The Real Reason Cryptocurrency Is Going Down (2024 Outlook)

Something's wrong and I can't put my Finger on it there's somebody or Somebody's who are selling just keep Accumulating Ownership of the most important networks The world has ever seen today I Interview American investor Mark yusco Who gives his outlook for the Cryptocurrency market into 2024. we Talked BlackRock and Bitcoin we talk is Binance safe we talk Silvana and before All that Mark what's your take on the Crypto market today you know Kind of afraid of this question Um because It's it's been a very strange summer Right you know if you follow My psychologic which I've been talking About for a while uh you know we Transitioned from crypto summer I'm Sorry crypto spring to crypto summer on June 15th And you know many people when they hear Crypto summer like oh good that's that's The big up well Actually no that's crypto fall so crypto Fall that period kind of right after the Having is when you get the really big Parabolic moves Crypto Summers kind of a funky period It's generally upward trending Although very slight and in fact a Couple of the Cycles have been pretty Flat-ish they're still generally up and

I have been Positive in the sense that Or I've been positively inclined we've Been making higher highs and higher lows So again the trend is generally up but This this latest move down in Bitcoin Sub 26 is starting to get close to that That previous low which look if we break That Then the the trend changes and and I Don't I don't like that so to your point Uh things are looking depressed Other than hash rate still really strong Uh transaction volumes are okay But The buzz is definitely down you know you Don't hear people talking as much about It Um maybe that's just the revamp of of Twitter I'm not going to call it X by The way Um and You know engagements down everywhere and People aren't really going there as much I find myself spending more time on LinkedIn actually which is interesting Um So that's a long rambling answer to say Summertime is normally Actual physical summer is normally a Time of lower volatility and lower Volumes because You know people are out and I think that Was true again this year now the

Difference between traditional markets And digital asset markets Regular markets when people are away Things just shut down because you know They're the markets are closed more Hours than they're open in the digital World people can trade anywhere so in Theory even if you're on vacation you Get your phone with you you can still be Active But I just feel like There was a lull and Um Yet we've we've had some some meaningful Positive announcements I think we'll Talk about some of them Um But generally this is a Meandering time Kind of approaching the having next Spring To me because crypto is such a nascent Space it can be affected by so many Outside factors that are so much bigger So whether that's fed tightening or Global liquidity or the housing market Fears like what do you think is the Biggest Factor Um that's sort of bringing crypto down So great question I mean really Important question I think I would Probably lean toward liquidity You know liquidity Drives markets and I've said that for

Forever and it's it's really true And particularly in digital space Particularly you know take something Like Bitcoin right one Bitcoin equals One Bitcoin always will and it Eventually we we all hope becomes a unit Of account the way we we think about Value But that's not what people talk about Right they talk about Bitcoin in Something else in dollars usually that's The number most of us talk about but if You're in Argentina you're talking about It in pesos and that's you know making New highs lately because the pesos in The toilet uh if you're in Argentina You're talking about it in boulevards or In Turkey you're talking about it Lira All of which are Dan you know those are Down so Bitcoin in those currencies is Up But the the rate of change of dollar Growth has slowed and therefore You think about it Right before the pandemic you know we Were in that 14 15 000 range Um They doubled the money supply so we Should be kind of in the 28-ish range And we're kind of in the 26 range so It's kind of where we should be if we Think about it in Bitcoin per dollar So in the absence of a lot of of Monetary stimulus

There's not a lot of of Translation change that's going to Happen so I think that's that's Certainly part of it and that leads to Some malaise most of the the stimulus in The economy has shifted to fiscal right Government still spending like drunken Sailor Um actually I'm not sure a drunken Sailor could spend nearly as well as our Government Um but they They pumped a trillion dollars into the Economy to kind of give us this this Boost that we thought yet if you ask People how they're feeling about the Economy People aren't jumping up and down right Everybody knows somebody who lost their Job or got laid off Um spending while other than Taylor Swift tickets spending is kind of muted I mean it's not it's not rambunctious So Um I I think macro Is Medium And maybe even leaning toward downward You know as as people think of uh Yeah I I retweeted something today Um I'm still gonna call them tweets too Um I'm not sure what else we would call Them but uh reposts reposts oh it's a

Repost oh the most generic name ever Yeah Um all right well X-post yeah repost all right Um but uh so I retweeted something that Uh Basically said bankruptcies were soaring Like is is bankruptcy a synonym for Strength haha Um I mean If bankruptcies are hitting all-time Highs that's usually not a really good Thing Um you know there's there's Bank Challenges you know traditional banking Challenges with with the losses in their Their fixed income books you know fixed Income markets are on Pace to have their Second negative year which I think would Be the first time in history of two Back-to-back negative years in in fixed Income so so that's troubling a little Bit Um Something it's just a very interesting Time to be an investor that's for sure When I look back the last few months in Retrospect to me it seems again in Retrospect why Bitcoin sort of had a Local top when it did only because we Had so much euphoric news all at one Time BlackRock ETF application Ripple Winning Um against the SEC huge it's been a

Two-year case and then it was sort of a Buy of the room or sell the news markets Depressed after that do you think that's Just part of a natural market cycle or Was there any hidden agenda like BlackRock probably bought six months Earlier or insiders Um and then we just went down since Those announcements Again great question Um and actually question uh pop and I Were talking about yesterday uh you know We did our our weekly uh chat yesterday Instead of Monday because of the holiday And You ask that that exact question which Is Something's wrong and I can't put my Finger on it and you know do you think It's Something going on with with binance or Binance depending on which part of the World you're you're from Um do you think it's you know some big Person unloading You know to your to your point about Insiders buying an Insider selling you Know if your goal is to accumulate an Asset You actually don't go out and buy the Asset and tell everybody you're buying What what the really smart investors Have done over the years is they Actually go out and short a little bit

Of the asset And then tell everybody how crappy the Asset is in interviews and stuff and Then go buy it when the price goes down So Again if you were somebody who was on The verge of being approved for an ETF And you were going to take massive share And you wanted to buy the asset cheap And maybe you want to put some of your Own money in there too uh you might be Contributing to downward pressure in the Short run Um so yeah I think there there Definitely could be a little bit of that And so I I would say it probably wasn't BlackRock or others buying that was Pushing it up it was you know people Looking at at The FTX now being in the rearview mirror And people getting back to fundamentals And and saying you know all the selling That was going to happen was happened And all of the liquidations some Leverage happened you know when they Kind of put binance in the in the corner Um so I I I still think blackrock's gonna be The first one approved Um When that's that's another question we Can probably talk about but but I still

Think they're gonna be the first one to Prove Um And I I still think somewhere and I this the Part that I'm I'm struggling with There's There's somebody or somebody's who are Selling and you know one of the Challenges of a Bitcoin in particular is It's pretty closely held right not that Much of the total market cap actually Changes hands on a day-to-day basis so The free float so to speak is is pretty Low relative to the overall market cap And so the fact that Somebody or somebody's Are still selling because again for Every buyer there's a seller Um Just not quite sure where that's coming From because I would have thought most Of the levered longs Had already been liquidated you know in Margin calls a year ago In your opinion how soon until we see a Bitcoin ETF and let me uh also add Sooner than we all think or uh farther Than we all think well I I think Consensus is sometime next year before The habit I think I think that's kind of Consensus Um

There's a big day coming up in a month Uh October 16th and 17th as I understand It uh October 16th is the deadline to Make a decision on bitwise's and October 17th is the the day for for BlackRock As much as I would love for bitwise to Get approved since we're investors in Bitwise Um I don't think it's going to happen Unfortunately uh sadly Um because I don't think it's a fair Process shall we say Um even though it's supposed to be uh And it's not supposed to be a king maker Um but I I think it would be optically Too big a deal for them to say no no bit Wise but yes the next day Um so my guess is they push them both But then they're gonna have the same Problem in three months so I I I I I at Some point they're gonna have to take The Heat If after all these other people you know The Winklevoss Twins were first to apply They even things just stopped applying Because you know they kept getting Rejected and you've had plenty of other People Kathy Wood you know in theory was Was first in line then bit wise then BlackRock And she already got dinged again and Again we're investors and 21 shares so You know we we think

Uh we're we're investors that are moon Which is part of 21 shares Um so I would have been happy with that One too but that didn't happen So I'm gonna go with before consensus Um because I don't think the weight all The way until next year Um But but I have no special Insight on That Um Yeah Once I'm a Bitcoin ETF does get approved Spot Bitcoin ETF is that game over in a Sense like that's Mass adoption for Bitcoin what else is there it's Certainly Mass adoption So for sure so and let's just do math so Eric balkounis Um had this great post and look you know The the industry the Ria industry Advisor industry controls about 30 Trillion three zero trillion And let's say 0.1 percent You know buy an ETF uh Bitcoin ETF That's 30 billion well 30 billion on 500 Billion that's not very much but it's Not 500 billion remember it's probably a Hundred ish of the 500 that is the free Float so 30 on 100 That would move the price price would go Up But what if it's one percent forget ten

Basis points what if it's uh what if It's one percent 300 on a hundred then we get that like That pair box bike we had in the last Run we went from 10 to 50. and that Could definitely happen now all of this Is is in Resp or in relation to fair value so Fair value today somewhere around 50k That's based on the metcalf's law curve We're below that obviously so we should Accrete toward that fair value between Now and the having next year the having Potentially doubles the fair value Because if the price doesn't rise then The miners go out of business that's Probably not going to happen so what has Happened in history is fair value Rises Price Rises and we get slow accretion to That So now we're talking could that you know See a parabolic move from 25 to 100. Sure Um and do you blow right through fair Value and go to overvalue probably Um you know what precipitates all of That Uh adoption and if 300 billion which is Only one percent starts flowing in now The the converse of that Is There's 20 billion in gbtc That if gbtc doesn't get approved and Let's say BlackRock does

Is all of that 20 billion gonna Liquidate Probably I mean probably if you're paying two Percent and you can go pay you know I Don't even know what blackrock's Charging but call it 50 basis points Um maybe it's less but call 50 basis Points you're definitely selling gbtc And you're buying the ETF so If only 10 basis points comes in we got 30 billion in we got 20 billion going Out Oh my God the price could actually Stagnate or God forbid go down in the Short run because people would freak out Because there wasn't this this big rally After the approval I think that would be temporary because Even if all of gbt gbtc liquidates which It probably will that's only 20 bills Whereas I do think the adoption is going To be one maybe even two percent now We're talking 300 to 600 billion Um that's a big move up so Mass adoption For sure Um how fast that's another question Moving to altcoins the SEC recently did Something that they very rarely do filed A sealed Motion in this case against Binance usually the SEC is loud public They want to send a message Is the other shoe about to drop for Binance

You know it's a again great question I I Think that's a hard thing for the SEC to Think that they have some jurisdictional Oversight of a company where 90 plus Percent of their volumes are outside the United States I I just think that's really hard I mean That's a stretch it'd be like me saying You know people in in Europe and Japan Should listen to what I say because I'm An American I mean no it just doesn't Make any sense Um they listen if they want but no Mandate and if you're you know Registered and where they registered in The UK and and home based in Dubai or Whatever it is Um The SEC is not your regulator now yeah You got a subsidiary in the U.S and Could you shut that subsidiary down or Would that have an impact Sure but how much of their total trading Volume is it not not much as I Understand maybe maybe it's bigger than But I think the real impact is the Psychological hit on altcoins right The problem for all coins is I see it Is the vast majority Are literally gambling tokens And that's not necessarily a slight I Mean I will argue that the vast majority Of publicly listed companies when you

Start getting down in the small and Micro caps Are gambling tokens I mean the Difference is with a stock you in theory Have ownership of equity you have a Claim on cash flows with most utility Tokens you don't so Mark you know It's a dumb statement But for for my for my point Gambling on AMC or GameStop is gambling You're not buying it because you've done Some discounted cash flow analysis and You think there's value you're buying it Because you know some and I want to see That movie so badly it looks so good Definitely I mean it just looks it looks Incredible and that measuring awesome Writer yeah oh well Maverick is he is The best I mean he truly is one of the Great writers of our time and if people Haven't read like Bitcoin billionaires You should just read it I mean it's just Such a compelling read even if you if You like or dislike them it doesn't Matter just read the book because he's a Great writer and so this and and the Casting was so good I mean So good I mean you're You're like can't help but root for the Little guys in this movie and they make Stevie and Gabe Kind of non-sympathetic which Unfortunately In this situation they kind of were and

Um I mean just brilliant casting so Although Stevie's probably not gonna be Happy about it but um uh I don't know I I struggle with the fact that There's a whole group of people who are Literally pinging their machine with You know digital representations of dogs And cats and and hamsters Etc Just because they hope somebody else Pays them a few more you know fractions Of a penny like it drives me crazy Well is it Sheba that's like 0.0001 it's like Dumb just Just do whatever you have to do to Do to get dollar and so we can you know But I guess people like having a billion Tokens that makes them feel good I guess Exactly that seems stupid to me but uh Seems like an accounting nightmare but Um No maybe it's a pet maybe it's Pepi coin That has the the so yeah yes yes both of Them it doesn't matter but but Ultimately People punting on that It's Entertainment it's literally Entertainment and there's no economic Value you know people say what but doge Is going to be the the the the base Layer of of x Twitter I'm gonna keep calling it

Twitter Um now we're going to call it X you know Here's the crazy thing I don't know if You read this story but like this guy Has wanted to have X as his company for 25 years right he bought the name for Like a million bucks from somebody and Then he did you know focus groups to try To get PayPal to Rebrand as X and the Focus groups all said the same thing That my wife said my wife said this is He sounds like an ex it sounds like a Porn company why why would I trust them If you're trying to become a Global Financial Services brand Trust is pretty important so having a Name that people immediately don't trust Is just stupid yet he still did it Like who does stuff Like if you told me that you didn't like My pink shirt like I wear pink every Wednesday you and I color coordinated Didn't know we really didn't but you Know I wear pink everywhere if someone Said your Marketing in pink I'm still gonna wear pink for brain Tumor awareness but at least I wouldn't Wear it every day because I would take That knowledge and you know people being Honest with me but this guy just doesn't Listen to that and I don't know seems Weird but Altcoin Activity

If if it's a coin where there's a Project and there's a process and There's a team and there's development I love it right that's what Entrepreneurship's all about that's what Venture capital is all about But geez the the gaming gambling aspect Day trading Pump and dumping I don't like that it's like it's like That's why I struggle with Solana right I mean Solana We're early investors we made a ton of Money you know thank you to Kyle and but Then when I find out That most of the ramp was pumping and Scam coins with Sam I I don't want to own it anymore right And that that's a shame because I think There could be something real there Right we just had a big announcement This week right so I don't know So Visa did just integrate Solana along With the theory which they already had Into their payment structure They they like it does that give you a Newfound Like You know here's the thing I think it's ironic that the thing that Was dubbed the Visa of the digital asset Ecosystem by Bank of America a few years Ago Is now being brought inside right so

It's it's like we can't beat them join Them so visas on well we don't want to Be displaced so let's go get this Technology and bring it in and and then Maybe we can figure out how to shut it Down and turn it off like you know how Big companies have worked for years Right you got a competitive threat you Buy the company you shell the technology And you keep putting mediocre technology Out there Um basically that's how gasoline engines You know dominated for a hundred years You know 1903 the biggest car company in America was the American Electric Vehicle Corp not lion right we had America we had electric vehicles in 1903 That went 46 miles And then Henry Ford bought the Technology and shelved it and so we Drove gas cars for a hundred years Um but I do I I struggle with two things my Understanding can I'm not an engineer I'm not a computer scientist I'm a Financial services guy I'm an investor But as I understand it from you know People who who are those things computer Scientists and engineers Solana struggles with accuracy Right And look if you're rendering An nft

Or gaming and you got a little glitch It's okay 99.99 is fine But if you're doing accounting 99.99 is not good right it has to be a Hundred has to be 100 and you can't have The network go down and you can't have Transactions get lost So All those things happened with Solana And that's why it was kind of heading Down this kind of nft gaming platform so Now I'd have it suddenly be Part of this Global financial Transaction settlement layer I don't know maybe I'm wrong I mean Maybe my information is wrong maybe it's Not 99.99 accurate maybe it's 100 and They fix the problem and But I still think there's too few Validator nodes to be resilient I still Think That what the theoretical maximum of Transactions per second is super high The actual transactions per second isn't All that different from visas again as I Understand it But I so to me what this is a bigger Indication of Is stable coins Stable coins are Superior technology right to ACH and and Fedwire right the fact that the bank is Closed more hours than it's open and

That I can't take my money and send it To you if I want to on a Sunday Is silly but if I want to send you usdc It's instantaneous real-time settlement So that Trend and whether it's you know Usdc on ethereum which Clearance is dominant or usdc on Salon As I understand it Um That's pretty interesting and so to me It's more about the usdc than it is the Network But it's causing me honestly it's caused Me a little bit of stress on my I think We talked about this once or twice Before The mental model that I I kind of use to Try to figure out where to invest next Is The internet model of you know We got tcpip at the base layer then FTP Then HTS HTTP and then SMTP and and then Www dot but Stack perfect Okay well what's the base layer Bitcoin probably base layer filecoin Like FTP move files with it okay good Um what's ethereum it's kind of like the Www dot it's kind of like a platform you Can build on it Or maybe it's more like https I don't Know maybe it's one of those two well What's SMTP what's what's the email Aggregator of of web3 I don't really

Know is it polka dots Cosmos Avalanche The slana I don't know so but I can kind Of get around a stack and someday There'll be five protocols not a hundred And you know 50 or whatever But then there's the Maxis are like nope One change rule all chains She's gonna be like the Lord of the Rings and just Bitcoin and then we're Gonna have lightning or Avail three and L4 and whatever else It's kind of what we have now right we Got gold at the base we got fed wire ACH And Visa That is the money layer It's not the internet layer but it's the Money layer okay that works But It's probably not going to be that Because we already have multiple L ones And so to have ethereum and Solana Competing To to host usdc well then how do I get It across one to the other oh I got to Use a bridge This is where it all blows up for me if I have all these l1s and have these Bridges We've seen over and over those bridges Are subject to attack they're vulnerable To loss and hack That's a bad system So If I'm Visa why

Why wouldn't I just pick one Right and say this is my my rail My old rail is is not good I need to Upgrade I need to put high speed rails In Um in a way it's kind of like Literally like like railroads you know We were first Europe was first then us and then China Played ketchup but China didn't lay Old-fashioned track they put High-Speed Rail and so they have better rail system Than the rest of the world And We're still to this day I don't think we Have one legit High-Speed Rail in the United States which is crazy I go to Europe they got plenty but in fact I Made this mistake I was in Europe for a Vacation earlier this summer and had Took this High-Speed Rail it was Glorious we had food and it was just it Could work and so I'll take the train in From Chicago from the airport I'll do Some calls on the way You get on the L you can't make a phone Call it's too loud I mean you literally Can't talk on the phone So That's a long way of saying I think Solana claims it's faster Which I think is true claim right I Think that that's provable

They say they're cheaper clearly Provable I mean gas fees on ethereum are Still crazy Um But I'm struggling with The accuracy and the latency and the Um And again that if if they solve that Somehow and I'm just not aware people You know write and tell me but I just Don't think that's the case so I'm Struggling with why would you go With a chain that has the likelihood That transactions could could vaporize That that's just not acceptable right if I send you money I need to know it gets there like when I Use my Visa card Well you know maybe that's what it is Maybe maybe that's okay I'm I'm thinking In real time maybe it is okay because in Visa it happens where your number gets Compromised there's a fraudulent Transaction and they just have an Insurance pool that makes it right So they back it out so that's kind of Like a a failed transaction somebody Used your road Improperly so in the event that they had A transaction go bad because there's This little you know pixel up in the Right corner that doesn't work Maybe they can backfill it with you know Insurance that that could work

In our final 10 12 minutes I want to Pivot to more big picture stuff but just Final question regarding crypto for the Average retail investor going into Q4 What's a bit of advice you would have For a crypto investor Uh couple things one just discipline you Know just keep accumulating Ownership of the most important networks The world has ever seen right so you Know to me it's easy bitcoin's number One ethereum is number two and then There's a handful of other networks that Are You know vying out to to be provable Parts of of the ecosystem you know the Vast majority of the trading tokens Knock yourself out right have fun but But have a certain amount of like going To Vegas right Here's how much I'm willing to lose You're probably going to lose it all Occasionally you might make some that's Fine Um but I would consistently acquire Ownership in Bitcoin ethereum and and You know some of the guys at the guys And gals that stop Now so that's discipline just buy some This week buy some next week buy some The week after the next month Um and accumulate an ownership just Don't do it all at once I would also and part of that is

Patience right is don't do it all at Once Average in overtime uh and accumulate a Position the same way you would with Your 401k like every two weeks your Money goes in your 401k you set it on Autopilot it goes into the index you Don't look at it for 50 years good same Thing for a portion of your you know Running money for for digital assets And the simple advice for all investors Is three buckets you got your liquidity Bucket to fund your lifestyle that has To be in cash or bonds or things that You can get to right away or credit card That you spend five to fifteen percent Of your your wealth to fund your Lifestyle okay good Then you got the 10 to 15 percent the Get rich bucket And I always say that's to do the Friends condo deal the brother-in-laws You know Venture deal the hot stock tip You got you're going to lose it all so Keep it small most people are going to Lose all of that because most people are Just bad at Trading It's fun right we all want to speculate We all want to gamble knock yourself out 10 15 don't don't make it a big piece And occasionally some people will make Some money there and look all great Wealth all of it every single last Dollar of it came from concentrated

Positions not from diversification All great wealth concentration Concentrated stock ownership business Ownership real estate and some luck and That's fine so maybe you get lucky maybe You don't but 10 to 15. that's 70 to 80 Percent in the middle that's your stay Rich bucket and that gets filled up by Your get rich bucket and then it gets Drained by your liquidity bucket so that Bucket needs to be stable it needs to be Broadly Diversified it needs to have the Endowment model kind of investment it's Gotta Have stocks got to have some bonds It's got to have some private now if You're young shouldn't have a lot of Bonds but it's got to have stocks and Equity and real estate and commodities And venture capital and some digital Assets Broad diversification keep accumulating And drop some money into it every two Weeks So that's the the singular advice and You know as we come into this this what I believe is going to be a positive Having for digital assets the stuff you Accumulate between now and the having Will probably uh serve you well Mark I Get some of the best perspective when You come on the channel I definitely Want to have you back on in a few months Get your updated take Um awesome where can my audience find

You So eases ways Twitter at markusco M-a-r-k-y-u-s-k-o uh we have a website Morgancreekcap.com I'm all over Twitter uh in terms of of Doing stuff like this so if you just Google me Um you'll find some interesting stuff But but uh really appreciate the chance To come on in and talk with y'all I Think I love best about my job is I get To talk to smart young people and uh you And your brother are just that so I Appreciate what you do for the community And and thanks for having me on the show