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Daniel Creech 00:00
How’s it going out there? It’s Wednesday, July 1, and you’re listening to the Wall Street Unplugged podcast, normally hosted by the one and only Frank Curzio,
Daniel Creech 00:21
but he is out of town, boots-on-the-ground type stuff. That leaves me, Daniel Creech, your safari leader in El Capitan to navigate these markets. You guys know the drill: when I’m here and in charge, we talk about whatever the flying Florida I want to talk about. Let’s buckle up. First, start off the program with some lightheartedness.
Daniel Creech 00:42
Hope you’re enjoying soccer and football. I caught a glimpse of a baseball game, and regular listeners know I know zero about baseball; I’m just being entertained here. The Boston Red Sox were playing Washington Nationals, I believe. Nationals strike out a Boston Red Sox player.
Daniel Creech 01:01
He’s walking back to the dugout, and then evidently the pitcher says something that did not go over well. It probably wasn’t “nice try, come back again,” or “you’ll get him next time, Buck.” Well, that caused this ruckus, and I gotta tell you what I absolutely love about baseball: there’s been some good fights.
Daniel Creech 01:21
However, most of the time, what cracks me up is that you have what looks to be like 30 to 50 grown men, athletes, amazing athletes. A handful of older, not-so-great athletes anymore, managers, and then 2 to 3 umpires break up 50 people wanting to fight with bats.
Daniel Creech 01:43
Now, anyway, nobody got hurt. It was just a bunch of, kind of, bees swarming around looking anywhere. It made me laugh, and hopefully— I know you guys are big sports fans, so maybe Nike should put something like that in an advertisement, since their stock is still a turnaround story.
Daniel Creech 02:03
Frank can comment on that. Moving along, we’re going to get political. I feel like the “ready to rumble” guy. Let’s get political. Now, I’m not getting political to tell you how to think, but simply to think. I don’t— I’m not trying to persuade you and tell you who to vote for or who to support.
Daniel Creech 02:22
That’s not my job. My job is to point things out about how and why you need to pay attention to this politics, because it influences markets in a huge, huge way. And this is only going to pick up, and the volatility is going to pick up, and that’s key. And that’s what I want to hone in on here: the volatility. Because we’re getting ready for the midterm elections,
Daniel Creech 02:42
and President Trump has announced that there’s going to be even more of a WWE event, because the Republicans are evidently going to have a midterm convention. Typically, conventions are only on the big presidential races every 4 years, thank goodness. However, we are going to now have a Republican convention. If the Democrats join that, it wouldn’t shock me.
Daniel Creech 03:02
You want to stir up your base and, you know, get voter turnout and all that kind of thing.
Daniel Creech 03:07
And as the volatility and the rhetoric picks up on the political side, it is going to go into markets. And what I want to talk about here is, man, does politics pay? Okay?
Daniel Creech 03:26
President Trump filed a 927-page filing about disclosures from 2025. Now, one of my favorite end-of-the-world websites, ZeroHedge, breaks this down, and Trump disclosed over a billion dollars.
Daniel Creech 03:47
That’s 1 billion, actually 1.4 billion, in just 2025. And that breaks down, like, 636 million in royalties from the CIC Digital LLC company that issues the Trump coin, which is down about 98% since inception. Looks like a bunch of bag holders there.
Daniel Creech 04:05
600 million in income from token sales around World Liberty Financial. And he’s got 196 million from Stablecoin Holdco LLC that are listed. This dwarfs— this isn’t even counting the tons and tons of money that he makes. Supposedly 77 million in income from Mar-a-Lago, 120-plus million from golf clubs in Doral,
Daniel Creech 04:26
Florida, Jupiter, Florida, all that kind of stuff. Now, before you say, “Aha, we got him, he’s the biggest crook in office,” that may be your opinion. That’s fine.
Daniel Creech 04:41
I also want to point out that the rhetoric from President Trump, and also other members of the House and the Senate,
Daniel Creech 04:52
are going to be in the spotlight this midterms. And I think— and I kind of hope here, and hope is not a strategy, but hear me out here, because I want to give an olive branch to either party who wants to do this. Because I am curious, and I’d love your opinion, daniel@curzioresearch.com: is it just that we,
Daniel Creech 05:13
the voters and the people, are content and suppressed to a certain extent, and conditioned, and have accepted this whole, “Hey, politicians lie, cheat, steal. That’s the way the game is. That’s the way it always has been.” And there’s a lot of truth in that. But events, timelines, situations,
Daniel Creech 05:34
everything has a breaking point. And the reason I want to call this out is because not only is what’s going on here only going to get more volatile and violent, but that’s going to transition into markets.
Daniel Creech 05:45
And I will make this point here: when will voters say enough? Because when you look at the upcoming midterms, are they going to talk about the unbelievably successful traders on both the Democratic and Republican side? Now, I’m just switching over here to AI,
Daniel Creech 06:06
and this is from Democrat Google. Mr. Warren Davinson from the great state of Ohio, Republican— don’t know who that gentleman is, just like that. That’s my home state, Ohio. He returned 78.8% in 2025. And Richard Blumenthal,
Daniel Creech 06:28
a Democrat from the Northeast, led in trading volume with 80 million in transaction volume. So Mr. Warren Davinson takes the top gain of 78%, but Blumenthal gets the most volume. Now, listen to some of these returns on the Republican side.
Daniel Creech 06:48
I already said Davinson from Ohio, 78.8%. Brian Steele, I believe, from Wisconsin, 62.5%. Rick Scott of Florida, my new hometown here, 54.8%. And two other guys from Missouri and California round out, 52.5, 50.
Daniel Creech 07:07
On the Democratic side, Donald Norcross from Jersey returned 70.8%. That’s still lagging the Republican Davinson. Seawell, if I’m saying that right, from Alabama, 67.9%.
Daniel Creech 07:25
And then 61.41 from Padilla Evans from Pennsylvania. These are just absolutely absurd returns. Now, I don’t know why CNBC or Yahoo Finance or Fox Business or anybody else doesn’t have these guys on and give us their wisdom and such. Now, I am going to make a point here.
Daniel Creech 07:48
I’m curious, on these upcoming elections, if the average person is going to have a voice on insider trading. We see that a lot, and supposedly both sides want it, but yet it’s not getting done. How about term limits? That would be a pretty easy one, I think. And then we get to this fraud situation.
Daniel Creech 08:10
And the reason I want to bring this up is because when you look at— I just took a couple of tweets here, and the reason I point this out is because this is tweeted by Elon Musk. Obviously he has— well, he’s the owner and runs X platform. But Musk has gazillions of followers, the richest guy, a trillionaire. And him and Ro Kahn,
Daniel Creech 08:30
who is out of Silicon Valley in California, have been in this macho man match back and forth about wealth taxes, distribution, solving world hunger, all this kind of stuff.
Daniel Creech 08:42
And when you look at this, the reason this is going to pick up is because when you get to this kind of stage, momentum— you essentially speed until you crash into something. And so, evidently, the Free Beacon has come out with this piece, not so flattering, on Ro Kahn,
Daniel Creech 09:01
talking about how his family— and he concedes his wife is rich, so he just— that’s the easiest way to make money is married, evidently— and they highlight some things about how, essentially, his wife and his family wealth is tied up in all these trusts and different things, and it’s very hard to figure out what’s going on. It’s very tax-advantage for them.
Daniel Creech 09:20
And they say his young children have ownership stakes in private golf courses and all kinds of things. He has a four-story indoor elevator. And I don’t care, and I’d be curious if anybody else does. You know, one thing that I think we provide value here is on finances in general and investing, and this idea of capitalism and that the pie continues to grow.
Daniel Creech 09:42
It is not a limited amount of pie that when somebody like Elon Musk takes a trillion pieces of this thing, that that means there leaves less of the piece of the pie to you and I. That is not how it works. You can expand the pie, create value and wealth through new services, ideas, buildouts, businesses, etc.
Daniel Creech 10:04
And the reason I point this out— one of the reasons I point this out— is because it’s just the unbelievable hypocrisy. Just like, you know, these Bernie Sanders— and they’re on the right too. I’m not— I’m not knocking only left politicians here. I’m knocking right politicians as well. You had Sheldon Alderson before he passed, who was a massive donor to the Republican side.
Daniel Creech 10:23
Obviously Elon Musk is throwing his money around. I just don’t understand why people have a problem with money instead of the hypocrisy. So Mr. Ro Kahn is literally doing the exact opposite, or saying the exact opposite, or mouthing the exact opposite that he is doing with his own family money. And I just can’t believe— I genuinely am a little surprised,
Daniel Creech 10:45
and I shouldn’t be, that people continue to fall for this. And just like Bernie Sanders. I mean, I’ll share another tweet from Mr. Bernie Sanders here, and this is outright scary stuff. And I don’t mean this willing— willy-nilly.
Daniel Creech 10:57
I mean, this ought to frighten you, because what you’re doing is you’re having very politically powerful people take aim at individuals and individual businesses to turn the massive amounts of volume of people, i.e., voters, against them, and that only leads to volatility and violence.
Daniel Creech 11:17
And that is by design. There are no coincidences in politics. So here you have Mr. Bernie Sanders, self-proclaimed socialist, multi-millionaire, multiple houses, never had a real job, rants and raves, and he’s getting people to go after AI now.
Daniel Creech 11:32
And this is an easy target, but they want to start a Sovereign Wealth Fund Act and essentially take from the AI and, of course, redistribute it. And it doesn’t stop with just AI, because look at this from a little while ago. Remember when Apple, all of last week, raised prices?
Daniel Creech 11:50
Well, that got Bernie Sanders going and called corporate— Tim Cook, the CEO of Apple— out for his corporate greed. Hiking prices on products over $200 is unavoidable, after it made 112 billion in profits last year and spent 300 billion on stock buybacks.
Daniel Creech 12:10
Now, you don’t point this out so that people don’t go and try to boycott products, disrupt, or attack these businesses.
Daniel Creech 12:21
And unfortunately, this is only going to get more and more in our faces. The speed of this, the nasty of— nastiness of this, is only going to pick up.
Daniel Creech 12:36
And I say all that because as we head into the midterm elections, odds are the Republicans are going to lose the— one of the House or Senate. And I just want to say, we’ve talked about this, “Hey, it’s summertime, markets are maybe pulling back here.” A pullback would not be crazy.
Daniel Creech 12:57
It would be welcomed. It wouldn’t be out of line or anything like that.
Daniel Creech 13:03
And if the market, which is forward-looking and prices and things, understands and thinks, “Okay, in addition to the Fed possibly hiking rates or being more restrictive and rate cuts being off the table, in addition to being sticky inflation, if the market starts pricing in socialism or, even worse,
Daniel Creech 13:22
communism, some of the people that are winning on the Democratic side, more on that side than the right side right now— but don’t— don’t put your faith on the right side— but you have such strong opinionated socialism taking aim and getting— winning primaries, and that could really easily help influence a market pullback.
Daniel Creech 13:43
Now, you don’t have the majority of those in office, even if they win some upcoming elections in this midterm, to really put a lot of stress or panic on an actual bill being passed to confiscate private property or to do a wealth tax just yet. But that is coming. And the closer that gets, in my opinion, the more that’s going to be priced in.
Daniel Creech 14:02
So just understand that that’ll lead to volatility.
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Daniel Creech 15:16
Last thing here that I hope for the midterms is— and this is an olive branch to Republicans and Democrats— why do you not talk about giving the American taxpayers back the tax refund just out of fraud? And quickly here, here’s some numbers. Treasury Secretary Scott Bessent says around 10% of the federal budget could be fraud or abuse.
Daniel Creech 15:37
Now, here’s a big wide gap. Federal budget’s roughly 5 to 7 trillion, with a T. Trillion, okay? So you take 10% of that. Now we’re talking $500 billion or more, depending on what number you use. You divide that by, let’s say, 165 million-ish. This is AI stuff. Check me.
Daniel Creech 15:57
Look it up. So you take 500 billion-ish or more— you can pick a little bit more— you divide that by 140 million mid or 165 tax returns million. 165 tax returns last year. And I’m using round numbers. Let’s say you get $3,000 to $3,500 per taxpayer or per filing back.
Daniel Creech 16:16
Okay? Now, well, numbers by itself don’t really help, so let’s put that in perspective. Perspective, again, with AI, knowing how to think and use it. Use the brain God gave you when He created you people, and then throw it into AI. Over the last three years, the average return is around $3,000. Again, I’m rounding.
Daniel Creech 16:37
Why wouldn’t Democrats or Republicans go out and say, “Listen, we’re all going to give you another refund check because we’re just going to cut out fraud and abuse now”? The quick low-hanging fruit here is, they’re all in on it and they don’t want to cut out abuse. It’s like the move line in casino, you know, where, “Hey, we know they’re skimming off of us and we’re skimming,
Daniel Creech 16:56
but you can’t skim too much because you’ve got to leave room for us, you know, before they take the bag of money back to the bosses in the Midwest.” Anyway, just a little help there on either side heading into the midterms. Listen, you could run on a fraud tax refund and get people to vote in your favor, I believe.
Daniel Creech 17:13
However, the big question is— and I’ll leave that to you— is why doesn’t— why isn’t that a bipartisan situation, or why isn’t that a bipartisan rally call? Next topic. Enough about politics.
Daniel Creech 17:29
Meta is stirring up some serious
Daniel Creech 17:35
data center nervousness,
Daniel Creech 17:39
okay? Now, Meta is actually rallying today, up about 10%. And they have come out and said that they are going to build, essentially, a cloud business, or— and let’s see, Bloomberg reported this, and I’m not sure if this was an actual statement from Meta just yet, but the stock is reacting nicely.
Daniel Creech 18:00
Like I said, up 10%. They are going to sell their excess AI compute. Now, A, let’s look at Meta here. And I really like Meta. I’ve liked it for some time. I haven’t recommended. I’ve stopped short. I would take a shot here after this news if you want to actually start building a position.
Daniel Creech 18:20
For 2026, revenue growth for Meta is around— I’m using round numbers here— they’re going to grow revenue by about 24%. Their earnings per share are going to grow between 22 and 40%, depending on what kind of baseline you look at and such. Now, their revenue growth is double that of the market average, expecting 10 to 12%,
Daniel Creech 18:40
but it’s in line on the earnings per share on the low end, on Meta’s low end. And so the market earnings per share are growing roughly 20 to 24%, depending on what you look at. And again, Meta’s is 22 to 40, depending on how you slice and dice that. Here’s the big thing with Meta.
Daniel Creech 18:58
We have this narrative right now with AI compute because of the massive demand across OpenAI, Anthropic, Gemini, all these guys. So you’re having this massive infrastructure that Frank and I have been pounding the table on, and Frank’s been dead-on about building out the data centers and the AI compute process. However,
Daniel Creech 19:19
as Goldman Sachs kind of talks about in this little note, compute must be scarce for the price to continue to stay elevated or rise. So the usage has to be somewhat limited.
Daniel Creech 19:32
The supply, in other words, needs to be limited because the demand is so high, that’s going to help justify all the people providing the compute to continue to put the massive billions in infrastructure to build this out. Are you following me on that? And so the narrative is, “Hey,
Daniel Creech 19:51
we have compute scarcity and high demand, therefore that price of compute is going to continue to rise or at least stay elevated enough to justify massive infrastructure spending.” The reason that this is a big deal is because Meta is saying, “Hey, we have so much compute that we’re going to turn around and sell some of it.” Now,
Daniel Creech 20:10
let’s compare this to— Microsoft is down, I think, fractional, but I don’t want to put too much emphasis on that. Actually, it’s up 3% today. It was down earlier, according to headlines. And Amazon— and the reason I point out Amazon is because— and it’s actually up a little bit as well, 1%, as of the time of this writing.
Daniel Creech 20:29
The reason this is great, in my opinion, for consumers is because it is diversifying this compute story. Now, I’m of the camp to where I think more supply or more demand is going to lead to more supply. That’s going to be deflationary. You’re going to see that cost go down over time. That’s just a little bit because I’m a history buff on economics.
Daniel Creech 20:49
Now, the reason this is kind of a big deal right now is because you got xAI under SpaceX. Elon Musk has just recently signed a deal to sell out their compute. And obviously, the big dog there is Amazon Web Services.
Daniel Creech 21:05
So Meta is going to go compete with Amazon if this turns out to be true from Bloomberg about excess AI capacity and they can rent that out. That’s a solid for Meta because that’s another source of income, and that can help offset a lot of this infrastructure, if that makes sense.
Daniel Creech 21:20
Now, the Goldman Sachs comment is, “Hey, if the compute is not scarce and that price to compute drops significantly, then that means that’s going to be hell for Anthropic, OpenAI,
Daniel Creech 21:36
and all those guys.” Because now your revenue projections or your earnings projections to justify all this spending is going to go down, and you’re going to have to fill that gap some other way.
Daniel Creech 21:46
Or you’re just going to have to convince shareholders and investors to be content with a longer runway before profitability or justification and a heck of a lot more debt and build-out, depending on what’s going on there. And so I just think, A, I like Meta here,
Daniel Creech 22:04
but full disclosure, I’ve liked Meta for a while and it’s been dropping like crazy. I just think they, along with Amazon and other companies like this, have incredible optionality. Yes, you can see the headline scares about, “Oh, they could go negative on the free cash flow basis because of their infrastructure.” I get that. I’m not saying it’s all going to work out.
Daniel Creech 22:24
I’m not even saying the return on investment will be there. I am saying, to a certain extent, I give them the benefit of the doubt because of what they’re seeing on the supply-demand side, what I think AI can be— essentially a new internet— lead to productivity, efficiency, and all that kind of stuff. That is not going to be a smooth ride, okay? We are not on a smooth interstate with the cruise control set and,
Daniel Creech 22:46
for all you lovers of hands-free driving, doing that. Hell no. We are on a windy, rocky, crazy road that I think the end will be good, but that doesn’t mean that you don’t have to slow down or maybe run off the road and change a tire or have to stop for gas or whatever.
Daniel Creech 23:02
Just, you know, take your old Griswold family trip and just understand it’s not simplicity from A to B, all right? There’s a great story, and that’s part of the fun of traveling and all that. With AI, do I think it’s going to be fantastic? Yeah, absolutely sure. However, it’s going to be a long road, in my opinion. You’re going to see pockets of efficiency and all that kind of stuff.
Daniel Creech 23:22
You see return quicker on software than you do other areas or sectors. More on that in later podcasts and programs. Back to Meta. I just think that this is a great stock.
Daniel Creech 23:33
It’s a great big boring stock, and the optionality behind it to adjust capital expenditures for AI, to turn on more of the earnings
Daniel Creech 23:44
fire hydrant, for lack of a better reason, because of their cash flows and because of their reach amongst users and social media. I definitely wouldn’t bet against these guys, but I would— and I don’t think this is a negative as some of this piece spins it towards Amazon. I like Amazon and Meta both, actually, for these big ones.
Daniel Creech 24:04
Keeping with AI and data centers.
Daniel Creech 24:08
So there is a decent story here about xAI possibly getting creative in Memphis, Tennessee, where they are building out— let me get the name of it here— Colossus.
Daniel Creech 24:27
Now, it’s this massive data center complex in Memphis metro area. And now, the reason that this is interesting to me is because the biggest risk to AI and data centers is political. And as we run into the midterms, you’re already hearing a lot of people saying,
Daniel Creech 24:46
“Hey, not in my backyard.” And I totally get that. If you don’t want a data center in your backyard, you know, you vote however you want to. You don’t want a windmill in your backyard or an oil rig, I get it. Don’t have it. Vote your vote. I would just say, don’t listen to all the fear of data centers.
Daniel Creech 25:06
And maybe they are noisy and loud.
Daniel Creech 25:08
Maybe they— maybe they’re ugly. Perhaps the water usage— and they do use a ton of water— in certain areas is going to cause problems, droughts, whatever. I’m not— I’m not just all rugged capitalism.
Daniel Creech 25:27
“Hey, I don’t care if you have this beautiful area. We’re going to chop down all your trees and build a data center.” What I will say is, there’s a lot of fear, uncertainty, and doubt that you should look through all that noise and, again, use the brain God gave you when He created you. Now, I give xAI a tip of the hat here if I was wearing one,
Daniel Creech 25:48
because this reminds me of the— well, I’m getting ahead of myself. So what are they doing? xAI, to build out this data center plan, Colossus, and getting pushback from residents and the community, they are offering incentives, okay?
Daniel Creech 26:06
So SpaceX, owner of xAI, also has Starlink, okay? And Starlink, I have not heard from anybody that has it. I know a couple of people that use it at their resident houses. I know a couple of people that travel, that have the pack, that travel with it if they’re camping or traveling and, you know, want to get internet access and stuff.
Daniel Creech 26:26
I don’t know a ton of people that have it, full disclosure here. I’m not trying to mislead you. But the handful, or more than handfuls, of people that I’ve heard talk about it love the service, okay? They like it. It works. Let’s just say that. I’ve never tried it. I’m just listening to people. Obviously, in order to have this service, you have to pay for the hardware.
Daniel Creech 26:45
You have to buy the package and then, you know, do the monthly subscription fee. Forget what the price is right now. I love this idea by xAI because, evidently, they’re going to offer Starlink to local resident Memphis customers, and they’re going to do it at a discount.
Daniel Creech 27:06
So they’re not going to charge them for any of the hardware. Essentially, the way I understand this is, if you live in the Memphis area— and I’m paraphrasing here to make a point— but it’s saying, “Listen, you want to— you live in this area that is impacted by our data center. Therefore, if you want to use Starlink for internet access, we are not going to charge you any of the hardware costs.
Daniel Creech 27:27
You don’t have to buy anything. We’re going to give it to you.” And then on the monthly fees, again, let’s say it’s 100 bucks, they’re going to give you a significant discount. Let’s say it’s $50. Now, I’m not telling you whether you should take this if you’re, “Oh, you can’t beat them. Join them,” type deal. Bang all that. That’s not my point here. My point is,
Daniel Creech 27:48
capitalism is great at adapting, and you want to solve problems with a win-win situation. So I don’t know if these incentives are going to be enough. I’m not even saying that they should or shouldn’t be. I love the perspective and the optionality here— use that word again— that they are doing. This reminds me, essentially, of what they do in Alaska with the Alaska Permanent Fund Dividend,
Daniel Creech 28:10
or the PFD. And that’s essentially where I think 25%— and this was started back in the ’70s, ’76, I believe. You basically take 25-ish percent of royalties and all that kind of stuff, put it in a fund, and then you spin off this dividend, depending on those investments, and you give them to the residents under certain parameters, restrictions, all that kind of stuff.
Daniel Creech 28:31
And you pay people, you know, let’s say your average person gets 1,000 bucks a year. I’m not exactly sure what that is, but the process is what has my attention there. I don’t think it is— in fact, I think it’s a great idea that companies start getting creative and interact and incentivize the local community.
Daniel Creech 28:52
If you want to look at that as bribery, that’s fine. I agree to disagree. But it can be a win-win situation. And the reason, in my opinion, that companies like xAI and even Meta, everybody else ought to follow suit. What did they say in the NFL? That copycat is the best form of flattery or something like that?
Daniel Creech 29:11
The reason that these big tech companies and massive infrastructure companies building out data centers and everything related to AI should be of the mindset of a win-win situation with its customers, the voters, and the local residents is, not only is it the right thing to do, in my opinion,
Daniel Creech 29:28
but better to go directly to the people and make a deal through incentives on products or services or, hell, just go down and say, “We’ll start a dividend for the local community and we’ll pay for infrastructure or we’ll pay for this or pay for that.” Incentivize them, because if you don’t, you’re going to be at the mercy of politicians,
Daniel Creech 29:46
and politicians will floor it up faster than you can snap your fingers. And they are going to come after you with all kinds of taxes. They’re going to come at you with all types of disruptions. And not only that, they are going to paint you as the evil villain.
Daniel Creech 30:02
Therefore, you are in the crosshairs of all the angry fringes on both sides. So we’d love your opinion on that. Should businesses incentivize local communities?
Daniel Creech 30:14
And again, I’m not just talking about bribery and look the other way and, “Oh, we’re going to ruin the birds and water and clean air and all that kind of stuff.” I’m being an adult about this and saying, “Listen, capitalism is about win-win. It’s about creating a bigger pie for everybody to participate on. You want to do it with products and services. You want to do it with dividends like Alaska does.
Daniel Creech 30:35
Get creative, but start the discussions and have a win-win situation with your local people. That will expand outwards and make a big difference.” End of rant on that. So data centers, Meta data centers. All right, let’s talk— let’s talk some Bitcoin.
Daniel Creech 30:54
Bitcoin is— where’s Bitcoin at right now? Frank and I have been having some discussions on Bitcoin. It is right around the $60,000 level. And we’ll just check over on Finviz here.
Daniel Creech 31:10
Now, I continue to be impressed that Bitcoin is around this level, which means it’s probably going to sell off to like 40 or 30. But I want to give you some interesting stats here that I’ve been looking at.
Daniel Creech 31:29
We’re all familiar— so Frank and I’s discussion, to keep this ongoing here— and again, I’m not attacking Frank because he’s not here to defend himself, but he was asking, and he’s asked general questions about, “Hey, what is the reasons to own Bitcoin right now?” And essentially, with Bitcoin and gold, fundamentally,
Daniel Creech 31:49
nothing has changed on why you would own a portion. Now, during different times, environments, context, you want to maybe own more or less, have more exposure or less. So gold, in my opinion, is the oh moment when the financial world is nervous about finances, whether it be debts and deficits or spending or whatever.
Daniel Creech 32:11
Gold is going to have a heck of a rally. And it has had a heck of a rally over 5,000. It is pulling back now. Why? Because there’s not as much of an oh moment. Not that we have our financial house in order, but we’re not worried. The dollar is rallying again. Interest rates are staying elevated. Inflation is staying sticky.
Daniel Creech 32:29
The narrative or the mindset of the Fed cutting is gone and now possibly hiking, let alone just holding rates steady, higher for longer type deal. And as Frank pointed out correctly, those are headwinds for gold and Bitcoin that don’t pay interest, etc. Now, on the Bitcoin side,
Daniel Creech 32:49
what has my— what really has my attention here is, when you look at Bitcoin, it’s very cyclical. So we have this four-year cycle and it halves, etc., etc. Frank’s talked about a lot. You also hear a lot about the 200-week moving average.
Daniel Creech 33:11
And essentially, that’s a 3.8 to 4-year cycle. So it lines up with this four-year cycle. So a couple of things here. The 200-week moving average right now is around— and again, I’m rounding here— 60,000-ish, okay? So that’s essentially right where it is right now. But it has dipped below.
Daniel Creech 33:30
It was 58. And this thing could, like I said, go to 50 in a heartbeat. Another interesting stat I want to share with you is the cost to mine Bitcoin. So you have Bitcoin is, what, 50, 60 percent off its highs.
Daniel Creech 33:49
It’s got a cyclical past history of rallying and crashing around this four-year cycle. And oh, by the way, that four-year cycle should end or start a new one, however you want to look at this, at some point in the fourth quarter of this year and into next year. So even if you are extremely bearish on Bitcoin, which can’t blame you from looking at the charts,
Daniel Creech 34:10
I mean, it’s down from 120-some thousand to 60 from October of last year. Could it drop to 50 or 40? Absolutely. More on 50 in a moment. But this cycle that has been proven in the past doesn’t mean it’s going to lead to past performance does not lead in the future.
Daniel Creech 34:29
It’s not guaranteed future returns. But we’re coming up on that timeline of that four-year cycle at the end of this year— excuse me, the last quarter of this year— into the beginning of next year. Now, not many coincidences in politics, as I like to joke.
Daniel Creech 34:44
Would it be that big of a coincidence if the Fed is kind of jawboning this tough-man stance and this stronger rate hike possibility and beating inflation until the first quarter of next year when the Bitcoin cycle happens? So they could be easing or jawboning about easing or saving the day and being able to ease.
Daniel Creech 35:05
That would be a tailwind for Bitcoin. We’re getting ahead of ourselves. Hold on. The 200-week moving average has had tremendous success, give or take, going back to prior bear markets in 2015, etc.
Daniel Creech 35:21
JP Morgan has the mining cost to Bitcoin between 78 and 87,000.
Daniel Creech 35:27
And when you look at past bear markets and pullbacks, the Bitcoin price has traded below the cost of mining anywhere from a couple of weeks to four or five months. And again, I’m rounding because I can give the naysayers,
Daniel Creech 35:48
“Oh, well, you said two weeks and it was actually three weeks,” or, “You said two months and it was four months.” I’m not trying to get bogged down in those details. Not that they’re not important, but with this volatile asset, you have to be more of a range-bound type to take this seriously. So you have this period of weeks to four to five months where Bitcoin can trade below its cost of mining.
Daniel Creech 36:10
Now, we’re already about four months. Again, if you take out the brief blip to 80, it’s been several months under— I mean, if you take the high end of Bitcoin mining cost, and again, you go all the way up to 90, we’ve been under that since essentially February.
Daniel Creech 36:29
So all year.
Daniel Creech 36:30
Now, again, gray area here, people. But we’re already several months into this Bitcoin price being underwater of the mining cost. In future programs, I’ll dig into this more and I’ll explain how that works and why the price kind of rises and the network pulls back as well.
Daniel Creech 36:51
So you have the four-year cycle. You have this 200-week moving average that has worked out very well. And I say all this because you do have this Clarity Act possibility, this kind of coin flip here. And Senator Loomis of Wyoming has been active on X, and I am trying to be supportive and not a smart alec,
Daniel Creech 37:10
but they keep saying, “Oh, we’re going to vote on it in July.” And it’s just kind of like the Iran back and forth. “Oh, we got a deal. We don’t have a deal. Oh, we’re going to vote. We’re not going to vote.” However, right now, I am getting more bullish on Bitcoin as it drops. And emotionally, that’s not easy. My position in Galaxy has absolutely taken a beating.
Daniel Creech 37:30
I feel like I’m getting beat while I’m down on it. But I say all that because you do have a possibility of Congress and our representatives getting their act together and actually doing something. Passing a Clarity Act would be a huge tailwind for it.
Daniel Creech 37:46
You have the four-year cycle coming to a wind down and starting a new one at the end of this year into next year. You have Bitcoin trading below the cost of mining right now, according to JP Morgan. And you have— what was my— I just lost my train of thought. I’m sorry. I’m an amateur. You have the Clarity Act,
Daniel Creech 38:06
the four-year cycle, the 200-week, and the cost of mining. There. That was my four. So my point here is, I would look at this if you still believe in Bitcoin and gold for your old-school ideas, okay? It’s scarce. There’s a limit to it.
Daniel Creech 38:25
There’s a fixed number. And I know gold increases its mining, but it costs a lot to mine gold. So the amount of gold increases— the amount of increases to the supply of gold are not astronomical. I’m not saying they’re nothing, but they’re nothing like printing of dollars. Bitcoin is fixed at 21 million.
Daniel Creech 38:44
Unless your fundamental thesis has changed on putting value to scarcity and utility and store of value, then that’s fine. I’m not trying to convince you. But if you’re still believing in those fundamental principles, which I am, then I would look at this as an accumulation phase because you’re getting the chance to add to Bitcoin.
Daniel Creech 39:04
And I’m not saying the bottom is in. Again, oh, the other reason I wanted to share is Bitcoin Magazine had a stat that said the average cost to long-term holders— I don’t know how they define long-term holders, but obviously, it’s not a short-term in this game— the average cost is about 49,000. So let’s round and make it easy at 50.
Daniel Creech 39:23
That’s why I threw that 50 out there. Markets tend to test people. They hit you hard and they make you capitulate. And again, unless your fundamental thesis has changed on gold or Bitcoin, those still remain there. I would look at this as an accumulation phase. I’ve been adding to my Galaxy position.
Daniel Creech 39:42
I would look to add to crypto through the end of this year. Now, I know that’s not instant gratification. And you might want to hear, “Oh, Bitcoin’s going to bottom and it’s going to go up 200% by next month or by this election, whatever.” That’s not what we do here. We provide value here. I would look at it as an accumulation phase or mindset through the end of this year,
Daniel Creech 40:01
especially up to the midterms, because there’s some fun stats about Bitcoin bottoming— excuse me— around elections and such like that. Anyway, I just think they’re throwing everything at Bitcoin. Let’s say it tests that 50,000 where all the long-term holders’ average price is, according to Bitcoin Magazine. We’ll see about that.
Daniel Creech 40:21
But I would definitely be using this as an accumulation phase versus a selling or panic phase here, as long as you can stick through the next six to eight months and see about how this cycle goes. So enough rambling for this podcast. Everybody, love me, hate me, don’t ignore me. Daniel@CurzioResearch.com. Last thing here. Have a wonderful, happy, safe 4th of July.
Daniel Creech 40:42
Happy birthday, America. 250 looks good on you. Looks good on us. Be safe. Set off some fireworks. Enjoy your family and friends. And programming note, tomorrow we have a great interview from Frank. So look for that. That’s free to everybody. No Alpha this Friday. You already got your update this week.
Daniel Creech 41:02
We’ll be back next week in the saddle. Again, happy 4th. Cheers.
Announcer 41:05
Wall Street Unplugged is produced by Curzio Research, one of the most respected financial media companies in the industry. The information presented on Wall Street Unplugged is the opinion of its host and guests. You should not base your investment decisions solely on this broadcast. Remember, it’s your money, and your responsibility.