The Fed Is Trapped! Bitcoin Already Knows! | Bitcoin Simply

**Dante Koko** (0:00)
The Fed is trapped, and Bitcoin knows it.

**Luke Gromen** (0:03)
If the Fed hikes, they're gonna lose the long end. If the Fed cuts, they're gonna lose the long end. So the Fed's only choice is how do they want to lose the long end?
And then what do they do to try to contain it?

**Dante Koko** (0:15)
Hold on, listen to what he just said. If the Fed cuts rates, they have a problem. If the Fed hikes rates, they have a problem. Bitcoin seems to understand that no matter what Kevin Warsh says at Jackson Hole, there's a long-term structural problem. That's independent of what the Fed says or does. And that's why underneath of Bitcoin's move back to 80k, something strange is happening. Fidelity's head of Global Macro said that Bitcoin and Gold are beginning to separate from stocks and bonds. And after lacking everything for most of the year, both have room to run. One of the largest corporate buyers of Bitcoin says that the buyers that are arriving now aren't going anywhere. And Luke Gromen, who sold most of his Bitcoin when the market broke down, says that he's getting interested again. But why are all of these things colliding at once? What's actually going on? Who is the real buyer of Bitcoin in this size? There's a massive amount of capital that's flooding in the Bitcoin that knows the Fed is trapped by the debt market. Today, we're going to talk about it. And we're also going to show you one chart that shows exactly every single time that the bottom is in. But it's not all roses. With Bitcoin going back to all time highs, we're also going to explore the dark side of that coin that all Bitcoiners need to start preparing for. This is Dante Koko, Bitcoin Simply. Let's go.
Let's start with the price. We're back in that 79k to 80k range again, even though we did break 81k. I think if we break 82k, we're going to gap up to 90k like that. Bitcoin's price is moving higher. That doesn't tell me much. Bitcoin goes up, Bitcoin goes down. I get texts, are you okay? People get excited, people panic. What I really care about is how Bitcoin is going up. So this is a pretty cool chart because it tells us a couple of things. The price is up, but the amount of funding coming into Bitcoin is down, and the spot volume is up. And this is interesting because it means that there are large buyers that are moving in size. When Bitcoin starts to rally, it's usually just leverage or a leverage position getting blown out. But this seems to be that there's a move of larger money, sustained money, that we haven't seen in the last year. Jury and Timmer, the head of global macro at Fidelity, is catching wind of what's happening. Bitcoin is becoming uncorrelated with stocks and bonds and it has much more room to run, as the other asset classes have already made their move this year. Which is interesting because Bitcoin is always stuck in some sort of identity crisis. Is it digital gold? Is it tech? Is it NASDAQ with leverage? Is it a risk asset? Is it a hedge asset? Depending upon the month and the news cycle, all of these things are true.
Yes. But something is different about this rally. Because people are starting to understand, I'm not just investing in an asset class. I'm investing against the currency itself beginning to collapse. Sam Callahan gives us a little insight into what's going on.

**Sam Callahan** (2:55)
Everyone's celebrating this time as volatility has returned back to the upside. And I think this is related to what's occurred at the Treasury over the last week when they're doubling the amount of share buybacks. And really what this points to is the lack of sustainability of the fiscal outlook. And the currency, the basement trade was really popular in the earlier in this year. And then AI kind of took some of the spotlight away from that. So Bitcoin and gold became out of favor. But the important point to make is that it wasn't a trade. This debasement was structural, meaning that it's related to the fact that we have $40 trillion of debt.
They can't afford to have the long end of the yield curve rise because interest expense will explode. Interest expense is already the third line item this year. Fiscal deficits are on track to exceed last year. It's supposed to be 2.1 trillion. Investors are starting to ask questions, and they're looking at alternatives and hard assets because when they come out and say, hey, we're going to go to Treasury buybacks, really what they're saying is we're going to sacrifice the currency. And you saw that in the dollar move in response to that news, and you saw that with the moves of Bitcoin and gold. So people are returning back to hard assets that will benefit from an environment of currency debasement.