Bitcoin Is Pumping, Smashes $45,000 | Bitcoin Spot ETF Approval Today?

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The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to “Buy,” “Sell,” or “Hold” an investment.

Happy New Year Bitcoin is trading at $45,600 making a massive mood to the upside on January 1 exactly what we all wanted to see all in anticipation of a p potential approval of a Bitcoin spot ETF which some including Reuters are saying could happen as soon as today Bitcoin is

Pumping ETF is coming kind of washing out a lot of the bad news that we’ve discussed on this channel at least for the crypto and Bitcoin Market can’t wait to do macro Monday on a Tuesday again with James lavish Mike Mone and Dave weissberger guys you do not want to miss

This one let’s go Let what is up everybody I’m Scott mker also known as The Wolf of all streets before we get started please subscribe to the channel and smash I said smash for the first time in a long time uh smash that like button it is a new year

New me new you new all of those things but what we do have is some new price action with Bitcoin and some new hype about the approval of a Bitcoin spot ETF let’s get right into it now I’ve got Mike James and Dave all for of us guys

It feels like it’s been a while welcome back happy New Year is this thing getting approved today is that really a really a possibility that’s coming from Reuters right here not me the SEC May notify Bitcoin spot ETF issuers as soon as Tuesday or Wednesday they’ have been

Cleared to launch the following week said sources of course uh we wouldn’t probably hear about that today let’s be honest if they’re gonna find out that doesn’t mean that we will but uh this I think after that yeah I think after that uh um that reuter’s article came out I think

Black Rock had a comment that they would they don’t expect anything you know before the end of this week at least I think uh I saw that somewhere as well it’s the the fifth is the last day of the comment period for one of them so

That’s what uh our best our buddies say Scott I think that’s the most likely so that gives us till Friday they don’t usually do those things ASA Friday but like I said either way this seems like we’re getting into the inevitable phase we have a ton of updates I don’t

Necessarily have the full summary I can just tell you we’ve seen a lot of them naming their APS ironically JP Morgan being the leader AP for many of these filings as Jamie Diamond goes on uh you know TV and in front of the Senate and Congress and talks about how cursed we

Are and we’re the worst and Bitcoin shouldn’t exist and we should kill it all uh never wait but their fees but you said they’re fees oh okay yeah I can make money but I mean and and now we’re already seeing uh two other things we’re seeing the marketing war begin we have a

Bitwise commercial I know a vanet commercial Mike as you said grayscale advertising all over the place everywhere you go every airport and now we’re having the fee battle right uh I know I saw that Invesco Galaxy novag grat saying they’re going to wave fees for the first six months we’re seeing

Some come in I think as low as like 0 49% I don’t want to quote it wrong but this is really really beginning to happen and it and it also demonstrates just how strongly uh Bitcoin has decoupled from risk assets and is absolutely uh you know beholden to this

ETF Event Horizon so this is an event driven trade at this point for for some people and long term obviously it’s not we all we I’ll own it forever but at this point it’s acting like that well you’ll own it for forever also not in an ETF correct correct so there’s the go

Ahead da yeah go ahead da well the one thing that that’s that’s amazing today uh and I I just got just look at the well I mean that’s kind of stupid but the the Futures spread to the CME Futures right now are is up to right now it’s around

230 basis points the scale is kind of crazy so hold on yeah 2 40 basis point which is insane uh we’re talking literally something that going to expire in 24 days uh so even no matter what your interest rate is that’s crazy so what it’s telling you is uh this rally

Uh is there are people who got caught short in the US that only use Futures to buy it and they’re buying it which when that when this spread inevitably comes down you’ll see some softening uh but you know that’s assuming that whoever is short uh has been able to get what they

Needed to get and it’s you know we’ve seen this a couple times the last time we saw the rally that it go like this the rally had legs until this spread came down probably the single most important indicator for Traders to see just so you can look at what I’m looking

At really quickly um where are we we’ll do that this is our dashboard but you can see this is the thing I’m looking at right here where I’m waving my cursor around that’s the spread between Bitcoin USD uh spot and the January future on the the CME and and those numbers are

Big I mean that number realistically you know the way it normally trades you would expect that number to be somewhere around 120 basis points would be healthy but still high you could make money at it 240 is crazy uh it’s a thousand spread to put that in in perspective so

It’s kind of nuts I’m just interested in how just how many tabs you have open on that window like 30 it’s because I’m lazy you know I open stuff close them uh I can’t help it but you know it’s like when I’m looking at stuff it’s like so I have one

Of of the of the the the the dashboards that have the spread situated another one that has other pairs of all coins and things and then looking at statistics who’s trading th a system alerts and all the other stuff and then all the stuff that I’m writing like

Specifications and stuff so it’s kind of nuts but you know whatever yeah I mean when we’re looking at funding Dave you’re talking obviously about the spreads when you’re looking at funding on those perpetuals it’s literally the most expensive it’s ever been in history to be long by the way that’s not

Generally a bullish signal I mean this is the funding rates on every and when you look I mean when you annualize it right now six it’s costing 66% interest annualized effectively to be long Bitcoin right now you’re getting paid massively to be short and this is the setup which exchange are you talking

About this is H from Matrix point point if you annualize it like I said you know these roll like every eight hours okay but I’m looking directly on the exchanges so binance Futures funding rate is 0.006% yeah that’s right here 0678 I’m seeing yeah what I’m seeing 0678 but

This is on coin glass but that’s same thing yeah that’s not I’ve it’s been much higher um but yeah the fact of the matter is they’re do and the reason they’re doing that is that the their inverse perpetuals right now are trading at about a $60 premium not thousand PR

$60 premium which is and until that premium goes away which it will I mean it’s lasted I can remember the first all time time we when made the all-time high and then the second time one was two weeks one was three weeks where the the Futures were trading the inverse

Perpetual swaps were trading between 50 and $80 above uh actually no it wasn’t quite that but whatever it was it was around these levels maybe a little bit higher uh for two or three weeks which is insane uh it just basically goes to show you that there are speculators out

There that are covering their shorts I mean I I I I made a tweet this morning and I think it’s important for people to understand when you think about the Bitcoin Market you have to understand that the ETF is is bringing in a c change I always look at it this way it’s

It’s just it’s a mental model that we have spe we have crypto native folks us who when when we trade and and I I don’t trade on Leverage anymore but there the Crypt native folks who rotate between Bitcoin and ether yeah sometimes you get new money to invest sometimes you put

Cash on the sidelines Etc but it’s crypto native folks and those people quite frankly tend to be the Chasers the The Leverage pushers the reason we get blowoff tops and big sell-offs and all that stuff that clearly uh has flipped as we turned into January from cautiously negative to uhoh and so

That’s what we’re seeing today the second category are the you call them the the the DCA the you know Mike Alfred’s you know I think you Scott myself James people who are bitcoiners who believe in Bitcoin and who are putting available assets into Bitcoin but for the most part are holding on to

What they have they’re not selling anything and they’re very patient in buying those people are starting to get less patient and getting closer toward fully allocated so you’re seeing that the third category is the one that matters that’s the one where Mike and I disagree on and the third category are

The news the com the people who are yet to be converted to bitcoin which is the vast majority of humanity as much as we don’t like to admit that it’s just true so it is it’s it’s and it’s all the big pools of money those people will are dip

There are a few it’s a trickle now of people dipping their toe in ahead of the ETF stuff but the reality is is the actual approvals will turn that trickle into a stream so you’ll get more but eventually for it to turn into a raging flood takes time and the marketing and

Whatnot and people have to become convinced and there there’s a there’s a concept in every building of a network and Bitcoin is a network at its core called critical mass at some point you reach a Tipping Point and that Tipping Point which we are a long way from is

Bitcoin at a value at a market cap Beyond gold where people say this is the new story of value and volatility starts to decrease why not because of the price although that certainly won’t hurt it’s because that third category it becomes mainstream Bitcoin goes mainstream and

The control of the asset price is much less in the hands of the crypto native speculators and that’s really kind of my mental model so I look at this morning I yeah I’m pleased to see it and it but it looks like the kind of move that could

Easily get faded when they don’t approve an ETF today because there’s common periods open but clearly there are some people who are just afraid that this could happen they read the reuter story and it’s like uh oh yeah I mean listen it’s trading I’m not going to say it’s

Been approved but like I said the approval could be direct from the SEC to the issuer and not public for quite a while I’m just showing a chart I mean it had obviously a pennant it was in for a month if you are a classical chartist this is the most classic bull pennant

You get right and this is targeting it never hits Target but 54,000 but you’re up 78% uh since that reuter story came out I’m not saying it’s the reason but maybe there’s somebody that knows that these things are approved and it’s starting to move or maybe it is just hype but I mean

This is a absolutely beautiful chart and I mean it’s you know it’s been 2024 for uh all of like 36 hours and uh we’re trading you know up seven eight percent right but I but the key word here is delinking and I know that that you know

You said it makes me smile it’s my victory lapish but I don’t really want a Victory lap what I really want is to is for for things to play out in in the way that I want them to play out uh the the absolute reality is the backdrop of all

Of this let’s not kid ourselves the biggest headwind that Bitcoin faces is still macro if you believe that we are going to see a dump in Risk assets that is still the biggest potential headwind which is why we you know I’m teeing you up Mike so be ready

It’s time for the first Morning Morning Call of the year yeah they didn’t have one today right Mike but you do get to respond and give your opinion anyways well I I I need to point out we do agree completely on the macro I just I got so

Sick of writing about it five years ago when Bitcoin was cheap when it looks expensive to me I like to focus Less on the diminishing Supply increasing adoption factor and ETFs I mean it’s something that we all get um it just when it you know when it was this time

Last year when it was extraordinarily cheap and Salon was down 97% or something was just silly stupid silly stupid cheap now it’s getting a little silly expensive and but to me and I completely agree with the macro is um what’s happening today is insignificant even with this morning with the equities

Down about 1% and Bitcoin up 8% on the year so far is kind of a little bit bubbleisha is that if you look at the last two years um the risk this year is just a normal reversion of what happened last year so everything went down in

2020 2 Bitcoin went down the most everything went up last year in 2023 Bitcoin went up the most what’s the problem now we all have to hear nothing but the bullish opium which is great it’s just way it should be but as a responsive rational risk taker you got

To be careful getting overweight long here now 15 at the end of last year was yeah you take the risk there but here’s the problem now is um we look at one asset I see settling and reaching all-time new highs that’s gold um and another asset that’s continuing to creep

Lower and doing showing major economic global economic risks that’s crude oil and copper um and then we look at you mentioned um you know bond yields and they’re still declining this tilt towards recession I think might accelerate partly partly because last year was too many people leaning that

Way now we’re all leaning the other way so I look at 2024 is going to be a very simple year now we’re going to have issues that we can’t predict but very simple in terms of doing the exact same thing it did last year reversions your biggest risk now less own Commodities I

Think because they’ve already they’re still too expensive and they’re heading lower but the biggest risk is risk assets we all seen a NASDAQ up almost 50% in one year um and China’s hailing towards recession Europe’s heading towards recession the FED hasn’t started easing yet we’re still well

Behind that and Bitcoin is one thing we’ve certainly I think concluded in in the you know the 20 minutes we’ve been talking already this morning it’s this this Bitcoin is the world’s number one 247 traded vehicle and it’s still a risky asset I mean it still trades two

To three times the volatility of gold in the S&B 500 so um I look at it as this year if you were stly bullish and you bought some gbtc at the end of last year are you overweighting or are you lightening up this time of year rational

You you know that we always get the silly people in at the Peaks and the travs but now it’s getting a little silly and we haven’t had the ETF yet and I completely agree yes the etf’s going to change everything but you know some of us have been waiting for this for

Five years so we’ve had a decent appreciation yeah James yeah go ahead yep well I mean look you guys have done this as well I know Mike and and David have also done this but when you’re in the event- driven world the the beta to the rest of the world goes to pretty

Much zero it doesn’t matter when you’re in an event purely event driven situation and it’s trading off of that right and so what’s interesting about this is exactly what you just said Mike is that it is a risk asset it’s the leading risk asset it’s been the leading

Risk asset it’s a tip of the Spear of risk assets for years but uh the reality is that if and when we do get ETFs approved they there’s there will be Capital that comes into this and it eventually will have an there will be enough Capital that comes into it that

Dampens that volatility in my opinion and that in and of itself is part of this event driven kind of uh I hate to say trade but activity price action the event driven price action is that is also factored into this so that’s that’s the interesting part about this nobody knows

Where bitcoin’s going to go obviously however this this is this is a this is the most fascinating event driven trade I’ve ever been involved in it’s it’s in incredible how this is acting as opposed to what it was acting like just a year ago and so that yeah I

Mean well it supposed to be a year ago go the funny thing is is like you know I I I I I kind of wanted to write about this you know if you if you ever study you know when I went I was in school I

Took so many intro courses it was crazy but intro to Sociology they they teached the yamama Mamo Indians in Amazon slash and burn agriculture and basically what happens with the with with this group of people and this is why there’s issues in the rainforest by the way is they

Realized that the most fertile ground ever is if you burn down an area of the forest and then till that into the soil it makes the soil incredibly fertile for crops yeah 2022 crypto damn near got burned down and you know you saw so much happening and in 2023 crops were being

Planted and people are saying 2024 is when we’re going to start being able to harvest some of those some of those plantings now it’s not a Perfect Analogy because the reality is is part of the reason that it that it needed to be done is we had fraudsters in our midst right

You know mashinsky committed fraud Steve erck not convi not convicted but I think that uh his his representations I believe were fraudulent I’m sure Scott would agree God knows Sam bankman Freed’s been convicted of fraud uh you know do Quan he hasn’t been convicted yet but it’s coming uh and lots and lots

Of people around that and there’s still a lot of crap in the industry we all understand it whenever you make have this kind of money being made by people it’s a Honeypot anyone who who traded internet stocks or OTC stocks in the early 2000s and the late 90s no you’re

Going to attract enormous amounts of Fraud and in fact the crypto frauds on a scale were still tiny relative compared to World common Enron and all the other crap that was going on back then but the fact is is that needed to be cleared out binance was a big overhang and we’ve

Talked about that in the market and more less that’s cleared out there really isn’t any overhang except for what’s an existential battle for Defi and for self- custody versus the Elizabeth Warren of the world but I don’t think people in crypto think they’re going to lose that the difference is there were

Lots of people in crypto who believed there was a chance that every one of those other bad things could be an existential killer of Bitcoin those are gone and so when you’re looking at an environment now the question becomes really is Bitcoin going to lead the pack

By being that Global store of value and if it gets to critical mass because all these potential impediments have gone away then those bullish Flags become very interesting right because you know where is you know where’s price Discovery the funniest part about all this is if we were having this

Conversation and we were and and 45,000 was a new all-time high it’s a different call but the reality is the all-time high not just once but twice was over 60,000 right you know months apart so we’re not even we’re not even recovered back to where we were when the hopium

Was being mainlined I mean when when Mike was completely right and I’m sure you know I don’t know we weren’t really talking back then but the fact is is when Bitcoin traded past 60,000 not once but twice uh there was a lot more hopium understand the network the hash rate of

The Bitcoin network is more than triple now and by the way I think yesterday was an all-time high for a single day in Bitcoin transactions right so if you look at going on you know that compared to the previous all-time high you have triple the size of the network so

Arguably people who care about fundamentals in Bitcoin will look at and say okay well we’re triple that so we should be at 180,000 okay cool your jets but the truth of the matter is that’s what they’re going to say the second thing they’re going to say is and wait a

Minute it’s about to be unlocked for 90% of the of the world’s wealth which which it was previously really inaccessible POs to uh at least uh 90 may be too high but 70 and we don’t know what that’s going to be but we know that’s going to

Be large and at the same time you had Michael sailor two years ago pitching to thousands of corporate CEOs and CFOs and basically all of them said but our board won’t let us buy this because the accounting treatment has changed as of today anyone whose fiscal year starts

From now forward can adopt Bitcoin on their balance sheet without any issue and I urge everyone to read Raw Stevens from uh you know uh year-end missive talking about why he stealthily not stealthily he told people about it but no one really thought about it use Bitcoin on his balance sheet to

Understand that’s another Pool of capital that’s available that’s why I think of the dlink that’s my reason I mean we’ve had we’ve had statistically we’ve had the dealing for almost a year I’m not saying that they won’t link again I think we all know that all

Correlations go to one in a Black Swan in a major collapse right bitcoin’s kind of been doing its own thing to some degree understand Mike’s base case for the stock market which I tend to agree with is this will not be different when the FED starts cutting it’s going to be

The Market’s going to sell off Mike I want to talk about that right now because Bloomberg just did their Outlook 2024 and we kind of just I see in the comments and I see people talking about this consensus idea that everything is Mega bullish new bull market I don’t

Know that that’s really the consensus I think people are very bullish on bitcoin specifically because of the ETF the cycle I think there’s a lot of reasons but I don’t think people have gotten there yet on the macro you talk about here’s almost everything Wall Street expects in 2024 by the way they’re

Always wrong on the consensus so if you read the article they say listen everybody’s sort of in the middle so we’re probably going to get either a massive selloff or a massive pump right we won’t have a cal year as everyone’s predicting but we can just superficially look through these right

This is e literally like uh institution by institution Black Rock our bottom line for 2024 this is a regime of slower growth higher inflation higher interest rates and greater volatility the Brandy Wine the odds of recession are not trivial B and Y we expect a healthy and welcome slowdown next year the consensus

I read through a bunch of these every single one says probably a recession but maybe a shallow one for the next year but everybody hedging uh Invesco we think the global economy is entering a brief period of below Trend growth driven by recent monetary policy tightening blah blah blah blah blah guys

There is no no nobody willing to stick their neck out at least from an institution right now and say hey man new bull market this is going to go crazy I mean Mike what are we missing here between what it seems like people are talking about on X and what these

Institutions are saying because it seems like everybody’s sort of in your Camp although maybe not expecting quite as much downside well I think it’s classic human nature anybody who was wrong in the stock market last year which I was um has to really be careful and hedge

And he can’t keep saying the same things but it keep it reminds me of what that famous quote from Rob Roger bson in September 1929 is I will repeat what what I said to you the year before and the year before that when he was bearish

On the equity Market he was wrong and it’s just I think it’s a similar situation but here’s the key thing I way I look at is I have never in my many decades in the business seen a market a global market so completely dependent on

One thing going up this year for us not to tilt towards significant Global deflation that’s the US Stock Market has to have an upe because if it doesn’t everything I see from Commodities is tilting towards Global deflation I mean Gold’s the only thing up everything else is down okay that’s already starting

There the the hikes that we we’re just hiking every country most central banks were just hiking back in September that’s right when crude oil peaked crude oil goes up what does that mean well they can’t cut because it means inflation um it’s just one of those

Things I just look at the risks are so great that it probably says to me is well why take that risk I mean just be underweight and there’s Alternatives no there’s Bitcoin but I think Bitcoin if the equity Market goes down I think Bitcoin will lead it obviously today’s

Not the best example one key but it’s the thing is the bottom line there’s so much risk tilted on this one asset I say the US Stock Market because if you measure it versus global GDP versus US GDP versus the rest of the world stock markets it’s the most expensive ever

It’s just okay thank you I I mean us is a great place but at some point you have to expect just a little reversion there and then you have that deflation a tilt which I think I’ll end with this is completely history a look back and if we

Get deflation this year it’ll look back in this oh it’s completely a normal reciprocity to that extreme inflation we had to the peak in 2022 so I have a question for you Mike what do you what do you think about this Theory I feel like the SNP NASDAQ basically the the

The Magnificent 7 uh and the stuff that’s it’s carrying along feels to me a lot like it did in 2000 or is it 2001 yeah when uh T when people had to sell because of capital gains in in March caused some rather vicious downside action which recovered before it finally

You know it did rally back and then got crushed again in the fall but the spring was the shadow dump I feel like the stock market which is still dependent upon cash flows of companies as opposed to uh protecting the value of one’s asset and I will always always do that

Is set up for and and back then it wasn’t every that fell it was all the High Flyers that got crushed but the internet stocks got got had a shadow crush it feels to me like everything that people had to sell because we know that people need have needed to take

Gains to fund their Christmas presents and all their spending which we’ve seen been pretty high it feels to me like there’s a real potential that that tax season uh could be a little bit of a of a PIN to that that that balloon that you’re talking about I’m not saying it’s

Going to happen but feel feels like a real possibility to me it makes a lot it makes a lot of sense and one thing I really enjoyed about cryptos early on and those of us who’ve um had to write checks to the IRS all our lives for

Capital gains and deduct the losses is when they were all the all these people made so much money in cryptos I would speak to him and off the Record was say I’m not paying taxes I’m like are you nuts you got to pay your taxes the Iris

Will always get you and just a lesson I’ve learned from my broker friends who their accounts would be cleared out because if IRS would just jump into their accounts but that to me I think that’s a key factor I’m brought I’m glad you brought that in but something I want

To tilt over too also is the amount of easing we have priced in in um which Jame is an James is an expert on to in suur um suur Futures is right now about 150 basis points um for the year and I look at that as okay we raised 100 basis

Points last year and you look in the big picture that’s not a big deal but what’s going to take from the really cut a lot and cut that much we all know I think it’s going to take weaker Equity markets and I look at it is the key thing is

Also with the election coming up is the market just priced for so many it’s just so expensive now in terms of um stock market and there’s so much easing priced in the system it’s just almost the complete opposite of last year we all know is it gonna be that easy in 2024

Where you’re supposed to just say yeah okay made a lot of money maybe I should just take some and as we head fill towards tax season then you’re forced to take some and you don’t want to be doing it on a downt James I think you said

Last week how every single thing was priced to Perfection right now I would say now they’re overpriced Beyond Perfection but uh Mike obviously just brought up up Sofer you wrote a newsletter by the way I’m going to give this soft pitch right now for the informationist for all of you guys out

There I don’t know why I don’t tell you about this on literally every show but it’s one of my favorite newsletters that uh James writes weekly incredible but that’s exactly what you talked about this week is sort of this smoke signal and the cost of borrowing overnight uh

Shooting up massively which I you know Preston pish your friend said here in this tweet I mean maybe the biggest smoke signal we’ve ever seen from this uh indicator but it’s just yet another one of these how is this all happening in the background and things are still going up situations

Yeah exactly and it’s not the biggest smoke signal so let’s first of all let’s back up really quickly and thank you for the yeah the uh the soft push um so the the what is Sofer Sofer is the secured overnight financing rate right and it’s basically what they what what the FED

Has created to take the place of lior because liore so the basic difference is that Sofer is is based on real transactions and liore was based on uh like surveys of transactions like estimates and so it was e really easy to manipulate liore and so the thing is

When when when you have a Sofer trade settle something that’s based on Sofer it it it’s based on collateral whereas liore I mean we we had liore uh trades and liore based uh interest rates on things that didn’t have any collateral and and hedge funds just basically just

Derivatives you know and so derivatives on derivatives and so super super easy to manipulate so that’s really important to understand that Sofer is difficult to manipulate that when you see a suur when you see a suur pricing it’s real it’s a real trade and it’s they’re monitored

And so you can see what’s actually happened and they’re just they’re accumulated and and uh they take averages um to simplify it but basically what you’re looking at is you’re looking at the suur what’s important to look at when you see suur is what this what is the spread between Sofer and the

Effective fed funds rate so you have the FED funds rate which the FED sets but then the effective rate which is actually where transactions are being settled in the market remember fed funds I mean this these are day-to-day U borrowings and uh and lendingsuite.co funds move large amounts

Of capital in order to uh rebalance their their balance sheets and and their positioning and their and their risk parameters really a lot of it is just window dressing uh often so at the end of the year you’ll see these these things move and it could be it could be

Just window dressing so I expect today for this to go down to where you know back to kind of the level where it was is it a big move yeah it is I mean when you look at what happened to so the sof for spread compared to uh svb collapsing

This is above that so it’s a big it’s a big move uh so what it does tell me though is that there’s a there is a lot of of uh there is a larger need of liquidity out there a a possibly a much larger need of liquidity out there than

People are are maybe attributing and so it’s a smoke signal in that hey if we do have a problem let’s go back and look at what happened in 2019 and look at where Sofer went then and that is that don’t blow people’s minds because and and PE many people probably don’t even remember

This but in 2019 back in the fall of 2019 in September Mike and Dave remember this well um you had a situation where the uh you know there was so little liquidity that the Sofer pushed all the way up to almost a 300 basis point spread to Fed funds which is just it’s

Just mindboggling so obviously the treasury and the FED had to step in and inject liquidity because you know you had it was just a Confluence of events where the treasury had a big auction it was settling the same day as tax payments were due and C you know

Companies were were moving money around for tax payments it it was it was a fumble let’s put it that way it was a liquidity fumble from the treasury in the fed and they had to step in and basically you know Shore up the treasury market because it did get un unruly and

So it was H it was pretty scary moment for people in in that financial sector of the market and uh so that’s the kind of thing that I’m looking for on a red flag hey we have a Houston we have a problem in the Sofer world but by then

Honestly it’s too late so it’s really you’re looking at things like all right the reverse repo balances are being drawn down once those are gone then you’re going to start seeing repo balances go up because what the FED did is they in instilled it’s just a it’s a

Daily repo facility that uh that these companies and and financial companies can use the banks can use to prevent something like this Sofer uh situation so if that if that all makes sense yeah that that all makes perfect sense I think um like I said it’s just one of those

Multiple smoke signals when you look at the plumbing it just working behind the scenes but yeah yeah it’s going up I mean it’s it’s on a it’s on a an upward trajectory that the volume is going up so let let’s see where this goes and and

What is going to what is going to trip that and make it and and and make people realize that when there there’s so much leverage in the system that when there is a need for liquidity it will be too late and that’s why I keep saying that

Watch out for a credit event because when there is one it’s going to be too late there’s going to be the need like like long-term Capital Management there’s going to be the need for one or a few entities that are interl that will cause so much contagion that there will

It would threaten the collapse of of financial system there’s just that much leverage out there I’m not saying it’s happening but I’m saying that the the problem is that it’s a nonzero probability and and when it and if and when it does hang on tight yeah Mike

Okay Dave I see you have something to say go ahead and then I’ll ask Mike a question well I mean I think it’s really simple to understand that that a lot of the and I love Mike’s words I’m I’m G to plagiarize again a lot of the

Hopium uh that exists in in some markets has to do with the the you know look 150 basis points of cuts priced in is insane unless you actually believe there will be a credit event because there’s you you be be simple there’s no effing way they’re going to cut that much unless

There is a threat and seas up in the financial system if all of a sudden now the market is betting that the FED is going to see this in advance and prevent it from happening then that would be the first time that they ever acted Pro ever were successful proactively have you

Have they ever been proactive in your in your estimation James no so I I think it’s really important to understand that that that when it sounds very clinical but a nonzero risk of a credit event sounds clinical what James is saying is there’s a nonzero risk that 2008

Repeats that’s right and so the problem is it’s not that there’s a high I’m not saying that there’s an 80% chance of a credit event what I’m saying is in risk reward probabilities you have to you have to include you know that you have to include that Delta move off of where

You are right so when you when you look at a at a at a credit event it’s not just is the likelihood of a credit event it’s how big is that credit event going to be is it going to be like we saw in uh in the UK with the guilt situation

And their uh and and how the their insurance companies were so leveraged with these with these uh leverage debt instruments that it was C it was possibly catastrophic and that’s the problem is that it’s not just that there’s a zero probability it’s that the probability is if something does happen

It’s likely catastrophic and so that’s the pro that that’s where that risk reward calculation gets skewed yeah Mike the question that I wanted to ask you is about what’s happening with oil before we Circle back to bitcoin to to end obviously uh as I’m reviewing things I saw there was a nice

Little jump in oil this morning maybe 2% uh you know not not trivial but not huge but uh as a result now I don’t see it here but largely what’s happening in the Red Sea right uh I think an Iranian warship entered the Red Sea the houthis are attacking everything that passes by

And I guess there’s some fear uh the supply chain could be interrupted but what’s happening with oil so I want to stick my neck out and allow people to at the end of their say hey potentially Mone you’re an idiot I think you’re going to see a 40 handle on

Oil this year maybe going down to $40 a barrel raise my hand if I’m wrong tell me I’m guilty it’s way crude oil has worked since I’ve been trading it in the 90s when in the pits when um Sodom hin initially invaded Kuwait it went to 40

Dropped down to 20 and took 14 years to go back above 40 we’re doing the same thing but in a much worse case now and that is um what’s happening in crude o is the simple facts of the last of supply and demand are kicking in exponentially so um it’s what you’re

Seeing is noise I mean there’s always going to be violence in the Middle East we grew up with that and can that cut Supply and if it does where’s it going to cut Supply to to the US no that’s changed the world’s changed we are net exporter if you see Supply bottlenecks

That kind of makes us build up our inventory but short term is bad but what you see now is still the backward end of the downward cycle from um sadom I’m sorry not hin but Putin’s invasion of Ukraine and I had to say one person because it’s more him than a country um

And it’s very likely you have to shut off what’s really pressured crude oil for the last 10 years and that is the excess of us and Canadian supply versus demand it’s it’s accelerating it’s actually near Six Million barrels a day if you cluee liquid fuels that come from

A farm background we got a lot of ethanol which is now being matched by OPEC spare capacity they’re cutting as much as we’re it just it’s just a lose lose so I see crude o right now 71 I’m going to write probably publish in tomorrow

Said the editors right now if you saw me typing a little the next 20 bucks in crude o think is down and that’s towards 50 and gets to 40 to get cheap you got to get cheap to shut it off to shut off what’s pressuring prices and that’s the

US um supply and demand Surplus so what you see at OPEC is just it’s silly that people still focus on it because they’re reading from the textbooks and the answers have all changed it’s a quote quote from um Einstein the aners of all chains the world’s completely different I think

It’s heading towards 40 and when people are saying it’s going to 150 I’m like you ignoring copper and corn you got to watch the whole whole Space so that’s part of the reason I think I’ll I’ll end with this I think normal commodity deflation just fall natural gas you’ll

See crude oil 40 is going to continue to fuel gold inflation um and part of that is giving the FED reason to ease but here’s the problem let’s say we have a little bit an issue in the Middle East and crude o something spikes to 90

What’s that do for fed easing and all this hope young people have for lower rates POF it’s gone Dave you’re muted I I really wonder about that Mike I think that the FED isn’t stupid I mean you know they may be slow they may do a lot of things but it’s not everyone

Knows that when oil prices Spike it’s a it it actually holds back consumer spending consumer demand it is a tax of the economy and so yeah the headline inflation goes up I don’t know precisely how the pcae deflator which is their preferred inflation index Works compared

To the CPI but I’d be willing to bet that it it will move less than the CPI in such an oil shock and they’ll see aggregate demand getting crushed so I wonder if that affects it I think that the real question from the FED I is is James’s question they won’t ease until

Financial Plumbing looks like it’s about to seize up or has already seized up I think and I think the world is basically saying they think something is going to seize up or doesn’t that doesn’t that imply that yeah I was gonna say doesn’t that imply that at the last meeting that

Pal knows something we don’t because he basically said that they were going to Pivot or ease without it implies it’s an election year in my very cynical way of looking at things well that’s part of that’s part of a bearish B for crude oil it is an election year and the world’s largest

Energy producer net exporter was more likely incumbents will get elected if prices are lower yeah and and there’s tremendous I mean look is the Fed run by the executive office and by Congress no but there’s tremendous political pressure and pressure from various non-political entities for the FED to

You know start lowering rates soon and they look I I never thought that we would get to the 2% normal inflation and and kind of stay there I I I think we’re going to have a trajectory that shows that we are whether or not the CPI you

Know I mean how accurate is that we we’ve talked about that ad nauseum um but I I just believe that we’re we’re we’re going to allow we’re going to need and allow for higher Perpetual inflation and so in order to do that you’re you’re not going to be able to crush the

Economy like that would be that would be the nightmare scenario there’s two nightmare scenarios right there’s the the scenario where the FED goes and raises rates again and you know just annihilates the economy or the other one is the Fed eases Up too quickly and allows for inflation to run rampant so

They’re they’re trying yeah Mike go ahead but I’m glad mention that’s that’s a thing key thing of human nature I think people are underestimated when they’re pricing so for you know for 150 basis points of cuts I think that hike too much but that’s a part of human nature

That’s changed forever that we grew up with it and that is the Fed had a good reason to ease through the last 12 years and and somewhat aggressively because inflation was gone but now we’ve learned that lesson we learned what happens when you create too much liquid and you get

Inflation so that to me is why we’re supposed to get this normal reversion now obviously we didn’t get it last year in terms of equities but the Market’s going to learn I think a lesson this year that is um the FED will just not ease with the ease it has in the past

Until it gets that bad they might you know start with a 25 base point cut if you know stock market’s down 10 % inflation’s declining but the key thing here I want to point out in terms of the facts Also let’s just look at PPI right now is deflating it’s down nine10 of

Percent the latest PPI reading the S the Bloomer commod index is down 11% over the same 12- month basis I think that’s going to get worse I think there’s going to be reason for them to to cut but I think for it to really get worse you

Have to see that just a little baby reversion in the equity Market that’s where I see the the Domino just tumbling for deflation this year and here being definition of deflation it always comes from a base level that just gets too high I mean it’s always the way it’s

Happened 1929 was the best example in history the base just got too high and we deflated until the until we deated the Cur till we debase the currency in n in two 1933 yeah listen I mean if things start to collapse James they’re gonna They’re Gonna Save Us right and then but it’s

Interesting when we look through all these Wall Street projections and I do want to go right back to Bitcoin in a second but if you read through the almost every one of them actually thinks that inflation will kind of be a little bit stickier now right and that we will

Be dealing with exactly what you said which is a slightly higher inflation environment maybe you know it’s 3% instead of 2% becomes the the base level yeah and and they’re not gonna they’re not going to point to it they’re just going to say that um well we’re we’re

Comfortable with a range you know of two to 3% and then it might be like more like three to four percent but they’ll hide it and it look they we have to have confidence in in our our in the US dollar why because we have to have

Confidence in our treasuries and so it’s a simple I mean it’s not that complicated do I think that there’s there there’s a you know a diabolical plan from the treasury and the FED to you to to uh debase the dollar and make people poor in this country no I don’t think

That I just think that this is just it’s just pure economics how this is working out and the FED understands a range actually works better he’s more incentivized that the FED is more incentivized to have a range that rather than overstay their welcome and push the

Economy into a into a recession or allow for that you know Arthur Burns ra inflation to rage out of control all 1980s you know it’s it’s easier to have a range and be able to dial uh and and adjust accordingly because it it makes it just makes their job easier and it

Allows for the the treasury to keep issuing as much debt as it needs to and and it just inflates it away yeah that’s the part I was yeah exactly Dave do you have something to say before I move on to the Bitcoin yeah well actually I want to talk about

Bitcoin just as we were just talking I watched the I per you know funding rate on derit go back to zero as as okex was and darab bit were both offered right around spot like no premium Wabi is still well above spot uh and then just

As I was about to say that it started moving higher again um so you know it was down at at 452 now it’s at 45 the I per around 454 you know it’s just nobody knows anything a the point is not only is the price volatile but all the people

Trying to do all this stuff are moving crap around and if you can’t see it it kind of it reminds me of of of of of an old Odd Couple episode where I’ll cut to the chase the there’s some actor basically they were it was about an

Occultist and he said we have a a a saying in the spirit game what you don’t know can hurt you very much I will tell you that people who are trading directionally and trying to day trade or minute trade who aren’t looking at every single market and seeing what’s going on

Here are getting crushed they’re getting whipsawed by every single move which is you know professionals can make a lot of money when this is true but if you have to ask yourself the question you know what are other people doing they’re trading against you and it’s just it’s

An observation from looking at the market you know with professional tools and understanding what you’re up against today is like probably the poster child day for day traders who are sitting at home who are on one exchange or one place just getting run over constantly either way because they can’t see what

Else is going on it’s just it’s fascinating sorry just P piggy back on that a little bit it’s that’s the key example extremes of last year we all knew we were going to go in recession and Bitcoin was cheap okay so we all know now we’re going to go soft Lane

Guaranteed and we see bitcoin’s expensive but the difference is with the equity Market it’s just those non knowns that yes they’re going to be the heav yes there’s GNA be ETF they’re just such non knowns that great a lot of that’s been priced in Dave you nailed that from

You know from 15 to 45 and then I just look at okay here’s the macro you’re day trader yes but that’s a key thing I like to point about Bitcoin is it’s the number one place on the planet if you’re any type of a Trader and this is from

Someone come from the trading pits all those ex Traders they all have gone to bitcoin why because there’s no better place to set up your Bots and just have it knock around and today I’m sure there’s more people getting stopped out than there are people getting long yeah I 247 it’s incredible that’s

That’s the most incredible thing I like it’s psychotic I mean just when being in Arbitrage we would trade things in everywhere from Australia New Zealand all the way all overnight into and and so but you had a couple hours of reprieve here and there so even though I

Was trading at 230 in the morning you know from from 4: or 5: PM until about 7 or 8 PM it was a nice little lull there there is never a moment that Bitcoin isn’t trading and I mean it’s it’s an incredible that and that’s what makes it

So attractive right I mean that’s the point I mean all I can tell you is is volumes through through coin routes this past weekend uh you know over 150 million average a day on a weekend uh and you know that’s just because it’s 247 but there’s one thing I will point

Out that’s interesting is I was just looking at it the amount of liquidations for this size move is Tiny I don’t know if you noticed that I mean short liquidations I mean spot is pushing yeah it’s but that’s important right you know the short liquidations 133 million on a

10% move that number is usually double that so it’s about half the amount of liquidations and yet as you pointed out people were still paying more to be long which is it it’s it’s a really strange situation I’m not gonna I’m not goingon to lie so listen as we come to the sort

Of last few minutes here I talked about earlier the fact that we’re largely going we’re going to see this large maybe massive marketing campaign for Bitcoin allaha ETF right so it won’t be a marketing campaign necessarily for Bitcoin although that’s how some of them are pushing it’ll be for the products

But it might actually just basically be a marketing campaign for Bitcoin you’re talking about 14 humongous companies large budgets coming into Super Bowl commercial season not trying to say that’ll happen or that’s even a good thing and if we judge by the past wasn’t good the last time yeah but um you know

We’re about to see this massive marketing campaign for Bitcoin and these ETFs with 14 people competing for AUM we have three commercials already I’m just going to show them they’re really short but here’s the bitwise commercial I don’t know if you guys have seen This thought you would like to know Satoshi sends his regards look for bitwise my friends okay so that’s a kind of a Bitcoin commercial I know it’s for bitwise but he talked about Satoshi which is very vague I’m surprised they went that route this one’s just for Bitcoin this is Van that’s a Bitcoin that that’s just a Bitcoin commercial by the way right doesn’t even mention the ETF and then has CRA to me the tremendous imp impact that the home computers have had on on everyone and yet it seems that people I’ve talked to say that it takes you

Longer to do something by putting it into a computer and calling it up again than if you just kept simple records yourself in the House I thought that they’d all be marketing their specific product and how it uh you know is it there may be regulations on just how much they can do that it’s you know they it’s gonna be interest that’s why they’re doing it right yeah exactly just

Get their names out there and uh yeah but they’re all trying to clearly trying to find their footing I mean people look the reason Bitcoin is trading where it is and not already at your Target price Scott is because there’s still a lot of people who expect that gu Gensler is playing

The role of Lucy and we’re all playing the role of Charlie Brown football the football for those who don’t know it’s a very famous comic strip on your listen reality there still people maybe it’ll happen I don’t know but I fully expect that they will have their their tickers and they’ll they’ll

Be pushing them very hard once they do get approved it’s just right now you’re in this funny period that this is signaling to the street that we’re GNA get approved we’re just going to get these companies are not spending money unless they also agree there’s a 90 to

95% chance it’s going to happen they still probably pricing in that 5% 10% but yeah probably but but the what is clear is that there is going to be some there’s going to be some massive uh you know jockeying between these companies to try to be some of the three four five

Winners out of this because you’re not going to I just don’t see 10 or 12 Bitcoin ETFs surviving for five years May maybe I’m wrong but I you know I would see 2 three4 as being the The Lion Share you know and so they’re go they’re

Going to they’re going to spend a lot of money on marketing to get there clearly love it and I can’t wait for it I’m here for it now it’s 10: a.m. guys a little bit of housekeeping I saw a comment here does Scott even read anything from here

Well they just that made me notice that the X comments are now coming up in my streamyard feed for the first time so we used to only see the YouTube comments so the answer is yes I am seeing those now guys that’s a b guys we tapped just on

YouTube for a second there we tapped 2,000 viewers it was really exciting I remember not so many weeks ago when we were tapping 1,000 viewers so clearly there’s a heavy thirst for this really really exciting and to that end if you are watching this on X you scroll off

And all a sudden it stops I don’t know if anyone’s actually tried to watch live video x it’s really H subpar so if you are come on over to YouTube uh subscribe here and watch it it’s a much uh probably better experience and you might get more comments see someone just said

Jiro said whooop that means I’m seeing it see I saw your comment there on X guys very excited to start the new year with all of you I haven’t talked to any of you about this but I have big plans for macro Monday um outside of my

Channel I really kind of I’m thinking about separating it and creating it into something bigger because I think we have something special here that’s different from the rest of the content so I plan to uh start aggressively pushing and marketing this show and creating more content around it you’ve probably seen

All the shorts I’ve been cutting your guys faces up and and or my my editors have and sharing it and those I absolutely love those things so I want to thank you guys I know man we’re still it’s like almost a holiday first day we all show up you guys are amazing and

Macro Monday is going to become huge in 2024 I can just tell the three of you and everybody else that so guys thank you everybody thank for watching the last housekeeping is at Crypt town hall on Spaces after a two-e Hiatus that was not my choice is back today uh so we

Will be back on Spaces at 10:15 a.m. Eastern Standard Time thank you gentlemen I will see you soon see you Fellas