Trading the Markets: January 07, 2026 | Kris Bullock and Nico Brugge

0:00Moments. They have the power to change everything. The moments we try something new. The moments we travel thousands of miles. In seconds. The ones that transform how we spend. How we save. How we build. The moments we connect and create memories that last a lifetime. The moments 300 million people say in unison, we want a better way. But the moments that really matter are the ones that come next.

0:58a long way. It helps us grow and keep these conversations coming with the best guests in the world. Thanks a lot.

1:11Happy Wednesday, everyone, and happy new year. Welcome back to another episode of Trading the Markets. It's our first one of the year, and we have a great one coming up for you. Chris is going to dive into a whole bunch of information that is going going to be shaping the market. So we'll get into that. But first, I would be remiss if I did not mention the crypto gathering. It's the holiday season is kind of just ending. We've had a whole bunch of events. So why not end the year or start the year with a new event? Crypto gathering is going to be in Miami January 22nd through the 25th. And if you haven't gotten your passes yet, and you're kind of just waiting around, we do have a new social pass available for you.

1:55So if you're bringing a plus one where you're only able to make it to a few events. You don't want to go to all the talks. You just want to go to the welcome party and the goodbye party and hang out with people. That is the pass for you. So head on over to realvision.com forward slash crypto gathering for more information. And while you're at it, come and join us at the Lowe's. We're going to be there hanging out, having a great time. So again, January 22nd through the 25th. Hope to see you all there. I know I'll be seeing Chris there. Chris, I saw you there as Well, I met you for the first time last year in person at last year's crypto gathering.

2:30So looking forward to seeing you again in person. How are you? Are you excited for the crypto gathering? What's what are your vibes leading up to the event? I mean, absolutely. I'm excited. No, it's yeah, it's a great time. We had a blast last year and just, you know, meeting everybody was so cool. It was it was I really enjoyed being able to meet all of you guys, all the Real Vision team, you know, which was was great after doing all these shows for for all this time. And, of course, you know, meeting all of the members that I've been interacting with in the Discord, that was great. The social aspect of it was every bit as good as all of the actual events, you know, within the meetup last year.

3:07And, of course, the events were great, too. It was like you were at a live Real Vision show, you know, and the audiences were packed and the questions were great and the speakers were great. And it was just, I mean, it was fun all the way around. It was just, it was awesome. Yeah, I couldn't agree more. I love that you said the live Real Vision event show right there because you're going to guys are going to get more of that. If you like that last year, cannot wait for you all that are coming this year to see what we've got going on. And I agree with you, Chris. It was the talks were great. Obviously, I learned a lot.

3:36That was the first talk that they had last year. That was the first time I opened my mind to the power of stable coins, having that talk. But it was the events and the parties that I really enjoyed the most. just hanging out with people, sipping on drinks, sharing stories and laughs, just memories that will last kind of a lifetime for me. So with that said, I hope you again, I hope you all join. I hope we create new memories. But Chris, we have some pretty big news that happened yesterday that you were telling me offline. That's basically kind of how the markets are going to react and what's going to kind of shape things up.

4:11So why don't we dive right into that here? Because this are trading the market. So we can't trade responsibly without knowing what's going to happen and shape these markets, right? So tell us what's going down. So yeah, I guess if you haven't sort of been living under a rock for the last few months, we've been talking about this MSCI situation with MicroStrategy and the digital asset treasuries and also the Bitcoin miners that are all potentially impacted by this. And just to kind of recap real quick, MSCI is a, well, it's like a listing service, a listing index, and a lot of the funds and ETFs and things like that, you know, base their allocation decisions on what's listed through this MSCI.

4:57And MicroStrategy was at risk of being delisted, not just MicroStrategy, but all of the other DATs and Bitcoin miners and things like that. The MSCI came out and basically said, we're we're evaluating the idea of potentially delisting these entities because they're operating more as like funds as opposed to businesses. You know, essentially, they didn't like the idea that these companies had more than 50 % of their balance sheet in digital assets because the MSCI likes to list companies that are actually businesses that are like making products and services and things like that. They don't want to just be listing funds.

5:34And so that's where they were, you know, kind of at conflict. And so they were, they were saying, we're going to potentially delist all these. We're going to announce it on January 15th. Of course, the announcement came a week early, I guess, just because they didn't want to like have the markets, you know, know exactly what was going to happen. So they dropped the announcement a week early. And for a time, everybody was very freaked out because they were like, this is probably going to happen. I don't see how MicroStrategy and all these other companies are going to weasel their way out of this.

6:00This is going to be a big bummer because there's going to be tons, like billions of dollars worth of forced selling that's going to occur if these companies get delisted. And it's going to cause all kinds of problems for MicroStrategy as a stock. It's going to cause indirect problems for Bitcoin. And everybody was pretty sure it was going to happen. And then, you know, sort of miraculously yesterday, they announced that they are not going to delist them. And so initially, it was like, yay, everybody's happy. Cool. They made it. You know, the$9 billion sell wall magically has disappeared now and it's all good.

6:32But once people started digging into the details of the announcement, they're like, oh, well, wait a minute here. So there's this thing basically where the MSCI decided not to delist them, but they also implemented what's called a share count cap, meaning the share count can't, let's see, how do I explain this? if MicroStrategy issues new stock today, the funds can ignore it. Whereas before, when MicroStrategy issued stock, companies like Vanguard and all these ETFs, they were forced to buy those MicroStrategy stocks, which made it basically easy for MicroStrategy to then go and keep buying more Bitcoin.

7:13They had this flywheel in effect. We'll just print more stocks. All these funds will have to go buy our stocks. We'll buy more Bitcoin and just kind of rinse and repeat. Now they can't do that. Now, if they issue more stock, the funds can ignore it. They don't have to buy it. So effectively, the passive bid is gone. So it's like, yeah, they're not delisted, but at the same time, they've kind of frozen their bank account in a sense or taken away their credit card. So they can't sort of do this sort of infinite money glitch that they've been taking advantage of. And so it's like good, but bad. At the same time, the sell wall is gone, but also the money that creates the passive bid to keep buying Bitcoin is also gone.

7:56So that's kind of a bummer. And then if you look at it from the miner standpoint, did you have a question? I saw you open. Yeah, I was actually, because literally Neil Sherman has a question on literally that exact point. So even though the MSCI adjustment also includes the provision that new share issuance doesn't automatically generate required buying by the funds, they are still subject to monthly and quarterly rebalancing based on their weighting. Is that correct? So that while it may delay buys, it won't stop them as long as share issuance results in net value gains. Is Neil on the right track there?

8:38Yes. Yes. that is true but i think that's going to be a much smaller amount and it's it's not going to be like you know microstrategy can't just keep issuing new stock and having it result in lots of new bitcoin yes the rebalances will play some role in that and it will sort of mute the damage i think but i think still it's it's kind of ultimately a net negative you know because it does sort of break the flywheel effect to a large degree uh but yes that is true um so yeah so yeah and then you have miners. I think we're going to see a stronger pivot, basically, with these miners away from mining and towards AI, you know, because they're not going to be able to make nearly as much money.

9:21They're not going to be able to basically buy new, I'm sorry, they're not going to be able to buy new mining equipment by issuing stock and raising money. And so they'll be less competitive as the difficulty increases. And so that's going to be interesting to see how that plays out in terms of hash rate and things like that. And then, yeah, I think what we're going to see is basically a shift away from DATS and more towards ETFs, basically. And I think sovereigns are going to kind of kick in. And also we have the whole deal with, there was a whole kind of JP Morgan situation where they played a role in all of this too.

10:01Like they basically came out with all this FUD in Q4 and, you know, right in coordination with the announcement from MSCI saying that they were going to start their new product, a product of their own, like a competitive product. And they actually launched their competitive product on January 2nd. And then, of course, a few days later, MSCI cancels the delisting situation on January 6th yesterday. So basically, there's this kind of conspiracy that like JP Morgan FUDded the market down and dropped the price really cheap and bought the retail bags, essentially, and launched their own casino and then took away the threat of the MSCI.

10:42So I think we're going to see a lot of institutional pivot towards ETFs and away from DATs is effectively what we're seeing. And I don't know. It's going to be interesting. MicroStrategy will still be around. They're not going away. They're not going to sell their Bitcoin, but there's like very little incentive now for that companies. I don't think, I think also buried in that announcement, no new dat companies can come online either. So it's like the ones that are there are sort of grandfathered in, but also they can't really benefit from the flywheel effects that they were, that they were having.

11:16So it's, dats are going to kind of, I feel like just slowly fade away. And yeah, we'll see a pivot towards ETFs, which isn't all bad necessarily. But again, it does take away a lot of that passive bid that Bitcoin was benefiting from. And so now it's going to kind of have to stand on its own two feet a little bit more. And we'll sort of see how that plays out. So a quick break in your regular programming. If you're serious about your future, grab my free report called Prepare for 2030. I think you've got five years to make as much money as possible. And this guide will help you navigate what's coming.

11:51The link is in the description. Download it now. But another thing I want to touch on is there is a bit of a mechanical unwind from all of this that we're seeing. And that is over the last couple of months, basically all of these hedge funds and everything were shorting MicroStrategy because they figured that it was going to get tanked by this delisting. And so they piled on shorts, basically. And then And to hedge these shorts, they bought spot Bitcoin to balance that trade out. And now that it's been unwound effectively, they're having to now buy MicroStrategy stock to unwind the short and also sell the Bitcoin that they had as the hedge.

12:34And so that's why we're seeing MicroStrategy stock up today and Bitcoin down today to a large degree. There's also some technical reasons, but there is some sort of forced selling, some mechanical selling that's coming from this short unwind for micro strategy. So I think that's playing a role in what we're seeing in the short term, at least with the markets right now. And kind of taking that more longer term, do you expect that to be good for micro strategy stock? Like you expect the micro strategy stock to continue that recovery or like how are you looking at that as more of a long term thing, I guess?

13:08Or is it more of a wait and see? It's going to kind of be a wait and see. They're still, it's, the situation's still not over. The MSCI kind of just kicked the can a little bit. They're going to continue to evaluate this. And then in February, it's going to be open for more debate. That'll probably take a while. I mean, it could take the whole rest of the year for them to ultimately figure out what they want to do with these companies. But yeah, so they just kind of kicked the can for the moment, basically. And now we touched on the miners a little bit, but I want to ask you, how do you think this overall is for the miners?

13:43Because we have seen them kind of, I guess, repurpose themselves or kind of reinvent themselves and not just focus on Bitcoin mining, kind of repurposing and loaning out their energy for AI and powering data centers. We've seen BitMiner really just accumulating tons of ETH as well. How do you view that for the miners as a whole? And do you think maybe looking into miners and having them kind of expand their offerings and their services is a good thing for investment purposes? I do think it's a good thing. I think that it's – I kind of get the sense that the miners are going to – it's going to really be based on the Bitcoin price.

14:25And I think we're going to see in terms of like commercial miners, sort of big tech miners, they're going to pivot back and forth between AI and mining based on the Bitcoin price itself. Because, you know, they're going to constantly be looking. And if they think that they can make more money, you know, sort of per megawatt hour, if they can make more money mining Bitcoin, then they will. And if they can make more money, say, hosting chat GPT, then they'll do that. And they'll just switch off the miners and go with whatever is the most profitable in the moment. I think we'll see a shift towards more bigger kind of state-backed miners, like bigger, you know, countries like, you know, Bhutan, whatever, El Salvador, Russia, the Middle East, all of those are sovereign-backed, you know, mining entities who are mining as much for, you know, national security as they are for profit.

15:13But I think we'll start to see a shift towards bigger, you know, bigger miners like that. And it'll be more of, you could call it more of like an energy arbitrage, I suppose, as as opposed to like a gold rush where they're just trying to rake in Bitcoin. It'll be more like, again, they'll be looking at AI. They'll be looking at how much can they make based on the Bitcoin price and things like that and going back and forth. So I don't think it's going to kill anything. I do think that we'll probably see hash rate. Actually, I have a chart here I want to pull up looking at hash rate because I think this is going to be interesting.

15:47I think we'll see hash rate actually level off. And like right now, it actually leveled off back in November. and is on a downtrend. Now, that's not totally uncommon. We can see that it did that back in 2024 too. But you could argue that we'll likely see hash rate probably not get too much higher than this, maybe level off, maybe even trend down for quite some time while miners sort of figure out what they want to do in terms of their business models and how they can make the most money and where mining is sort of going to concentrate over the next year based on this situation with MSCI. So it'll be interesting to play out.

16:25None of this is necessarily bad for Bitcoin. It's not like Bitcoin is going to be less secure or the hash is going to be too concentrated or centralized or anything like that. There's still plenty of decentralization in the Bitcoin network. I think it's just going to be, we're going to see sort of a shift away from smaller entities and more towards sort of industrial grade infrastructure, Bitcoin mining and, you know, less towards, obviously the mom and pop operations are completely dead. And the public companies are even going to start to wane now, you know, if they can make more money basically operating, powering AI than they can mining Bitcoin.

17:07And so it's going to be interesting. Yeah. A lot to look out for. So Saz has a question, kind of going back to what we said about ETFs. So are you thinking ETS will become a more legitimate mode for retail investors as well? What are your thoughts there? Yeah, I mean, we're already starting to see it a little bit. Like here's a chart I've got that breaks down basically ETFs, treasuries, and then total institutional flows. And we're seeing, you know, just looking at this on a weekly timeframe, we're starting to see even a tick up basically here in ETFs. And I think here's treasuries. I think we're going to see a leveling off of treasuries, maybe not so much of a decline in treasuries necessarily.

17:49But I do feel like this number is going to going to kick back on and continue to run up. And I think overall, like this blue line is overall total institutional flows. And I do like the fact that it is continuing to run up in this bounce that we're seeing in Bitcoin. This is telling me that this is at least in some part being driven by institutional flows, which is a good thing. And it's also sort of supported by just looking at the net flows on a monthly timeframe with Bitcoin here. We had major, obviously, net outflows in November. December, it was a little better. But here already in January, we've got net inflows.

18:28And so, you know, I'm wondering if this is going to play out similar to how it did back in February, March and April of last year, where we had, you know, the chart looks almost identical like that. And so I would like to see that continue. And I think it will. I think we will continue to see net inflows from ETFs and also sovereigns. I do think that I'm not going to be surprised if sovereigns start to step in finally, you know, now that ETFs have been much more legitimized and the sort of question or uncertainty surrounding DATS is negated at this point. I think that we'll start to see bigger entities step in.

19:05And I think that's where a lot of the money is going to come from for Bitcoin over the next year. Now, this might be a little bit of a silly question here, but for this MSCI, was that only in relation to Bitcoin or does that include everything under the crypto umbrella? So like, would it be like, is it just Bitcoin or does that count ETH, Solana, BNB, XRP and the like? It counts everything. So basically any company that has more than 50 % of their balance sheet made up of digital assets was subject to this delisting situation. And so, yeah. But I think going forward, the issue about them not being able to issue new stock, the sort of share count cap that it's called, that's going to be in place no matter what.

19:53So like all of the treasuries that exist are fine, I guess, but they're not really going to be able to grow. And so, yeah. But yes, all assets are, it covers all assets, all digital assets. Okay. So we're kind of coming up on the end here. I want to take a look at Bitcoin's price, right? And just see, we referenced, or you referenced earlier how MicroStrategy stock price went up, Bitcoin's going down a little bit. I just want to read these tea leaves here and see what you're thinking about Bitcoin's price action as we are today. So a couple of things. We kind of came up and sort of double topped at this level right around 94, 650 and got rejected.

20:37We're headed back down to the 10 day moving average, which really is fine. I mean, that's not a big deal to come back and retest the 10 day moving average. That happens all the time, even a normal healthy price action. There were a couple of developments recently in terms of like a CME gap. We've got a couple of them here to look out for. One of them is that sort of the 90, 190 level that, you know, could potentially get filled. That would be a likely landing spot. And if that gets that, if it goes past that, there's another one down here at around the 87, 800, 85 level. So these could be likely potential landing points in the short term.

21:13Maybe they don't fill right away. Maybe they don't get filled for several months even. But usually in the short term, CME gaps either get filled within the same week or they get filled six months down the road. So these are kind of numbers I'm looking for. So around the low 90 ,000 level, I guess, give or take, is a likely landing spot in the short term based on both the moving average and the CME gap. And then the rest of crypto is basically just going to follow suit based on its sort of market cap and its kind of beta level against Bitcoin. But whatever's going on with Bitcoin, the rest of the market's going to do exactly the same thing for the most part.

21:49So and everything is kind of, you know, corresponding. Bitcoin is down 2.7 percent. ETH and SOL are both down around 4 percent. So, again, same sort of thing. SWE is hanging in there. It's only down about 2.85. So it's right in there. But they're all sort of seeing a sort of interim peak, you know, retest. And either it's going to run back up or it's not. But I generally am still optimistic. I don't feel like that this was the peak. This was all we're going to get out of this rally. I do think it's likely to continue. And so I think we're just seeing a little bit of a retest, a slowdown retest, basically, back to the moving average and then back up again.

22:33So that's my gut right now. And tax season is approaching too, right? In the next, what, by April 15th, we have the deadline. So usually that's been a kind of a time period that people look for liquidity to reenter the market, at least from a retail perspective, right? They look for liquidity to enter the market. And there are those rumors of tariff dividends being paid out, if you will. So we'll see. And those I think the rumor was that they might even be added to the tax return. But I guess we'll we'll just have to wait and see how that that plays out. All right, Chris, a lot of important information for us.

23:08I want to ask you one last question before we end here. With all of that, what are you because we know we have people that, you know, they have money in their pocket and it feels like it's burning a hole and they just need to throw it into the market. How are you thinking about your entries into the market based off of this recent MSCI news? Well, I would, again, going back to, I like to look at the moving averages for entries. I'm going to be looking at the 10 and the 20 to see if we bounce off the 10 or make it all the way down to the 20. But those are kind of really, anytime you can get all the way down to the 20-day moving average off of a rally, those are always great times to buy.

23:48So that's what I'm going to be holding out for is touches on either one of those two moving averages and sort of go from there. That's great. Great. Great mention there. Patience, guys. We will see you again on Monday for our live TA show. And of course, again, head on over to realvision.com forward slash crypto gathering to check out more information on the social passes. Chris and I hope to see you all there. Until next week, everyone, don't fuck this up.

24:46and create memories that last a lifetime. The moments 300 million people say in unison, we want a better way. But the moments that really matter are the ones that come next.

25:34Hey, everyone. As you know, on this podcast, I bring the best guests in the world at that nexus of understanding of macro crypto in the exponential age of technology. If you're enjoying the show, a quick five-star rating goes a long way. It helps us grow and keep these conversations coming with the best guests in the world. Thanks a lot. Ever wanted to explore the world of online trading but haven't dared try? The futures market is more active now than ever, and Plus 500 Futures is the perfect place to start. Plus 500 gives you access to a wide range of instruments, S &P 500, NASDAQ, Bitcoin, gas, and much more.