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CHINA TO LEAD THE CRYPTO BULL MARKET W/ Rep Davidson #CryptoTownHall
Recorded: June 26, 2023 Duration: 1:14:19Space Recording
Short Summary
The transcript discusses significant developments in the crypto industry, including regulatory advancements with the approval of a leverage Bitcoin futures ETF and upcoming legislation on stable coins. HSBC's entry into cryptocurrency services in Hong Kong and the proposal of a BlackRock ETF highlight a trend towards institutional acceptance and integration of crypto into traditional financial systems. However, the U.S. faces a decline in market dominance as liquidity moves offshore and investors lack access to a spot Bitcoin ETF. Despite this, the growth of decentralized exchanges and Bitcoin's price surge indicate a robust market interest and potential for increased institutional participation.
Full Transcription
Dave and James fancy seeing you guys here again since we spoke I think 19 minutes ago.
We always have more to say, Scott, always.
Yeah, I felt like we cut off that conversation way too early, so it's good to know that we can continue it.
For anyone wondering what we're talking about, the three of us were on YouTube from 9 to 10,
and we're talking about some of the same topics.
Certainly they were going to be discussing today.
I still can't wrap my head around.
Yeah.
HSBC changing their entire opinion, but we'll get into that a little later.
James Safred, I see you in the audience.
I just invited you up as well, so you can check your DMs for that.
And I know that Eric from Bloomberg will also be joining to talk ETF today.
Guys, we've got a lot of...
on the agenda for today, just waiting right now for Congressman Warren Davidson to join.
He's been on the show, obviously, before, as you guys know, leading to charge fire, Gary Gensler, the SEC Stabilization Act.
Oh, he's here.
How are you?
Hey, doing great.
Nice to join you guys.
Warren, I think I talk to you more than I talk to my mom now.
Uh-oh. Make sure you call mom.
Yeah, I know. Seriously. You're at the top of my agenda. We're just waiting for a couple more people to join on and get the speakers up. But I appreciate your time. I know you only have about, I think, 20, 25 more minutes here. I will call my mom right after this. I'm going to tell her that you sent me.
So I guess we can go ahead and get started as the team starts to bring everyone up.
Yeah.
Congressman Davidson, I think we should start from the beginning again.
I know we've given this context before, but I think it's important as we always have new people filing in to let them understand what we're talking about and sort of lay the groundwork.
Obviously, you proposed the SEC Stabilization Act.
Partially, Fire Gary Gensler has become the calling card of that, but it's obviously about much more than that.
Yeah, I mean, I think there's a lot going on.
You know, some of the people that pay attention to, you know, this market, the crypto market are most attentive to this.
But, you know, the reasons to fire Gary Yensler are pretty broad.
You know, the Securities and Exchange Commission was originally created just as that a commission.
You know, five commissioners so that there wouldn't be ties.
But then they kind of went with a kind of superpowered chairman.
and they expanded the responsibilities of one of the commissioners
in making that person chairman.
And it really hasn't worked well.
You know,
maybe at times it did,
but what Gary Gensler is exposed is there's,
there's, of course,
a Gary Gensler problem,
but there's also a structural problem,
you know,
where,
you know,
maybe you could have Huster Purs or somebody write a dissenting opinion,
but it doesn't really change anything.
And so Gensler is also,
been able to move way out of step with Congress.
And even at times with Treasury and others,
he's got no way other than to get fired by the president of being reined in.
And he's put a super aggressive rulemaking path out on most things.
He's averaged two rules a month.
He's done it with almost no comment from the public.
And then the one thing that he clearly needs to have a rule on, crypto, he says, no, it's already perfectly clear. So easy that no one can do it. And I liken that to Hotel California, you know, a little adapted, but you can check in with Gary Gensler on anything. You're just never going to leave.
and get the clarity that you need.
Even for the handful of things that have been approved,
you would never say that that's an optimal path to implement anything.
When you look at rulemakings that he's done, he doesn't have legal authority to do some of them.
So like the ESG rule, for example, would require different disclosure regime for all publicly traded companies.
And because of the nature of disclosures in the supply chain, it would have impacts on privately held companies all the way down to family farms.
And, you know, just one of the companies that I talked to is,
is a supplier to a company that would be required to report under this.
He's like, I do about a million dollars a year with them,
and it would take me about $30,000 in compliance cost to do that.
So obviously I'm going to have to pass that through,
but so would everyone else.
So, you know, there's real costs associated with it.
The idea that, you know, one unelected, very unaccountable bureaucrat
could somehow impose that on the entire economy,
isn't consistent with our constitution. And that's essentially what the Supreme Court said in
West Virginia versus the EPA. The EPA was trying to regulate carbon. And they're like, we're not saying
whether you should or shouldn't regulate carbon. We're just telling you that there's no law that
gives you the authority to regulate carbon. So you can't do that. And that's,
That's the job of Congress.
And that's the same thing here with ESG disclosures.
If really the market says we need that, Gary Gensler doesn't have the authority to do it,
he should actually be working with Congress, not trying to,
you know, impose his will on the market. And that's largely what's going on in crypto.
He should be coming to work with us. We should pass a law that provides clarity.
I felt like there needed to be a law since I really since I got to Congress in 2017 on
Financial Services Committee.
And we've had legislation that's been bipartisan since 2018, but instead of saying, let me work with you to do that, he's trying to say that he's got all the things he needs, except he can't even answer whether Ethereum is the security or not.
So he clearly isn't providing the clarity of the market needs. I could go on on all the abuses with a whole range of other things.
But the remedy is to eliminate the role of the chairmanship.
have a sixth commissioner appointed
to you have three Republicans and three Democrats
And then they have to work together at a minimum.
And in general, it's clear when they don't have consensus, well, they have to work with Congress to provide clarity.
And I think that's especially important for our capital markets because we have, you know, 50% of the world's invested capital.
I mean, we have this great treasure in the United States, and we shouldn't allow Gary Jensler or anyone else to politicize it.
Yeah, you talked about being early on proposed legislation for this.
You proposed the Token Taxonomy Act in 2019.
I think you reproposed it correct in 2021 or recently.
And now we're seeing that we are supposed to at least get a markup in July
on stable coin regulation and potentially some other crypto-related legislation.
So is this actually happening now?
Are we seeing real progress for the first time?
What does it mean that they're going to be marked up?
Yeah, so Bill's getting, the way the process works is you draft legislation, then you notice it for a hearing. Both of those things have been done, and then you take it into markup. And that's the committee gets the chance to offer amendments.
to the bill and ultimately once the committee has passed the bill then it goes to the floor for a vote
and then the rest of the house membership in theory could offer amendments and then once the
house passes it then it goes to the senate where usually uh sorry where usually everything goes to die
uh they don't take up much legislation so
The hope is that we can put enough pressure on the Senate that they feel, yeah, this is a piece of legislation we need to take up.
And let's say they took it up and they adopted a different version, then you go to a conference committee that has members from the House side and members from the Senate side and you work out the differences between the two pieces of legislation.
if that can be done, then you land up with a harmonized version.
And then the same version has to pass the House and Senate.
Once that happens, the president has to sign it.
And if it does, then we finally have a law.
So, you know, that's a tedious process, but at least it's finally further down the line because the House is going to mark up legislation on stable coins in July and hopefully on market structure, if not in July soon.
I look forward to seeing that happen and seeing the process.
One of the head scratchers, I think a lot of people were pointing at this weekend or at the end of last week was that the SEC just approved the first leverage Bitcoin futures ETF.
I'm sure you saw this.
The volatility shares 2x Bitcoin strategy ETF.
Basically, now you can trade a Bitcoin ETF with leverage, but we still can't get a spot ETF.
What do you make of that?
Yeah, I don't know. Sometimes I'm thinking they're trying to actually poison the well on this.
Like, you know, they're trying to make it bad in the United States.
You're like, why would you do a leverage option versus there?
And when they did the, when they did the futures version, the logic is, you know, with future contracts, then there's a,
All those kinds of things because of the leverage and everything else,
you get more know-your-customer provisions on who owns the Bitcoin.
And you can't do wash trades in it.
And that's the fear, I think, at the end of the day,
as a spot Bitcoin ETF creates a giant market where wash trades could occur.
And, you know, wash trades would break some of the...
traceability as to, you know, where all the, who owned which Bitcoin.
And if you needed to solve a crime, you know, let's say there was a company that is based
in Ukraine and wired money to like notable U.S. individuals.
In theory, we would want to solve those crimes.
If it's on a public distributed ledger, you can follow it pretty clearly up until the point
where you do things like wash trades.
Yeah, I just find it interesting that spot ETF, I think everybody clearly would be better for retail, safer product, and we're still getting more futures ETFs, which have marked, you know, market tops in the past, and now you can do it with leverage.
It just seems like we're on completely the wrong path.
I totally agree with the market logic. I'm just sharing the...
The excuses, really.
I mean, and anyone can find an excuse, the challenges for leaders to find a way.
I've certainly been working at it, but, you know, we're as close as we've been, but we're not there yet.
That's for sure.
Yeah, and speaking of ETFs, we obviously saw big news that HSBC is rolling out cryptocurrency services in Hong Kong, three ETFs specifically that they're going to allow people to trade.
I mean, there's the same HSBC that was cutting off banking rails to cryptocurrency exchanges just in March and beyond.
What I'm getting at is...
It seems like Hong Kong specifically and potentially China are seeing an opportunity here as the United States cracks down on this asset class.
Does that concern you? Is that a fair narrative?
Yeah, I mean, Hong Kong's been, was great for capital formation for a long time.
The Chinese Communist Party decided they were going to formally take it all the way over.
So they were kind of out of commission for a while.
And it seems like the Chinese Communist Party has resolved whatever back-end,
relationships they want. So I would, you know, tread with caution in Hong Kong. It is, you know,
a degree of separation from the Chinese Communist Party, but don't kid yourself, it's not really
separated. It's just the Chinese Communist Party's little spot market for capitalism.
Yeah, but does it concern you then that China is effectively adopting this while we're shutting it down and that we're going to be either far behind or there's going to be a massive opportunity for them?
I mean, obviously all we talked about a few years ago was the China shut down, bans, it was never coming back and here we are.
Yeah, I mean, I think it's smart.
If you look at some of the statements from Xi Jinping, he's highlighted that blockchain has the potential to be as big or bigger than the Internet.
And I think a lot of people, innovators in the space, see that same kind of potential.
You know, I am concerned about how the Chinese Communist Party is using all of this.
Yeah.
you know,
capability.
I am definitely concerned,
you know,
go all the way back to,
you know,
when,
when Binance,
you know,
basically exposed the FTX fraud.
That's not to say finance wasn't doing the same thing.
They're just fully staked by the Chinese Communist Party in a lot of people's
estimation if they need to be.
So they're never going to have a true liquidity crisis until the Chinese Communist Party
won't cover for them.
And some people fear that that's kind of what's...
a vulnerability within Tether now, maybe not something that existed all the time.
Some people fear that's something there.
So if you look at something that the United States, we've dominated pretty much everything
in tech since the Industrial Revolution.
I mean, we, you know, we massive innovations even in ag, but, you know, certainly from
industrial revolution on to, you know, automobiles, aviation, aerospace, computers, the Internet,
our capital markets with less than 5% of the world's population, we've got over 50% of the world's
invested capital. But in crypto, you know, you've got at least 70, 70 plus percent of them
liquidity is offshore. And, you know, Hong Kong and Singapore and frankly, Gary Gensler are
working to make sure that we have less. So it's kind of the exact opposite of what we've
historically done when it comes to innovation.
Which makes it interesting, obviously, that we're seeing the BlackRock ETF proposed in this environment.
I mean, the same week that we saw the SEC crackdown on Binance and Coinbase, now people at least viewing it as a legitimate opportunity.
I know James from Bloomberg is up here.
I saw that he tweeted 50-50 chance of an approval or a denial.
Do you think that that would be a meaningful step in the right direction in this case to at least bring some of this back onshore?
Sure.
Well, I mean, I'll just say I think it would be disappointing to see Bitcoin be the first ETF approved when you've got people that have worked for a decade to get a spot ETF approved.
You know, Bitcoin, I think, is on, or BlackRock, I think, has only lost one ETF filing ever out of lots of them.
And five hundred and 76.
Yeah, they're 575 and one.
Pretty good record.
Yeah, that's a, that's a pretty solid batting average there.
So, um.
You know, it's hard to bet against them, but it is sort of like, wow, okay, so it's a big club and you're not in it, comes to mind.
And when you look at BlackRock, some of their ties to China are concerning.
And if you look at what they've done in the United States with respect to ESG as an example.
You know, they bought enough Exxon Mobil shares to have, I think, three seats on the board.
And they use those shares, they use those board seats to say no to an oil-filled exploration project.
because it would be bad for their, you know, ESG scores.
Well, it's Exxon.
They do oil, right?
They're pretty focused on carbon-based energy production, right?
And with the same...
company behind it, BlackRock, used their stake in a Chinese state-owned oil operation to win the bid.
And so all this ESG stuff doesn't apply to the Chinese companies.
It applies to the American companies.
And you see BlackRock doing things like that.
I got a lot of concerns about BlackRock.
And it highlights, you know, kind of what's going on with the, you know, the phrase ESG.
A lot of people are sympathetic to that, probably people listening in now, you know,
want environmental social governance standards and they care about, you know, the planet and all that.
And that's being exploited to use essentially a social credit system,
which is rationing capital in the United States of America and often in a way that advantages China.
Yeah.
Had a glitch there lifting my mic.
Yeah, that makes perfect sense.
It's definitely a head scratcher that BlackRock has been the champion of ESG and is now going for a Bitcoin spot ETF.
I'm hoping that that means that we can somehow put the narrative to bed that Bitcoin is bad for the environment.
Do you think that we can make that argument?
Well, I think, thankfully, the argument has been made is, you know, very effectively.
And, you know, again, I, in my, look, there are probably people that genuinely are concerned about the environment.
They're also not trying to shut Google down.
So it makes me say, I don't know that it's sincere when you say it's about the environment.
I think the attack on proof of work is.
they'll pretend isn't really an attack on Bitcoin.
It's an overt attack on Bitcoin when you attack proof of work.
And the reasoning is it's more secure.
And you can you can overpower other types of security more easily than you can, you know,
getting 50 plus percent of the hash rate to control a proof of work protocol.
So...
You know, that's a big concern is the, you know, what are you going to do with all that energy kind of invasion of privacy?
My concern is kind of the other way, Black Rock being able to do more in this space, given their hostility, might be concerning in the long run.
Yeah, and I have to ask you, I know we're running out of time here, but the same question
I'm going to ask you every time we speak is, how can people hear help, right?
What can our audience do to actually affect some of this change?
I mean, I feel like even just tweeting hashtag fire Gary Gensler helps.
Yeah, it certainly does.
You know, and I'll share some stuff with you soon on the way we're raising money to try to do this.
I mean,
One of the big lessons I got from my time at West Point was, you know, to fight the battle you're in, not the one you wish you were in.
You know, I think a lot of us, when we think about our government, we wish it works differently.
But the reality is it doesn't.
So how do we move things today?
I mean, part of it is still the way that it should work, which is public pressure, public awareness.
public information, and getting this on, frankly, every members of Congress,
you know, House and Senate, everyone's radar screen that you really need to understand the policy,
and you don't have to understand the technology, you just need to understand why it's important.
And you should support the stable coin legislation.
You should support, I hope the market structure legislation were not quite there on either of them.
So I'm hopeful that there'll be products I support personally, but I'm encouraged about the momentum.
And then, you know, make sure you get on people's calendars.
That really does make a difference.
It makes sure that the staff and the member or the senator prepares for the meeting.
And it's...
Sorry about that. I think lastly, you know, the fundraising part is important and why you look at who lobbies Congress.
Let's just say the status quo. One way to look at Congress is they're really good at preserving the status quo, which is a polite way of saying they don't get much done except spending a lot of money to keep doing what they've been doing.
It is a big ship, so it's hard to turn.
That's understandable.
But the other part is look at who spends the most money lobbying.
And it's, you know, health insurance maybe is the biggest.
Banking is certainly one of the biggest.
And they're all interested in things that are broken, not getting fixed,
because it's working really well for them.
So when you want to change stuff, there's almost always somebody that finds an excuse that
for why you can't really get it fixed the right way.
And I just think making sure that people that need to raise money know that there's a way to raise money
takes away some of the concerns that people have for being right on the policy.
Well, I hope we'll be able to have you back when you can share a bit more about that.
I think that's going to be really, really interesting and compelling.
Yeah, I hope so.
And, you know, I'm taking meetings this week about how to put the –
framework together for the digital asset market structure bill.
There's a draft out there that people have been commenting to the House and Senate committees on,
and hopefully, you know, we'll get all that input in.
That's the way I did the Token Taxonomy Act in 2018.
And in December of 2018, Darren Soto, a Democrat from Florida and I put that out as a totally bipartisan bill.
But we wanted comments, and we thought that, you know, by the end of January, end of February, we would have, you know, the revisions out.
But we had so many comments from so many places that it took till, you know, really, I think late March, early April before we published the Token Taxonomy Act in 2019.
Right.
And, you know, we've got some things that we would tweak to it today if we were to bring that bill as a standalone thing.
But the reality is, you know, it's certainly influenced what we have in the market structure bill.
But, you know, what we're moving forward on is much more comprehensive than what that bill started out as, which is just to provide a bright line test for what is and is not a,
a security that's still relevant today it would provide a clear line on custody and the market's
broadly solved that technology's broadly solved that but the one thing that might keep your
coins act does is protect self custody real clearly so i think that's one of the things that i
need to see in the stable coin bill and the market structure bill is you know
Got to protect self-custody, permissionless peer-to-peer transactions in both.
And when it comes to the market structure, it's got to be a bright line test so clear that everyone looks at it and sees the same thing.
You can't look at it and see like modern art where you get three or four different takes on it.
It needs to be like, yep, that's an apple, that's not an orange, and very clear to everybody.
I'll look forward to seeing that. Thank you so much as usual for your time. Look forward to having you back very, very soon. And we will all be, as I said, every single time we'll be supporting you. And for anyone who missed it, Congressman Davidson and I actually had a podcast that came out just yesterday where we discussed a lot of this in depth that's pinned just above. So thank you once again.
Yeah, thanks for having me. Thanks for the podcast. That was great. And I hope you guys have a great rest of your conversation. Look forward to hearing about it. Take care.
Thank you so much.
Perfect, guys. So listen, James, since we have you here and you were invoked in that conversation, I saw that you said about a 50-50 chance of the BlackRock ETF approval, but I'm actually curious your thoughts on HSBC and their three ETFs in China and what that means.
Yeah, so we actually have a colleague in China, Rebecca Sin, who I work closely with.
And I mean, I'm not the expert on China or Asia crypto markets.
But it's just another signal that the Chinese government, the Chinese Communist Party, is backing crypto at this point.
There's a lot of rumors that they're pushing banks to start banking crypto companies.
And as I mentioned, Rebecca Sin, my colleague, has been very bullish on crypto growth in the U.S.
Initially, we thought Australia might be a hub because they were the first ones to really approve ETSs,
and they were doing some things.
But she has obviously since changed her tune and basically said that Hong Kong, at least in Asia,
and could be maybe a global hub, but at least in Asia and the Asia Pacific,
Hong Kong is going to be the, looks like it's going to be the crypto leader in the space.
I mean, we've seen ETF's approvals for years all over the world, right?
I mean, I think it's the fact that it's China and Hong Kong that's so telling.
But I mean, Canada, obviously, South America and Europe, ETPs, but very similar products.
It seems like the United States is the only place we're not seeing these.
Yeah, US is the only place that we're not seeing these.
I mean, it's undoubtedly, I mean, the SEC always talks about how they're protecting investors.
But really, I mean, you can look to any other crypto ETFs, spot Bitcoin ETFs.
They've been in Europe for years.
They've been in Canada now for years, as you mentioned.
So it's definitely putting U.S. investors at a disadvantage by not allowing them to have access to spot.
Bitcoin ETF, which would be the most efficient, clear, clean way to get access to Bitcoin through the traditional financial rails.
And I mean, you can look at all the issues with different things going on.
You can point to prime trust for other issues that are happening in the U.S.
They're supposed to be U.S. regulated.
Who knows what exactly is going on there.
But an ETF would be the cleanest, safest way if you're using the traditional financial rails.
and the SEC just isn't allowing that to happen right now.
And ironically, we talked about a few ETFs,
grayscale apply for an ETF that's basically going to invest like 50% or 40%
or remember the exact number of,
of the an ETF will be going to international spot Bitcoin
ETFs and the rest will go into Bitcoin miners
and that hasn't been withdrawn yet
I don't know I don't remember the exact date when it comes out
but that's that would come out in a few months theoretically
so we could have potentially even if we don't get these spot Bitcoin
ETS which we've been talking about for the last week or two
Gray scale could have an ETF that literally puts 40% of the assets into spot Bitcoin
ETFs and the remainder goes into Bitcoin miners.
So it's basically like here we're going to invest in spot Bitcoin ETFs that every other regulator has approved.
And then the SEC, I'm assuming, might have to approve it.
I don't know.
We'll have to watch and see if the SEC forces in withdrawal, but they haven't yet.
The gymnastics that we have to do here just to get these products listed.
I mean, it's astounding.
When you hear that they're going to create something that's going to be a product that invests in other ETSs,
and as I asked Congressman Davidson about...
a 2x leverage ETF. We're getting every single product that can effectively be suboptimal for
retail investors and not the one that we need. By the way, guys, the floor is open, raise your hand.
Anyone else who's up here want to speak or contribute, please feel free. I think it's absolutely
laughable that the SEC is hiding behind protecting investors while they turn around and then approve
a leveraged, you know, a leverage ETF, a non-spot futures ETF in Bitcoin last week.
It's just laughable. It's nonsensical.
I think we all agree there. Patrick, go ahead.
Yeah, I think that the approval of the leverage ETF and to some extent, even if there is approval, approval of a spot ETF gets to what I think is a longstanding negative trend in the U.S. economy, which is confusing financialization for true support of innovation and growth.
Because if you really wanted to support the growth of the crypto industry in the U.S., you would be supporting point-of-sales solutions, self-custody, miners, infrastructure runners, the people who are actually building out and maintaining these networks.
Whereas, you know, supporting someone's ability to leverage that on it, great, maybe that legitimizes it, but that is vastly different than actually supporting a network of the infrastructure that's actually running and ultimately receiving value from the network.
Yeah.
I think you could actually make the case that it's the opposite. I mean, if we look at what's
happened in the history of approvals of similar products in the United States, it's pretty
clear, right? I mean, the CME futures contracts approved in December 2017, the day that the
Bitcoin market topped. The futures ETFs were almost to the day or week that the market topped
when we got those approvals just a couple years ago. I mean, these products are
are used to manipulate price downwards.
Right, and maybe it's anecdotal,
maybe it's a coincidence,
but it's happened every single time.
Dave, go ahead.
Yeah, I think it's no coincidence.
I think, you know, Caitlin Long is my favorite person to talk about financialization of Bitcoin and why it's threatening.
And the fact is that this particular SEC believes that futures is the best market structure,
mostly because that's where the chair cut his teeth in the financial markets.
But the fact is that a spot ETF, which requires physical holding of Bitcoin in a trust, is not financialization.
But leveraged futures ETFs is exactly the definition of that.
And it is laughable isn't the word.
It's just transparently imbecilic.
You know, it is so transparent that the only reason for approving it is, well, we said futures are okay.
So we don't really care about, you know, protecting investors from, you know, the ravages of overt speculation in Bitcoin.
But what we won't let investors do is actually buy and hold Bitcoin in a trust structure that will make it easier for grandma to own it.
and for trust planning and estate planning and all sorts of other stuff that people assume,
plus not to mention with custodial issues, that it's safe.
And so, you know, a spot ETF has a lot of that, that the futures ETFs obviously don't
and the leverage ones don't.
But the other point that someone made, you know, earlier today, and in fact, Congressman Davidson
said, is like, well, they're worried about wash trading.
But that's why a spot ETF that's held in a trust structure that uses
the pricing from venues such as Coinbase.
And there are others which are explicitly using software like NASDAQ smarts or others like
Eventus Systems or others like Solibus Labs to actually look for wash trading and prevent it
is so important.
And yet despite that, they continue to point to it, you know, laughably.
That's why not to approve it.
So basically it's very transparent.
It's just political is what they're trying to do.
And it doesn't make any sense.
And it's clearly anti-investor.
Wizard, what do you think of all of this?
I mean, why do you think that we haven't seen this ETF approval for SPOT?
Yeah, you know, I'm sure there's a lot to do with, you know, lobbyists and, you know, a whole bunch of different extraneous, like, people trying to push back against decentralization and power for the people kind of thing.
I mean, I feel like that's pretty standard for USA and so on.
But, you know, you're seeing that, like, you know, in Asia, obviously they've been basically accumulating at the expense of...
USA and I feel like now
instead of like you know
they kind of instead of being able to catch up
even though America technically has
one of the biggest, you know,
wallets of Bitcoin,
I don't know. I feel like it's just, you know, traditional banking and so on until they can get a good grasp,
or not a good grasp, but a good hold on the assets. Like, you know, coming from TradFi and working on Wall Street for like 15 years, you know, I could see why, you know, the powers that be will want to hold things back until they have full control.
You know, people, you know, the large, you know, powers that be here, they don't want to like,
give up control over their assets so until they can have a good handle on you know them controlling
the etf dem controlling um majority of the assets the the market microstructure or the flow um you know
they don't want that to kind of um you know be taken over so that that's probably why it's been
held i think that's probably a pretty fair answer uh otherwise you know and that could be a reason
why a lot of the defy stuff they're pushing away because it's kind of
you know, not really that easy to kind of control that stuff on the blockchain.
So it could be a reason why, you know, they're kind of pushing the SEC to kind of go aggressively on those
and make kind of Bitcoin to be like a stronghold because it'll be much easier to pass and control
maybe possibly the ETFs on Bitcoin rather than some random, you know, third or fourth tier coin on some chain.
So yeah, that's kind of my second thoughts.
Go ahead, James.
Yeah, I mean, so the first thing I want to say is that I think part of the reason why they've gone through and approved these two X leverage Bitcoin futures ETFs, and I'm not defending it by any chance to say that they should approve these and.
not approved the spot ones but part of it is like they can't lean on the same reasonings that
for denying a leveraged futures ETF because it is a regulated market there's plenty of other
leveraged futures products out there so like the the reasoning for denying this like they don't
really have one that they can't
can lean on anymore.
Like there's nothing they can do,
whereas they can still lean on the spot market
and say it's not regulated
and all the other things
you're talking about,
wash trading,
manipulation,
what have you.
But what it really comes back to
is this is a political move,
right?
They,
Gensler wants more power.
He wants to be able to say the SEC
and,
under his control, basically put a feather in his cap and say he got the industry under control.
He tamed the wild west of crypto by making them come in and register and do all these things.
Like he's regulating via enforcement and he's basically holding his Bitcoin ETS as hostage in the way.
They're holding these spot Bitcoin ETFs hostage because until Ganser can get some sort of control and oversight of the underlying spot markets, which is
blatantly what he's after he's not even hiding away from that he says basically that they want to
have control over it even though right now it's not really in their purview for some of these things
and i i would admit like that there's plenty of stuff in the crypto markets that i view of
securities that makes sense that the cc should go under but i don't think bitcoin fits into that
into that wheelhouse
I don't think Bitcoin fits into that wheelhouse, and he's actually been quoted in the past saying that the exchange regulation also doesn't fit in their wheelhouse, right? And if we're talking about how they're going to track the underlying asset, that obviously is coming from exchange data. So, I mean, it's all kind of a head scratcher. I know, James, I saw you given a bunch of
hundreds and thumbs-ups over there.
We kind of talked about this earlier this morning, of course,
but it does seem like this 2X.
They just can't reject it, so they have to approve it,
as James.
Well, we've got two James.
As James Safer said.
Yeah.
Yeah, James Lavish up here.
So, yeah, the issue is just like James has pointed out,
is that they've already approved the cash settled.
It's easy for them.
It's a regulated market, but they can lean on the past denials for the spot Bitcoin
ETF that they've already issued.
But the interesting part is that now it's BlackRock.
right so we've got we've got an entity that controls 10 trillion dollars of assets and then you've got
fidelity that just jumped in as well um you know to uh to start an exchange they they control
almost five trillion dollars of assets so now you've got 15 trillion dollars of assets that are
jumping in fidelity is already uh they've already said that they're going to offer
Bitcoin holding in their in their IRAs.
And so whether that's just for employees right now,
I don't know that it's not offered in in their regular IRAs.
But that's what they're all moving towards this,
this space.
And so there's two sides of the coin, right?
So you've got you've got Black Rock.
that is the monster, right?
It's the absolute behemoth that everybody loves to hate for good reason.
They've got a lot of reasons to hate Black Rock.
But on the flip side of it, it can bring a massive amount of capital into the space very easily, just as James pointed out.
It's very easy for an RIA.
to use an ETF, a spot ETF that is regulated on an exchange in the United States and not have to worry about things like custody, not have to worry about things like, you know, tax, not have to worry about things like the settlement and the counterparty risk.
They don't have to deal with that because they're using a prime broker, DTC, the ETF is regulated.
It's very easy to get in and out of.
This is this, like it or not, if BlackRock gets regular, if they get this ETF, this is a super highway for small institutions and RIAs to be able to bring hundreds of billions of dollars into the space, if not trillions, period.
Yeah.
Go ahead, Simon.
Yeah, I was going to say the whole argument of the market manipulation,
you know, it has to be what James said,
the player that was going to get this first has already been predetermined.
Because even if you've got all those regulated markets,
the objection to the sport ETF, I mean, we've been at this for, what, 13 years now?
No, 2012, 2013 we started trying to get the ETS approved.
And the objection was market manipulation, but how does a futures, a Bitcoin futures product, get its price?
It's based on the same underlying market.
And so whether you approve a futures ETF or whether you approve sport, to me, if I'm looking at it from, you know, let's relate it back to the prime trust issue.
It has to be, if you're trying to figure it from the perspective of a regulator, it has to be custody.
because what happens to an ETF if somebody loses a private key and they're custodying it.
So, you know, but the whole thing of market manipulation, it just doesn't even make sense
because that would relate to a futures product anyway.
And the answer to the question of why is always the same old markets, which is competition.
So the key is in the title.
If America could...
it would try and ignore this market.
But it can't because it's geopolitical.
And it's been that way since 2013 when China first started trying to support the Bitcoin
market and then it flip-flop back and forth.
And then the mining, you know, started finding new homes with each ban, with each un-band,
with each band, with each un-band.
But it's always been that way.
And it's been competition.
Yeah.
and the desire for a country to support the innovation
and what comes from having a politically neutral currency.
Because if you give away all of the KYC data
and you give away everything to another country,
We saw that with the Chinese ban when everything went to Japan and Singapore,
and America is starting to experience the same thing again.
So it's competition that drives it back in the end because you'd rather have a foothold
rather than have full control somewhere else.
So BlackRock is the perfect institution.
It's not market manipulation because the products will be just subject to the same wash trading
and the same manipulation in the underlying price.
whether it's the futures or leverage or sport.
I just think it's nonsensical that it would be a dangerous or harmful product to retail investors.
I mean, it's ridiculous.
There's ETFs for literally everything, like multiple reverse leverage marijuana ETFs.
If you go down the rabbit hole of things that we've seen approved for ATFs, it just makes this completely laughable.
But James, do you still view it as 50-50 for BlackRock?
And do you think that it is possible they could jump ahead of the line?
Um, so they wouldn't be jumping ahead of the line, first of all.
I mean, they, they only one ahead of them right now is ARC 21 shares.
So it's possible that they could be the first one out under even the current rules, which like, obviously...
kind of looks bad like they're playing favorites,
but under the way the rules are set up,
technically they're second in line behind Arc and 21 shares.
So possibly they could jump to the front.
And yeah,
we're probably still around 50-50,
but all of the pro reasons why we think it could get approved
are largely subjective and qualitative,
like just looking at who it is,
is BlackRock, what's going on here.
But if you look like just backward looking at what the SEC has said,
what Gary Gensler has said,
what the statements have been on denials in the past.
If you lean more heavily towards that and not towards the subjective,
then it's less than 50-50,
just because the SEC has been very blatant in their stance
that they are not going to approve these
until they get a regulated market, spot market.
Now, we think...
Eric Beltudas and I think that it's possible that the SEC is,
we talked about on here in spaces like this before,
that maybe Gary and the SEC are looking for a way to kind of save face.
100%.
They can do that with Bitcoin and then still focus on the rest of the crypto ecosystem potentially.
So that's part of the reason why we think the odds are better than super low.
But even still, even if you're BlackRock,
I've said this before,
even if you view the odds is ridiculously low,
like if Blackar files this and they said,
we think there's a 10% chance we can get this through
to the finish line and get B first,
like the, even the odds of that
are just worth it to them because the downside
isn't really that great, right?
They get to the,
They get a denial letter.
They might piss off some people to the SEC because they have to do a lot more work and write these 80, 90, 100 page denial reasons.
But other than that, there's really limited downside to them trying, aside from the cost in doing it.
And BlackRock isn't worried about that.
So it's just the, it's asymmetric upside to getting approved.
Yeah.
But they would have to jump arc.
They would have to jump arc 21 shares, as you said.
Right.
Correct.
So there would have to be some, they would have to do the, there again,
the sort of mental gymnastics to disapprove one and approve the other for BlackRock
to be first.
Well, our 21 shares is filed with CBOE around.
So you file with an exchange and CBOE in their 19B4 application,
where they file for the rule change to launch a Bitcoin ETF,
they don't have anything about a surveillance sharing agreement in there right now.
Now, I don't know if I, if I'm CBOE, I'm doing everything I can to get Coinbase to come on
and say that they'll do a surveillance sharing agreement and whatever else,
if we think that this is a possible way that the SEC is going to allow this to go through.
But theoretically, if...
If CBOE doesn't have that and NASDAQ, Coinbase, and BlackRock do have that.
All of a sudden, that that's the exact reason that the SEC can deny or delay 21 shares in ARC.
So they have grounds.
They could make the argument.
With this specific one way, they make the argument.
Yes, yeah, yeah, because the thing that differentiates BlackRock is that surveillance sharing agreement, whether or not that's enough to get through the SEC is a completely different conversation.
And you also mentioned the important point, I think, that one is with CBOE and that BlackRock is with NASDAQ, I believe, and there's only two, to my knowledge, BlackRock and then Valkyrie refiling to go with NASDAQ instead of NISI.
Correct. I believe Valkyry would need to file a 19B4 as well with NASDAQ to get approved.
But theoretically, once you approve one with NASDAQ, the other one would come right on schedule.
Not 100% certain.
This is a lot of legal and like really getting in the weeds type of stuff.
And then also I believe in Vesco Galaxy filed with NICC.
So they have a 19B4 application that's also active.
So you have active 19B4 applications from all three major exchanges
where a crypto ETF would theoretically launch right now.
But the only one that I've seen with stated having a surveillance sharing agreement in it,
which is the thing that makes this slightly different than all the other applications is the NASDAQ one.
That said, their Gemini and the Winkel Boss twins did file with a surveillance sharing agreement for their Gemini platform when they tried to launch their trust.
But while I could make the argument that coin mace might be a market of significant size,
I cannot make the argument that Gemini is or ever was a market of significant size.
So, yeah.
Right.
BlackRock clearly believes so if that's who they chose is their custodian, right?
Exactly.
Speaking of custodians, you kind of mentioned prime trust before.
I'm sure people have already seen my videos and arguments about prime trust, but
We kind of have this situation now where the SEC is going after Coinbase, obviously going after all the crypto-native companies in the United States and seemingly starting to play favorites towards Wall Street.
BlackRock ETF.
We're seeing, you know, obviously Fidelity and Schwab and Citadel launching in exchange together.
It doesn't seem like.
it's entirely coincidental.
Do we think that, and anyone can answer this,
do we think that custody is also going to start moving towards the big boys?
As we see things like seemingly obvious fraud at Prime Trust,
do we think that we're going to now get B&Y Mellon and the state streets,
and that's where we're going to now have to custody assets for this industry?
Anyone can jump in if you guys don't have an opinion.
I'll say probably, but go ahead, James.
Yeah, so I think it's kind of heading that way.
There's a lot of...
The SEC proposed a bunch of custodial rules
that they were worried about.
And one of my pet theories was,
when looking at the Grayscale case,
our assumption that Graysk was...
Before anything filed, our assumption here was that Grayscale was going to win the case,
but that the three-judge panel that deciding the Grayscale versus SEC case would basically, the decision would be you violated the APA,
you can't deny Spot-Bickling ETS for the reasons you gave potentially, and then it would go back to the SEC.
And one of my pet theories was they might deny on then custodial reasons because they're trying to make sure.
change the rules for what's a custodian and all these different things that would affect the crypto market.
So I do think that things are going to go push more towards the custodial around.
And there's a lot of trad-fi companies.
You mentioned B-O-M-L and there's other people out there that are already investing
and trying to build out their institutional custodian offerings for traditional finance companies from traditional finance companies.
So I agree with what you were saying, basically, is the TLDR.
Now, as far as I want to pivot a bit to price action because we have not talked about the fact that Bitcoin started last week around 26,000 and ended the week around 31,000.
Anyone, Dave, I know James, we kind of talked about this earlier.
Do you think that this is strictly a reaction to the BlackRock news
and at the tail end of such bad news with finance and Coinbase?
Do you think we're seeing a real turning here?
I mean, I'm looking right now, we were talking about the decoupling.
I have even more data here.
It's the correlation, according to an article I'm reading right now,
says that the correlation between the NASDAQ and Bitcoin currently at 3%,
the lowest it's almost ever been.
Yeah, there's a few things going on there, in my opinion, Scott.
And one of them absolutely is this announcement of the BlackRock ETF filing.
That's a big deal.
And possibly even bigger is the Fidelity Schwab Exchange.
Right.
Yeah, like I said, this is going to be an on-ramp, a massive super highway on-ramp for small institutions and investors who have not been comfortable enough with the space.
This would drive mass adoption. It could drive mass adoption much faster, and it legitimizes it.
Bitcoin in particular in this space. And that's a really big deal. But then another thing is with all of
the problems we're seeing and and with the, the SEC filing suits, you're seeing Bitcoin dominance
rise again. And that and that in and of itself is moving more capital straight to Bitcoin. And so,
you know, do I think that we have a choppy period ahead? Of course. We talked about this and
on your show about the probability of a recession.
But the decoupling of Bitcoin in my mind only takes place once it gets to a large enough market value.
And it's tiny right now compared to the other assets in this world.
Bitcoin is minuscule, you know? I mean, it cannot compete with bonds. It cannot compete with real estate.
It can't even compete with gold in the size of the market right now, especially because gold has so
much paper in it. But, you know, until it gets to a large enough asset value where investors,
huge institutions can use it as a separate allocation in their portfolios,
until it gets to that size, which is in the trillions, in numerous trillions, then it's still going to be correlated in some way in my mind, especially because it trades 24-7.
Hedge funds love it because they can whip it around and there's a lot of leverage in the space still.
And so they use that to their advantage.
Yeah.
Makes sense. Dave.
Yeah, I mean, I think there's a confluence of factors that have been going on.
And look, I agree with James' basic assertion.
As I said on your show, I think that when we look back at this period,
the amount of movement that we're seeing,
you're going to look like little tiny indecipherable squiggles.
But the truth is that we've seen for six months on chain accumulation by strong hands.
We see that the hoddlers, the long-term holders of over a year, are at the highest percentage in history.
We see the hash rate at more than double where it was when it was at the all-time high, you know, in the 60,000s.
And so, you know, I look at all of those things and...
you know, that's kind of a fertile ground for reclaiming, you know, kind of erasing the carnage in Bitcoin from last year.
Now, what's interesting is, is, you know, I know there's a few bitcoins that are listening.
Nothing that happened last year, whether it be Celsius, BlockFi, Voyager, Luna, or FTX.
None of those things invalidated the thesis of investing in Bitcoin.
Yet it got sold because of force selling because it was the available collateral to be sold.
So one has to understand that because the thesis is still there, that there's a lot of people who had no interest in selling,
and that's why you're seeing those statistics.
Right.
When you look at where the market could get to in size, it makes it a very interesting thing.
And from an on-ramp point of view, it's worth noting, and I think I've said this before.
But, you know, my brother's a financial advisor, and I talk to a lot of them.
There are lots of financial advisors out there.
I mean, you know, obviously there's over 15,000 RAs and FAs in the United States of size.
A huge number of them.
are interested in follow what's going on with Bitcoin as an asset and do absolutely nothing
with the professionally because they can't. And there's two things that they worry about. They worry
about that they can legally and they worry about that they could do it safely.
So when James talks about it as an on-ramp, understand that we may not like, you know, the factor.
You may say BlackRock is cutting the line or whatever, but BlackRock infidelity are names that 15,000 plus RIAs and a lot of others will trust.
And so it can drum up a lot of interest in the space.
And so I think that you're seeing people look at that.
And, you know, there's only 21 million Bitcoin that will ever exist.
So, you know, it just isn't a lot out there at these prices to be able to accumulate if, in fact, this starts.
And people are always trying to run ahead.
But the types of people who've been buying have been patient.
And I'm not sure that's going to change any time soon, but it is worth understanding that, you know, how dangerous it could be to be short.
Yeah, Dave, you actually, the accumulating.
Okay, go ahead, James, please.
No, I was going to say the problem with RAAs is that they don't have a, they functionally don't have a way to cover their own ass in this, right?
So they have to deal with settlement.
They have to deal with custody.
They have to deal with legal ramifications.
They have to deal with tax ramifications.
Bitcoiners say to me all the time.
And it's true that they should be able to figure this out.
But it's just not worth it to them because the downside is too big.
They can literally blow up their own little franchise that they have inside of that fidelity,
inside of those major institutions.
And they don't want to do that.
It doesn't make sense to them.
So yeah, I also, Dave, the same thing.
Talk to IRAs all the time.
And they're like,
I just can't own it. I can't do it. I don't have the ability to. And the personal fiduciary downside is too great for me to do it.
So this not only gives them the way to, but it gives it legitimacy. It instantly legitimizes Bitcoin as a separate asset class for all of those.
potential investors, period.
Which is why, by the way, that's why the 50% where they say no anyway, even though they'd lose in court, they may want to do it so that it doesn't happen during this administration.
Because legitimizing Bitcoin is literally the last thing the anti-crypto army wants to see happen.
Yeah, actually, Patrick, I have a question for you.
I pinned a tweet above that says following the COVID-19 crisis, the percentage of Bitcoin
held across exchange addresses has been in perpetual decline dwindling to a current value
of 11.7 percent, 2.27 million Bitcoin, the lowest recording since December 21st of 2017.
Dave talked about, obviously, the fact you can see on-chain that whales are accumulating,
that, you know...
high volume addresses have only grown.
What are you seeing on chain to support this price action we're seeing
and that might support sort of this bullish move we're seeing in Bitcoin?
Yeah, so aside from the accumulation on chain,
one thing that we've seen this year is a huge increase of volume on decentralized exchanges.
And actually the ratio of volume on decentralized exchanges compared to centralized exchanges is,
hit in all-time high relatively recently.
And so that goes beyond just Bitcoin, of course,
because the large majority of things traded on chain
are not Bitcoin.
There are various tokens on Ethereum or stable coins or ETH itself.
But that shows that solutions for interacting with the crypto market
that don't actually rely on exchanges are
are only increasing as the share of the market.
And honestly, I think it shows that kind of the cat is out of the bag.
And there's really no way to shut the bottle of people being able to interact on chain,
buy things on chain.
And whether the U.S. gets on board or not, that part of the industry is going to move forward.
A lot of people are saying that the SEC is coming after defynext.
For that very reason, probably.
Yeah, and that may be the case, but if you look at the numbers, you also have, for example, the total value locked in Defi.
So for people who don't follow the defy market, that's basically the amount that's locked in Defi protocols is currently at about $65 billion, which is one of the highest points it's been at since the crash last June.
So in a year.
And in that sum.
You know, increasing especially because you have this ability to on stake Ethereum now.
So you have a lot of people staking ETH through liquid staking protocols.
And, you know, specific protocols aside, the fact of the matter is that if you look at the, look at the defy market and look at the trust that people have put into defy protocols, it's actually actively growing and increasing right now.
Yeah, making it a ripe target.
Wizard, listen, you're a trader.
What do you make at the price action that we've seen?
Obviously, like I said, starting the week around 26, ending almost at 31 covering Bitcoin itself, basically engulfing 10 weeks of consolidation or negative price action in a single week.
Yeah, hello.
Can you hear me?
Just want to make sure.
Yeah, you're good.
Okay, perfect.
Okay.
Yeah, I mean, from a, from a, you know, market perspective, it's very interesting because, you know, historically, everybody, you know, usually says that, oh, you know, it's correlated to NASDAQ, to tech stocks, kind of.
But obviously, we've seen a big change in that from a fundamental perspective over the last few months.
the correlation to gold
is actually the rolling correlation to gold
on a month-to-month basis has increased
pretty significantly
which you know pushes into that narrative
of digital gold
being Bitcoin and so on
obviously you know I think
DeFi coins, all of coins, you know, those have just been under pressure as, you know, Bitcoin and Ethereum have, you know, hit like new local highs.
You know, Bitcoin obviously recently hit the yearly high just like a few days ago.
For me, you know, it's very strange because...
The digital gold narrative is definitely pushing.
So, you know, at any time you saw, you know, things with recession popping up.
So, for example, when the banking sector was kind of imploding a few months ago,
you saw Bitcoin kind of, you know, post a pretty solid rally.
and, you know, which was definitely, you know, pushing that digital gold narrative further.
But then you saw, you know, a lot of consolidation as stocks, tech stocks started hitting new highs.
You saw, you know, Facebook and so on hit like two and to three X their local lows over the last 24 months, whereas Bitcoin kind of just consolidated, if not started moving lower as gold kind of hit the top line and started moving lower as well.
Right.
But what do you've seen over the last little while, you know, you could kind of, there's a lot of theory about sort of market manipulation that, you know, Bitcoin was kind of kept under pressure so that the black rocks of the world could kind of keep accumulating.
And, you know, you could definitely say there's a lot of cadence to that theory that as we got closer into the black rock.
Yeah.
and other ETFs and, you know, opening up of crypto in Hong Kong and so on.
You saw this huge kind of squeeze up in the market.
And there's obviously technical factors as well.
You know, Bitcoin did since January kind of have a big move up.
And then I came back down to that 25K level that a lot of people were expecting it would retest from a technical standpoint.
And then now it's basically, yeah, like you said, it's kind of engulfed.
It's showing a lot of bullish push up.
uh for me i kind of want to see it break through this uh you know this a 32k level that's a
been kind of a you know resistance at this point uh but you can also say a lot of you know
today this week's resistance is next week's support which is kind of you know uh looking the same
way but if i see a good push out from here over the next uh few days uh you know i definitely
stay very bullish on bitcoin uh
All coins, you know, I'm kind of unsure that all coins are definitely, the trade that I've kind of been sitting on a lot lately is shorting all coins and longing Bitcoin.
And if you look at those charts, even Eats, and I'm a big proponent of Eid, you see that's getting destroyed.
Yeah, yeah, that chart is just so bearish.
So I think, you know, Bitcoin is definitely going to lead the way up, which I think makes sense.
The narrative is for it.
Yeah.
You know, I think sitting on Bitcoin is pretty comfortable.
If we do see a pullback to 28, like we could see a big sweep down.
If you look at like, you know, the daily chart at the moment, you could see a little pushback over here in this 30K range.
Yeah, 286 is a key level.
I mean, that was the 2021 lows between the 65 and 69 times.
Exactly.
So I could see a big push down and a sweep in liquidity and then we push up higher, which is
kind of how I'm kind of positioning myself.
I'm sitting in some stables looking to re-buying that 28K range.
I don't see us getting to 25K within the next...
We were just there this week.
We were...
We were there like 10 days ago.
Yeah.
Exactly.
I don't see getting there.
You know, usually people who have kind of missed out like, oh, we're going to get.
I'm going to buy in 25K.
I'm like, well, we just got there.
So I don't really see us, you know, getting there anytime soon.
I could see 28 to 28.5K, uh, 20, 28.6, as you said.
I think that makes sense, uh, just so that because we've kind of pushed off like, uh,
you know, two free times over the last three days in this 31, 32K.
But listen, for me, I see even if, you know, stocks kind of pull back, tech stocks pull back, I think that's okay.
I think you might see a little bit of a correlation.
Yeah, like I said, the correlation is the lowest it's been.
Exactly.
We have a very clear correlation to gold when we're going up and to stocks when we're going down is what if you look into the numbers.
But the.
current correlation with NASDAQ, 3%, depending, 30, 60, 90, all sub.2 correlation.
So right now you can't just blindly look at tech stocks and assume epis in this environment that Bitcoin's going to do the same.
Eric and KJ, both of you guys obviously are go-toes for price action.
What are you making of the market this last week after seeing sort of max depression with the Binance and Coinbase news just two weeks ago?
Either if you can jump in.
Yeah, sure, man.
Hopefully you can hear me well.
Yeah, you're good.
Basically, it was a very interesting situation.
So we had, what, about five, six weeks of kind of chopping sideways and down there.
And that kind of allowed everything to reset as far as my metrics that I look at.
Volatility hit lows that we haven't seen since like June, July of 2020, actually.
It was the last time that was comparable to.
So, you know, when I see something like that,
and then we have a nice move up in the past week,
it tells me that, you know, it's unlikely to stop here.
Yeah, there might be like a week or two of sideways
as it kind of grinds up against us $30,000, $31,000 level.
It's completely fun.
And it might even, you know, might even come back down to like 29 or 295.
Completely fun as well.
But ultimately, you know, that sort of expansion,
now is in play and you know I'm kind of looking for this move to carry upwards and
onwards over the next you know a month two months maybe even three months basically to end
summer
You know, kind of similar to that rally in 2019, actually.
So something similar to that, you know, where does Bitcoin end up?
I don't know.
Areas of interest are 35.
You got CME gap somewhere around there from last year, I believe it was May 2020, or
2022, I should say.
Then he got 385.
Then he got some crazy ones in the 40s, actually.
One of my good friends actually is looking significantly up there, and he's quite good
with higher term time frames like this.
Yeah.
I wouldn't kind of discount that as well, but my main, the main thing that I'd actually be suggesting after that, however, is that, you know, there's a very high probability that we'll see a pretty sizable pullback.
once this rally has ended.
All the way back to here.
Every time, I mean, if you look at the halving cycles in general,
you generally get a pullback that makes a slightly higher low, right?
And so...
Yeah.
Yeah, you know, the pullback that I'd be looking for could be,
you know, it's going to be probably anywhere between 25 to maybe even 40%.
So it completely depends upon how high Bitcoin gets on this current rally.
But, you know, it's got a lot of good narratives going for it right now.
And it has a momentum as well.
And as far as I'm concerned, it might spend a week or two here,
but upwards and onwards is the direction as volatility continues to expand.
Talk dirty to me, Eric.
Go ahead, KJ.
What's up, everybody?
Yeah, you guys have already covered it pretty much very well.
My feelings are aligned with you guys.
We're 28K.
Yeah, it's possible.
Personally, I don't think we're going to get it.
Um, as far as like midterm targets, the 40, 40 to 42K area makes a lot of sense to me as well.
Um, I think that would be just enough to do the trick to get people thinking we're going to get an all time high this year.
And then you get kind of like that bull flag, draw down, slow bleed back to these levels.
Makes makes a lot of sense.
I'd be looking for that in Q3.
Um, and then looking to kind of go full risk on again in Q4.
But.
I've watched
a whiz of Soho
just absolutely crush
shorting Pepe
and other alts as well
and I think
I saw a lot of people that haven't really discussed Bitcoin dominance, like ever.
On my feed, like in the past week, kind of talking about it a lot.
And it's interesting because the chart that I look at is showing a double top here.
There could potentially be one more like acceleration move out of vaults into Bitcoin.
But it doesn't have to come.
And when you look at that chart, for me, it's pretty clear that the meat of that move
The, like, the time to go from Bitcoin to, I mean, from Alts to Bitcoin is long past.
And I'm seeing a lot of setups on Alt-U-S-D charts.
Like, there was a...
What the hell was the chart?
Um...
I forgot the name.
I think it's called Other,
where it's basically all of crypto aside from the top 10 coins.
And most,
that chart itself is looking very much like the majority of the mid to larger cap
bolts that we look at like Seoul and Avax,
where they basically had a year in a choppy range that,
Some of them actually took their lows on the dip a few weeks ago.
Some of them, you know, made higher lows.
But at the end of the day, it created the same kind of ejection move that stopped out anybody that was in that range.
People hate alts.
And they're talking about Bitcoin dominance and how bullish it is.
Yeah, I think, I think especially for spot buyers,
these alts can do two to three Xs off these levels.
And one of the ones that's been getting a lot of play recently
in regards to like the team selling
and kind of becoming a meme is chain link.
However, chain link fundamentally is one of the stronger cryptos.
And I don't say that about a lot of coins, frankly.
But it's something that I would, I mean,
you're going to see chain link play a factor
and what goes forward.
And when you look at that chart, it's been,
not it's not just going down it's like it went sideways forever while other things went up
accumulation yeah it looks like accumulation yeah and then it basically it blew the wave so that wave
was like over a year long it dumps closes outside of the range that i mean that's like a very clear
barrier
bearish signal. And I was talking to my friends about it. We were watching and I'm like, I'm looking at
ChainLink to kind of assess the health of like what everything else is going to do. Because if this
just starts to nuke, it's really not good. But if it happens to reclaim that range, somehow, then I think
it's really bullish for other alts. I'm not saying that Chainlink is going to outperform anything.
Almost certainly there will be other alts that outperform Chainlink. But if...
If it's able to reclaim and that was like a bearish fakeout,
it makes me super bullish on alts from like swing trade perspective.
I can tell you,
I can tell you anecdotally that I had big cheds on my show last week and he...
made, like, he made a joke about wanting to be in Bitcoin
and why would you ever want to be in any of the older all coins?
And he just said Link and made a joke.
And I got massively, like, assaulted by the Link Marines to their credit.
So there is still a very passionate and engaged community there
that would push it given the opportunity.
That's what they're known for.
I mean, they're always going to do that.
I mean, not to say I'm like a Link Maxi or anything,
but, like, just the chart itself.
As I was watching it break down, we were like,
let's see what this does here.
Like overall, this doesn't look great.
But if it can reclaim, that bodes well for everything else.
The only chart that's, like, really concerning is finance BNBBCC specifically.
Oh, that doesn't look good.
So...
Yeah, I think there's fundamental reasons people would be slightly bearish on B&B right now.
You've got some background noise there, too, KJ.
I think you stepped out into the streets.
Guys, we're going to probably wrap this up in a couple minutes.
Unless any other guests have any thoughts on price action here,
we'll probably move on and get it going again tomorrow.
Guys, you can see above, there is, of course, the PIN tweet.
If you're interested in advertising on the show, we are taking sponsors.
You can email the address that is right above their...
for sure. And that's basically all we got for today. I want to thank everybody, all of our
awesome guests for your contributions. Of course, Congressman Warren Davidson at the beginning,
always a pleasure and an honor to have him. It always blows my mind that people who are busy
running our government have time to pop over and talk to us in our little crypto spaces here,
which is amazing. All the guests really appreciate your time. Thank you, everyone. We're going to go
ahead and...
wrap it up. See you guys tomorrow 10.15 a.m. Eastern Standard time. Thanks, everyone.
