 Great welcome to July set news. My name is Rob and we got a lot of things to go over So just as the thumbnail and title suggest there's actually some good news from the Federal Reserve We're gonna take a look at exactly what they said yesterday before that. We'll do a quick market cap We'll talk about the red day. That is crypto. We're talking about who's in the money who's out of the money I'm talking about liquidations plus we're gonna talk about a little negative decoupling not the decoupling you want But the decoupling you deserve We'll take a look at that as Fed comments and then we're gonna talk about Because we there's a big discussion about quantitative easing and quantitative tightening We're gonna take a look back at history. I'm gonna show you exactly what happened the last time the Fed came out and said we're gonna do some quantitative tightening and Surprise it is not good. And then lastly we'll take a look at how 50 plus Legislations as far as bills are pending in Congress and how Sam Bakeman freed CEO of FTX Schools everybody in this nice little video. So we'll go over all those things and we'll do a Q&A at the end but first let's take a look at what is going on today and You got to remember I know everybody's a little bit down the dumps because no one likes to be in a prolonged bear market But we knew it wasn't gonna be easy did anybody say this is simple if it was so easy everybody would do it that's just not how it works and You just have to be mentally prepared for the long slog that is ahead of that is ahead of all of us and Some of you have done this once before some of you know twice three times five times before so it's not new to you But just remember yes Inflation is there and of course it eats up the dollars that are in your bank account But you know like I said here aetherium just did that might last 24 hours, but remember These things gonna keep happening we might even go down we might I mean who knows I don't know We could go down further or we could go up nobody has really much of a Crystal ball, but if I take a guess at it probably gonna be in for some more pain But remember the strong do win in the end So we're gonna take a look at some positive news and some negative to give you a little balance for the day So right now we had a pretty good Piece that happened for the S&P 500 and Nasdaq We're gonna talk about some positivity that the Fed did and what I do for the market. Absolutely nothing It actually sent us into the other direction As far as the red day so right now we got Bitcoin down 0.7 percent. Why well, we'll take a look Ethereum down 5% good news though tether and USD coin are stable and Up actually 0.1 percent. So if you're looking for some positivity, there you go Binance going down XRP Binance stable coin is up to a dollar. All right, let's take it for what it is Tron is up for some reason if you try on holders and everything else is pretty much red. Jeez This is a pretty red except for sell out 12.5 percent And I don't need to tell you because you look at your portfolio just like I do So the question that I had was what the heck is going on here. So first of all I'm gonna jump ahead real quick. So when I see numbers like this go down I expect the S&P to be down and Nasdaq to be down as well because they are correlated I've been talking about this about this for months. However, if we take a look today, let me refresh this This is up 2% for today. It's pretty good 2.18 percent so still up and of course Nasdaq I believe is still up as well and that's the one that's more closely correlated but not today So if you want to see some Uncorrelation of the markets, you got it. Unfortunately, it wasn't aware that you wanted to be so why is that? Well, if we take a look we can look at TA and all those things I'm not a TA guy. I'm just not there's way better channels than me to take a look at TA Anybody will tell you that but there is something to be of notice here. This is from into the block and You can see right here This is just for Bitcoin itself as far as like holders in the money and out of the money right now right now You've got not too many people I mean it like half as far as into the money as far as bitcoins Remember if you're out of the money, you probably got in at 2020 2021 maybe 2022 and you're not in the money because Honestly, you haven't been around for quite some time now Maybe some of you got in you sold but this is the statistics we have and when you got a lot of people who are still a little bit in the money and There is a bear market and there are the macro events that are going on which we have talked about at great length Let me take a look at you just the GDP worn Ukraine the lockdown to China You can take a look inflation rates all those things right You're still gonna see a little bit of people in the money And if they need some they will probably sell some because you got to pay the bills People got to keep the lights on that's just that's just how it is However, I think as you start to see more people out of the money Which at some point people like you know what just out it would make a lot of sense to sell some people will But I feel not that I can have any crystal ball But I feel that there's a lot There's a little bit more of max pain to go through and that is what it is and also just remember this as far as holders composition by time Address is according to their weighted average 60% of people in Bitcoin have hold held for over a year Diamond hands. Good for you guys 33% one of 12 months and then of course less than a month is seven percent now I am heavily in this range in the one year plus actually soon like five years plus but this one right here less than a month these are people who are out of the money and Who may have sold or are trading around and doing whatever that they're doing which actually isn't my next point liquidations so if you went long on Bitcoin You know and you want to do leverage it's up to you I'm not a leveraged trader, but I can tell you I take a look at these charts every so often to see what happened and This is by by bit or coin glass excuse me calm They'd rebranded and you can see that just yesterday You had almost about 350 million in long liquidations and of course shorts because it bounced around a lot But I will tell you this if it's me and I'm just looking at this chart as a layman There's a lot of a lot of longs heavy heavy longs being liquidated here. Look at this one 800 million. Oh, wow That's just the 8th of May And then over here 668 million people going long and long and long and then whatever else I'm not telling you to go short because I don't do that But you can do whatever you want to but I will tell you this I do get a lot of emails of people who don't know what they're doing and They fall prey to leverage trades and if you know what you're doing It's all up to you, but I will tell you this it sure does create a lot of instability So that's what we have for what's going on in the market. Let's jump into the main story, which is this the buried Fed comments and We're trying to find some good news that it's out there and this is all as good news But you have to understand that the bears are firmly in control of what is going on right now with the crypto Digital world and that is just true. You see sell-offs. You see people I mean shorts didn't get didn't get liquidated It's all longs and they are gonna push that price down. That's just how it's gonna be So when we take a look at this here Actually first I just so you know as far as like why the S&P 500 and what and why Nasdaq went up is because of those macroeconomic Factors, which look like this. So just real quick The reason why you see our Stumble and there's not Alibaba I thought it was interesting climbs more than 13% after the Chinese internet giant posted better than expected results as Business has got a lift from COVID related lockdowns in China. It's amazing We have a bunch of lockdowns in China and people are gonna order a bunch of things online have it delivered to their apartment and houses So there is some good parts of COVID and that's one of them April pending home sales Failed nearly 4% bigger than the 1.5% drop forecast in the six straight month that declines That's actually good in my opinion because it'll makes a housing more affordable for single-family homes Mortgage applications have plunged over the past few months Falling by a total of 26% is a lot with no bottom-in-site as potential buyers recoil from the surge of mortgage rates Not rocket science when you've got that would be home purchase rise by 50% Eight months expect more the same and will feed to close existing home sales. And here's the good news though Ernie's report some other came out pretty good Weak lists are weekly jobless claims came in lower than expected by five case That's a little bit of a bump and then but this wasn't so great the second look at the Q1 GDP fell to 1.5% instead of the Initial estimate which is 1.4 and of course the negative 1.3 So even though they had this some good news some bad news as the P doesn't seem to care is NASNAC It's just the problem here is I think institutions some places Wall Street are treating our space as a personal piggy bank And yeah, that's what we have. So jumping in then To some positivity as we get out of that stuff and this was I have them This newsletter I get the daily upside. There's a link in the description. It's a free newsletter Don't really anything for it, but it just kind of shows you what's going on in the macro space This one really caught my attention So congressional budget office Projections are talking about recession fears are easing those and they states and then of course what I'm going to read to you is some of these Quotes from different headlines the Fed minutes show officials expecting to raise rates three times to address inflation Fed minutes point to more rate hikes that go further than the market anticipates So if you get headlines like these it's a little bit of a fearful factor didn't seem to affect the traditional markets just ours But buried in the Fed minutes released yesterday was a hint that the central bank has some flexibility More than enough in fact to send markets soaring on the day, which we saw In the latest minutes from the Fed's monetary policy setting body with that markets should expect at least two more 50-point rate Hikes, I think we all were aware of that the question though is is that priced in some people say yes I say no, but it is what it is They also show the Fed plans to become data dependent When weighing policy action, and this is super important for what we're going to talk about next As far as what happened with the quantitative tightening which they're going to do right now data dependent is code for flexibility and When we talk about what they're going to do with this tightening aspect if they didn't have this flexibility They learned from what happened before this would be pretty awful and then So we'll give that a second, but in addition of the favorable verbiage from the Fed the Congressional Budget Office released data to suggest the economy nor inflation is quite as bad as some I believe Inflation adjusted GDP is expected to grow 3.1 percent year over year in the fourth quarter and That's down from 5.5 percent, but it's up from 2019's lackluster 2.6 CBO estimates inflation measured using the CPI will cool to 4.7 percent in the fourth quarter So if that is the truth if the Congressional Budget Office says, you know what? I know we're at 8.5 percent even though we really didn't tell you it was 8.5 We think it's gonna cool down to a little bit over over half of that and we're gonna see some better days So if that pans out, I think we're in a pretty good spot But again, it's anybody's guess especially with the macro environment To balance that out CBO delivered to some short-term good news to go along with a long-term frightening news And the bad is this by 2032 the deficit here in America will increase to 6.1 percent of GDP It's a lot But the good news is this year it'll drop to a cool 1 trillion which is down from 2.8 trillion So again, these are all numbers. I think that people look at I think that's a good reason why you've got these types Of bumps in the market. So that part is great, but here is It's bad news and it's good news and it would be bad news if you just read this article But what we just talked about that data dependent that flexibility is going to be super important Just remember those terms right now as we talk about What the Fed's quantitative time means this was a great article by Christopher antsy over at Washington Post and this was from April 7th And it's gonna break down beautifully how this is how this has played out in the past not just in America But in other parts of the world what's potentially could happen the history and of course where we go to from here. So What's quantitative tightening? I like how he says it's the opposite of it's the opposite of quantitative easing so instead of printing a bunch of money they're gonna take all that money back essentially and The Bank of Japan pioneered its use in 2001 after had run out of conventional ammunition Lowering its benchmark short-term interest rate to zero if you know anything about the economy in Japan That pretty much decimated for a very very long time and it's still in a slide correct me in the comment section a Quantitative easing essential bank buys bonds to drive down longer-term rates as well as it creates money for those purchases Increases the supply of bank reserves and the financial system the hope is that these lenders Pass that liquidity along as the credit to companies and households sparing growth. They don't hoard it That's the big thing So how does it happen? So by the Fed letting the bonds its purchase reach maturity and run off its balance sheet because a member it went from I think it was 4.6 to like 9 trillion on their balance sheet They doubled it effectively created the money used to buy the bonds out of thin air And that's is essentially what you do with quandary and you just print it But you can't keep doing that because that leads to super inflation which is from right now Then the Treasury Department pays the Fed at the matured the bond by subtracting the sum from the cash balance It keeps them that does it on the deposit with the Fed effectively making the money disappear amazing If you try to do that nothing any other business that's called fraud But for the central banks, that's just a Tuesday So have central banks made the switch before no The Fed use quantitative easing for the first time Let me say that again the Fed use the quantitative easing for the first time in The 2008 financial meltdown and during the weak recovery that fall then they implemented quantitative easing Once it thought the economy was sufficiently strong the tightening lasted for a little less than two years From 2017 to 2019. This is super important. They've only done it once it was a Not a less than a futility it worked for what it was But there are some caveats. So I'm gonna skip this in the middle part. I linked this description. You can read this This is the meat and potatoes How did the markets react last time for quantitative tightening? So you had Chair Janet Yellen from the Fed now. She's part of the CFTC great Said in June 2017 that this is something the quantity that will just run quietly in the background Over a number of years. It'll be like watching paint dry So remember Every time you hear some expert talk and say just how Something won't work and something doesn't doesn't need to happen or whatever else remember experts can only tell you what was They can't tell you what will be because this was a new prospect and Janet Yellen for as much Background or she has in the financial sector. She was wrong as well So just keep that in mind as we move forward because crypto is one of those places that there's not a lot of people I can tell you what's gonna happen. All right, but the bad So quantity of time tightening started without a hitch in October 2017. That's pretty good Which we're here right now, but just three months later bonds slid across the globe and stocks dropped by November 2018 Some market participants were arguing the Fed had shrunk bank reserves too drastically Leaving lenders scrambling for cash and rolling money markets the dollar strengthened putting pressure on emerging market borrowers that have built up dollar Denominated debt. So what did the Fed do? Well at first it kept the the tightening policy and that's when Jerome Powell came in because he took over for Yellen and And he said it's on autopilot. Don't worry. So again Powell is wrong just like Yellen But here's the kicker and this is him. This is the crux after the S&P 500 index Tumbled almost 16 percent Over three weeks in December 2018. The Fed was like, maybe this isn't the best idea to keep going It abandoned rate hikes in January and went on to announce the phasing out of quantitative tightening in March 2019 Did it calm the markets down? Well rates surge in the repo market It's a source of funding prompting the Fed to inject short-term liquidity And it kept going. So here's the thing remember in 2019 Little bit wonky, but then what did that lead to? Well led to 2020. That was a pretty good year, especially for what was happening Unfortunately, we had COVID and they had to step in and then they did quantitative easing again from 2008 And now we're back to quantitative tightening. The thing is though that data dependent what Because Jerome was around when they did the quantitative tightening in the beginning and he hopefully I would think hopefully would learn from his mistakes They go, you know what? We want to soft landing we probably won't get the soft landing But we can't just say we can't just keep raising the rates and we do not want to see like what happened in December of 2018 Well, we lost 16 percent on Wall Street on the S&P 500 So I think what they're gonna do data dependent They learned the mistakes from before and hopefully they'll say, okay We can play around a little bit because we understand what happened in the past, but There's also this part here any new safety valves This time the Fed has new tools that can use to avert at least some short-term strains of financial markets that introduced Standing repo facility which can provide as much as half a trillion dollars or 500 billion of cash overnight to the banking system of the repo It's just and a separate facility offers dollars to offer central banks around the world So you see how things are kind of connected here They're like, hey, we're gonna give you data dependent on These raid hikes and then we'll probably back down just like we did over here But we have to do the right do it the right way because we don't want to keep having Inflation rise and hopefully if the CBO is correct like they talked about over here Hopefully it does the inflation rate goes down from 8.5 percent to 4.7 or in the fourth quarter We will see and yeah, let me let you think about that in the comment section and then here's some other It's moderate news take it as you will for legislation and This is the article. So I found it interesting Because I have a very unpopular opinion in the crypto space and you know what I believe that we should have some regulation We should have some parts. We should have some clarity and I think that will Really get us into the next level of crypto and digital assets. I don't like the ambiguity. Give me the it's just like tax loss Give me the rules so Like to say like this so I can bend them not break them But I can do what I can want to do legally and then move to that next level if I don't know the rules How can I play the game? This is the big problem. So I think this is what we need Here's what we got so Congress is introduced 50 digital asset bills impacting regulation blockchain and CBDC policy, which I'm a fan of Okay, so there's good parts in here in this bad parts. I'm gonna link in the description because there's just too much to go over So the hundred eighteen Congress have reached a milestone 50 bills and resolutions have been introduced so far and it's all different types draft legislation of stable coins from Senator Pat Toomey and Josh Goetheimer, which I will tell you that if you're from the United States We got two parties Republicans and Democrats and they usually never work together But here's an example of bipartisanship amazing Pat Toomey and Josh Goetheimer. One's a Republican was a Democrat and these are Supposed to cover the entire digital assets regulatory sphere from Cynthia Loomis again a Republic a Republican and a Democrat Kristen Julliper. Yeah, amazing So what we got 50 bills identified are broken into six categories taxation CBDC's crypto clarity which I am all for and Regulatory treatment of digital assets and then there's also the last one issues of sanctions and ransomware implications of all in China rushes use of blockchain because of the sanctions and Access limitations on use of crypto by US elected officials. I like that I mean if you're gonna stop them from trading stocks or think you should then they should also not be able to get into crypto as well That's just me. I mean for the most part want to use crypto to buy coffee. I could care less couldn't care less so Here's the positives and the negatives and of course people in the comments will tell you and they are right that sometimes Regulation goes a little bit step too far. I think that we can have a little bit of a balance, but You know, that's just me worked out pretty well for the internet Law 230 when they wouldn't allow These different companies to be sued or these blogs to be sued by whatever people actually post on their on their website I'd allowed the internet to flourish and move forward. That's what I'm talking about. So This is double-edged sword HR 3684 became public law on November 2021 and it's going to be implemented in terms of crypto tax reporting by January 1st 2023 so coming up in six months or so it provided a definition of digital assets and created a new definition for a broker The IRS would consider someone for purposes of requiring tax as any person who is responsible for regularly providing Regularly providing any service Effectuating transfers of digital assets on behalf of the person. So that's okay But it could potentially include miners stakers and programmers So that's not good because if that happens then these miners they're like, I don't have I'm not gonna report on who buys The Bitcoin after I mine it or if I'm staking it. I don't have the information on like me as a as a stake pool operator I don't have the information on you for Cardano. I don't so if they want that Good luck because I can't get it and of course programmers. It makes no sense. If you're a programmer How the hell would you have the data for the people that are using your product? It doesn't make any sense. Like it like Ethereum or Cardano or whatever else. So That's bad because they screwed that up. Let's be honest But here's the good news while the US Treasury is Promulgating how the industry will need to comply. There have been no less than five bills introduced in an attempt to Modify or reverse the impact of the legislation. So I need to make something pretty clear here. And that is that we're coming up for Elections super Tuesday in November. So right now there's a battle between Republican and Democrats I think we all know that this is one of the few times That you have a lot of leverage you have a lot of leverage To if these people listen to you or not because they're all in a dog fight to either keep their seat or To actually gain a seat in their respective districts So if you make your voice heard, it's very easy whoever is in your district for in the United States Whoever that you know for whatever states or place that you're in Just Google them Find their office and send me an email and say I would like you to be pro Crypto, I'd like you to and then reference this article here about things. We're talking about HR 3684, I don't think it's fair that minor stakers and programmers should be implemented. I'd like you to Blah blah blah blah This is one of the few times you actually have a little bit of leverage because if it if they're a shoe-in for their job And I'll listen to you. That's just how it is. Remember, they're supposed to work for us. So use the lever Did you have anyhow to move on? Here's the good parts Tom emmer It's a good guy following on Twitter Public in Minnesota Andrews had introduced previously the safe harbor for taxpayers with forked assets It excludes from gross income or income tax purposes any amount received as forked Convertible virtual currency. So if something forks and you happen to gain that There's no taxes. That would be great It also would establish a safe harbor period to suspend any penalties To a taxpayer who receives a fork convertible virtual currency until the IRS Issues regulations or guidance. That's what we should do with Gary Gensler until you give concrete guidance Then there should be no fines there should to be no fees and you shouldn't be able to shut down these different centralized exchanges For offering yield give us guidance publicly not behind closed doors, and then we'll talk anyhow Susan Delbeen with Again other Democrat from Washington and Republic of Arizona David Schweiker introduced the bipartisan virtual currency Tax Fairness Act would exempt personal transactions made with virtual currency When the gains of 200 bucks or less makes sense to me I don't see why we should be paying capital gains on something like that Because I mean if you want to if you want to use Bitcoin and buy coffee like this classic example Why you got to pay capital gains that 200 bucks or less wipe it all out and again I will tell you that Republicans and Democrats pretty much hate each other right now if you don't know I mean and Not all the time, but it is nice to see some bipartisanship in the three laws We just talked about or three bills. It was bipartisan. So that's good Something positive to take away from this and that's pretty much it I didn't cover the whole thing because it's super long and I've only got 24 hours in a day So I linked that in the description. You can check it out. There is good and there is bad And that's what we have and to finish this up This one's great so out of all these laws That are here, especially that piece where they said that there was five no less than Five different bills trying to undo the the verbiage of 3684 you know what the reason is is because of just awful education and This is a Sam Baker freed. This is him talking to I believe this is a congressional hearing and he just gets pissed off after so much time because of the stupid questions and people You know talking down to him like he's a kid and he just this guy's my hero That's all say let me I I want you to hear this in crystal clear Format, so let me share The tab And let me make sure the volumes absolutely blow your ears off I'm gonna mute myself But I actually found something a little bit offensive that was said I'm gonna be pretty blunt that most of the traders on our platform know a lot more about these contracts Than many of the people in this room including many of the people in this room were condescendingly talking to them about what they do And don't know and shouldn't shouldn't be offered Anyway, I just had to get off that off my chest a little bit and I think it's to some points about consumer choice here I'm not saying that should be a sort of like be all and end all but I think there is something to be said for it and I think that that there is some irony in You know some of the statements made by people attempting to protect those who know massively more than they do About the topic and who understand these products extremely well on most of our users do But I actually found something a little bit offensive that was said. I'm gonna be pretty What's the traders on our platform know a lot so that's it I got to give out to Sam for for saying it like it is like Why are you talking about me when you only know what you're talking about so just be quiet and listen up There's a good reason why the good Lord gave you two ears in one mouth so you can listen twice as much as you talk And yeah, that's all we have for today. So look a little bit long on the news But it was pretty detailed, but that's all we have. So if you got to take off, that's great time is precious