Lark Davis on six catalysts for crypto markets

Transcript

I don't think we should ignore a $16 billion cash injection into the hands of a bunch of crypto natives GM good morning welcome to the milk Road show The Daily crypto show that's serving investment insights hotter than a coffee you forgot on your car roof I'm your host Jay Hamilton and today we're looking at the six biggest catalysts that are coming in the next 6 months and how you should plan for them in your crypto Investments here to guide us is crypto investment expert l Davis Lark welcome back to the show hi thanks for having me back it's going to be a great conversation I'm stoked about today's episode me too first we must start by acknowledging a significant event that made headlines worldwide over

the weekend that was the assassination attempt of former president Donald Trump now this is a major Global event and regardless of our political views it's important to approach this topic with a focus on the broader implications and our shared Humanity I want to make it very clear that we do not condone violence of any kind political disagreements should never escalate to physical harm violence is never the answer and it's crucial that we uphold the principles of peaceful dialogue and respect incidents like this can really have a massive impact on global stability and public trust and it's a reminder of the fragility of our societal structures and the importance of maintaining peace and security the Ripple effects of such an event can be

felt across the world influencing everything from political climates to economic markets with that being said every us election is a major Catalyst for markets including crypto markets regardless of political views it's importance for us as investors to view the election and candidates from an unbiased perspective in order to make smart investment decisions so with that in mind Lark we have the US election coming up on November 5th what impact do you expect that this election will have on the crypto markets and how do we plan for it well it's very interesting because I I saw a tweet and this this as quite funny because it's kind of what I did and the Tweet was something like if

the first thing you did after hearing about this assassination attempt wasn't going and checking the price of the crypto markets then you're not deeply your bags are big enough you're not deeply involved enough and I did I I read the news I went I went and looked at Trump the the stuff on Twitter it's like oh my gosh what's the price of Bitcoin doing I know I know not to diminish the moment obviously but it does have an impact on markets that's the funny part aside but the real part is that it does have an impact on markets these are major Global political events and they have to be treated as such because everything that happens we don't live in a microcosm in the cryptocurrency markets everything that happens has a direct impact on all markets okay so that being said a lot of people are saying that this is going to

cement Trump's chances for taking the presidency and all that stuff and we'll see how that all turns out but still a few months away a lot can Happ happen between now and then let's see however what people are front running on those images and stuff and and everything that sort of come out of this event and the strength that was showed from that event is that Trump's likely to be the next president now if that's the case and again we're not advocating for one candidate or the other we're just talking about the implications of what happens if somebody does get elected Trump has come out as the pro- crypto candidate big time he has leaned into it heavily and I think a lot of crypto money has got behind him and all a lot of pro crypto packs are supporting him a lot people like Brian Armstrong from

coinbase they've put a lot of money into seeing proc crypto people get elected a lot of people across crypto space putting their support and money behind Trump and now I know I know politicians they get elected and then what then they kind of don't do the things that said they're going to do on the campaign Trail however sometimes they do and to an extent that the bribes I mean the campaign contributions come in okay that can have an impact policy later so you're going to have those continual voices pushing from behind saying this is good for America let's get America in front of the crypto thing because that's an advantage for us a strategic Advantage for us and so For Better or Worse Trump has become the proc crypto candidate and people are expecting then

a much more friendly SEC obviously with all kinds of other Pro crypto laws potentially being passed now when Trump comes out and says we're going to put Bitcoin as a strategic Reserve asset for the USA I don't know about that that' be great but I don't know about that but can we get a more friendly SEC head that I feel is almost certainty and in that case that really opens up the path for Big Time crypto things to happen in America which is one of the most important markets of course globally for the cryptocurrency markets so this is what people are pricing in when they see all this happen when they see this craziness happen that it increases Trump's chances of winning and that if

he does win we're going to have a very Pro crypto person in the White House a potential Red Wave following that of candidates that will be able to get through a pro crypto agenda so we shall see again still months away from the election but that's I think what the market was pricing in when they saw this happen yeah and one of the things that we're going to talk about the later in the show the last item the last catalyst is the coming of other ETFs we'll talk about the eth ETF which is coming very soon and then the ETF which the date for the salana ETF would line up with a new SEC chair so you can imagine if we had a different SEC chair then maybe the salono ETF comes sooner than it would

under the current regime so definitely there is impact as you said okay let's go to the second Catalyst which is rate Cuts let me bring up here the fomc timeline of when their meetings are for the rest of the year so everyone understands when we could possibly get rate cuts and then Lark I'll throw it over to you to Dallas what you think is likely to happen so the F fomc which decides on interest rates is meeting at the end of July July 30th and 31st then in September then in November and then in December so four meetings left this year for possible changes in the interest rate in America what do you expect to happen here lar and what are you watching so we have two more CPI

prints the inflation data coming out so we have one coming in August and we'll have one coming in September before that fomc meeting so assuming that we don't see a spike in inflation inflation's been basically non-stop trending down okay since early 2023 we've had inflation is going down down down down down it's heading towards where it needs to be the market is pretty heavily favoring right now the First Rate cut to happen in September at that September meeting now that's just the first one okay I think the last I looked some some people were saying it's as high as 90% some of the prediction markets are saying it's around oh here we go 83% so that's what the prediction markets are saying right now about an 83% chance of that fed cut in September

so that's a pretty big likelihood now that's just the first cut I have seen uh other predictions that we could see eight rate Cuts in a row now you're going to hear a narrative around rate Cuts rate cuts are coming that means where the bare Market's coming and it's all going to be super bearish and everything's going to fall to pieces now you need to look at the de data because the data shows something very very interesting if you go back and you look at all the previous rate cuts when did rate Cuts happen and what was their impact now a lot of the times the rate Cuts happen when there's already a recession underway they happen about halfway through the recession trying to ease up uh borrowing and lending so people can get money and try to

Kickstart the economy etc etc etc that's not the case right now there is not a recession in USA right now and the US economy has been very stubborn which been very interesting wheat still positive for growth jobs you know things have been taking some hits they're not you can't be too Rose tinted glasses about that there have been some hits to the US economy and the jobs markets and all these sort of things but overall it has remained relatively resilient and it's not in a recession so rate Cuts coming outside of a recessionary environment have always been bullish for markets because especially if you get eight rate Cuts in a row what starts happening when that First Rate cut happens the markets could get very excited what happen when you have eight rate Cuts in a row suddenly the cost for

businesses to borrow money to put a new addition on the building buy that new coffee machine hire that new staff member are reduced by almost half because we're going to go from 5.25 to 3.25 that's a big drop in the cost of borrowing money for us businesses that has big implications for the US economy and a positive way in a positive way so this is a good thing the rate Cuts could be a very big catalyst for a lot of excitement in the markets for a lot of bullish energy to come into the markets so I would not be fading those rate cuts out of a recessionary environment because the impact potential is very real amazing super exciting to think that we could have eight rate Cuts in a

row we'll have to follow along and see if uh if that comes true that would be wow that would be insane let's go to the next Catalyst uh which is the Bitcoin supply and demand issue that we've had over the past few past month or two German government Mount gaw a few others what are you seeing when you look at Bitcoin currently and the current Supply demand issues do you think we're through that or is there still more pain to come it's been very interesting to watch as I was saying previously and is that the bark was worse than the bite of the German Bitcoin dog right and so Germany sold a Bitcoin and of course people

front ran that and the market front ran that and that's when you saw the big collapse in price okay what's interesting is that when they got down to around 40,000 Bitcoin which was still they had 80% of their supply left the market kind of stopped caring so much the people who wanted to front run that narrative and sell sold and then what happened Germany unloaded 40,000 Bitcoin in a week and the price of Bitcoin actually went up slightly showing of course that the narrative was BS the whole time that the market was of course going to be able to absorb that Bitcoin the only thing that would have caused total chaos of is if Germany had taken all that 50k BTC to coinbase and Market sold it in one go that would have caused a lot of chaos why would they do that it be it' be nonsensical they of course

want to get some money out of it what's funny too is now that Germany's done selling their Bitcoin they're getting trolled yeah this is hilarious somebody sent them a187 worth of bitcoin with a message attached to it have fun staying poor I mean you got to give it to the Bitcoin Community man that's hilarious Abol incredible now the other um big overhangs that are out there and this is this is really important to think about because the German Bitcoin was this big scare story this overhang and we've got the biggest overhangs right now largely being cleared out of the Market Mount gox is the next one we we broken that down more but just to reiterate for anybody who may not have heard it before is that Mount gox people

getting back 140,000 Bitcoin a lot of that's going to be going to funds the funds want to get the best price possible so they're going to be looking at manage selling to minimize the impact the people who are regular people and are getting that Bitcoin back we're talking about ogs in the market here we' been around for years now some of those guys might sell take it as a free payday a lot of these guys are probably going to get it and go why would I sell now when I know Bitcoin is going to a million dollars in 10 years I'm holding it this long I hold another 10 years who cares so the impact of this event probably going to be quite minimal as well and the US does have some Bitcoin from Silk Road that Silk Road Bitcoin they're literally working with the

coinbase is working with the US Marshalls department to have managed selling of that so that it doesn't impact markets and they get the best price possible out of it so all these giant scary overhang issues have been haunting the market for a long time they're largely resolved I know Mount Ox is not fully resolved yet but it's a bit of a nothing Burger when you really understand the situation you look at how the selling of 50 40,000 Bitcoin in a week was just absorbed and the price went up so you have to keep that in mind and the other Dynamic so that's the overhang effect of all these big stashes of Bitcoin out there the other thing you have to understand is we're in a post Bitcoin having environment right now now what does that mean go back look at the market any single time we've had a Bitcoin having now I

know we had a bit of an abortion this time because we had this new high before the Bitcoin having due to the Bitcoin ETF hype yes okay that was an interesting spark and that's going to provide wild liquidity to help us get up to our crazy price Targets later in the cycle here however what happens every time there's a Bitcoin having you have new supply and demand mechanics now ever since Bitcoin ETFs came out they have bought twice what Bitcoin miners have produced twice what Bitcoin miners have produced that's Insanity that's absolute craziness and now Bitcoin miners are producing half as much so you have to think about the the mechanics here and yeah all these big overhangs and these giant injections of Supply they matter obviously but they often don't matter as

much as people think they do but the reality is and this is what's always happened in the markets demand keeps slowly going up over time and of course now with ETFs we have a big demand Spike but demand keeps going up slowly over time and and the amount of Bitcoin available for miners to sell keeps going down over time and you keep getting these Diamond handed Fanatics people who literally will hold their Bitcoin for years the the exit Fiat crowd more and more Bitcoin keeps getting into their hands and it creates wild market dynamics for the cryptocurrency markets more broadly because Bitcoin is the tip of the spear when it comes to liquidity and how the markets move when Bitcoin goes up in price you will see whales take profits you'll see whales take loans versus their bit coins speculating

altcoins because they now they have more wealth etc etc etc so these supply and demand mechanics are very impactful and they always have been very impactful to the cryptocurrency markets and this is perhaps one of the wildest examples of that this Market cycle because never before have Bitcoin miners had less Bitcoin to sell and never has the demand been higher for Bitcoin so the e or sorry the Bitcoin ETF inflows were over a billion dollars in just the past week we alone that is insane the for the net inflows to be that high in a regular week like we're it feels like everyone's missing what's happening right in front

of us right now what's pretty crazy is that you look at the actual flows for the last few weeks trafi Bros did not sell in panic they waited and then they started accumulating under 60k and they bought a billion dollars worth of bitcoin under $60,000 think about that they didn't Panic sell they didn't Panic sell some of these guys had bags from higher they didn't Panic sell they accumulated that is pretty interesting because I know there's a lot of retail money in those Bitcoin ETF products I think the first sort of flush out in the market got a lot of those people out we did see big inflows that we saw a billion dollars in one day when Bitcoin hit 74k and then we saw half a billion dollars out on the

big crash back in April or May I think it was April that flushed out the retail crowd but the institutional money which we see as a huge huge percentage of the total money in these Bitcoin ETFs hedge funds and stuff like that they waited they were patient they bought more under 60k and these guys are going be aiming for 90 to 100K before they start selling again so it's very very interesting to watch the effect of all this playing out the other thing that is coming up when we talk about catalysts and this is our fifth Catalyst today that you've been watching is FTX uh we haven't talked about FTX in a while there was a lot of talk about it to start the year and it's just not top news in the media right now but it hasn't hasn't gone away it's

still there so what can we expect with the FTX payout that's coming the FTX thing is a very interesting wild card because what you see with some of these other bankruptcies like malx for example people are getting back Bitcoin right and that who knows what happens with it but with FTX everyone's getting cash back a lot a lot of the FTX money came from if just so Random they had this big they invested in some company that got bought out and ended up being worth billions of dollars so it's one of the good things FTX actually did was some of their money and so that was all sold for cash and some of the crypto was sold for cash etc etc etc so people are getting back a cash payment so there's 16 billion dollar in cash money coming back to people that FTX owes money to

and people are largely going to be made whole in cash I know not in crypto and people are going to be pissed off about that and good reason so I mean screw FTX and screw all these guys and they're damn fraud obviously but people are going to be getting back a lot of cash okay so $16 billion cash coming back into the market now look are some people going to get that money and say you know what screw crypto I'm taking my cash I'm going to go buy bonds I don't want any of this crap anymore I'm done yeah sure but most of the people who are on FTX they're crypto natives right so what are these guys going to do when they get a giant pile of cash in their hands they're probably going to go buy some more cryptocurrencies not everybody let's make it clear not everybody what

if half of them what if8 billion dollar gets injected into the cryptocurrency markets over like two or three weeks and then of course you have the opposite reaction to what we just had to the German stuff which is the market front runs that to the upside oh my gosh the FTX money's coming quick we need to buy the coins before the FTX guys get their money and they start buying coins etc etc etc so you can see that effect playing out too but I don't think we should ignore a$6 billion doll cash injection into the hands of a bunch of crypto natives who have been some of these guys have been felt like they've probably been missing out on the Bull Run maybe some people had all their money in there and they're going to get that and they need to feel the need to

play catchup and need to run and run and bye bye bye bye by so watch out for that as an interesting Catalyst any idea what the timing of that is you know it's always hard with these bankruptcy things I mean Mount gaau we've been thinking that they're going to get their money back for the last seven years I remember covering the story back in 2017 like they're about to get their Bitcoin back guys and then they just didn't you know so it has so far been indicated it's going to happen by the end of the year um potentially next few months that being said don't hold your breath you know how these legal proceeding things can work out it could be longer than people expect but I hope people'll get their money back really soon so they can hop on board of this bull run and take

some Advantage with that money and hopefully make some gains before everything finishes yeah for sure it' be really that would be the at least we could do something for these people who are getting robbed of the fact that they're not getting crypto back they're getting cash back let's give them a chance before this next exactly run okay final Catalyst that you're watching is altcoin ETFs we have the eth ETF coming any day now could be this week could be next week could be today while we're recording who knows and then we have salana ETF two filings for that in the US already some salana ETFs are almost I think they might exist in certain countries or they're coming much sooner so what do you expect to see from altcoin ETFs and how will that impact

the markets they're coming it's very interesting quite funny actually to watch the SEC being such sore losers over the ethereum ETF and just there's no other real explanation for why they're dragging the process out so long and make it they know they have to do it they know they have timelines but they're just waiting because they're just kind of being sore loses about the whole thing but we are going to get the ethereum ETFs listed on the market pretty soon and that's an interesting moment because with Bitcoin we had the listing happened like the day after two days after was straight away so there was all this hype right whereas the theum ETFs got approved all the hype died down the price literally went under what it was when the ethereum ETFs were announced and the Hypes kind of dissipated away so I'm going to be very interested to see how

listing day actually plays out because there's no buy the rumors sell the news moment here to really front run it'll probably be announced on a Tuesday listed on a Wednesday and that'll be it and then it'll be out live and trading in the markets so that's going to be very interesting obviously I think there's law demand for ethereum ETF products from Wall Street I'm sure it'll be very interesting in buying it then we have grayscale ethereum that's going to start coming out and I know they're launching a mini trust with some of that so it's going to mitigate a little bit of the selling pressure but still gray skills got a lot of ethereum we have to deal with those outflows for the first few weeks just like we did Bitcoin but that'll eventually get sort self sorted out and then it's just a clear runway

for massive inflows and exciting price movements for ethereum but the bigger picture here is that it was never going to just be Bitcoin and I know the Bitcoin Maxis heads probably someone's head like literally exploded right just Michael sailor images just crashed all over the place anyway the reality is it was never going to be just Bitcoin ETFs because Wall Street likes making money and they see cryptocurrency as this giant Bonanza that they want to be part of and so Bitcoin was first then ethereum and then we're going to start getting all kinds of other stuff and if ethereum is not a security if ethereum is okay for ETF products then guess what basically all the rest of the altcoins are the head of the cftc came out recently he said 70 to

80% of altcoins in his opinion are not Securities there are some that definitely have the security thing going on right but the vast majority of them are not things like salana salana and ethereum are basically the same from a regulatory perspective it's a software it's a blockchain you use it to pay gas fees it gets node rewards and if it's okay for ethereum then it's okay for salana so a salana ETF will come it's only a question of when it comes this SEC may not want to do it but the next SEC probably will okay so and even if Biden wins the next election and the current SEC head stays at some point

he'll be forced to approve those Sal ETFs because if they deny it then they'll all those people will take them to court and say well you approved the ethereum and this one's exactly the same so they're going to lose in court again waste people bunch of people's time then we'll get the salon ETFs and then when that happens that opens up the Gateway for Avalanche ETFs polka dot ETFs chain link ETFs Dogecoin ETFs Litecoin ETFs and we're going to see all these products starting to list which to the American mind sounds crazy oh my gosh but then you got to realize guys the Europeans have been doing this stuff for years we've had etps in Europe for all these coins for years now right us markets are woefully behind so it'll come and of course the important thing

for us markets is that it's the liquidity engine of global stock market isn't it it's yeah okay great that you know Bor stutgart lists you know an avalanche ETP product but the liquidity is just not the same is it when you look at us markets which are 52 to 54% on any given day of total Global Equity markets it's a big big deal getting these things listed in the USA and we will it's just a matter of time sounds like things are looking pretty good so we've got six catalysts all which are lining up to be positive obviously as you said we don't know how when exactly some of these things are happen or how it'll turn out and a lot can change and things do

change fast but when you look at the US election coming up in November when you look at the potential of the First Rate cut likely coming in September and then possibly eight rate Cuts in a row when you look at Bitcoin this overhang has now for the most part cleared out maybe a little bit more still to come around Mount gaw and Silk Road selling but German government's done that's cleared out when you look at the Bitcoin having effect that obviously has a large impact and then of course we also have FTX bringing as you said $16 billion in cash and then altcoin ETFs allowing new investors to enter the space what are six incredible catalysts to to finish off 2024 how's it feel to you Lark does

it look like we're about to have a good a good rest of this year it feels pretty crazy when you you know we didn't even talk about liquidity we didn't talk about M2 money supply there's all these catalysts that are lining up right now that if it doesn't happen I'm going to be probably pretty damn surprised like we had everything every Tailwind possible for this Market to see massive price appreciation so I'm excited we have lots of big things happening in the market and of course we'll keep you guys updated on all this stuff as we see these things coming to fruition and big times in the market though I think a lot to be paying attention to right now and that if you're not paying attention to the markets right now you will be regretting that in six months time and if you want to make sure you stay up to

date on the markets make sure you go follow lar on Twitter definitely he's putting out great stuff Lark I don't know how much you tweet as much as you do every hour it seems like Lark's got all the stuff St on top of the markets and you also want to make sure you subscribe to the milk Road newsletter which comes in your inbox every day and in five minutes or less is going to make sure you're up to date on everything with your crypto Investments and the crypto markets thanks so much for listening and everybody have a wicked awesome day thank you for listening to milk Road radio the easiest path to get get smarter about crypto if you like this episode share it and hit subscribe or follow so you don't miss out on the next one there's also a link in the description to a free 5minute daily

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