Bitcoin Is Stuck... What’s Next?

**Bijan Maleki** (0:07)
Oh my God, I wasn't even ready to start. Happy Wednesday, everyone, and welcome back to another edition of Trading the Markets. If you are joining us on Yahoo or on X, please know that if you want to ask your questions live, you have to be an RV Connect member and above to ask Kris any questions you have by your portfolio, any charts you want to look at, there's any questions in general. You'll be RV Connect and you can ask on Discord or on the platform. And right now is a great time to join because you can join RV Connect right now for $14 a month or $150 a year. So right now we have our best ever offer going on at Real Vision. Obviously the markets are going crazy. A generational setup is forming, which is why we're offering the best get in price right now. So head on over to realvision.com/pricing for more information. That's deals on Connect, Alpha and Pro. We've been releasing a lot of new dashboards. Kris's new AI dashboard just went live yesterday. In addition to his crypto dashboard, you'll have Joe Bland's macro portfolio, you have Jamie Kutze's dashboard, which just went live today, Steno's Alpha dashboard, the Pro GMI dashboard and Steno's Pro dashboard as well. So there's a lot of live portfolios going on in addition to a lot of tools that'll help you take emotions out of this market and navigate it well, which is the GMI risk monitor tool and the GMI compounding tool. So a lot of new stuff hitting the website and a lot more coming too, so stay tuned for that. Again, realvision.com/pricing for more information. Kris, happy Wednesday.
Not a happy Wednesday for the crypto markets.
Bitcoin is what? Teetering at the 60,000 mark, give or take. Last I checked, but what's going on with you?

**Kris Bullock** (2:10)
Yeah, no, you're right. I think in order to just paint a broader picture here, I want to spend a little bit of time starting out by breaking down what's going on in a more macro sense, talking about liquidity and M2 and credit spreads and risk framework and all of that. Some of that stuff, I touched on those indicators on the AI show on Monday.
Then later in the show, of course, we're going to get into Bitcoin and break that down. I also want to talk about MicroStrategy and the STRC saga that's going on and how all of that is contributing to Bitcoin as well. So yeah, lots to break down for sure.

**Bijan Maleki** (2:49)
Yeah, absolutely. Before we came on air, you were saying obviously we're talking about the crypto markets being down, but the stocks are holding pretty steady, which is anchoring everything. So I know you wanted to talk about the macro before we get into Bitcoin. So yeah, let's get into it. Again, guys, if you have any questions, just throw them in the chat and we will get to them, of course.

**Kris Bullock** (3:14)
Yeah, so the big story right now is liquidity, or sort of lack thereof. We're in a contraction, and this is the, this yellow line here is the global M2, the big liquidity measurement that we all use. Several of us have different, slightly different variations of this, but they all kind of generally say the same thing. And right now it's saying that liquidity has rolled over and is in a contraction phase right now. And so kind of to explain what this means or why this matters, I kind of want to zoom out and just talk about what's happening here. So when you have less liquidity, that means there's less money in the financial system. And so when there's less money in the financial system, that increases volatility because you're, you know, think about it like your order books, like you go on an exchange, there's just less people active on the exchange. There's less money in the order book. And so when there's less money in the order book, that means it takes less money to move the needle more. And so you get a buy, a big buy come along a big sell come along and that will cause a huge spike to the upside or to the downside because there's less depth in that book, meaning there's less liquidity in that book. And so less liquidity equates to higher volatility. So you see liquidity going down. If you go over here and look at the VIX, this is why we got this big VIX spike, over the last week plus up into the 20s. That's directly correlated. So again, less liquidity means higher volatility. And when you have higher volatility, big money doesn't like volatility. Institutions don't like volatility. And so when things are volatile, they take their money and they go and they flight to safety. They put it in things like the dollar and things like bonds that don't move very much because that way they can just sit on the sidelines and wait for this volatility to go away. So that's why you have this dynamic here where, you know, again, liquidity down, volatility up. Then you get a spike in the dollar index because again, people are flight to safety, you know, de-risking into the dollar. And then you also get bond yields going down because again, people are de-risking into bonds. So this is the whole dynamic playing out here before our eyes. We're seeing all of this. So that's why the dollar is going up. When the dollar goes up, that's generally bad for risk assets like crypto, you know, so that's why crypto is being impacted by the also gold and silver and things like that, also being impacted by the dollar going up. But there's a separate dynamic going on here that's also kind of reflected in this Dixie chart here.