TLDR;
This podcast episode features a discussion about the crypto market, including past trades, macroeconomics, and potential future trends. The hosts share insights on a recently closed short position on Ethena (ENA), analyze macro events like employment data, CPI, PPI, and Jackson Hole, and discuss the potential impact of these events on the market. They also touch on the dynamics between countries like the US, China, and India, and the implications for the crypto space. The episode concludes with a discussion on altcoins, Bitcoin dominance, and specific coins like XPL.
- The hosts review their past trades, including a successful short on Ethena (ENA).
- They analyze recent macroeconomic events and their potential impact on the market.
- The discussion covers international relations and their influence on the crypto market.
- The hosts share insights on altcoins, Bitcoin dominance, and specific coins like XPL.
Intro [0:00]
The hosts greet their audience and mention that they will be discussing their backlog due to not having a podcast last week. They acknowledge their viewers and express gratitude to those who said hello at a recent event. They joke about Coinfest and extend an invitation to Coinvest. They remind viewers to subscribe, like, share, and comment on the video.
Ethena (ENA) Trade Review [1:57]
The hosts discuss a previous heated debate about Ethena (ENA), where one person was long and another was short. One of the hosts mentions closing a short position on ENA after the price dropped, using FOMO levels as a basis for the trade. Both hosts acknowledge making a profit on the trade, with one achieving TP plus SL plus. They mention comments from viewers and discuss future trade plans, including longing Ethereum and Bitcoin, and looking for RSI divergence to identify potential short opportunities in pumped tokens.
Macroeconomic Update [7:59]
The hosts transition to a discussion about macroeconomics, updating viewers on events from the past two weeks, potentially stretching back a month. They mention the ups and downs of sentiment related to employment rates, the probability of a rate cut in September, PPI data, and Jackson Hole. One of the hosts provides an update on employment data (NFP) revisions, the firing of the BLS director, and the CPI, noting that the CPI supports the Fed's September cut. They explain the Fed's dual mandate of price stability and maximum employment, and discuss concerns about a potential economic recession if the Fed delays interest rate decisions. The PPI data is discussed, with a focus on the impact of tariffs and the market's reaction.
Jackson Hole and Market Reaction [12:47]
The hosts discuss Jackson Hole and the market's reaction to it. They mention that after positive sentiment from NFP, CPI, and Jackson Hall, the market dropped again due to news, including Wales selling Bitcoin. One of the hosts believes Jackson Hall is key to the fourth quarter, noting Jerome Powell's explanation of adjusting policy based on labor force data. They suggest the Fed is dovish, which should support a bullish market, but acknowledge that the market doesn't always align immediately. They use Nvidia's earnings report as an example of how news doesn't always lead to immediate positive reactions.
International Relations and Economic Impact [17:40]
One of the hosts shares insights on international relations, noting that Donald Trump's trade deals are starting to show good results with Europe, and he's getting better at meeting with Putin. They highlight the dynamic between countries like the US, China, and India, with the US pressuring India for enabling Russia's economy. They also discuss Trump's stance on Chinese students and the economy. They mention that the Fed is softening its stance, and the time for change is near. They also touch on a recent announcement about the American government not buying Bitcoin.
Nvidia and China [24:52]
The hosts discuss Nvidia and its relationship with China. They mention that Nvidia was prohibited from selling its most advanced chips to China, so they created a less sophisticated chip for the Chinese market. However, China hasn't bought the goods, leading to Nvidia's performance not being as good. They discuss regulatory factors, tariffs, and the possibility that Huawei can now make similar chips, leading China to prefer using its own technology.
September Rate Cut and Market Manipulation [28:41]
The hosts discuss the likelihood of a September rate cut and its potential impact on the market. One of the hosts believes a September rate cut is likely, but the market will be volatile and manipulative due to option contract expirations. They mention that institutions like to manipulate prices closer to max pain for expiring options. They also discuss the importance of NFP and CPI data in September.
Federal Reserve and Economic Projections [32:36]
One of the hosts shares their screen to show the Federal Reserve's summary economic projections (SEP). They explain that the biggest question is whether there will be three rate cuts, and this depends on labor data and CPI. They highlight that changes to the SEP can influence the market to move in a bullish direction for the rest of Q4. They note that the only meeting where the Fed will change its SEP is in September.
Market Sentiment and Investment Strategies [38:59]
One of the hosts expresses a lack of fear, stating that new money will continue to flow into the market. They believe that rate cuts and fractional reserves will make borrowing cheaper, encouraging people to borrow money. They advise against entering the market during periods of high volatility and suggest spreading investments across multiple points. They also mention the importance of the Reverse Repo Program (RRP) as an indicator of liquidity in the market.
Reverse Repo Program (RRP) Explained [46:18]
The hosts explain the Reverse Repo Program (RRP) and its significance. They describe it as a tool used by the Fed to set the minimum interest rate in the market. They note that the amount of money lent to the Fed through the RRP is decreasing, indicating that people have more opportunities to borrow money elsewhere and that the climate is not one of fear.
Bitcoin Wales and Ethereum [50:55]
The hosts discuss a tweet about Bitcoin Wales dumping Bitcoin and switching to Ethereum. They analyze whether this is a sign that even Bitcoin Wales isn't seeing much upside in Bitcoin and will instead be trading in favor of altcoins. One of the hosts believes the sample size is too small to draw meaningful conclusions. They also discuss Bitcoin dominance and the potential for a rotation towards altcoins.
Bitcoin Dominance and Altcoin Season [54:30]
The hosts analyze Bitcoin dominance (BTCD) and the potential for an altcoin season. They note that Bitcoin's dominance is not at an all-time high, and there is a divergence. They discuss the trend of corporations using altcoins as their treasury and whether this is a sign that the altcoin season many people have been waiting for could finally happen. They emphasize that if an altcoin season occurs, it will be selective, with corporate interest being a key factor.
Ethereum Supply and On-Chain Activity [1:00:41]
One of the hosts shares a chart of Ethereum's supply, noting that Ethereum can now be inflationary or deflationary. They discuss the trend of fewer people using on-chain transactions and the lack of FOMO. They attribute this to the decline in DeFi and metaverse hype, as well as the shift towards futures trading.
Market Sentiment and Asset Selection [1:05:18]
The hosts discuss why the current altcoin season doesn't feel euphoric. They attribute this to the selection of assets that people are buying, with many focusing on meme coins rather than Ethereum and other altcoins with utility. They also mention that the four-year cycle theory is already at its tail end, but there is no euphoria.
Coinfest Alpha and XPL [1:11:02]
The hosts discuss insights from Coinfest, noting that the market wasn't really quiet during the event. They mention two key takeaways: the first is the sentiment that people are already talking about enjoying profits and trimming positions, and the second is the recurring narrative of stable coins, specifically a token called XPL. They explain that XPL is a stable coin from the token side and is currently being hyped up, especially among Indonesians. They also discuss the relationship between XPL and Tether, noting that it is invested by Bitfenex and is designed to move Tether for free.