Bitcoin Leads Crypto Drop… And A 2026 AI Tech Outlook 12/1/25

0:02Live from the Nasdaq MarketSite in the heart of New York City's Times Square, this is Fast Money. Here's what's on tap tonight. Crypto getting crushed. Bitcoin returning from the holiday weekend in a day is hitting its lowest level since April. And the crypto proxies aren't being spared. The reasons behind the move and where one crypto investor sees the space heading next. Plus, New Year's same AI rally. Why one top tech analyst sees the sector surge continuing into 2026, where he sees the most opportunities as investors digest yet another AI power deal. And later, Blackjack and the Big Apple.

0:34The casino is coming for New York City. Heavy metal musing. Silver and gold continue to surge. And auto stocks speed higher. How the traders are navigating the space as GM hits a fresh record high. I'm Melissa Lee. Come to you live from Studio B at the NASDAQ. On the desk tonight, Tim Seymour, Karen Feinerman, Steve Grasso, and Guy Adami. Shares of Walmart closing at a record high. And the XRT retail ETF ticking higher after a strong Black Friday start to the holiday shopping season. and much more on the never-say-die consumers coming up. First, we turn to Bitcoin and a fresh battering for the cryptocurrency.

1:06Bitcoin this morning falling to its lowest level since April and now tracking first negative year since 2022. And the crypto slide is hitting a host of names in the digital space very hard. Check out shares of strategy. One of the companies most leveraged to Bitcoin, those shares tumbling 36 % over the past four weeks. Over the last six months, the stock has been cut in half. The CEO in a podcast has said that they could sell Bitcoin as a last resort measure. But that really spooked people. If you see the champion of this Bitcoin strategy say, yes, we might actually sell Bitcoin. And by the way, we're going to have a dollar reserve to pay dividends.

1:45That is fearful. That strikes fear. It's problematic. And I think that's last resort. But the market's going to challenge both strategy and Bitcoin holders. And I'll say this. You know, now that the CME FedWatch tool, I think it's up to 90 percent certainty of getting a Fed rate cut next week, I guess it is. You would have thought that would have been supportive of Bitcoin. It's not. So Bitcoin is falling with a potentially dovish Fed, a lot of other things going on. And Bitcoin can't get of its own way. I think it's sort of a risk off thing. And I juxtapose that with the U.S. bond market that had probably one of its worst days in a while, up seven or eight basis points today.

2:20I think it's problematic. And you throw Japan in there as well. And I think it's all part of the same narrative. I mean, an unwind of the carry trade, that fear has come back. Well, that's exactly where I think Guy's going and where I would take it a little bit further, because there is some sense that the carry trade, by definition, is levered. OK, you borrow in one currency and you invest in other stuff, but it's all on borrowed money. What MicroStrategy and some of these other, call them different levered Bitcoin plays, are certainly showing that there is a lot of leverage in that. The questions I'm getting from a lot of people around me, seemingly over the last over the Thanksgiving table, but certainly over the last couple of days, is something along the lines of can crypto derail the entire market?

3:03And it's an interesting concept here. And again, where we're going here is I'm not sure. No, I don't think it could. I don't think it's big enough, et cetera, et cetera. But when we're talking about where we're starting to see risk assets come under some pressure and yes, Japanese bond yields are a very big deal. And you do have a BOJ that's making it clear that they're going to have to raise rates. And yes, by the way, Japan kind of feels like the U.S. in late 21, where suddenly there was this transitory inflation that there wasn't. That means also that there's going to be more pressure on the end to weaken, which could actually at first be very good for some of these trades.

3:37I know this is starting to get complicated. I'll just simply say it's not just Bitcoin, but I'm not worried about the leverage in the Bitcoin market being something that's going to take down the broader market. Absolutely not. But in terms of the impact on the crypto trade, it's something that can still be a weight. I mean, back in early October, what we saw was a massive deleveraging, right? It was like$19 billion in leverage bets unwinding. There's more leverage to be taken out in Bitcoin. And so that's just another pressure on this trade here. Yeah, I was surprised that some of the things that would be most closely related didn't move that much today.

4:09So looking at something like Coinbase, which is down a lot in the last three or so months, It was down today. Hood also down a lot from the peak, but still very much off the bottom. I mean, I'm long Bitcoin. I have been long for a really long time. I actually thought it throughout. I don't know. It hit 82, 83 recent couple of days. I don't know. Ten days. They're all blending together. I sort of thought that was the bottom. I don't know. Also, you have this sort of potential front running in front of a strategy. Right. And so at some point that will reverse. I have no idea where that is, what that number would be.

4:47That's not something if you're long, you don't want to hear that they're considering selling. That's sort of the first seller you don't want there. I agree. I was going to start there that we're getting that decision in mid-January whether or not they get kicked out of MSCI. Right. Now, that could be$2.5 billion or so coming out of strategy. But if the other indices follow, it's$9 billion. So this is a big move that I think people are getting ahead of, to Karen's point. So if you look at Bitcoin in the market, market's down 1.5 % from its high. Bitcoin's down 44%. Ethereum down 35%. So this is not something, it's a bifurcated market.

5:26So I wouldn't worry about this taking down the market. I would worry about what is so sick about crypto. And we're trying to decipher it. It's the institutional investing. It's ETFs. I think that's changed it. To make it worse or to make it worse stable? To make it worse. I think everyone thought it was going to make it better, but I think that now you have stops put in. So if an institution owns an ETF, they're not, they don't hold it forever. They put in a stop and they say, I'm going to put it in the stop 10 % below where I own it, and they get forced out of it, which triggers more sell. Wouldn't they have done that on the underlying, though, put in a stop?

6:02I don't know if they would do it on the underlying. I think if they hold, it depends on what they hold in the fund, right? If they hold the ETF in the fund, I don't know if they go out. I feel like if an institution has come this far and made an allocation to Bitcoin, and I hear what you're saying, Steve. I don't sense that they're the weak hands, though. I get the sense that they've made a lot. There's been a heavy due diligence deliberation process that took three years to get them to a place where they feel comfortable. And if anything, they're hoping it goes lower. I would be hoping it goes lower.

6:32I would be looking to buy Bitcoin at$80 ,000. I would be looking to buy it at$75 ,000. But if you if you own it on your sheets and like any other stock, let's just say it's IBM. There's got to be an exit strategy and you don't just keep buying it. There's got to be some sort of a mandate. You hold it forever or not. Again, as an allocation. And then there's the whole world of the investment advisor world where Bitcoin has become an allocation in the last year. In a way, it wasn't. In fact, it was a naughty word to bring up with your advisor. You had to do it off to the side. Now you've got a place where I think a lot of advisors actually have put people in, probably at the highs, and you have some concern there.

7:09That may be the weakest set of hands. I don't know that it's the institutional hands, though. I think my guess is they're looking to add. I think what's also different this time around is that there's these digital asset treasury companies. There have been a spate of them that are public through SPACs or whatever. It's conversions of normal companies with operating businesses that are now all of a sudden digital asset treasury companies. And that's a whole other different dynamic. I'm not sure if that's a good one or a bad one, but it is a different dynamic to have these holders out there and have investors participate in the Bitcoin trade or the crypto trade through these debts.

7:43Yes. So, Michael Seller, obviously, the first strategy. They have$650 ,000 now at an average price of$75 ,000. That's basically the cost of that is$49 billion-ish, which is ironically or maybe not ironic the market cap of strategy right now. But these other treasury companies that got in, almost by definition, they have to be underwater now, if you think about it, which I also think is problematic. And I'll throw this in as well. It seems to me, and I might be wrong, but people or institutions or groups that own Bitcoin probably are in the tech trade, the AI trade as well, which theoretically could put some pressure on that space.

8:21It just feels sick to me. Does it not feel? I know, Tim, you said that this is it happens all the time. I agree with that. Right. You've seen drawdowns of 80 percent. But when you look at the momentum in the selling, it feels like something else is going on. I don't know if it's structural, to Guy's point, systemic, but it feels different this time. Are they trying to crack strategy? Yeah. To break it. Yes. Why? To what end? To what end? To what end? So let's say it reaches whatever their 75 ,000. Right. Then you have a very big seller that begets more selling from that same seller. And then you buy?

8:58And then you buy. Oh. So it's almost, I mean, it's sort of like a version of the AMC apes. I mean, you're trying to squeeze somebody into a position of pain so you can take advantage of that. I mean. Yes. I don't know that that's the case. Right, right. But that's an interesting theory. But if you're talking about something's off. It feels something systemic. I don't know if that's the chicken or the egg. But it just feels different. I want to say, to Tim's point, those allocations, though, that I think the reluctant allocations, I think of as fairly small. Right? So let's say you have 2.5%, 3%.

9:28I don't know, something in that range. That wouldn't be enough to sort of freak me out. I'd say I have to get out of this no matter what. But look at the ETF outflows. They've been in multiple billions when they're on the outflows. But they don't need ETFs anymore. It's a lot easier to just own the underlying. Yeah, but they are ETFs now. When you have the outflow, they trigger a sell in the underlying. So there has been massive outflows. So what's creating the massive outflows? We're not debating on whether there are massive outflows or not. We're debating on why there are massive outflows currently in the ETF space.

10:01Well, let's get more on strategy and the overall crypto trade. Bring in Cosmo Jang. He's general partner at Pantera Capital, joins us on the Fast Line. Cosmo, great to have you with us. You're also a very active investor in digital asset treasury companies. What do you think is going on here? Well, look, MicroStrategy is clearly taking a beating over the last month. It's a combination of the overall macro factors as well as stuff specific to digital assets and microstrategy. If you look at macro, clearly there's a little bit of risk pullback right now with waffling around Fed rate cuts, with the government shutdown a month ago, and just the lack of economic data.

10:35And while that's been happening, crypto has been pulling back pretty meaningfully. And then specifically to microstrategy, there's been a lot of questions over the last month, including the index inclusion question, which is coming up over the last couple of weeks. And then today, you know, some more concerns about whether or not the dividends can be fully covered. And so there's just a lot of speculation about whether that's going to cause more forced Bitcoin selling. All that is weighing on MicroStrategy. Right. And the CEO has said that he doesn't want the net asset value to go below one. I'm curious, since you have so many debts on your on your, you know, in your portfolio, Cosmo, are many of them below, you know, below one?

11:11I mean, are they underwater in terms of when they acquired the crypto that they hold, whether it be Ether or Bitcoin? and where the cryptos are trading now? Well, so there are two really interesting independent questions there. One is, you know, where are these trading? We're certainly seeing these debts from when we first started investing in these and starting this boom. A lot of these debts, you know, on average, they were trading around a two and a half times MNAT premium. And today they're trading at around close to one on average with the median debt trading at 0.9. So certainly the majority are trading below one times.

11:43I think what's really interesting is that this concept of underwater doesn't totally apply to them because these are effectively permanent capital vehicles. And many of the people who own these own it as another way to get access to the underlying. And so for them, it's like whether they bought Bitcoin or the debt, they're sort of relatively ambivalent between the both, between the two. And the debt itself isn't forced to sell its Bitcoin at any given time. I do think, though, what's really interesting is with all these stats trading below one times, actually all of a sudden becomes a really interesting asymmetric upside trade potential.

12:20It's unlikely they trade meaningfully below NAV because there are all these ways to protect NAV, just like MicroStrategy has come out today to say they're doing buybacks. And then you get the potential upside of it could trade at a premium again in the future. And so limited downside relative to the underlying with a meaningful upside relative to the underlying. Cosmo, it's Karen. Thanks for being on. Do you know, it appears to me that you could sell an IBIT ETF, take a loss and immediately buy Bitcoin underlying and have that loss and not have a watch sale by buying the actual by buying Bitcoin.

12:53Do you do you think that's going on at all? I definitely think there's some of that. Certainly, it's getting close to the end of the year. And so everyone's thinking about tax loss harvesting. You know, it is what it is. we're here and digital assets have been one of the worst, one of the lesser performing asset classes of the year. Most assets are down on the year. And so I do expect there to continue to be some chop as people think about tax loss harvesting. And there are many ways to get spot replacement, like you said, whether that's selling ETF to buy spot or selling ETF to buy debt. Cosmo, where I see Bitcoin, I think that there are people waiting to buy it lower and don't feel they have to buy it here, but also are excited to buy it lower.

13:34And I am referring to the institutional community, a community that maybe, you know, you guys have been in this camp for a long time, but you have friends, you are in the middle of an institutional hedge fund community. What is the appetite for Bitcoin as it's selling off right now? It's really interesting. And you bring you a great point from, I'd say, starting two weeks ago when Bitcoin hit that 80K, all of a sudden I got a bunch of techs floating in from my old world, from the guys at large, long-only, large private equity firms that are like, hey, Cosmo, is it time to start buying Bitcoin?

14:07Whereas everyone else within the crypto-native world, when we're spending all our days talking to other crypto-natives, we're all worried that the sky's falling apart. But you're exactly right. All the institutions are looking at this like a buying opportunity. We're getting a lot of inbound right now from people, not saying that they're terrified, but saying that, hey, is it finally time to start going from that 0 % to 1 % allocation? Are crypto natives worried about the skies falling, Cosmo? Because that in itself concerns me. I think what's really interesting is there are a few sentiment indicators that I follow to try to tell where we are in the market environment.

14:43And on most indicators, it would suggest that we're at oversold conditions. The RSI went below 30, which means it was oversold on Bitcoin. if you look at the fear and greed index, which is an amalgamation of a lot of technical indicators, it's at 10 on a scale of 100. Last time it was at 10 was after FTX collapsed. And so certainly people that are within the sector are really, really scared. Now, it's like, you know, there's a classic saying, you know, you want to be greedy when others are fearful. And we found that as long as we're not in a prolonged bear market, and who knows, we could be entering, there's always that possibility.

15:17But so long as you don't believe we're in a prolonged bear market, Anytime those technical indicators have come to those oversold levels and fear and greed down at that level, it's always been a great buying opportunity. All right, Cosmo, we're going to leave it there. Thank you so much for your time. Cosmo Jiang. What's interesting, I thought about MicroStrategy, too, is that the notion of having a U.S. dollar reserve in order to pay its dividend, in order to fund the reserve, they're going to sell stock at the money, at the money offering. So they're selling stock in order to fund a U.S. dollar reserve in order to pay the dividend of the preferred stock.

15:50It just seems sort of circular to me. Problematic. I mean, at a certain, you know, the market's starting to, I think the conversation that Karen brought up correctly is the market is testing them right now. And we'll see. And that happens when there's a big position out there, whether it's in crypto or anything else. If the market's aware of it, the market will shoot against it. And I think that's what's happening now. So, Steve, you might have a better thought of this than I, but do you think this existential threat that's out there of quantum breaking the encryption? Yeah, I mean, I think there was a hack in October, and I think that it's always out there.

16:27But it's out there means is it 10 years, 5 years, 5 months, 5 days? It's not 5 days, but it is susceptible to a quantum hack. All crypto people, natives, will say that. Let's get to retail now. Black Friday was a winner. Overall spending was up more than 4 % from last year. This, according to MasterCard Spending Pulse data. And online spending jumped over 9 % from last year to nearly$12 billion. The XRT retail ETF finished the session higher and over the last week is up over 6%. So is the consumer coming to the rescue once again? Wow. Were you shopping, Guy? Oh, you know. Unbelievable. See his new tie?

17:04New tie. I mean, yeah. Couldn't wait. Friday. and why do people, why do they sprint into those stores? What do they sprint into? Because there's only one TV for sale. Yes, yes. I'm not trying to be careful. And by the way, don't push people around, guy. You're a big guy. You're a big fella. I mean, not when you have a cart, you know, that could really be dangerous. Excellent points. Walmart all-time high, I think that makes sense. And the fact that it had been flatlining for as long as it has suggests, as Louise Yamada would say, the longer the base, the higher in outer space. And I think that's where we're headed.

17:37Costco getting off of that. We talked about that last week, that Costco looked like it was setting up held a good point. I think out of all of them right now for a trade, Costco is the most interesting one. Argus cut its price target on Target to 125 from 135, saying, you know what? We just don't like what happened here in the third quarter. It just wasn't good enough. We don't like the idea. We don't like the idea that Walmart has been reinvesting its winnings over so long, and Target is now this behind. And it may not be that pair trade that's now at a three and a half standard deviation difference of Walmart to Target.

18:12We've had multiple retail analysts on this show in the last, I'd say, six weeks. And I think we even heard this across the board from a couple of core investors that Target needs to show more in terms of their ability to compete on price, more in terms of their ability to actually have the impact of investments that we know have worked for Walmart in terms of digital and margin enhancing type stuff. I think you can nibble Target here. I like Target here. I think we've had a chance to digest. I think new management. I think there's a chance to actually see this push on. And it's tough to buy Walmart at 36 times.

18:47Well, that piece is sort of funny, though. So we're kind of lukewarm, up 40 percent is our target. Yeah. Yeah. OK. Okay. So Guy always talks about the, you know, American consumer, just no matter the situation, you can always count on them. And I think of you more as a saunterer guy than a run with you around the mall. But I think, I mean, there was a lot to like. There was a lot of good retail reports. I think that companies were in better shape inventory wise than we had feared with the tariffs earlier in the year. That was really causing trouble. Some very big moves. It was the one thing I did today.

19:22I sold some Abercrombie and Fitch upside calls in March just because I feel like that move, while not unwarranted, is so enormous that I had to take some money off, too. I think Target, to Tim's point, everything is really out of that name. Trading at the multiple that it's trading at right now, if you want to just place a bet and say your downside is limited, you go with Target. If you stay with the winner, you go to Walmart. E-commerce, still blasting through what they thought it was going to be. That's how Guy does all his shopping. I love the e-commerce. On the line. On the line. Yeah. Because they have parking there.

19:58You can go. You don't have to leave the comfort of your own house, apparently. And people do this. Yes. As a form of, like, commerce. People did it a lot, even on Thanksgiving this year. Can't last forever. What? Coming up. Anti up in the Big Apple. while the casino's coming to New York City and why Wall Street is betting big on some high rollers in the space. Plus, the heavy metal trade cranking up to 11, the all-time high in silver. Gold's year in run and the move, the next move in Dr. Copper as investors dig in. Do not go anywhere. Fast Money's back in two.

20:33This is Fast Money with Melissa Lee, right here on CNBC.

20:44Welcome back to Fast Money. Casino stocks rolling higher today. Wind popping more than 3 percent, hitting levels not seen in four years. This comes after Goldman added wind to its conviction buy list. MGM and Caesars also getting a slight boost today. The pop coming on news. New York City will get three mega casinos. They are set to open in Queens. And the Bronx, New York Mets owner Steve Cohen is part of one of the proposals. Could be great for the Big Apple. Well, I'll tell you what. I think Steve Cohen's going to do a great job building around that whole area that is maybe the best baseball experience in the game.

21:18And Guy Adami knows that, that the Bronx only wishes it could feel like this. The bottom line here is the addressable market is massive. The more important thing is that casino stocks are moving. They're not moving on this announcement. They're moving on the announcement that GGR, gross gaming revenue across the different places that core, whether it's Wynn, Las Vegas Sands, or even some of the Vegas-based, you're seeing very strong follow-through from not only the VIP, but also some of the high-end. So to me, this is a case where I actually think, finally, you're seeing the casino stocks take back the EBITDA discount that they took during COVID.

21:55Melco is a name I'm long, and I do think Macau is picking up steam massively. I agree. I mean, you put a market multiple, maybe slightly premium to market multiple on Wynn. And you're talking about$150 stock, which I don't think is crazy, given the EPS growth and given some of the tailwinds. So, you know, I think we've been talking about this for a while. It's stalled for a period of time. It seems to be on its horse now. I think it goes higher from here. Wynn has outperformed the group, but Las Vegas' chart looks better. And I think you're playing for the high end or the VIP, as Tim said. I'd rather play with those.

22:26But if you want to go with online, then you go with DraftKings, which has been – what's it called now? Outcome betting? What's Kashi? Prediction. Prediction markets. Prediction, that one. So that one's the – I think DraftKings is taking a hit because of that. So if you're willing to deal with the headwind from the prediction markets, I think ultimately DraftKings will be a winner. Is there a headwind, do you think? DraftKings has run into – and we've been talking about DraftKings every time we get into a sports betting scandal, even though they are not the ones. But the way the parlays and some of the approaches that have been taken here, I think the addressable market's great.