[00:01:50] HODL: Well, this bull market sucks, Preston. That’s just, we weren’t wrong. This bull market is wrong. It sucks. It has not given me what I want as an investor. And we all know that when you’re not getting when you want, you should just take leverage and double down because eventually the tide will turn.

[00:02:06] No, I’m kidding. I think that obviously, I mean the, the trade war stuff, the trade war stuff is the big headwind here, and I think that, the markets weren’t really pricing that.

[00:02:18] Preston Pysh: I wasn’t expecting, I was not expecting Trump to be like, Oh, I don’t really care about what the markets do, which is pretty much what we’ve seen so far. I didn’t have that in the cards. I mean, that was a goose egg, basically.

[00:02:30] HODL: 100%. And so, yeah, there’s a lot of uncertainty in the market and uncertainty is not good for asset prices.

[00:02:36] Jeff Ross: I was too taken aback. I think at the last quarterly update, I mentioned that I don’t think that doge will be able to clear 2 trillion. I think we all agreed on that, but I said, I think it will be very interesting and it’s going to cause a lot more havoc, wreak more havoc than a lot of people are anticipating. And I’d say that was a fair call because I think a lot of people are kind of surprised, to the downside or upside, depending on how you look at it with what’s going on.

[00:03:01] I’ve been watching a lot of Scott Besson interviews, the treasury secretary. And I think that what happened is Trump basically gave him the keys to the economy. And so there’s the tariffs on the one hand, and from what I gather is Trump and Besson had a conversation and Trump said, what do we got to do to get rates down?

[00:03:18] And Besson’s like, I can help you with that. And they’ve made that their number one priority. Screw the stock market. They’re getting rates down. That’s going to help mortgage rates. It’s going to help lots of people who have debt. It’s going to help the government who has to roll a lot of debt and maybe we’ll be talking about that to be able to do so at lower rates.

[00:03:35] In the very near term, March, April, May, June, July, these kinds of months, we have a ton of debt to roll. And so I think that’s a big part of it. And so yes, that had a much larger impact. In fact, I had an emergency briefing with HODL like two weeks ago, which I was super bullish. And then it hit me like, Oh my gosh, they really are to use Darius Dale’s term.

[00:03:53] They really are throwing the kitchen sink at the economy and they’re trying to tank this thing and they might actually succeed. So I had a panic moment. Thankfully, Joe came on last week. And talked a little sense into me so we can talk about outlook now, but yes, that took me by surprise.

[00:04:07] Preston Pysh: Real quickly because I want to get to Joe, but would yoU.S.Ay that this 7 trillion that they’ve got to roll within the year to reissue? And they obviously want to do that at the lowest interest rate possible is the driving factor is that they’ve got to roll that at a much lower rate than what we’ve been dealing with for the last year.

[00:04:26] Jeff Ross: I think that it is a factor, but I’m not sure that’s their primary goal. In fact, I think Besant is still going to issue some short term T bills. So, I think they’re going to try to play this out for a little bit longer. We’ll see. I’d love to hear what Joe has to say about it.

[00:04:39] Preston Pysh: Joe, go.

[00:04:40] Joe Carlasare: Okay. So if you recall, I think we had our last podcast before the actual inauguration. Is that correct? Do I have that right?

[00:04:48] Preston Pysh: No, I think it was before. I think we did one, around Christmas timeframe. I think.

[00:04:53] Joe Carlasare: So we had it before the inauguration, right? So Bitcoin made its all time high in memory serves on the date of the inauguration, right? So, and then the S&P, in terms of the broader risk complex, that actually made its all time high on the 19th, the February, excuse me. So about a month after that, so the markets did have a bullish trend, not to say we were right, but I’m just saying for the point of like view that like we had sort of a nice little rally up across the asset classes going into the inauguration.

[00:05:18] In the inauguration, okay, we started to have resurgence of, I think this is really the tipping point, really, growth scare. I think yoU.S.Aw some indicators, we can get into this, some of them, Jeff and I talked about some of those, I think those are continuing to accelerate this growth slowdown, which people had anticipated.

[00:05:34] And, you’re starting from a position where you have very little runway, you had spreads, very tight cred spreads. I’m really skeptical though of the meta narrative that is emerging that like, this is all about rolling treasuries. And, and the reason for that is because Besant came in and if Besant really wanted to sack the economy, but Jeff, all you need to do is look at the QRA and he gave forward guidance that he’s going to continue to do the Yellen game of issuing a lot of front end paper.

[00:05:59] So that seems at cross purposes, right? If your goal is really to sack the economy and to to flood the market with longer term duration. That to me would be the way to do it. Because all you have to do is say, we’re going to issue a ton of long term paper. What’s that going to do? That’s going to send long and yields up higher.

[00:06:14] And that is going to sack the economy. That’s going to send asset prices, prices rolling. To me, here’s the real question right now. You’re at a technical correction. I know that people are so used to Assets only going up, but the S&P is down like 10%. Yeah. Bitcoin has had a little bit of the, sell the news narrative.

[00:06:32] I think that’s coming from the SBR. I think there are very high expectations, totally unjustified because it is massively bullish, which we can get into. The fact that there is a strategic Bitcoin reserve, that it is only strategic interest in the United States to hold Bitcoin, not these other digital assets.

[00:06:47] That is wildly bullish, but I think the market, for whatever reason, Bitcoin centric. Thought that we’re going to go in and buy, a million Bitcoin and that was going to start the nation state arms race to acquire as much Bitcoin as possible. But overall, right, yoU.S.Till have historically tight spreads.

[00:07:02] YoU.S.Till have a very strong labor market. I mean, I, I shared with you guys before the podcast, some of the payroll data, the tax receipts, I could see, I could point to 10 different things, but clearly the Trump volatility from the tariffs is causing a lot of consternation. People just don’t know how to position for it.

[00:07:17] So overall, to me, the question is, if you’re really going to laser focus on where assets go from here, you have to say, are we going to run into a position where we actually get a growth scare turn into an actual growth slowdown that is manifesting in labor market? Or is this going to be a thing where we were just reading something right before we came on some reporting that, some of Trump’s team is saying, let’s slow down the tariff talk, let’s try to save face and pivot a little bit.

[00:07:44] I tend to favor the latter. I don’t think they’re going to drive the plane to the mountain. Other people can feel free to disagree with me.

[00:07:49] Preston Pysh: And here’s the thing that you just shared with us tonight, Joe, and this is coming from, I don’t know this guy, but I guess he’s from Fox business. Charles Gasparino, lots of talk in the Trump circles about the need for some grand plan to resolve the tariff disputes with Mexico, Canada, and Europe.

[00:08:05] That is cut a deal via one universal settlement. This started bubbling after today’s market losses and the growing sentiment that the market upheaval isn’t over until this stuff is settled. I have no clue whether this is something the white house is working on, but the chatter among the outside Trump advisors in and around wall street in DC is real.

[00:08:22] The idea is that a compromise Trump saves face with the base. The trading partners who are now hurting economically because of the uncertainty all get relief. The administration then can move on and focus on broader parts of its economy plan, i. e. doge budget reductions, tax cuts, and deregulation story developing.

[00:08:41] Joe Carlasare: Yeah, so just one thing on that. A lot of the first, say, like, 60 to 70 days of the Trump administration has been a lot of the, you take your medicine, like, here’s the stick, we’re cutting this, we’re getting rid of this. We haven’t gotten to the good stuff, right? Which is the tax cuts. And I think they did that purposely.

[00:08:56] I’d love to hear other people’s thoughts on it. But it seems to me you would do that first, right? Before you give a massive tax cut, which the media is going to run with and say he’s blowing up the deficit. You kind of want to have some of this window dressing with the doge programs that Jeff and I had talked about in HODL as well.

[00:09:09] So I’m curious if you guys agree with that.

[00:09:11] Jeff Ross: I do agree. I think they’re hitting us with the stick first. They’re hitting the economy with the stick and then they’re going to come in and soothe everybody with tariff talk, tax cuts, more deregulation. I will also say, since we’re talking macro, that I do think that what we’ve been seeing are primarily the delayed effects of the super strong dollar that peaked in mid January, and it obviously had super huge effects on global M2 monetary supply, right?

[00:09:33] And like we talked about last time, I said, as soon as the dollar turns, we’re going to see global M2 turn higher, and that will be bullish, but there’s like a two month delay for these effects. So the way I look at it is the Dixie, the dollar peaked on January 13th. At about one 10 has, and then has been since just plummeting, which is pretty amazing by the way.

[00:09:52] Yeah. There’s a great chart. I’m very, very bullish and constructive on that. And I think that based on how oversold things are, how fearful everybody is, how everybody knows now that Trump is taking the economy and throwing it into the gutter. I just think we’ve reached just massive oversold and bearish levels now, and I’m very bullish heading forward at this point.

[00:10:12] Joe Carlasare: Oh, wow.

[00:10:13] HODL: Joe, you rehabbed him. You rehabbed, Dr. Joe.

[00:10:15] Joe Carlasare: I don’t know if that’s possible. I felt like I got him down.

[00:10:18] Jeff Ross: I remember the title of my thing with you, Joe, was things are turning bearish. Is it time to buy bonds? Right? And then I even told you I bought bonds. I bought TLT for the first time in my hedge fund for years and years for a trade, like a short term trade.

[00:10:29] And instantly got stopped out. And so I’m like, well, why did I get stopped out? So I spent some more time looking into kind of things. And every forward looking indicator that I look at is pivoting. It looks like it’s bottoming and it’s pivoting bullish. So the U.S. Economy is one thing, right? The world economy to me looks very good.

[00:10:47] Currencies are rising against the dollar because the dollar is falling. Everyone is starting to do easing now. That’s very bullish for M2 monetary supply. And that’s very bullish for Bitcoin. I’m very bullish here for Bitcoin. Yeah. We may see another couple of weeks of sideways chop, but very bullish.

[00:11:02] Joe Carlasare: What is it? We’re going to see 600 billion spent by the German government on infrastructure.

[00:11:07] Preston Pysh: Wow. I hadn’t heard that.

[00:11:09] Joe Carlasare: Oh yeah. Did you see the German? I didn’t see it. I don’t know if you could pull up a chart of German bunds, the long bund, but it like, what is it, a 30 year high, Jeff? I think we saw 2%.

[00:11:17] Jeff Ross: I haven’t followed German boons, but yes, I’ve heard that news. Also lots of people on NASA are asking about Japanese government bonds if anybody has an opinion.

[00:11:24] Joe Carlasare: I mean, look, there’s a new regime in Japan, right? Like Preston, you were tweeting out about this. They’ve got inflation, they’ve got economic growth, they’ve got spending and yields are added higher. So I think it’s a different era. And it’s interesting to me because everybody is fixed it in the U.S. cutting cycle and rates coming down, but unlike prior periods where we had this globally synchronized either growth or globally synchronized cutting.

[00:11:48] We kind of have different patches globally where you’ve got Japan and Germany where their bond markets are selling off and potentially here we could see some rally in the 10 year. I don’t know. I also can, my base case is that we hover around these levels. I don’t expect us to break down to 3.5 on the 10 year now for the next six months or a year. I think you hover in the low fours, maybe, maybe high threes if growth slows down a little bit more, but I don’t know. To me, it seems like that you’re stuck in a range for a while now.

[00:12:13] Preston Pysh: The thing that I think has surprised me the most is the dollar, the direction of the DXY, which we had the chart up earlier. All this tariff talk, the treasury, the US treasury bonds getting bid and everybody else selling off. Like, I guess I’ve been watching macro for quite a few years. This one’s just kind of mind blowing to me.

[00:12:33] This doesn’t make any sense. I don’t understand it. I was working with a, I took a Luke Roman report. I pumped it into AI. I was saying, how is he explaining how the dollar is weakening here? I just don’t understand how they’re doing it. And the response I got back was basically that the U.S. Is basically looking at all foreign investors and shaking them out of equities is one, which that makes sense.

[00:12:56] But at the same time, you have treasuries getting bid. So like, I would think that that would totally offset it, especially with the market cap size of the treasury market for the dollar to at least hold its value, let alone be going down in the face of all this tariff talk. So I’m not sure if you guys have wrapped your head around it, but I sure as heck haven’t.

[00:13:14] Jeff Ross: I’ll just throw in there real quick that I think rates and the dollar front ran Trump’s policies. So I think he came in talking about how he was going to throw on my favorite word is tariffs, right? And all of this stuff happened. And I think that front ran it caused rates to spike, caused the dollar to spike.

[00:13:29] And now similar, like again, exactly the same as 2017, we’re just going to have this slow petering out now of dollar strength and treasury rates, I think for the rest of 2025, similar to 2017.

[00:13:40] Preston Pysh: So you think the dollar strengthens from here?

[00:13:43] Jeff Ross: No, I think it continues to weaken throughout 2025.

[00:13:47] Preston Pysh: So like, what’s the mechanism? Like, how are they going to be able to continue to do that? How are they going to be able to continue to weaken the dollar from here? That’s I guess I’m just not understanding how they can do that.

[00:13:55] Joe Carlasare: So if you look at the Dixie, right, which everybody calls that the dollar, right? That’s really just the exchange and it’s balanced heavily with the Euro and then you have to wonder why is the Euro appreciating? Then you look at the European forward expectations for growth. And they explain a ton of that story while also you have to look at European spending, right? So you’re going to go into an environment where there’s going to be greater European spending, which will cause a growth impulse.

[00:14:18] And if the Euro is appreciating, that’s going to be the biggest single component currency of the DXY index. So to me, that explains the story when you have a, if the growth slowdown is really happening here in the United States. And you have that juxtaposed with a acceleration or rebound in Europe triggered by excessive government spending, right?

[00:14:36] They’re supplying the stimulus, the same sugar bowl that U.S. Has been addicted to for the last couple of years. That can explain that differential. That can explain that growth acceleration versus a growth slowdown that you would expect the dollar to recede in that environment.

[00:14:50] Preston Pysh: Pulling up the, global M2 chart here.

[00:14:53] I know Joe, you’re not a big fan of this because you can give your rationale. I know you didn’t in previous shows.

[00:15:00] Joe Carlasare: But Michael Hows the guy you want to listen to for the M2 debunk?

[00:15:04] HODL: But there’s Bitcoin is lagging M2 at the moment, right? That’s what all the bitcoiners are saying.

[00:15:08] Preston Pysh: Yeah. Yeah. That’s the chart that keeps being the hopium chart that just keeps on being charged.

[00:15:13] HODL: M2 is up here and we’re down here and it’s like, we’re going to catch up. Don’t worry. And

[00:15:16] Preston Pysh: It’s like a 60, which I don’t think that there’s. It wouldn’t surprise me at all. If that was a valid take that Bitcoin. And I think it harmonizes with what Jeff was saying earlier is that he thinks it’s going to rip from here.

[00:15:29] But yeah, according to this, we’re looking at all M2 across all the major economies, all put into dollar terms and you can see, and this is only updated like monthly. So this bar that was just thrown on there is a couple of weeks old. And what it has been since I have no idea, but you can see it’s a bidding yet again, which should be bullish.

[00:15:51] Jeff Ross: I mentioned this at the last, I think two episodes we’ve done, but I think the story of this year is going to be similar again to 2017, where everybody’s watching for the Fed to come in with a liquidity boost but I think most of the liquidity is actually going to come from China and from the Eurozone and from other nations. And that’s what’s going to drive, because Bitcoin is a global asset and it is very sensitive to global monetary supplies and conditions. So I think everything is starting to ease.

[00:16:15] All the chips are starting to fall in place. We’ve reached max bearishness. So maybe we chop around again for another month or so, but I’m not waiting for lower prices. We could get Who knows? Maybe we hit 70 to fill like a CME gap. People are talking about that because we basically ripped from 70 to 80, but you know, back in the fall, I think, or whatever that, whenever that was.

[00:16:33] Preston Pysh: Jeff, check this out. So this is the S&P 500 and look at the RSI down here on the bottom where my cursor is at and look at what level it’s hitting. The pace of this sell off has been really aggressive compared to other drawdowns. This is on par. I think we’re writing now about a 19 or an 18 on the RSI and during the COVID spike down, we got to 14, but we’re in a similar range, right? We haven’t been in this range from an RSI standpoint for since 2020. Surprisingly, like I’m very surprised that it’s been that.

[00:17:08] Jeff Ross: And the fear and greed and indices are just so low off the charts as well. Like everyone is so convinced that this is it, which tells me that this isn’t it. Cause the max pain right now is for a huge spike higher. I think in the queues and NASDAQ stocks and in Bitcoin.

[00:17:25] HODL: Yeah, I’ll give you an anecdote here. I mean, just to show the uncertainty in markets is I took a cash position recently when Bitcoin was in the nineties and I haven’t had a cash position in almost seven years.

[00:17:34] Right. That’s a small cash position, but the uncertainty was so much that I was thinking like, we might have a horrible market here for the next two years. And I’m like, now I got kids and I got to pay for their private school. Right. So like I took a small cash position, but I think that I’m emblematic of a lot of the uncertainty that’s being felt in the market, trade like that in seven years.

[00:17:55] Preston Pysh: Yeah. What was the trigger that you were sensing that gave you that.

[00:17:58] HODL: And it was, it was just sentiment.

[00:18:00] Joe Carlasare: I was bullish. That was the trigger. He was like, dump it all.

[00:18:06] HODL: No, it was just sentiment and the possibility of the trade war getting exacerbated and becoming a real thing. And I thought to myself, Hey, I can reverse the cash position quite easily if I need to. And it’s very small. It’s like, yeah, under 2%.

[00:18:19] Joe Carlasare: You know what’s amazing thing is though, Preston, you’ve got this, it’s real sharp self on par with COVID type like moves, right? Very aggressive, no relief, no bounces along the way. And then I always look at some of these things like the Chicago Fed financial conditions index, which you can read the breakdown here, but they’re looking at financial conditions, money market debt, equity markets as a whole. They built this model out. And you got like the reading last week, it’s like comparatively to what we went through in 2022 2023.

[00:18:48] It’s like nothing. It’s like barely moving. The same thing with, I’ll show you the option adjusted Bank of America spread like the for credit spreads, people were posting today about credit spreads are blowing up, but in reality, here’s the one that I want to show you.

[00:19:01] Preston Pysh: I think Joe, what it shows you is a lot of the uncertainty into the market is a type of uncertainty that we haven’t seen in decades. I think because of the tariffs, I think that’s a huge part of it, but you know, what is this here?

[00:19:13] Joe Carlasare: So this is the bank of America, high yield index options, adjusted spread. This is my favorite gauge of trying to look at credit spreads and how they’re produced. So you have like a five year chart here, right?

[00:19:22] And like, yeah, it’s bounced up a little bit. It came from a historically low levels here in February and January, but you’re really back to like the range we were hovering in for most of. The early part of 2024. And yeah, this, this is the, carry trade blow up right here, back in August, early August. But you know, like nothing crazy, nothing just bizarre. I think it’s amazing how quickly narrative spread.

[00:19:45] I mean, I’ve heard this narrative that we talked about at the top of the show. About, oh, well, Trump’s trying to crash the economy. This is all about the bond market. Like everybody seems to be parroting this within days and information travels so quick, whether it’s true or not. Right. Sometimes perception governs reality and that’s where like the market just glabs onto it. You have to trade around it if you’re investing.

[00:20:06] Preston Pysh: I want to talk to you guys about the SBR. I know that this topic has been covered at nauseam on podcasts and whatnot, but I guess I’m more curious about it from a legal standpoint and whether you, Joe, as you were looking at the method and the way they went about this.

[00:20:23] What are your thoughts? Was this the right way to do it? Should they have just waited for all of this to clear through Congress?

[00:20:30] Joe Carlasare: No, I think it’s an amazing feat I mean it just helps take stepping back for a second Okay if you’re in the world where you’re talking to professional investors or you’re talking to just regular people and you are able to use as a talking point a truthful statement that the United States has a strategic fund of Bitcoin I don’t care where it comes from.

[00:20:51] I don’t care how it’s funded. That narrative, okay, from a communication standpoint, from an optic standpoint, is incredibly valuable. I honestly don’t think they could have done it a better way, because there would have been huge fights even within the Bitcoin world, the Bitcoin community, if you will, about like, okay, should we use taxpayer money for not?

[00:21:09] Do we want the US government to have a whole bunch of Bitcoin? Do we want to be a player in the marketplace buying Bitcoin? Maybe we’ll get to that bridge eventually. But we got Bitcoin that’s sitting on their books, right, that is already appreciated, a lot of it that has been seized. And you’re going to tell you, we’re not going to sell this into the market.

[00:21:24] We’re just going to hold it. That’s massively bullish. And to separate out all of the other crypto assets, if you will, from that, and they’re in a stockpile that can be sold. I mean, I honestly don’t know why anybody would be upset about this. I know that the market in the short term price action, like I said earlier, it wanted a bump.

[00:21:41] It wanted, there’s going to be another bidder here in an uncertain environment. Think about the confidence that gives if you’re putting on big leverage positions in Bitcoin, putting on big leverage positions that you know that the government has to come to the marketplace and buy, of course you’re going to be bid.

[00:21:53] So I think yoU.S.Aw a lot of that front running positional unwind as that news dropped. But man, from a talking point standpoint, I could not be more bullish about how they execute this. I think it was a brilliant move and execution and everything. My only sort of consternation about it is that I don’t think Bitcoin has realized how big of a deal this is and they weren’t giving it the proper respect in terms of just our internal messaging about it to other people.

[00:22:14] HODL: So, yeah, I want to totally co sign everything Joe said, and I think via executive order, this was one of the best possible outcomes. The only better possible outcome in my mind would have been if they had done a secret executive order and then started buying massive amounts of Bitcoin, without tipping their hand to the geopolitical game theory here, right?

[00:22:30] But that’s a dream case scenario. In a realistic scenario, this was the best possible outcome we could’ve got on the SBR, and it is now, strictly speaking, illegal. For treasury to not develop a strategy to buy Bitcoin, they have to come up with that’s law. They have to come up with a strategy in order to buy Bitcoin.

[00:22:49] That’s one of the craziest things I’ve ever heard. And so to me, I’m a Bitcoin has been around for 10 years now. Like we prophesied some of this stuff. We thought this was going to happen. This is a Sputnik moment. Yeah. This is the moment where the Russian satellite goes over your head and you have to look up and go biscuits.

[00:23:04] The world just changed , right? And then you have to develop your own strategy for how you get in the space race, except this time it’s a sat race, right? You’re going to have to figure out what you do with hash power. You’re going to figure out, have to figure out what you do with Bitcoin as an asset, as a commodity, how you hold it.

[00:23:23] How you manage it, what your policies are for it, where it fits into your national strategy. Every nation on earth has to come up with that. The day after the SBR got signed, a packet was put on the desk of every president, central bank head, finance minister in the world, and it said, Bitcoin is strictly limited to 21 million.

[00:23:41] This is absolutely scary. And the United States is taking this deadly seriously. The world just changed. And like, I don’t care that the price is 80, 000 because I know where this is headed over the next 10, 15, 20 years. And so, yeah, this is a big deal.

[00:23:55] Preston Pysh: You know having been in this space for as long as you said HODL, if I told you out of the blue that the U.S. was going to have a strategic reserve and you had to project which way the price action responded up or down, what would you have said?

[00:24:10] HODL: Oh, I would have said we’re at a million tomorrow. That’s crazy.

[00:24:12] Preston Pysh: Oh no, really? Okay. See, my experience having been in the space is that whatever you think is the opposite every single time, like every single time guaranteed, if it’s terrible news, all it just happened to be up 1 percent on the day. If it was news like this and it’s sold off, it’s just like, that’s just kind of how this seems to always go.

[00:24:36] And the irony is, is it’s almost like gold will do the polar opposite at these moments. Like right now, gold’s like making a new all time high and everybody’s, your gold bugs are posting their charts that are two weeks old, showing how great the performance is relative to Bitcoin only for two or three months later, it’s just going to stomp the living hell out of it yet again.

[00:24:58] Anyway, sorry. I just find it really amusing. Like at this point, like having watched it as long as you have it’s borderline hilarious.

[00:25:06] HODL: Listen, we know as long term HODLers that Bitcoin takes the path of maximum pain for the maximum amount of market participants. So it’s going to cause the most amount of pain to the most amount of market participants for the most amount of time possible. And when you hold Bitcoin every day, it feels like this sucks. I hate this. I want to sell this position. Right. And then there’s like three days a year where you’re like, yeah, it’s horrible.

[00:25:33] Preston Pysh: Jeff, your thoughts on the SBR.

[00:25:35] Jeff Ross: I agree with everything you guys are. I don’t really have much to add. It was, kind of sad how it was initially funded, right? Legally, but unethically seized, I would say Bitcoin probably in some circumstances, but everything about it to all of your points was fantastic. I can’t believe how great the order is. Like I spent a bunch of time combing through it. It’s just perfect. The way it’s written, what that means for the future, that the stockpile and the fact that you could sell ETH to buy a Bitcoin and the reserve, or I think that’s just brilliant.

[00:26:02] So I’m very excited about it. And I think Once the delayed effects of the dollar and global M2 start to pick up again, which I expect, within the next couple of weeks, a month at the most, then suddenly everybody’s going to be talking about what a big deal this is. So, just delayed effects, but it’s coming for sure. And this is going to be a huge propellant for the actual bull market, which should be starting soon.

[00:26:22] HODL: By the way, the reason it’s written so well is because of the guys at Bitcoin Policy Institute. So we all as Bitcoiners owe a huge debt of gratitude to them. And also David Sachs team for listening to the smart people in the room and doing the right thing.

[00:26:33] So, I think Sachs, I had reservations about Sachs when he first came in as the Crypto czar. I think he nailed it. He really split the baby down the middle on this one. In a way that was palatable to basically everybody. If he’s listening to this, he’s probably not. But if he is like, Hey, a way we can do, some budget neutral strategies is to dump those points in the coin stockpile and buy more Bitcoin.

[00:26:54] Joe Carlasare: And he stuck Brad Garlinghouse in the corner.

[00:27:01] Preston Pysh: It’s been a little surprising to see like the Brian Armstrong’s and some of the others that came out and we’re like, yeah, no, it really just needs to be Bitcoin in the strategic reserve. I was kind of blown away. I wasn’t expecting that.

[00:27:14] HODL: I think it’s a self preservation thing, because if you try and get the U.S. Government to buy your bags, right. You’re in, you’re heavily traded insider coin bags, illiquid, all coins. Then Elizabeth Warren and the AOCs of the world, when they get power are going to come in and they are going to punish you and they will have another turn at the yoke of power. Right. And it will not be a good day for you when that happens with what the guys like Brian Armstrong want is they just want to operate their business and be left alone.

[00:27:40] So it makes sense why they would come out for Bitcoin like that.

[00:27:43] Joe Carlasare: Can I ask a question you three because I’m interested in this. So you have a stockpile. Let’s just for one second entertain this. The digital asset stockpile that is not Bitcoin. That stockpile under the executive order can be sold. There’s no prohibition on selling it.

[00:27:57] So I guess my question is what is the point of the digital assets stockpile? I mean, that was already the existing state of affairs of government seized a digital quote unquote assets other than Bitcoin. So why did that even get included, Donald? What’s the, you know what it

[00:28:10] HODL: is? Yeah. I’ll tell you what it is.

[00:28:12] It’s a Maya culpa to the industry. That’s what it is. Yeah, but it’s not even that, right? Does it? I mean, well, it’s a fig leaf, right? Like they just, they gave them a trinket. It’s a, it’s a trinket. It’s like an honorary mention like award. Right. Brad was in the room.

[00:28:24] Preston Pysh: He was just facing the corner. He was in the room though.

[00:28:27] HODL: Well, I’ll tell, I’ll tell you another, I’ll tell you another thing here that politically, I think the Lumi bill has a, has a high chance of succeeding. Because I think the Democrats do need to do an about face on cryptocurrency broadly, because they basically attack a diverse, young coalition of rich voters.

[00:28:43] I mean, for no political gain, it was one of the stupidest things they could have possibly done. Right. So they need to make a culpa here and supporting Lummis, in a bipartisan way, supporting the Lummis act would be one of the best may have called was they could do. So that’s why I have like a high degree of confidence that that could actually get through.

[00:28:59] Preston Pysh: Joe, why were you laughing? What was your smirk?

[00:29:01] Joe Carlasare: I just think it’s hilarious. Like it is an honorary mention. It’s like, there was this floating idea out there. I mean, even the president tweeted about acquiring in a strategic.

[00:29:12] And they talked to him off of it, which is Bravo again, to your point, how about David Sachs? I just think it was like, okay, we got all these people coming from the industry. We have to give them something. We have to do something. So we’re just going to label this, the digital asset stockpile, which basically just.

[00:29:25] Does nothing. It’s no different than the existing state of affairs, but now they can say, Oh, there’s a digital asset stockpile for the U.S. Government. They’re not buying any more of it. They could still sell it. They could sell it for Bitcoin, right? There’s nothing to say they can’t dump all the seized Ethereum, which they should before it goes lower and buy Bitcoin. So, yeah, I think it’s hilarious.

[00:29:43] HODL: Well, it’s great because the Ripple guys and their lobbyists were out here acting like real scumbags trying to, basically get rid of the SBR. And so, you get what you get, Brad Garlinghouse. Enjoy the corner seat.

[00:29:55] Preston Pysh: Joe, what do we need to do on this SAB121 to get this fully in the gear, because it seems like Hester Pierce’s announcement was only part of the equation. What else needs to happen? What do you think on the timeline of that before banks really kind of start showing up and doing custody and maybe borrowing lending?

[00:30:14] Joe Carlasare: I mean, so I think this all gets rolled into the market structure bill, obviously, just to update the listeners, right? the SEC did rescind it, right?

[00:30:23] But the SEC rescinding their bulletin, their staff bulletin doesn’t necessarily give a lot of the entities the confidence that a law would, right? And this is always the trouble because if you get guidance from IRS or you get guidance from any regulatory agency, that can change with the wind, right? That can change with every administration and arguably the Congress can change it, right?

[00:30:44] If the Congress decides that they want to go a different route when they pass some formal market structure bill. That too can be an issue. So if you’re an entrepreneur, if you’re a bank, which are by their nature, risk averse, you really want to see something in clear law, knowing that it will be very difficult for any subsequent administration to undo it.

[00:31:01] That gives you the confidence to go forward and actually build out whatever product you’re trying to do. So to me, I think we’re going to have a market structure bill. I definitely keep hearing interest about a stable coin bill. They’ve already held hearings about some of this stuff that I’m sure you’ve followed.

[00:31:14] So I think you’re going to get that. And then the real question is how appointed. Are we going to be able to get things through the Congress? It’s still to be determined on that. I am optimistic as he is. I think that you have seen some indications from Ro Khanna and other Democrats in Congress saying, look, guys, you really need to stop fighting a losing fight.

[00:31:32] There’s no advantage. There’s a John Reed Stark, who is a friend of mine. I know some people don’t like him, but he will tell you, right. There’s no advantage for a Congress person to be anti Bitcoin or anti crypto. It’s not like. You get funded with a bunch of money other than maybe Ripple Labs, you don’t get funded from a bunch of resources if you’re anti Bitcoin.

[00:31:50] So why would you be against this? a lot of the other interest groups that are in Washington, there’s a clear reason because there’s a constituency and there’s money behind it. For example, the pro choice, pro life movement, right? There’s huge interest groups that donate depending on which group you affiliate with. You don’t really have an anti crypto lobby that’s funding tons of money against it.

[00:32:09] Preston Pysh: You don’t think the big banks were initially maybe the funding source?

[00:32:13] Joe Carlasare: Initially. Right. That’s sort of, I mean, I think that’s dissipating with every quarter. I think it’s probably the opposite now.

[00:32:19] You got to remember the banks were instrumental in getting the bill through that Biden vetoed SAB 121. So I think there’s been a clear shift in on wall street, probably with the advent of the Bitcoin ETFs, maybe even a little bit before that, where they’re saying, listen, we want to co op this space. We want to run it.

[00:32:34] We want to kick out the kids and be the adults at the table. And I think you will see that. And to do that, you got to put money behind both Democrats and Republicans to get it across the line and the Congress.

[00:32:44] HODL: It was a totally boneheaded move, and it showed that the Democrats didn’t understand the state of play. I mean, like I said, this is a young, diverse coalition of informed voters who are going to be a factor in elections for the next 50 years. So, why antagonize them? Makes no sense politically.

[00:33:01] Preston Pysh: What are your thoughts on stable coins moving forward here? Are the banks wanting to play in this space? I would imagine the answer is yes. But, what do you guys think there?

[00:33:10] Joe Carlasare: Well, you saw today that the Senate banking panel advanced the stable coin bill. It’s the, The Genius Act, I think it’s called. So that’s the leading bill in Congress, which if that language passes up, tether is going to have to comply, which is going to be a tall order and otherwise they’re kicked from us exchanges. So that’s a really interesting story given tether still has a huge footprint in our space. So that’s what I’m looking at right now.

[00:33:32] Preston Pysh: What do they have to update in order to comply?

[00:33:35] Joe Carlasare: Well, they’re going to have to do more record keeping and disclosures with respect to their holdings, that we don’t have as much insight.

[00:33:41] We have some sort of indications at the margins, but that’s the real big one that I think that they’re resisting. And, but you got five Democrats on the panel. I was just pulling up Warner, Andy Kim, Galea, the new Senator from Arizona, and also Brooks and Bill Hegarty, all of them voted to advance it. So that’s bipartisan.

[00:33:58] It’s going out of the Senate floor and it’s the bigger hurdle. So that’s the real key. If we can get it through the Senate, they literally say in the press or today, crypto is not crypto is nonpartisan. So it’s interesting. We’ll see if we get it through stable coin bill signed by the president is massively bullish. I can’t overestimate how important that will be getting through.

[00:34:17] HODL: I think it’s pretty crazy too, that it’s now smack dab in the middle of the Overton window, pretty niche conversation that we’ve been having for the last 10 years, that stable coins enhanced dollar hegemony. That was something that we believed as people in the crypto ecosystem and Bitcoin, but to hear it from directly from the White House is pretty surreal and shows that we’re in a totally new era of the crypto ecosystem.

[00:34:40] Preston Pysh: Yeah, Jeff?

[00:34:42] Jeff Ross: Yeah. I mean, it’s another thing that feels inevitable, right? It’s interesting tether and these USD coins, they have fans in the government because they’re buying a ton of treasuries, right? They’re what top 20 in the world now for treasury purchaser, which is pretty amazing. It’s the most incredible business model I’ve ever seen.

[00:34:59] Tether is literally, it’s just an unbelievable how much money they make per employee. And then third Bitcoiners like it because tether they’re buying Bitcoin on their books too. So they’re playing their cards very well. It’s coming, for sure. I don’t think anything stops it at this point.

[00:35:13] Preston Pysh: Hey, Joe, you sent over something about the SLR and basically using the SLR like a switch.

[00:35:20] Did you want to cover this at all?

[00:35:21] Joe Carlasare: So there is a liquidity ratio, okay, that banks have to maintain and one of the well regarded. Accounts that I follow. I think I know who it is, but I’m not going to say the, he’s conks on Twitter. He’s got a huge following. He’s got a sub stack. He’s talking about the rumors that he keeps hearing in some of the shakeups at the Fed and the potential that they exempt treasuries from the liquidity ratios that imposed on the banks.

[00:35:46] And if they were to do that, that would instantly improve liquidity in the system. It would create no disincentive for holding treasuries. And the real rationale behind exempting treasuries is because they are money good, because they’re backed by the full faith and credit. Why are we counting them against liquidity ratio of the underlying institution?

[00:36:03] So if they were to do this, right, this could be one of these, he calls it a plumbing put that would be in place in the system and it could be a better way to provide liquidity to the market in an environment where you’re still dealing with relatively high inflation, closer to 3 percent than 2 percent and you’re going to have to roll a bunch of debt.

[00:36:19] So you’re going to provide an implicit buyer for all these treasuries in this market, which is the banking institution and you telling them it’s not going to hurt your equity ratio.

[00:36:28] Preston Pysh: So, in short, it’s kind of a gimmick to free up the amount of holdings that the banks have to have, which then puts more liquidity into the system.

[00:36:37] Effectively, yes. The snap of a finger. Okay.

[00:36:40] Jeff Ross: Seems like a no brainer, doesn’t it?

[00:36:41] Joe Carlasare: Oh, yeah. No, I mean, I think it is. I’m surprised they haven’t done it so far. And yeah, I mean, I think it’s one of those things where you don’t see it. It doesn’t get a whole lot of big headlines, but you’re looking at why is the market functioning a little bit more liquid?

[00:36:52] It’s got a little bit more of an implicit bid there from certain markets. One of those things that could have a big effect going on for the next 6 to 12 months. We also want to get some guidance from Besson with the next QRA if he’s going to finally move off the yelling game of a lot of short term paper.

[00:37:07] That’s going to be huge, right? That’s going to be a market moving event, which I’m watching closely.

[00:37:11] Preston Pysh: Lyn has talked about adjusting the SLR quite a bit. Is this just an adjustment to it or is what this guy’s proposing bigger than just…

[00:37:20] Joe Carlasare: No, it’s adjustment to it.

[00:37:22] Preston Pysh: Yeah. Okay. All right. HODL what’s on your mind. What do you want to make sure we cover?

[00:37:27] HODL: Well, something that’s been interesting to me here is I think that sentiment in Bitcoin land has been just horrific. I mean, people have been crying over what is basically nothing. It’s a normal correction here. And I was wondering to myself why this is. And I think the, the reason is that the nominal has gotten so sky high that if you have one Bitcoin and we have a 20 percent correction, you’re now missing 25,000. Right?

[00:37:54] Like where did that 25,000 that’s, that’s a car. You just lost a car. So I think this is driving a lot of the enhanced. Or, sort of a hysterical sentiment in the market, because the fact that if you check the crypto fear and greed index, we’re at extreme fear. Now makes basically no sense. If you’ve lived through some of these market cycles and it makes me think like, okay, is everybody here a new market participant and they just don’t understand how these markets function or is a lot of this OGs who are selling their coins because they are just the nominal is too much. They’re worn out.

[00:38:28] There’s some data on this that says like hodlers from the last five years have been rotating out around 100k. Maybe you don’t really consider that an OG or whatever, but like in on chain data terms, we do consider that an OG.

[00:38:39] Joe Carlasare: What is the threshold?

[00:38:40] HODL: So that’d be class of 2020.

[00:38:43] Preston Pysh: You know, what I find interesting HODL is I’ve talked this a lot too, is if you hold for any four year holding period, the returns are pretty impressive. And if you look at that four year holding period right now, like you go back four years from now, it’s really bad.

[00:38:58] It’s maybe up like, I don’t know, 20 percent or 15 percent or something like that.

[00:39:03] Joe Carlasare: Which is really not in real terms either. Just not right.

[00:39:07] Preston Pysh: And just percent.

[00:39:08] HODL: Yeah. So that’s what I was going to bring up is that I would say we haven’t even started a bull market. Not even in a bull market. There is no bull market, right?

[00:39:15] We all were getting giddy at the anticipation of a bull market, but it’s not here because we basically are, if you’ve held a hundred percent of your net worth in Bitcoin, you’re flat since 2021. That’s pretty rough at this point in time, but I mean, we expect it to change going forward, but like right now it’s kind of, it’s not great,

[00:39:34] Joe Carlasare: Yeah. So the chart that, I don’t know if you could pull this up, Preston, it’s a fun one. Kurt Demeester tweets it out occasionally, so I’ll credit him on it. He puts Bitcoin. I measured against gold, right? And you see, basically there’s this, it’s like five year long top, right? That we need to break through.

[00:39:50] And his view is that you need to break that top, that Bitcoin gold ratios. There you go. You got it. Oh, you already had it ready. Okay. Yeah. So that’s Bitcoin express and gold. So you see this, like if you’re a 2021 or even like, say you got in 2020 right there before that top, you’ve been basically bouncing up against that top in real terms, that’s why you put in gold as opposed to just nominal.

[00:40:12] I know true true inflation says the all time high of Bitcoin prior to the, the one we reached after Trump one, it was already like 76, 77. So to get back to where you were in 2021, in the spring and fall, you basically needed to get to 76. So, we’re sitting just over 81, that, I mean, it’s okay, but it’s definitely not a bull market.

[00:40:32] Preston Pysh: This really is a better chart than comparing it to the dollar or any other fiat currency. Like this is a great chart comparing it to gold. I think.

[00:40:42] HODL: Yeah, beause it helps you get rid of all the monetary, the money illusion.

[00:40:46] Joe Carlasare: Yeah. The other one, if you could put up, I don’t know, he doesn’t point it out, but put up Bitcoin against SPY. That’s a fun one. I look at frequently, I don’t know if you can just put in the Bitcoin USD over SPY. So you’re getting a context, right? Like, so relative to people who their preferred store value is the SP 500 ETF. I think it paints an interesting picture as well.

[00:41:05] Jeff Ross: I think it’s more fun to do SPY over Bitcoin. So you just watch this super sad, down into the right.

[00:41:11] Preston Pysh: Yeah. I think that’s what it is. HODL. I think it’s when you look at the four year period, which has always just had like amazing returns, you’re just seeing something a little different right now.

[00:41:21] Joe Carlasare: That’s very true. Also. Yeah. So you see that, like, I like this chart actually.

[00:41:25] So you’re looking at basically just for the listening viewers, you see us, we’re kind of basing at the all time high back in 2021. And of course, if you’re holding spy, you do get a small, tiny little dividend that they pay quarterly or whatever it is, Jeff, right? What is it like?

[00:41:41] Jeff Ross: 1 percent or something.

[00:41:44] Joe Carlasare: Yeah. So you can make the argument like you’re basically just keeping pace with spy.

[00:41:47] Preston Pysh: Oh, man, that’s a good point. Okay. So Jeff, what topic do you want.

[00:41:51] Jeff Ross: Deal is 1. 26, by the way, on the spy. I love all this, by the way. And I look at the gold, the big, or the Bitcoin, the gold chart. I think that’s about once a week, just to be oriented.

[00:42:01] Do you have the true inflation chart?

[00:42:03] Preston Pysh: I do not, I do not have that.

[00:42:04] Jeff Ross: It is unbelievable.

[00:42:06] Preston Pysh: Let me see if I can find something, but yeah, go ahead and talk it.

[00:42:09] Jeff Ross: So all I hear from people are people in mainstream media screaming that tariffs are inflationary. And I say, take a look at the trueflation chart that shows us inflation is currently at, according to trueflation and you’re popping it up here, I think it’s 1.37%. It is just falling off a cliff, right?

[00:42:28] HODL: Hey, Trump did the Fed’s job for them. That’s good.

[00:42:30] Jeff Ross: He did. And this is part of why I think people might be surprised to the upside that the Fed might be lowering the federal funds rate more than people are giving them, are anticipating. Data come with the current data, the way it is inflation, just ripping lower right now.

[00:42:48] It’s making their job easier that they don’t have to like be battling with Trump. They can be like, look, unemployment’s creeping a little bit higher. Rates are coming down. Inflation is tanking. Maybe we should think about lowering the federal funds rate a little bit.

[00:43:00] Joe Carlasare: Well, Jeff, what’s great about this chart is that so unlike the government CPI numbers, it just for the listeners, this trueflation, which we’re showing the trueflation charts, it shows that in 2022, when the Fed was doing the rapid emergency 50 bit pikes on successive basis, we got up to 11 percent inflation.

[00:43:17] Now I believe, correct me if I’m wrong, the actual government stat for CPI was in the eights. Is that right?

[00:43:23] Preston Pysh: Yeah, it was like seven or eight, somewhere in that range.

[00:43:25] Jeff Ross: I thought it was nine.

[00:43:26] Joe Carlasare: But the point is true inflation. In my view, it tends to overestimate the inflation relative to CPI. Okay. Not relative to overall debasement, but relative to CPI, it tends over. So if they’re printing 1. 3 or 1. 4%, it could actually be lower with CPI stats. You have CPI coming in even lower than this, which is fascinating, but here’s your transitory inflation right here.

[00:43:50] Jeff Ross: Hit 9. 1 percent in June of 2022.

[00:43:53] Joe Carlasare: Okay. Yeah. See, so they, they have an 11 much higher.

[00:43:56] Jeff Ross: But I think what I want to bring about is all of these tariffs and these threats and this stuff, and doge and all these kinds of things, we are being forcefully ejected from fiscal stimulus and markets do not like being meddled with. And they are being strongly meddled with right now.

[00:44:13] So there’s tons of chop. There’s tons of uncertainty. People are very upset. Markets are tanking, overvalued stocks like the mag seven are tanking. And I just think that this is what happens. Like, so people who say first order thinking that tariffs are inflationary, they’re not. Second order effects are the market does not like to be meddled with it drives the economy lower, a lower economy leads inflation.

[00:44:37] And right now the economy is leading inflation lower. And so until we see a change, and I think we’re getting close to a change, by the way, I think we’re getting close to a bottom because I think the news is going to start shifting and we’re going to start surprising to the upside with economic surprises, economic indicators. But anyways, this is my answer for people who are yelling at me saying, and tariffs are inflationary. They’re not.

[00:44:54] Joe Carlasare: So Jeff, do you, or anybody else, does anybody expect? As we’re sitting here, March 13th, unemployment to start ratcheting up higher. I mean, there are federal jobs that are being cut, right? Like, are we going to see unemployment bearing down on 5 percent by the end of the year?

[00:45:09] Jeff Ross: If I had to guess, I’d say it’s going to trickle a little higher, but not go get out of control. So I don’t know what’s at, what’s at 4. 0 or 4. 1 right now, maybe up to 4. 3, 4, 5 at the most. I don’t think it’s going to spiral out of control personally.

[00:45:23] Joe Carlasare: Preston, any thoughts? I’m trying to pull up the chart right now, just to see what the trend has been. I don’t have an opinion off the top of my head.

[00:45:30] HODL: So there are people, just anecdotally, there are a lot of people talking about layoffs and layoffs are a big deal and people are forecasting more layoffs, et cetera. But if I had to guess, I would say that I agree with Jeff’s take will be largely flat.

[00:45:43] Jeff Ross: You must have a point to that question, Joe.

[00:45:45] Joe Carlasare: Well, I’m just curious. Look, so we have the treasury secretary going out and saying that the economy has started to roll a bit, right? And I’m just quoting his statement. He’s saying it’s starting to roll a bit. He’s also said, as have others in the administration, that, look, if we start to slow down here, if we contract or potentially head into a recession for the next six months, it’s the Biden economy.

[00:46:05] It’s not the Trump’s economy, right? It’s not Trump’s economy. So I don’t think they make statements like that. Maybe it’s kind of an insurance policy, like a hedge, you’re making that statement in case anything goes wrong. But they have to realize that, when you make those sort of statements, people get jittery and they get a little nervous and then you get these growth scare discussions that we have on these podcasts and other podcasts.

[00:46:25] So I’m, I’m just curious, are they seeing something in the data that gives them pause where, perhaps we are headed for a real strong slowdown and if that’s the case, then asset prices are going to get hit, at least in the short run. So I’m just curious if anybody believes that narrative or, I mean, when we were last talking, it seemed like Jeff, that you were more in the camp, that that’s real, but that’s not just baseless that we could see that sort of slowdown materializing in the actual, growth weakness.

[00:46:51] Jeff Ross: Yeah. So I had like my two days of panicking where I’m like, Oh my gosh, they’re actually intentionally throwing the kitchen sink at the economy. And then I spent, so after we had that show, Joe, I, the next day I turned off everything and I just studied the data, like got all my autism on like full cranked up to 11.

[00:47:08] And I’m like, exactly, exactly. Like, no, nothing distracting me. And I looked at it. I said, you know what? They’re front loading the bad news, right? I think we all agree on that, but they don’t have enough. in their arsenal to really tank the economy. And then when I was looking at all of my other indicators, I think everything is overblown right now.

[00:47:26] There’s way too much fear. And regarding unemployment, that tends to lag the economy. It’s a lagging indicator by about six months or so. And so when I see the current numbers that come out, I look back at the ISM about six months ago and say, where was that? And so if we look back in, I think in August, September ish range.

[00:47:45] I think that’s about when we hit a kind of a shorter term low in the ISM. And then it has been creeping higher ever since. So because the Fed looks at that, that gives them fodder to be more dovish, but looking ahead, as we do as investors, everything looks bullish. In fact, one of the things I was just looking at earlier today as CEO confidence, it had a little dip and then it shot higher again in February, the reading we just got.

[00:48:08] CEO confidence is hugely important as a leading indicator because it tells CEOs are the business makers and the decision makers. They’re the ones deciding should they hire or not. They’re the ones saying, do we spend more money to grow our business? Temp services are off the charts high. Overtime workers are off the charts to the upside.

[00:48:27] All of that, those are all leading indicators saying we are going to grow as an economy heading forward. And we’ve probably bottomed right around now.

[00:48:34] Joe Carlasare: So you’re saying we actually are entering Raoul Pal’s, the banana zone, like it’s still coming. The banana zone is,

[00:48:40] Jeff Ross: I actually do think that, yeah, I mean, I think like we all say the bull market hasn’t started, it’s going to start and it’s going to be one of these moves again that we’re all like, I can’t even believe this is happening. This is crazy.

[00:48:50] Joe Carlasare: Including the alt coins and all that. They’re all going to run.

[00:48:52] Jeff Ross: Yeah.

[00:48:53] Joe Carlasare: Ethereum?

[00:48:53] Jeff Ross: I sure hope not, but who knows.

[00:48:55] HODL: Talk about that period is without narrative. They need to find it.

[00:48:58] Joe Carlasare: We got to talk about that. That, I mean, that’s amazing. Preston. You’ve been in as long as you have, right? Like the Ethereum narrative has come.

[00:49:04] Preston Pysh: Oh, it’s closed. Yeah. Well, I think, it’s interesting. I remember, Oh man, maybe it was 2019, 2020. Adam back. I was having a conversation with him and a couple other people. I forget what we were talking about. It’s just far as smart contracting. Oh, I remember what it was, Binance had just came out with their smart chain, basically their Ethereum, their version of Ethereum.

[00:49:27] And we were all having a conversation about it. And I just remember Adam saying, I just don’t see how Ethereum is going to be able to compete with them because they’re talking as if they’re decentralized as well, but they’re clearly more centralized, which is an advantage in this particular space. To be more centralized.

[00:49:46] And I don’t think that anybody participating in these markets actually even cares whether it’s decentralized or not. And as a result that nobody really cares, I think that they’re going to outperform Ethereum and that they’re going to be kind of caught in this no man’s land or dead zone. Of competing against the more centralized version.

[00:50:03] That’s going to be faster and cheaper and all these things, but not actually decentralized at all. But since nobody participating in these markets even cares about that, they’re going to cater to people that want that. And they want more programmability, but they don’t even care that it’s not decentralized.

[00:50:22] Sure enough, here we are, it’s probably, I don’t, I don’t know what, again, I think it was maybe five years ago or four years ago that we had this conversation, but here it is playing out in full steam where Ethereum was trying to be somewhat decentralized and somewhat, not as centralized as the other solutions and they’re just getting clobbered by Solana or BNB or whatever.

[00:50:45] Joe Carlasare: The big problem with Ethereum here is that it pushes costs onto the users and the users are just getting squeezed out because they can’t afford these costs anymore. And so people are fleeing to greener pastures, et cetera, greener pastures in quotes, in air quotes. to me, it’s fascinating to look at the price though.

[00:51:01] The price is the real indicator here, because it is down. 50 percent in Bitcoin terms over the last like six months or something. Yeah, it is just absolutely getting clobbered. Bitcoin’s at 80k Ethereum’s at under two grand or something right now I mean last time during the bull market when Bitcoin was at 69k, Ethereum was like approaching 5, 000 and here it is under two

[00:51:21] I think that this is this is I think drawing on the sentiment right the sentiment is really bad even in the Bitcoin circles Because if we’re honest, right, a lot of quote unquote Bitcoiners, they lever up on the old coins going into quote unquote bull markets and the all coin complex is just completely imploded.

[00:51:38] So those people are seeing like horrible losses across the board that would have been better off just probably buying Bitcoin. And it even comes through some of the Bitcoin proxy plays like the miners are just, really struggling even MSTR, right? The darling of last year, man, what a brutal year so far with MSTR. Hopefully that rebounds.

[00:51:56] Preston Pysh: The thing that I find really interesting about the whole BNB or Ethereum or any of them, right, is the only use case that has popped out of all of this after all of these years is tokenizing sovereign debt. That’s the only use case. I haven’t found a single use case beyond tokenizing fiat is what it does.

[00:52:17] Joe Carlasare: Well, gambling with the meme coins, gambling.

[00:52:19] Preston Pysh: Well, I would just say that that’s just rug pulls, right? Just rug pulls on a token that literally represents just a person’s name or something silly or funny that Dave Portnoy can make a coin. That’s what was a jail coin or something like that, or prison coin.

[00:52:34] I don’t even know what it was and he talks about it. And then just rug pulls his entire audience or, I don’t even know what actually happened there. I see stuff on Twitter or X or whatever on the fringe. That I don’t even see as a use case. I just see that as a scam. And then the use case is just tokenizing sovereign debt.

[00:52:52] And so when you think about the act of tokenizing sovereign debt, let’s call it Tether. Let’s call it USDC. They’re the issuer that are buying and underlying, and they can claw that back if they want to since they’re the issuer. And then on top of that, you have BNB or Ethereum or whoever that can also get the tap on the shoulder.

[00:53:15] If they don’t like what’s being issued on top of it or roll it back, like, look at that. The last thing in Ethereum where there was a serious conversation as to whether they were going to roll back this supposed North Korean hacker that. What was it? A couple billion dollars that was hacked. And I mean, there was a serious conversation about rolling back the chain.

[00:53:39] So when I’m looking at that, I’m just saying to myself, okay, so how can anybody, especially when you get into like governments that are making decisions about a quote unquote, strategic stockpile of this stuff, how can they take a strategic stockpile of these tokens that are clearly just centralized garbage?

[00:53:57] That are just enabling a turnkey way to tokenize sovereign debt. And this isn’t my pitch to create a CBDC by any shape of the imagination. I’m just looking at it from, I guess, from afar and saying, like, what’s the value of the underlying token other than just kind of using it to fund or to, they call it gas fees in Ethereum to fund the continued use of these turnkey ways to tokenize sovereign debt. I don’t know if you guys have an opinion on that or not.

[00:54:28] HODL: In theory, they should fall to their utility value. Most of these platforms have absolutely no users. People are just not using these things. Now the average DAU or NFT project, it’s a ghost town. It’s like Google plus remember Google plus there’s no one using that thing.

[00:54:44] It’s propped up by all these bad monetary incentives. And so I don’t see any reason why ethereum will continue and Solana will take its place and then something will cannibalize Solana and add infinitum forever. That’s the thing that makes Bitcoin special is Bitcoin’s not a part of that conversation.

[00:55:00] Preston Pysh: What are your thoughts on tether saying that they were going to use the taproot asset protocol to tokenize tether sovereign debt over the lightning network? Any thoughts there?

[00:55:10] HODL: I mean, it’s pretty interesting, right? Like we would expect that people would want to be closer to Bitcoin as Bitcoin continues to be the monetary center of this universe.

[00:55:18] So, yeah, I mean, it would make sense that things would want to be as close to Bitcoin as they possibly could. So I think right now it’s kind of like small ball for tether, but we’ll see if that program grows for them over time.

[00:55:28] Preston Pysh: Yeah. I think it is too. I’m just looking at it from an engineering standpoint. And it’s like, well, it should be able to route it faster and it should be able to route it with lower fees than any of these other. And I think with time, you’re going to have much better reliability with more nodes on the network. And it’s super cheap to run nodes where if you’re doing Solana, it’s basically the foundation that’s running all the existing nodes. So I don’t know.

[00:55:50] HODL: I think this is an important point for the average investor, which is basically that there’s nothing that you can do on an altcoin that you can’t do on a Bitcoin side chain. Pure and simple.

[00:55:58] Joe Carlasare: So educate me on this because I had always heard right or wrong that right now, lightning, although it’s really promising, obviously I’m very excited about it. It can’t hold, can’t withstand a billion dollars of transactions on it recurrently. Is that true?

[00:56:10] Preston Pysh: It comes down to that? It comes down to the channel capacity. So like, if you and I wanted to open a, a hundred Bitcoin channel, we can do that. And then you have all that capacity in order to conduct those transactions between the two of us.

[00:56:24] But to conduct transactions beyond that with another node, that node has to be able to match your channel capacity or else we have to find a bunch of channels that are out that all. So right.

[00:56:35] Joe Carlasare: If so, there’s got, I think, what is it? 140 billion market cap. If they wanted to deploy, let’s say 10 percent of that on the lightning, how challenging do you think that would be from an engineering perspective?

[00:56:46] Preston Pysh: The taproot asset protocol doesn’t need that capacity in Bitcoin in order to set up this channel. So if we’re set up, Joe, as far as a connection on the network, we can route tether tokens through that without that monetary value being represented in Bitcoin. That shouldn’t be a concern at all.

[00:57:04] Joe Carlasare: And those tether tokens are running on a separate lightning?

[00:57:08] Preston Pysh: It’s running on the taproot asset protocol, which was developed by Lightning Labs.

[00:57:12] Joe Carlasare: Awesome. That’s cool.

[00:57:14] Preston Pysh: Yeah. So I don’t know. I think it’s really exciting. I’m excited to hear that they’re getting ready to stand that up and to, to start routing tokens there.

[00:57:22] And I think that overall it just makes the network more robust. And I think it also creates more incentives for people to run Bitcoin lightning notes. So yeah, we’ll see.

[00:57:31] Yeah, go ahead, Joe.

[00:57:32] Joe Carlasare: So, just to pivot one, one sec, because I always love talking to all three of you, but in particular, Dr. Jeff, while I’ve got him here on record, I want to know, as you’re going forward for the next two weeks, we get some new data here. And just to close out with this, what are you going to look at that would give you real concern? If our listeners are diving into this episode here and they look at some of the economic data that comes down, what in particular are you going to say, okay, this one’s a little bit worse than I expected flipping back to Dr. Bear.

[00:57:58] Jeff Ross: So it’s kind of just everything. Let’s see what would make me bearish. It’s hard to think about what would make me bearish right now. So if the PMI data came back and it looked like the economy truly, so that’s what we were talking about. Like when I see actual data showing the economy is actually slowing. I would get concerned.

[00:58:15] If services, went well below 50 PMI services, if an ISM, both of those manufacturing went lower, if CEO confidence turned way, which would be crazy because it like jumped higher up to like 60%, which is a pretty high reading right now.

[00:58:31] Preston Pysh: Yeah.

[00:58:32] Jeff Ross: I don’t know what would make me bearish right now. I mean, I’m very bullish right now. I don’t really know how to express it.

[00:58:39] Preston Pysh: I think this is an important point for people listening is anytime I’ve talked to a really talented investor, because I used to ask these questions and people was like, all right, give me the one metric that is more important.

[00:58:51] That gives you 80 percent of the value with 20 percent of the effort. They’re always so hesitant to answer that question because it’s a confluence of multiple factors that really kind of build a picture. It’d be almost like telling an artist or somebody that you can only paint with one color, but you want to understand what it looks like in a full range color picture, right?

[00:59:11] It’s literally impossible to do unless you’re doing the confluence of all these different factors that are pointing towards a common picture. I really liked the couple that you did highlight, Jeff and Joe, right back at you. Do you have any confluence of factors that you think would be important? Kind of looking, moving forward, that would be?

[00:59:30] Joe Carlasare: I mean, for me always, I think that there’s so much signal provided by the bond market.

[00:59:34] So if you see yields getting bid hard, okay, that is telling me that is the bond market. Processing most likely a combination of falling inflation, but also the kicker of slower growth. Okay. Which I think is concerning, right? It’s always, always about the rate of change. So if you wake up in two weeks and the 10 year is suddenly below three, seven, something.

[00:59:57] I’m like, that’s real bad. Okay. That’s not just inflation. There’s, there’s a growth expectation as being priced through that mechanism that, and of course, spreads, right? I look at spreads very closely. It’s on my routine checklists on my trading view charts. I look at that, the high yield market, because that’s really the first signs of stress.

[01:00:12] And you see that moving again, we showed the chart earlier. We don’t need to bring it back up, but to me, that is in particular, the key message you want to look at. And also the yield curve, right? The yield curve has been uninverted. I think that is, basically been pricing in some of the growth issues we’ve been talking about.

[01:00:28] And I think that it’s pricing in the inflation being, successfully brought down closer to target. But overall, those are the three things I’m going to always be looking at on, on my charts.

[01:00:36] Jeff Ross: Nice. I like to tell people too, on this new channel, what I’m using is. The economic data is great, but what do you do practically? Like as a fund manager, if you’re managing your own portfolio, I like to just really come clean with people. So like, say, I don’t know what, when this is going to get released, it’s March 13th right now, but say, in the coming weeks, Bitcoin chops sideways and dips as low as 70K, which I think is actually possible.

[01:01:00] Personally, I will be buying those dips with veracity. I’m running low on cash, personally, and my fund, I will probably be borrowing to buy more using leverage, which I don’t recommend to anybody. But as a fund manager, it’s not that unusual to use margin. But that’s the kind of things I do when I’m very strongly convicted about something, especially macro related.

[01:01:21] When I see these positive divergences forming in RSI, so technical divergences, As well as global M2 and dollar based divergences, where the price is going lower, but those things are all moving in the right direction. That gives me a lot of confidence that the next major move we’re going to see is going to be to the upside.

[01:01:39] So that’s what I do practically.

[01:01:41] Preston Pysh: Love it. HODL, anything to close us out with?

[01:01:43] HODL: I think it is likely that we get a down move on Bitcoin, which I’m only saying so that it doesn’t happen. So this is a reverse psychology. So now that I’ve said that it can’t happen, but it will happen, but it might not. So think about it.,

[01:02:01] Preston Pysh: Oh, you’re going to be right in there somewhere.

[01:02:03] All right. Guys, this is always a pleasure. I love picking your brains and I just love the plenty of different takes in multiple different directions. And the fact that you guys don’t mind making yourself vulnerable in some of your takes and positions and I think that that’s just really helpful.

[01:02:20] I know it is for me personally, and I’m sure it is for people listening. So thank you so much for making time. Let’s go around the horn. And if you have anything you want to promote or point out, do it right now. HODL. Do you have anything?

[01:02:30] HODL: Join Nostr. Set up a Primal wallet. It’s great. Join Nostr. It’s very easy. It’s not that complicated anymore. Primal makes it really simple.

[01:02:38] Preston Pysh: It is really good. I agree. Download Primal.

[01:02:42] Go ahead, Jeff.

[01:02:43] Jeff Ross: This has been great. I don’t care if you follow me or not, but I also agree that you should join Nostr, buy a Bitcoin. I don’t want any more fun people. So don’t join my hedge fund. I’m not looking for patients. Don’t come find me. I just want to live quietly in my little office here.

[01:02:59] Preston Pysh: Joe?

[01:03:00] Joe Carlasare: Yeah. you can Google my name, Joe Carlasare, and you see my firm website. If you have a litigated matter, I’ve got tons of cases, but I will absolutely talk to you. And if I don’t know how to help you, I can definitely refer you to the right person. But I want to leave you with something important here, which is that.

[01:03:15] I do believe that some of the pullback in Bitcoin is clearly due to the macro complex, this broad sell off of risk assets. There are just fund managers that dump it all when the price is moving against you. So you should look at that, if you’re listening to this, as an amazing opportunity. I feel bad when I see people like depressed about the price here because, well, why didn’t we get the SBR pump?

[01:03:35] Why aren’t we above 130k? Why aren’t we doing this? The reality is that you have a levered market across the risk complex. And when a huge chunk of it, like the S&P, the gold standard of this time, right? Starts to sell off. It’s going to pull Bitcoin down. Hey, Bitcoin cannot, it’s not strong enough. It’s not big enough. It’s not liquid enough to just stand on its own in the face of what you were showing Preston, which is like really strong headwinds of global sell offs.

[01:03:57] Take advantage of that, use that, within reason. I don’t recommend leverage, but there are people out there that have been waiting for a good entry. And yeah, can Bitcoin go to HODL’s target of 55K in the next week? I don’t know, but even if it doesn’t, right, these prices are great. I think I was excited.

[01:04:11] I was buying Bitcoin, full disclosure, and I hadn’t bought some since I think the 40 to 50K range before, but I’ve been deploying capital and I’m excited. I don’t think the pessimism is justified. We still have a strong economy and eventually the president’s going to settle down and we’re going to get going again.

[01:04:26] Preston Pysh: I like that.

[01:04:27] Jeff Ross: Can I just plus one, what Joe said about the fund, different types of funds and fund managers, when technical indicators point in a certain direction, tons of funds just automatically sell to Joe’s point.

[01:04:38] So take advantage of it and don’t get scared off by it. Momentum based funds, when it goes below certain levels, they sell. When technical indicators do something, they sell. When volatility spikes, they sell. That is your buying opportunity. Take advantage of these opportunities. Plus one, Joe. Good point.

[01:04:54] Preston Pysh: I love that close out. Bravo, Joe. Bravo, Jeff. And, HODL, we will not forget your very, very important guidance that you gave before we, threw this over.

[01:05:05] Guys, thank you so much. This is always a blast and can’t wait for the next one that we do.

[01:05:10] Jeff Ross: Thanks, Preston.

[01:05:10] HODL: Thanks for having me, man.

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