Historic Crypto Crash Over?🔥Don't Panic!📉

Episode Transcript
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Speaker 1 (00:00):
Is this historic crash over.

Speaker 2 (00:01):
We're going to break it down for you guys, give
you a recap of what happened over the weekend and
what to look to welcome back into the show. All right,
So I do want to thank our sponsor, that's Salt Lending,
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(00:22):
taking loans out on some of your major assets, the
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(00:45):
So check out salt Lending. You can use our link
down below. And that's my point right here on this
lease or on this tweet right here, which is you
don't get wealthly by gambling and borrowed money. You get
rich by stacking assets. And that's the key here whether
you're getting into digital assets even businesses.

Speaker 1 (01:01):
That's the key hole through the.

Speaker 2 (01:03):
Noise leverage is that is basically the killer here unfortunately,
and I think this is the problem that people a
lot of people are going to roll into in real estate.
Is the one I'm looking at right now that could
potentially take a big hit in twenty twenty six. I
won't get into that today, but I'll give you guys
some insight on that why it could be looming as
a problem.

Speaker 1 (01:23):
Polymarket is October Ober.

Speaker 2 (01:26):
And I think a lot of people are questioning at
right now, are we going to see more highs throughout
this next month to two months going into the fall.

Speaker 1 (01:36):
And I think this is the question.

Speaker 2 (01:37):
That when you look at where the market came from
just over the weekend, even though it was the largest
that we had seen in history, biggest crypto liquidation COVID
crash one point two billion ftx one point six today
nineteen billion, and there's a lot of people that say
this could actually be bigger than even that. So this

(01:59):
is something that will get very interesting, especially from a
lot of the situations that occurred over the weekend and
on Friday, and of course some of the things if
you look at this top ten crypto liquidations of all
time there it is the US tariff on China.

Speaker 1 (02:15):
That's I think that was the.

Speaker 2 (02:16):
Cover for this that started to create a cascade event.
Versus if you look at the AML crackdowns, Tasla's stance reversal,
the overheated rally collection, this is our connection. This was
back in twenty twenty one, so a pretty big event
guys in terms of crypto in general. Hopefully you are
in a position though where you guys are holdlers. Let

(02:38):
me jump to this tweet right here. There was a
lot here that in terms of trying to break this down.
Finance reminded everybody who really runs the market a couple
of points I want to hit on finance. Buttons stop working.
We had stop orders that froze, limit orders got hung.
Not only that, you had arbitrage bots also that were
amplifying where selling more price was still held. That was
the issue that I think really caused the absolute mayhem

(03:04):
in the market. And if you look at this chart,
this is the atom chart Cosmos, this went to zero.
This is impossible for this to occur unless there were
nefarious actions going on in these exchanges that's the concern
that I think a lot of people are now waking
up to. Don't forget this chart, guys, and these are
the kind of things that really you have to be
cautious with in any kind of leverage trading. I think

(03:28):
most of you guys understand that if you're watching our channel.
Now here's the CEO of crypto dot com, which I
thought was interesting that he put this statement out. Regulators
should look into the exchanges ahead the most liquidations in
the twenty four hours and then conduct a thorough review.
Granted some of these were DeFi hyper Liquid was on
the list, but hyper Liquid was working somewhat flawlessly. It

(03:50):
was just in the situation of what was happening in
the moment. And then you look at bybet Binance, this
looks to me a little bit more targeted at competitors,
So keep that in mind. This is the kind of
stuff that happens in these kind of unbelievable red Days
insider training. Minutes before Trump's China tariff announcement, we had

(04:10):
a whale opened up one hundred million dollars short on
Bitcoin four point thirty. The whale opens up one hundred
million dollars short four fifty to Trump announces the tariff
on China. This stinks so badly, and then of course
nineteen point three billion in liquidations hit the market. In
the whales profit you guessed it, one hundred and ninety
two million, So who is that crypto whale is the

(04:31):
real question. There's a lot of speculation going all over
the place, and if you just look at what's been
happening in DC and continuing to really take a look
at the market, But even with all of that happening,
this was what really surprised me is that even fear
and greed right now holding it around a forty. And
remember we slipped to under twenty back in April of

(04:55):
this year. So has the market looked at this as
more of a manipulation event more so than a tariff event.
I know that might be the cover that has been
playing on this. And of course within that you had
Bitcoin extending there gain another five percent after this drop,
so it's reclaiming one hundred and fifteen k Eth is

(05:15):
also up eleven percent of the day, four percent away
from pre liquidation levels. This was October tenth, So our
things back is the real question. As we start to
take a look into.

Speaker 1 (05:26):
The rest of October.

Speaker 2 (05:27):
There are a lot of things happening around this one
thing that was kind of the alignment here that I
think is intriguing because it does set up maybe a
next leg for this. And this was my tweet, the
most suspicious seventy two hours in the trade war and
crypto history if you look at just the layout here,
because this is getting into a lot of negotiation between

(05:49):
the US and China around rare earth materials and let's
not forget what crypto gets in in terms of how
all this. But Trump of course threatened the hundred tariffs.
This was on Friday.

Speaker 1 (06:01):
This was by November first, everybody was.

Speaker 2 (06:04):
Kind of throwing shots across the bow, and then Sunday,
somehow all of this gets settled over a weekend. So
a crisis gets settled over a weekend. That's my question
is is there an opportunity for another, you know, grace
one event to occur that could be driven into what's
going on between the US and China. That's the real

(06:25):
question that I think is next up here. And just
as a reminder, this is kind of the playbook that
kobeec has looked at it, and I would agree that
most of these in terms of tariff developments, has all
played out. Trump puts out a cryptic post. He announces
these big, crazy tariffs. That's what happened on Friday, after

(06:45):
the market closes, Yes, Trump doubles down. Saturday, the target
tariff typically responds on comments that's China. On Sunday, before
the future is open, Trump posts an announcement, Hey, working
on that's again, this is all all architected. And then
of course, right into number eight who speaks, Well, that's
Secretary Bessant, which is exactly what he did. He spoke

(07:08):
today and appeared on live TV reasserting investors. Over the
next two to four, various members on Trump's administration will
tease trade deals. So you're going to see that happening
between now and that next meeting with g and then
he'll announce a new trade deal. Stock will go to
the crazy crypto will go nuts, and then here we
go again. Step one repeats, So I'm in agreement. This

(07:31):
is the playbook of how liquidation's wealth and manipulation is
architected in the And of course this happens all the time, guys.
But the stuff that doesn't happen is when all of
these exchanges start breaking. That's the problem that really occurred overall.
I'm going to go to a clip real quick, because

(07:52):
this was what President Trump was doing while the Marcus
were crashing.

Speaker 1 (07:55):
Take a look.

Speaker 3 (07:56):
Thank you everybody, Thank you, Your taxes are coming down.

Speaker 1 (08:02):
See everyone's happy, honey.

Speaker 3 (08:04):
Then a good job run through the night Holts.

Speaker 2 (08:08):
All right, So that happened over the weekend. And remember
all the markets were crashing, mostly crypto markets and positioning,
and I think that in essence was probably Trump not
even worrying about this. So intriguing times, guys. Now here's
the play from Scott Bessen who went on to talk
about this.

Speaker 1 (08:26):
Take a look at this one.

Speaker 3 (08:28):
They also go on to say, through China's military civil
fusion strategy, the PERC increases the size of its military
industrial complex by compelling civilian Chinese companies and research institutions
to support its military and intelligence activity. Some of those
companies that do that trade on our exchanges. You have
a huge lever to pull right here, to take off

(08:50):
those Chinese companies from our exchanges and not give them
the ability to sell their shares to perhaps in some
cases unwitting investors. Will you pull that economic lever.

Speaker 4 (09:02):
Maria, I can tell you everything's on the everything's on
the table. I am optimistic that this can be de escalated,
but we're willing to do whatever it takes and to
adopt whatever posture it takes.

Speaker 2 (09:20):
All right, So key statement there from Bessant was everything's
on the table, but we don't think it's going to
go that far. And I think this is one of
those things kind of reassuring the market because this is
a factor going forward, so much so that when you
consider where China is today versus where the US is
in terms of negotiation, this goes into whether or not

(09:42):
we have the leverage.

Speaker 1 (09:43):
Take a look at this clip.

Speaker 5 (09:45):
Just to you, you're arguing you think that the US
is lost leverage here. I mean, Joe, you were just
making a comment I think before you think America has
the leverage here.

Speaker 6 (09:53):
I do.

Speaker 7 (09:55):
Well. I think I'm not saying America doesn't have leverage,
but I think beij Jing thinks, right or wrong, that
it has the strong hand right now.

Speaker 1 (10:05):
Well.

Speaker 7 (10:05):
Number one, the export data today shows that China is
exporting to other markets and is becoming less dependent on
the US market. Second, I don't think they think that
Trump is going to go through with these threats, particularly
the tariff thread of one hundred percent on November one.
He's done this before. He's backed off, not because of

(10:26):
China but because of domestic pressure. And let's be honest,
food prices and other prices now are going up, putting
the President in a more vulnerable position when it comes
to raising tariffs.

Speaker 2 (10:39):
All right, So some of the things that she pointed
out is kind of the position that Beijing thinks they
are in, which is a position of strength. If you
do look at the data for September, trade exports are
up eight point three percent year over year. That's a
versus a six point six what was thought to be
the case, import seven point four percent year over year,

(11:01):
and then the trade surplus reached ninety billion. So there
are some signals here that could kind of point in
that direction. The commodity importans kind of tell the same story.
But I think the broader implication is how long can
China withstand a major impact from the US and whether
or not the US can withstand that from being able

(11:22):
to implement that onto China. But two points that we
were kind of getting at earlier is that Trump is
in a position where he kind of just reassesses a
lot of this and he's been using tariffs as is
number one targeting and negotiation ploy. The question is whether
or not Beijing and Ji think that this will work
going into it. So you've got the meeting that is

(11:44):
confirmed right now between Trump and Jijiping. This is set
for coming up in Korea. They were canceling this last week.
Remember that there wasn't enough there to get it done.
Trump was again probably playing a negotiation ploy. They've reassessed
and after a crazy market over the weekend, have repositioned
for this. And China, of course behind all that, you've

(12:06):
got Chinese the Renaissance Bank now reportedly in talks to
Ray six hundred million for a funding investment in B
and B. So boy, crazy stuff ahead for all of this.

Speaker 1 (12:18):
This is another just so we know who he is.

Speaker 2 (12:21):
This of course, is the co founder and chief customer
service officer over at Binance.

Speaker 1 (12:26):
Look at this statement right here.

Speaker 2 (12:27):
If you've incurred losses attributable to Binance, like some of
the issues that we just mentioned earlier, please contact our
customer service to register your case. We're going to review
your account activity individually and then analyze the situation and
then provide compensation accordingly. Now I've seen apologies come out,
I've seen all sorts of situations with these exchanges. This

(12:50):
one I think was so heinous that them going to
this next step. Maybe they'll do this with a handful
of accounts to try to reposition the market and get
think in good graces with traders, because this is an
issue right now that finance is facing overall. Now with
all that being said, now you have Axios reporting that
JP Morgan announces another one point five trillion US investment initiative,

(13:15):
and some of the things they are hitting on is
to go into these major sectors. This will be everything
from AI tech likelihood of course, direct equity and venture investments.
Possibly we'll see stuff moving into blockchain and crypto. Now
that Jamie Diamond is all in on this, this will
be a big step in the next direction. Tom Lee,

(13:35):
who is the number one investor out there on Wall
Street right now, and there is a reason that he's
saying by the dip. The biggest reason of course is
Tom Lee is the chairman on one of the biggest
ETH treasuries, if not the biggest ETH treasury out there.
Bitminor and of course behind the dip kind of selling
his book. However, he has been right in most cases,

(13:57):
especially on his Bitcoin calls and on his Ethereum calls.
Up to now, Ethereum has not played out the way
that I think they wanted to just yet. The real
question is can it do it going forward? Here was
him talking about how this crash is a gift.

Speaker 5 (14:12):
Take a look we were looking at Friday. Was the
possibility at least that some of that selling, or maybe
even a lot of that selling came from margin calls
at that time?

Speaker 8 (14:22):
Andrew, there has always been a lot of leverage in crypto.
I think that the volatility and leverage is what has
drawn people into that space, especially when you get outside
of Bitcoin and ethereum. Those two are generally not held
on margin. I mean, there is some leverage with what
they call perpetuals, but that's why they held up so

(14:42):
well over the weekend. But this liquidation that was triggered
over the last three days, the estimates are at least
nineteen billion of liquidations, but it's probably understated. It might
be four times bigger. It's the largest since twenty twenty one. Essentially,
you have to go back to FTX. JP Morgan's announcement

(15:04):
today really ties into why investors should stay pretty constructive
on the US. I mean, JP Morgan, the biggest and
one of the and the most powerful bank in the world,
is investing a trillion and a half dollars into the US,
and of course now we have this big tailwind as
blockchain is an initiative that Wall Street is building products on.

(15:26):
So I think there's a lot of reasons for investors
to stay optimistic. I think the selloff Friday is giving
us a bit of a gift, all.

Speaker 2 (15:35):
Right, there, you heard it, a bit of a gift
continued bullish nature toward what we're seeing from Wall Street.
And this gets back into the thesis that I've had
for a while, and that is some of the core
assets when you think about the top ten handful in
terms of blockchain assets, digital assets that continue to be
the cornerstones of where this market is moving.

Speaker 1 (15:56):
Now.

Speaker 2 (15:56):
Granted, there's going to be some all coin winners, and
there's going to be some coin winners, yes, the problem
is is there may not be as many in comparison
to what we've seen in the previous cycles. So that
I think is the question of how to invest this out.
How do you play this market for the next few months?
And I think right now the blue chips are the winners.
If you take a look at Tom Lee, he's even

(16:18):
going into the discussion of why gold is pumping and
how it has an effect on crypto.

Speaker 9 (16:24):
Take a look, everything's about crypto. You found a reason
gold's up, and it's because of crypto. Not directly because
of crypto, but you think the incremental buyer and gold
are there's gold based stable coins and people need to
buy gold to back the stable coins, and that you
think that's enough to be up ninety two dollars all
the way up to a new high.

Speaker 8 (16:46):
Well, there is an interesting correlation we found, which is
when I look at Tether's supply of dollars outstanding, it
really started to rise about three months ago, and that
corresponded with gold essentially going up every day. I'm not
positive this, but I think stable coins, including Tether, maybe

(17:09):
one of the largest birecycle today.

Speaker 6 (17:14):
That's perfect. So the people that have been bullish on
gold for so long and barish on crypto and bitcoin,
they're finally getting their big rally in gold, and it's
because of the thing they hate so much crypto.

Speaker 4 (17:28):
Yeah, that's right.

Speaker 8 (17:30):
Teather is proving to be a good meeting ground between
bitcoiners and gold people.

Speaker 2 (17:35):
Imagine if Tether had not purchased all that gold and
instead just flipped over to bitcoin or treasuries. You know,
those are the kind of factors that Lee is getting at.
And the other thing that you have to consider is
whether or not his play on ethereum is the best play. Well,
he thinks it is. In fact, another eight hundred and

(17:55):
thirty eight million more into ethereum and this is all
happening during the kus, So the stash is now setting
at twelve billion, buying the dip and continuing to play out.
This may be if Tom Lee is right, this could
be one of the biggest plays we've seen a Wall
Street for quite some time. And of course you got
to look at at the history of it, and you
also have to look at the history of some of

(18:17):
the other big players of Wall Street. And this of
course is Black Rock CEO Larry Finks saying there's a
role for crypto the same way there is a role
for gold.

Speaker 1 (18:26):
This is not a bad asset.

Speaker 2 (18:28):
This was a statement that he put out on the
sixty minute interview over the weekend. This tells me that
they are prepping traditional assets or I should say traditional
digital assets, to be a category that major investors will
start to go in. This of course gives the green light,
I think for a lot of these family offices and instructured.

Speaker 1 (18:47):
Capital in general to move to the next level.

Speaker 2 (18:50):
And if you consider silver, because it's hit all time
high again over fifty one dollars right now, if you
consider this being a longer term play, then it would
make sense that the central banks are moving into it. However,
I still believe gold is probably going to be the
route in terms of central banks continuing to add to
their balance sheets. I think silver is just a backup

(19:11):
right now. However, there are a lot of people in
the silver business that think this is just a beginning
for where the silver market is going, and we've done
a couple of videos on this. We've had Andy Sheckman
on from his team talking about silver and where it
could go. Well before the move started on silver, because
there was a short squeeze primarily based on supply and delivery.
That is an issue that I think we'll start to

(19:33):
see maybe with gold, and it could push gold continue
up even though there are a lot of people looking
at gold as being a liquidation event going into bitcoins.

Speaker 1 (19:42):
So this market is going.

Speaker 2 (19:44):
Crazy in a lot of different ways. The real question
is how does it hold up over the next few months.
One thing I do want to hit on this right here,
when you look ahead, there's some key things happening for
crypto holders. The thirteenth OPEK is going to report their release.
Their report will be released. You also have Jeral Powell
speaking this week October fourteenth, the fifteenth of New York

(20:06):
FED is going to give some manufacturing data that'll be released.
But other than that, you just have to look at
it this way right here, do not fomo too much.
Pay attention to the macro events. I agree with that
last statement right there. Pay attention to the macro events
because it will have even though it doesn't have a
direct effect, it has these carry on effects that create

(20:26):
these cycle manipulation models that start to occur in a
lot of different areas of crypto, and in most of
the time it happens during these massive leverage areas. So
I think this is the factor. I know a lot
of you guys get into leverage. While I don't necessarily
agree with that I understand it's a strategy on all investing.
It's been that way for Wall Street forever. I don't

(20:47):
anticipate that it's going to be any different in crypto.
But what I do ask you to do is just
be a little bit more cautious in how you're playing
this out. If you look at this statement and the poll,
after the crypto's biggest liquidation event in history, where are
we going to go from here? Some people say retesting
the lows then up. Many people say no, We're on

(21:07):
a v shape recovery from here. Fifty six percent of
you are very bullish, and some of you saying that
the market is over. I do not think that is
the case. It is possible we could see another major
event that causes a downward trend. The question is will
that happen before the end of the year, and will
it flush out even another group of crypto holders.

Speaker 1 (21:29):
Going to the next level.

Speaker 2 (21:30):
If you look at the markets right now, Bitcoin holding
on this is on the daily after a massive green
candle coming up on Sunday from one ten all the
way back up to one fourteen, holding right around one
fourteen to one fifteen. Let's take a look at eth
also had a major green candle and continuing its climb
right now above forty two hundred as we're filming this.

(21:51):
XRP had a major move also three days in a row,
now holding back at two sixty one, even though there
was a massive liquid on XRP all the way back
down to around one thirty, holding in there.

Speaker 1 (22:05):
So one thing to take a look at also is
where Sue is.

Speaker 2 (22:09):
We of course, has had a nice little move after
again hitting that low and retesting some of those two
dollars marks that we haven't seen in a very long time.
Avalanche was another one that popped down to seventeen dollars
on coinbase. So it's interesting as we continue to see
these majors. Let me know what you guys are betting
on right now? Did you buy a dip? Are you

(22:32):
in crypto?

Speaker 1 (22:32):
Still?

Speaker 2 (22:33):
Drop some comments down below? I'd love to get that right.
Make sure you guys are in the diamond circle. That's
where we communicate with you. I put out a letter
each week kind of recapping some of this, getting into
the details of where we get to get ready to
roll into these markets. I put an email on Friday
after the market's hit what I was looking at to
try to do over the weekend. So hopefully some of

(22:53):
you got that and made a little bit on some
of your trades. Non investment advice, but that is where
I do it. In the Diamond Circle email it's called
the Baron Market Edge, so check that out and of
course follow me out there on X at Paul Baron.
We'll catch you next time right here on the Paul
Baron Show.

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