and you know go look at husband's we're I mean that the overvaluation the stock market and the sentiment the positive sentiment and stock market is just off the charts yeah on practice had some great shark. Start with the moral investment comfort s on this and it's just stunning I mean and so you know this there's a reason why warn buffet has as much cash as he has. I mean, this sends badly in my .

can I can I pick you back? And little is some of the most knowledge hear in the business how high cash rates are they still with seven, seven trillion dollars in money markets? That's very low.

actually. If you compare that number, people point this number all time compared to market capital S M P. Five hundred and market capital U.

S. Stock market, which was sixty five trilling for little whiles coming back. It's so like eleven percent or so before the financial crisis, close to fifteen percent. So on a market camp basis is when people talk about like high cash rates, they're near the lowest lab ever. Just that's how high market capus tion start market is and .

liquidity is not exactly a problem. Financial conditions are loser than before the hiking cycle started.

What was he was point at that? We now we've seen what's happening. We are we've seen the fed cuts. Twenty five bed points, great, but by neels have gone up only five days points more. Its have gone up about twenty like this point.

I mean, some of us old treasure guys knows that is not a good sign is basically the fed and obviously, we had an election but doesn't matter. And markets on the fed stop now it's not working. So what does that mean when they what's going to take in the cut rates? Typically IT means risk cases did to go down in in and reduce that inflation and and give them a reason. Okay, now we have to start cutting, realist, really cutting.

Now we have only to a few minutes left. Unfortunate, I atopic all day, but so let's start rapping up with what we think the market just might be overlooking either on the downside or the upside and day who want to take the first?

Yeah, i'm i'm watching today and I kind of laughing because you're watching the stock market, you know a little bit to dose up a little bit more, but I seem about half a percent gold getting absolutely hammer, you know, down two point seven percent today and bitcoin, down about one point seven percent. So everyone talks correlational day.

down about three percent mark gold .

on friday from gold.

so so we can see. And one day it's from friday, a bitcoin. The gold measures from friday is two point eight percent. The big clain measures from friday is three point three percent.

A lot. What my point is yet another day where big is correlated to gold and not to quote, risk assets. Now the proof that cause people will say is something to do with israel, lebanon, uh, in hands boh.

You know, kind of if you know the whispering about a peace deal, and maybe that's true and that's good. None of that has a damn thing to do with the mea trend of points, rey law. And so I think that we're going to hanging out here. You also over the over the weekend, we see a theory of outperforming bitcoin for the first time in a while. Does that meaning anything honestly know uh, when bitcoin markets get to a place and this kind of swing around, no, I always thought this week was going to be dangerous from the crypt perspectives, the thanksgiving have had a rather checker history with bitcoin.

I can remember having more than one holiday um interrupted because you know with the company that at the time I was running and you very, very involved in the Operations is twenty four, seven, three, sixty five and we've some really interesting thanksgivings uh and you don't have institutional al buying. So it's going to be much easier to push markets around this week. I think then we come back from thanksgiving in the real fund start. So yes, I I don't know what will happen between now the next monday, but I wouldn't be surprised to see a fair amount of volatility over the next h over the next week.

Certainly astonishing the difference in the mood now to thanksgiving two years ago, which was in the aftermath of the F, X. Collapse, and things were pretty bleak. Mike, what do you think we're overlooking?

Um this is a little contrary. And I have to point out, I do think the next big trade will be U. S. Treasure long bands just kind of catching up. The rest of world IT might be just a trade and might be more of a position we'll see and it's going to be all predit IT and just a little bit of a Normal reversion in very um stretched U S. Security market. Now the reason I have that view because it's already happened in common severe deflationary forces, which is Normal of the big bike and the next key commodity, you've really watched to see if i'm right or not to see if coper can break below four box so I can sustain a about five box. Three other risks that breaks below .

for the micro undercurrent laws are special guests. That's rep up with you. What stories do you think?

Daniel marino booth, I would say guys watch the employment market. There was a very obscure employment report that came out last SHE identified that will be more fully amplified this week that shows that they are gonna revise the employment numbers down like a million and 2 one million fifty thousand and uh um it's a it's gonna shock the world he said from what she's hearing she's to beat the fed and SHE thinks there are people out of the fed with their hair on fire because because that's just to them you know， real the economy is slowing down.

I asked, I said as any chance power does not cut in december and he said, absolutely no way you know there's a chance to o fifty basis points which shocked me. I mean, we all know they should be raising rates given the way the markets are performing. But take a look at, you know keep your eyes on this employment number coming out this week. Ah there might be a surprise there.

Interesting and disconcerting as well. With that, we have to wrap up. It's been after amazing talking to the three of you.

Thank you much. We've done a pretty good macro walk through. We've had a sprinkling of conspiracy theories as we know you all expect. And we also had just some disagreement, perhaps not as much as on other shows because things do seem to be having in the same direction.

But looking a bit further ahead, there is a difference of opinion of where both markets and the reaction the crypt to and the reaction of cripp to that could could go. Thank you, the three of you so much for being here. The mii attempt to fill Scott shoes and are huge shoes to fill.

I hope IT hasn't been to, you know, too disappointing for all of you. I do regret not having Scott's DJ talent with switching screens around to illustrate the points we're making. Is talent to special on that? It's been fun. I hope to talk you all again soon. Thanks so much, everyone, for watching.

Thank .

you. OK.

Let's go.