Rate Cut Potential in December🚀Crypto Market Update

Stocks rallied on Monday as investors digested fresh comments from top Fed officials and AI companies rebounded from last week. The rally came after two top Fed officials voiced support for an interest rate cut at the central bank's next rate-setting meetings, slated for Dec. 9 and 10.

~This episode is sponsored by Uphold~
Uphold Debit Card ➜ https://bit.ly/UpholdXRPCard

00:00 Intro
00:10 Sponsor: Uphold
00:50 Signs of life
01:30 CNBC: Fed December rate cut odds
03:15 Fed rate cut odds back up
04:00 04:40 Shadow Fed theory
05:20 Scott Bessent: “Time for the Fed to move back to the background”
07:50 Government shutdown January odds
08:20 Trump healthcare plan fakeout
09:50 NVIDIA misbehaving
11:20 Below All-Time High
11:45 Strategy stock bleeding
13:00 Should $MSTR be delisted
14:00 Tom Lee: comments on $MSTR
14:30 Tom Lee DAT plan
15:20 Tom Lee: on the Fed & ETH super cycle
17:40 Cathie Wood: Easing starts Dec.10
19:10 Klarna stablecoin
20:10 BREAKING: Polymarket CFTC Approved & Kevin Hassett emerges as favorite to become next Fed Chair
21:00 Outro

#Crypto #Bitcoin #Ethereum
~Rate Cut Potential in December🚀Crypto Market Update~
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Episode Transcript

Speaker 1 (00:00):
Rate cuts are back in play. What does this mean
for the crypto market today, We'll break it down for you.
Let's get started. Our sponsor today, of course is Uphold,
and you guys, of course can get involved with our
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(00:21):
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(00:44):
features that you guys are going to love. Let's get
into the topics today because we're going to really talk
about where the FED is going and how this plays
into the current market position. If you look at the
status right now, Bitcoin of course extends gained gains arise
above eighty nine thousand, and of course eth was up
over six percent. All of this kind of looking into

(01:04):
what the Fed's likelihood of a rate could could be.
And if you consider that, just as a reminder, everybody
has pretty much been going in on the dip. For
those of you a brand new a crypto that was
your first gift from the crypto community is being able
to get in on some of these better prices, both
on Bitcoin, eth, XRP, you name it. Everything was on
sale over the last several days. Of course, how does

(01:27):
this play into where the Fed could be going? Let
me go into this next clip because it breaks down
a lot of analysis on why Chair Pale might be reconsidering.
Take a look.

Speaker 2 (01:37):
Fed's December policy decision, looking now to be blowing more
decisively towards a rate cut despite the possibility of a
significant number of descensions of the December meeting, comments by
leading FED officials and reporting by CNBC suggests the FED
is on balance more concern with the weakening job market
than it is inflation running too hot. To be sure,

(01:57):
there's a lot of voters on the committee that i've
either opposed to out writers supported causes approach to cuts
that could mean multiple descents in December, but Governors Myron
Waller and Bowman and now President Williams look ready to
vote for a cut. Williams view likely affects Powells that
the FED will remain somewhat restrictive even after a cut.
So what's happened. The probability is keep getting higher. They

(02:17):
have been down as low as thirty three percent before
Williams talk. Now they're at seventy three for December, and
that same cut as an eighty two percent probably happening
by January. One way the centers could be convinced to
support to support the Ray cut is position the Fed
depending on the data for a January pause. Waller, who's
a strong supporter of a December cuts, yesterday the FED

(02:38):
should go meeting by meeting in January, so maybe that
ends up being a pause. Becky, I don't know if
you make decisions this way, but which decision would you
feel worse not having made? And I think the way
this balance is out is if the jobs data is
really weak, the ones that we get after the FED meeting,
I think they'll regret more not having cut for the

(03:00):
jobs mark for the jobs market than they would having
not cut because they're concerned about inflation being around three percent.

Speaker 1 (03:08):
That I am in agreement with. If you look on
which side of the blade you might fall, because this
is really what you're dealing with is a very very
sharp market. What's amazing to me is the retracement here
within the poly market. Let me kind of zoom in
on this and show you guys when this occurred, because
as of last week, we were setting on November twentieth,
a twenty five basis points decrease twenty two percent. What

(03:33):
we were looking on the no change was seventy six percent.
Now look what happens right here. You start to see
this move and then there's the flip. There's the twenty
five basis points decrease going up to sixty five percent,
and then of course it's just been climbing from there
and as we report today, eighty four percent right now
on poly market. So most likely we're going to see

(03:54):
a December rate cut. Now what does that look like
in January? Because I think this is another factor. Even
if you look at jen Or, even though it did
dip down, it's still well over fifty percent. Zooming on
that for you guys, still over fifty percent on a
no change, and then of course that kind of puts
into the position that they were talking about there on CBC,
is that these governors could say, hey, go ahead and

(04:14):
make the cut. Now, it sets you up for a
pause in January. And remember that's the end of January,
so you're going to see quarterly earnings coming in. You're
going to see a lot of things coming in after
the end of the year, which will give the Fed
a little bit more breathing room going into the end
of January of being able to make the right move
as we head into a very busy spring season going forward.

(04:38):
Other things you have to look at this, of course,
is the theory, and this is a concept we've talked
about before, is the shadow FED, because remember, everything is
barreling down toward the potential, well, I shouldn't say, the
eventual replacement of Chairman Powell. And of course you look
at that along over with what Trump's been doing in
terms of announcing saying, hey, I've got the next Federal

(04:59):
Reserve chair. I think I do. Obviously he's been talking
about this, well, many people have been talking about this
shadow chair and also kind of the shadow FED in
general because a lot of these moves maybe are pushing
this dissension that we're seeing so much, and we're starting
to see a little bit of a left versus right

(05:19):
kind of scenario play out in the FED. I want
to go to a clip real quick, because this is
Scott best at kind of breaking this down.

Speaker 3 (05:24):
Take a look, and Andrew, I'll tell you one of
the things in terms of the criteria that I've been
looking for that I have morphed a bid on in
the fall and when we started with eleven candidates is
in talking to these candidates, I realize the FED has
become this very complicated operation. It's no longer just a

(05:45):
price setting of money. There's this very complicated calculus between
the monetary policy balance, the balance sheet, and regulatory policy.
And we've really emphasized in the interviews what's the interplay
for that calculus in terms of the best way forward

(06:09):
for the American economy and what is what is each
person's point of view in terms of protecting the American people,
protecting the economy, and moving forward with the dual mandate.
I think it's time for the FED just to move
back into the background like it used to do.

Speaker 1 (06:31):
Interesting statements there by bessent because he is getting to
this point of where the FED should move into the background.
I don't know that the Federal Reserve will ever move
back into the background, because they have been one of
the narratives of global macro that everybody is following. And
I'm talking about every country out there is looking to

(06:52):
the United States and what is happening there now. The
real question is how does this play out with Trump's
strategy to basically maintain or get control of the FED.
There's two things that could go on here. One, if
he does get control of a positive move in terms
of yes men at the Federal Reserve, many people would

(07:12):
look at that and say that's very uncertain for the markets,
and in most cases a lot of investors don't like that.
The other comparison that you could look at is maybe
a strategic step in meaning slowly taking control or getting
the right kind of people in the FED that would
align with the Trump administration. Maybe that would be a

(07:32):
softer play into the markets. I still don't know how
that's going to respond, because I anticipate that Trump will
be more like a wrecking bull, and that is getting
all the way into May and seeing drastic drops in
the federal reserve rate overnight rate, so this could play
out either way.

Speaker 2 (07:49):
Guys.

Speaker 1 (07:50):
One thing to watch though, is this right here, and
that is the government shut down still setting up for January,
but not necessarily a high probability as of yet only
twenty seven percent, and it's been declining a little bit
from holding at thirty one. This is one that will
be interesting. But remember DC operates on different time than
we do. It all of a sudden, it's going to

(08:11):
be an emergency thing, and that's usually what you get into,
which is the narrative and the news cycle that controls
how a lot of constituents vote. The other thing I
want to get into was Trump's healthcare fake out because
there was a big announcement. He came out, did a
lot of posturing around this whole big shift, and then
of course it got changed. Take a look, we're.

Speaker 4 (08:34):
Learning President Trump is planning to unveil a new healthcare proposal,
could include a temporary extension of the Enhanced Affordable Care
AC subsidies, which are due to expire at the end
of the year. Zach, thanks for being here. As I noted,
we are very much still waiting for specifics here, but
I'm sorry this has actually been Sorry, Zach, we're getting
breaking news while I'm talking to you. I have learned
that the White House is postponed. It's inspected. Unveiling of

(08:58):
this new healthcare proposal was expected to be unveiled today.

Speaker 2 (09:03):
Yeah.

Speaker 1 (09:04):
I saw this over the weekend and it was interesting
because you had a lot of people that are very
pro Republican and just you know, retweeting and saying, oh, yeah,
this is it. This is going to be the shift
that Americans need in terms of healthcare, and immediately the
Republicans pretty much struck that down, got Trump to retrace
on this. This is a big deal because I feel
like it does put the Republicans at a disadvantage when

(09:27):
you think about how they're going to deal with the
situation of extending the healthcare and this that impacts the markets,
because the markets do respond to these kind of things.
So this will be interesting to see how this actually
gets done, whether or not Trump and the Republicans will
come to an alignment on this that can also align
with the Democrats. There is a lot still brewing. Another

(09:48):
thing that you want to play into the market and
how you're looking at your investments is of course looking
at the AI trade. Now, this is one that we've
talked about before, but this is a little bit unusual.
I would agree with Cobec on this one. And Vidia
is now down six percent. This was after earnings was
flying high just last week. Remember in video actually outperformed. Meanwhile,

(10:09):
the SMP is now up point two on the day. Now,
there could be a couple of things here that you
really have to consider, and maybe the market has started
to look at this incestuous idea of financing your customers
so they can buy your product might not necessarily be
a great thing. And I understand we are in the
early days of major involvement in how AI is going

(10:32):
to be integrated into the broader market and also the
broader strategies around where tech is going. But this is
never you know. I'll give you an example of this.
Back in the late nineties early two thousands, Dell did
this a lot, and they were building a computer Titan business,
and they started financing a lot of the retailers to

(10:52):
sell Mordell's and essentially that was great for them for
a while, and then all of a sudden it was
not great for them, and That's the question. I wonder
if Nvidia is facing now as we continue to see
them backstopping a lot of their own customers and no
really end in sight in terms of how this is
going to end up. So could we be seeing an
aibubble playing out because this will affect crypto in a

(11:15):
big way. Look at this right here, This might be
telling the tail. Apple down two percent, this off the
all time high, Google down two. You can kind of
see Amazon down fifteen, big deal, Microsoft down fifteen, in
Vidia down sixteen, twenty off on Tesla, Meta twenty five,
pallunteer twenty six, and Bitcoin down thirty three off of
its all time high. But Ethereum forty five percent down.

(11:39):
That is a sale. That right there is a sale.
Coinbased down forty six Last up here, micro strategy down
sixty nine percent. And if you consider that along with
Michael Saylor's strategy in general, the stock is bleeding. He's
not backing down off of this bet. You look at
a couple of points in the highlight here over sixty
percent on the year, strategies share are up by more

(12:00):
than five hundred percent. This of course is looking at
the long term. But Apple recorded one hundred and thirty
percent gain in that same period, So there are benefits
to this. The real question is are investors willing to
hold this long term? Are they willing to go that
extra mile to be able to support what Michael Saylor
has been doing. Other people say, no, you've got JP

(12:21):
Morgan potentially on a short here. I don't know that
is a short as big as they're claiming, And I
definitely do not think that if we saw a pomp
of fifty percent that that would ever put JP Morgan
at risk of bankruptcy, So that I think is just
a little bit more of sensationalism. The point is is
that this is like any other trade. You're either in

(12:42):
it long, you're in it short, or you're in it
to hold for a long period of time. Where are you, guys?
Let me know in the comments down below. Hit them
down there. We always love to get your feedback. By
the way, if you're not subscribed to the channel, make
sure and do that right now, because this is the
place to catch all the news around crypto tech and
how this is changing the financial industry of the future.
Other things you got to look at within micro strategy,

(13:04):
This is kind of interesting strategy will definitely be removed
from the MSCI, and I think that hurts micro Strategy,
and I think it hurts them in the sense of
validity to Wall Street. And this is another problem, which
is what Ted was talking about here. I love this
guy's ex handle, but strategy not a real business volatility

(13:27):
product for hedge funds. We're seeing a lot of people
now starting to play this in the wrong way, which
is mostly in a short position. Remember Tesla was in
this kind of hunt in their early days where Tesla
had a lot of shorts. Elon was costly fighting against them,
and eventually it broke out for Elon, but mainly it
was on the principles of where that business was going.

(13:48):
And of course now it made it look like this
was a great bet. But the question is is does
micro Strategy have a narrative like that. According to most
not necessarily, because what you've got is basically a business
that's holding bitcoin, and that is pretty much it. Let
me go to a clip real quick, because this explains
a little bit more. Take a look.

Speaker 5 (14:06):
The market could be very skeptical of the prospects of
that crypto itself because a stock is a discount to
the future, and then a crypto token is a discount
to the future. So the stock in theory is going
to be signaling price expectations about the crypto, maybe even
before the crypto does. That's why if someone's trying to

(14:28):
figure out when bitcoin bottoms, they're actually better off watching
micro strategy.

Speaker 1 (14:33):
Okay, so when you listen to that clip, there's two
things here. One, of course is and he's right, I
will agree with tom on this is that when you
have an asset like MicroStrategy that is declining in the market,
it does hurt the narrative of the underlying asset. Now,
the other thing that he's also maybe prepping for, because
this is something that he also talked about in that interview,

(14:55):
is if you think about all the dats that are
currently in the ETH ecosystem, there's a lot of junk
in there. Could he be setting up to acquire some
of these dats which would give him the benefit of
a better market position around eth. This, of course would
shine a big light on B, M and R to
become the new micro strategy of Wall Street. Maybe there's

(15:16):
a bigger plan going on here with what Tomley is
up to. We'll see he goes further in this interview
and this topic on where the FED is and how
it relates to ethereum, take a.

Speaker 5 (15:27):
Look, Uh yeah, Macro's is actually really a big deal, Chris.
You know, crypto was the first really to sniff out
like and it's going to be responding to a FED
right and if the FEDS remains hawkish and executes policy error,
you know, that's bad for crypto crisis. That's why it's

(15:50):
really important for anyone involved in crypto understand that what
the Fed's going to do is a big deal. I
think the FED is in a very difficult spot because
if there wasn't what was what looks to be is
political interference, I think the FED would be cutting without question.

(16:13):
Now the ethereum and bitcoin are public tokens, and so
their price isn't going to be purely anchored on fundamentals.
You know, they're going to be reflecting investors' perceptions. There
is downside maybe to twenty five hundred, but that that's

(16:33):
minor compared to the upside of trying to discount a supercycle.
So we think eth can be seven thousand, nine thousand
by the end of January, and that's that's a huge
recovery move, but that's also pretty typical of what could
happen in the fourth quarter.

Speaker 1 (16:48):
All right, A couple of things within that clip. He
does get into the point of the FED having a
very interesting position right now because it does affect crypto,
and crypto is one of the ones that sniffs out
what's happening in terms of policy errors for the FED
quicker than any other asset. One thing many of you
would say is, well, Paul Hey, Tom Lee's been calling
for all time highs by end of year for both

(17:09):
bitcoin and ethereum. Granted that is the case. I would
agree with that under certain conditions. Is what he has
kind of been falling back on. I disagree in the
sense because he's been very bullish, but him pushing this
into Q one isn't at the very least an interesting
reposition on the market. And he's a little bit less
bullish on ethereum than he was previously, so clearly he

(17:30):
understands the impact of the macroeconomics playing into this. All right,
So I want to go to this last clip, which
is Kathy Wood talking about both bitcoin and also quantitative
easing and the impact that's going to have to take a.

Speaker 6 (17:42):
Look, maybe it would become half the market cap of gold,
it would take some share from gold, or maybe expand
the market. Well, that market has doubled, so I don't
think our bull price should change all that much. We
should have been quicker to say all things equal on

(18:03):
CMBC the other day. So I just wanted to clarify
that we are very bullish on crypto assets, but we
know that they are the most susceptible to liquidity draw downs,
and I described earlier. We have a number of reasons

(18:24):
for liquidity draw downs now, but we think that they
will be cleared by the end of the year and
hopefully by December tenth when the FED uses all right.

Speaker 1 (18:35):
Of course, that was Kathy Wood addressing her previous statement
she was talking about even on CNBC where she had
adjusted Bitcoin down but didn't allocate for the market penetration
that we've seen another asset, so I can get where
she's coming from there. I guess the real question is
if we continue to see micro strategy moving down in
the market, if they get delisted, those kind of things happening,

(18:56):
what would be her position around bitcoin at that time?
Will she continue to hold this bullish narrative or because
remember she's holding both assets, both in ethereum as well
as bitcoin. Let me know what you guys think, how
she's gonna fall on which side of the asset war
that's going to be going out there. Okay, this is
another piece of news that hit the market. Klara of course,
introducing klarna usd. This is their first stable coin. The

(19:19):
other thing they're going into is being able to purchase
crypto with loans thirty day, almost like payday loans that
are interest free. And the idea is, and I'm not
supporting this, guys, for those of you or even considering this,
but the point being is that there are those who
don't have access to digital assets right now because they
don't have the liquid to go out and do it.
This could give them very light exposure. Even if it's

(19:42):
only one thousand dollars, if you were willing to lose
five percent of that. So if you think about that
fifty bucks, all right, you could go out and say,
I'm willing to lose five percent of this if the
market doesn't go up in thirty days, But if the
market goes up ten I'm up ten percent. So those
are the kind of scenarios that could be going into
Clarina's strategy and let me know if you guys would
even use this. I think most people on our channel

(20:04):
would probably not go in this direction, but maybe you're
a brand new crypto investor and this might be the
route for you. Hit some comments down below, let me
know how you would do it. All right, one last
thing here, guys, I want to jump on with Polymarket.
As you see here, they just got CFTC approval for intermediation.
This of course paves them into the United States. One
thing to consider though, is back to the point that

(20:25):
we were talking about at the beginning of the show,
is the amount of instability that is happening around this
FED rate cut. And I know that there's some announcement
now that just got broke on Twitter, is that Kevin Asset.
Hasset could be the new FED chair. Many people would
say that could be bad for crypto. That also could
be very hawkish for a rate cut in December. So

(20:47):
you can see the craziness that we're going to look
at between now in December the tenth a lot of swings.
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(21:09):
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