Bitcoin holds at $80K as the Fed holds rates and Google earnings disappoint
Ivan on Tech (Ivan) delivers a solo market update on Bitcoin, the Fed's rate decision, Google and Microsoft earnings, the US Bitcoin strategic reserve, Christine Lagarde's early ECB departure, and a wide-ranging Q&A covering SpaceX, Tesla, Hyperliquid, Galaxy Digital, and Elon Musk's political risk.
Summary
Ivan opens with Bitcoin sitting at $80K, down roughly 8% from its recent high, attributing the pullback to weak Alphabet earnings and the Fed's decision to hold rates while signalling that inflation remains too high. He contrasts Google's negative free cash flow and deteriorating advertiser relationships with Microsoft's profitable AI buildout, arguing the two companies are in very different positions despite similar AI spending levels. He covers the US Bitcoin strategic reserve, noting Senator Bill Hagerty confirmed the government will not sell its approximately 200,000 confiscated Bitcoin, though Ivan expresses mild disappointment that the reserve ambitions fell short of pre-election promises. He also discusses Christine Lagarde's early departure from the ECB (announced for February 7th, ahead of her October term end) and the democratic concerns it raises around the selection of her successor, with Macron able to influence that choice before a likely change in French government.
In an extended Q&A, Ivan discusses the SpaceX and Tesla merger thesis — arguing Tesla holds more leverage as the 'bride' in any merger and that uniting the two tickers would be bullish — alongside political risk for Elon Musk, illustrated by a clip from Kara Swisher suggesting Musk could have faced legal jeopardy under a Harris administration. Ivan also reviews charts for Hyperliquid (bullish), Galaxy Digital (bear trend but near 200-week moving average), and robotics exposure via Robo Strategy.
Key Takeaways
FULL TRANSCRIPT
Bitcoin at $80K — Fed holds rates, Google drags NASDAQ
Ivan: Bitcoin is at $80K right now. We were all the way up at 81, almost 82 earlier this week, and now we're back towards $80K. This is mainly driven by the fact that Alphabet had a bad earnings report yesterday. You had Microsoft doing a good report and pumping very nicely, and Alphabet doing not too good of a report. This comes down to AI spend and the fact that they have a big problem with free cash flow. Alphabet's AI spend is not getting paid for by the users of their AI, and that's why it has been punished. That's also why NASDAQ is down a bit. If you look at pre-market trading, NASDAQ is going to open a bit lower, and that has pulled Bitcoin with it approximately 1%. So all in all, that's one part of the situation.
The second part is the Fed. The Fed held rates. The Fed said inflation is still a big problem — a big, big problem, actually. But they're not going to cut. They will be holding rates. This was expected. We even ran the poll in our daily newsletter and our hive mind in the newsletter also said they're going to hold.
All in all, Bitcoin is basically where it was yesterday, two days before. We're here at this $80K level for now like three weeks — even four weeks. Even back at the beginning of October we were around this level. So not too much has changed for us. We are bullish.
Google vs Microsoft — the AI free cash flow divide
It is interesting to dig deeper into the reports because there's a big difference between Google and Microsoft. Microsoft is such a strong case versus Google, at least for now. Microsoft is not spending too much on their AI buildout because they don't even build the model — they just serve the end client. They also have a lot of revenue from AI. They have less capex. They don't need to build all of the latest models. They don't try to compete there. And they have monetisation that is working.
So let's get started at the beginning. The rates are holding. You had two people wanting to hike rates — Governor Lisa Cook and Cleveland Fed's Beth Hammack dissented for a 25 basis point hike. So two of them wanted to hike. The other ten didn't want to hike. So they did not hike.
When you look at the words — because normally whenever they change rates or don't change rates, everyone listens to what is being said in the press conference — the statements around inflation and growth have changed. Growth went from "solid" to "strong," and inflation is now described as "too high." When growth is strong, it is inflationary, and now inflation is too high. So the Fed wanted, in a way, to raise rates. The way they spoke is almost like they wanted to raise rates but simply couldn't. To raise rates in this economy before the midterms would be a disaster. Imagine Trump if they raise rates right before the midterms. They cannot do it.
So all in all this was quite expected. The most interesting thing here is the earnings. Microsoft AI — just like we said — AI pays for itself when you look at their products. Azure has a big increase, plus 48%. Very important. Microsoft Cloud growing a lot — very, very big numbers. But here's the most important thing: positive free cash flow. All of this buildout of AI is, at least for now, getting paid for by itself.
Google is the difference here. They're also growing — they have growth in all kinds of departments — but the problem is negative free cash flow. They actually have to issue new shares and dump them onto the market in order to fund this AI buildout. That's why shares are down so much — 10% after hours. And the question is: was Google the company that tanked NASDAQ? Because as you can see, NASDAQ is down a bit, and if you run a simple calculation it seems very plausible that the 10% dump in Google after hours is the reason why NASDAQ is slightly down today.
There are many opinions on whether this is a good time to buy Google or not. The bullish case comes from Quiao, who says he will add to his Google position for the first time since bottom-ticking it last year. He says the thesis remains the same — Google is the best-positioned company in the world to win AI, the very thing that the market believes is threatening its main search business.
That's another big problem with Google. When you Google something, you get the answer — which is great — but it also means they cannot really make money from you. They make money when you click the sponsored link. They make money when you spend time trying to find what you're looking for and wade through all the sponsored content. And advertisers are starting to notice. There are many advertisers speaking about the fact that the money they spend on Google ads doesn't make sense anymore.
For example, one advertiser spending $500K-plus per month on Google ads goes through all the changes Google has made where they're basically robbing the advertiser — according to him, at least. For example, before, when you wanted to bid for a specific keyword and you bid $5 and your competitor bid $1, you would be charged $1.01 — just right above your competition. Google wouldn't take your money for nothing. They would only charge you enough to beat whoever else wanted to buy the same keyword. Now they've changed it. Whatever you say you're willing to pay, they're going to take. Why? Because they need to make the numbers look good. They need to ensure that all the numbers in the report look like they're growing.
Short-term, they have been able to put lipstick on a pig, according to some advertisers like this one spending $500K per month. Short-term they're able to squeeze the advertiser by changing how they charge and how the bidding works. Another thing they've changed is that you can no longer bid on specific keywords. Before, you could have an exact keyword that you bid for. According to this advertiser, Google is now going to show your ads in other keywords also — ones where you didn't even want to run them. The definition of this "close variant" that Google pushes down your throat is unknown.
Let's say you want to promote your dental clinic in New York. You say "dental clinic New York" — you want to be number one. Now Google is also going to show your ad when people search other things. Maybe they search "toothpaste New York" and Google says, "Hey, we're going to show you here also." You didn't want that. You still pay for that. So if you're a dentist, you're going to get screwed. And of course the same for other keywords.
So all in all, the numbers look like they're growing. But the cost of this is that advertisers get screwed. If advertisers are screwed, it's not good. And also, how is the AI going to monetise? Who the hell knows.
So you have the bull case that Google is still very good at AI — they are probably the number one AI app right now with Google AI Overview. When you Google something, you get an overview. Obviously it's very nice. At the same time, it's too good. It's so good that you don't even have to look at ads. Should they start adding ads there? Yeah, let's see. The whole business basically will have to be redefined.
There is a bullish case and there is a bearish case. If we just purely look at the trend — if we look at the Google stock — the Google stock is in a bear trend. We respect the bear trend. It's in a bear trend, and since it went bear, yeah, you miss yourself. It's going to open 10% lower. So either you see it as a discount — the way I trade, my strategy is we need a bull trend first. It will not go to Valhalla without a bull trend. If you're a big Google believer, could you buy here? It could make sense.
Let's bring out the moving averages. Let's put the 200-week moving average here and see where that is. It's still so far away. It has to go down a lot to reach the 200-week. Should it come close to the 200-week, you could buy even in a bear trend. You can buy this — the only exception is when you have a quality asset close to your 200-week moving average. You could even buy in a bear trend. It's like Bitcoin when it was at the 200-week — below the 200-week — we said we're still buying here. The same thing applies here. Should it come close, then you can ignore the trend. But otherwise we need the bull trend.
And as always, everything can go to zero. This Google thing can go to zero. That's why you read the disclaimer. Whatever I tell you here is entertainment. Whatever I tell you here is education. Whatever I tell you here is my own personal opinion that you probably should not follow without using your own brain a bit as well. Maybe you should use the brain. Maybe it is here for a reason. Not financial advice.
Microsoft spending, ETF inflows, and the Bitcoin strategic reserve
So that's the situation with Google. The situation with Microsoft is in one way similar — they're also spending a lot of money on AI — but it is getting paid for from all of their services. Free cash flow is positive. And also, by the way, they are spending less than expected. Google also spent a bit less than expected. Google spent $51.4 billion and Microsoft $45 billion. So yeah, that's the situation with tech for us. We follow the trends. Stocks bullish, NASDAQ bullish, S&P bullish, Bitcoin bullish. We're bullish.
And you do have Senator Bill Hagerty coming out saying they're not selling the Bitcoin strategic reserve. Listen to this.
Senator Bill Hagerty: "The United States has about 200,000 Bitcoin right now that have been confiscated for various reasons. We have cash and a lot of other things too, but about 200,000 Bitcoin. President Trump issued an executive order and said we're not going to sell that Bitcoin to the marketplace — we're going to hold it as a reserve. His point being that Bitcoin is finite, that we want to be early in this process and see that reserve go up. I think it's worth maybe $16 billion right now at current rates. That number is likely to increase if you believe that Bitcoin is going to increase. That's the decision that the White House has taken — to do two things. One, to make what the president viewed as a smart financial play. But two, and I think this is actually much more important, to demonstrate support for a new innovative industry and that it happened here.
The legislation — I should say the executive order — does not allow for increasing the deficit to buy more Bitcoin. So it has to be done on a deficit-neutral basis if we were to grow the reserve. But the reserve can continue to grow in value as well. Again, back to the finite nature of Bitcoin. I think that's the expectation that the White House had when they put this in place. The legislation — and Cynthia Lummis has been working hard on this. She will not be in the Senate after this cycle, but the legislation that has been put in place, that framework can certainly exist as we move forward."
Ivan: That's a bit of an issue — we're going to lose Cynthia Lummis. What the hell? We're losing Cynthia Lummis. Anyway, they're not going to dump the reserve. You get the point. There's no reason to listen more. They're not going to dump it. They're going to hodl it. Hopefully they're going to grow it. But maybe a bit underwhelming — all of this Bitcoin reserve, everything that was supposed to happen. But it is what it is. Before an election you have one message, after the election it's normally a bit different. Before the election it's like your project before the ICO. Before the election, the Bitcoin reserve was supposed to be like a central bank reserve. After the election — what is this? What is this tiny reserve? I mean it's good. They have a bit of reserve. It's good — confiscated Bitcoin. But that's interesting. They confiscated Bitcoin from criminals, and the criminals got the Bitcoin from the victims. So the victims are not getting Bitcoin back, but there is a reserve. How does that work? Do victims get paid back in fiat or something? Or maybe they can't find the victim? It would be interesting to learn about the mechanics of how they actually built that reserve, because they did not buy Bitcoin — they confiscated it.
Yesterday we did see inflow into the ETF. The ETF has solid inflow. I like that. For basically the past two weeks it's been very solid. Yes, there are a few outflow days here and there, but all in all it's a nice solid month for Bitcoin ETF.
And my humble opinion on this market — very humble, not financial advice, not a recommendation — be bull in the bull, be bear in the bear, do not be bear in the bull. I'm bullish Bitcoin. I'm bullish altcoins. And I have been since the summer when Bitcoin went to the 200-week average — we said it's time to be bullish, and we keep that message. Even if Bitcoin goes down 2% in a day, people get very concerned. Bitcoin went down 1%, 2%. Or even when Bitcoin goes down 8% from the high — even in this extreme, dangerous, super volatile, mega crashing, black swan kind of circumstance of minus 8% — Ivan is still keeping clarity. We have full clarity even in this crazy, crazy scenario. Even in this insane bearish scenario, I'm still bullish. Now, what you do is up to you. Not a recommendation. Everything can go to zero.
Lagarde steps down early — ECB succession and European politics
Switching gears. Lagarde will step down as ECB president in February, although she should continue until October. This is a big problem. This is a big democratic problem. People are raising the alarm that she is stepping down so that Macron can play a big role in choosing the next ECB president. There will be an election in France in April. The worry is that Le Pen or someone who wants to clean up the mess is going to win, and they are worried — Lagarde is worried — that maybe Le Pen is not going to make the decision that Lagarde and her friends would prefer for the ECB. That's likely the worry they have. That's why she's stepping down in February, so Macron can still be part of the decision to select the new ECB president.
The ECB president is decided mainly by German and French leadership, and then the other countries are there somewhere also. So that's why people are sounding the alarm — it's a big democratic problem that she tries to time her departure so that her existing ally can participate in selecting the next one.
Christine Lagarde will step down as ECB president on February 7th. Her term was due to run until October. The timing is about who picks her successor ahead of France's presidential election. For Bitcoin and US stocks, it's a short-term non-event. But for Europe as a whole, it's a discussion point about democracy, because there are already many concerns about how democratic the EU really is. If you're an average EU citizen, you don't get to decide too much about what's happening there. And now with this timing, it's even more tilted against what the average person wants.
Let's say the average person wants Marine Le Pen in France. Her party will not even be able to participate in this decision even though they should, if they win. It's a big democracy question.
On this channel, we're apolitical. But if they put some guy from Spain — I'm just worried it's going to be some ally of Sánchez. If they put some Sánchez-related guy, it's going to be very, very bad. Pablo Hernández de Cos, ex-governor of the Bank of Spain — is he a Sánchez guy or not? If they put a Sánchez kind of guy in the ECB, he's most dovish, most supportive. Okay, maybe he's good for Bitcoin. Listen, if a Sánchez guy is good for Bitcoin, let's put the Sánchez guy.
Klaas Knot — he's Dutch. Hawkish roots, more centrist since 2023. Joachim Nagel, Bundesbank president — hawk. Germany reportedly shifted to targeting an ECB board seat. Isabel Schnabel, ECB board member — strong hawk. Okay, she's going to leave. They don't want a hawk.
So yeah, that's the situation with the ECB. Hopefully it's going to lead to more printing. Hopefully it's going to lead to more support for the industries which Europe needs a lot. European cars are not doing too well. There's this whole cheapening of Mercedes-Benz. You buy Mercedes — it's plastic. They have no nuclear power. They shut it down because Greta told them to. How are they going to figure it out? The ECB will have to print.
Actually, thinking back on Greta — maybe she is bullish Bitcoin after all. There is no nuclear. So when the economy is not doing well, when you don't have power, you don't have energy, you are closer to the printer, you're actually getting closer to hyperinflation. So thinking purely from a Bitcoin perspective, Greta and her crowd shutting down all nuclear — maybe it was good for Bitcoin. Because if the economy is weak, if the government is weak, they are closer and closer to printing, to hitting that print button. So maybe Greta is the most misunderstood Bitcoin bull ever. That would be crazy. Wouldn't that be crazy?
You have bond investor Jeff Gundlach talking about the fact that the Fed did not raise and he thought they should raise, because they're going to be behind inflation. And when the Fed is behind inflation, normally gold does well. So that's something to think about — some kind of rally in gold. Gold has been doing quite badly. For us, the gold trade ended at the beginning of the year. We went from crypto into stocks and gold, and then since the summer we're back deploying into crypto in a fantastic, beautiful way.
Q&A — THORChain, Hyper, SpaceX, Tesla, Galaxy Digital, and more
Ivan: Let's go to Q&A — questions, answers, debates.
Thoughts on THORChain listing Monero with no KYC? I mean, I guess it's good, but at the end of the day I think they are playing with fire slightly. Obviously it's good that they list no-KYC Monero and stuff like that. The reason why I'm saying it's a bit playing with fire is that should Democrats take over after the midterms, or should you have a Democratic president after the next election, I think it's going to be problematic for all these privacy protocols. Currently they have no issues — currently, except for Roman Storm, the Tornado Cash guy, who still has issues. So yeah, when it comes to all of the privacy stuff, obviously it's good that it's there. But if there is a change in leadership in the US, crypto — they're coming for us in one way or another. Trump is pro-crypto. They're going to be using crypto against Trump. They're going to say it's corruption. Crypto is Trump corruption. And all this privacy stuff is the lowest hanging fruit for them to go after, because it's so easy to say it was terrorists or Kim Jong-un. The average person is going to love that. So yeah, something to keep in mind. But obviously good that they do something there.
Hyundai — let's see. Hyundai Corporation. Not too much recently. Kind of in a weak position. I wouldn't touch it here. It went bull but quickly reversed. Stop loss probably hit if you took that trade. It's very weak. The only reason it would be interesting is if it goes above the recent high.
Galaxy Digital — Novogratz says we're going to go to $1K. I say it's no. Galaxy — it's his fund. One good thing is that it got support of the 200 moving average, which is normally a very good support level. Yeah, it's in a bear trend, but if you love Galaxy and you love Novogratz, getting in around the 200 moving average is not bad. But it is a bear trend, so it's better to wait for bull. Should it go bull, you still have like 100% pump to the highs since last October. But why pick this one? There are many other easier charts. This one is so choppy.
What's your take on robotics? Bullish, bullish, bullish. Let's see the company — Robo Strategy. Not doing too well. But if you want a robotics company to keep an eye on, check Robo Strategy. It's from Andrew Kang — he's well known in crypto. He did have a crypto fund before. If you want something publicly listed, it is this one. Not doing too well, but the company is interesting. Do your own research on this one.
Bullish news on Hype? No specific news, but let's check the chart. It's up. It's very nice. Fantastic. Yeah, today it's doing quite good. Don't worry about the news. I don't even know what the news is, but it was in a bull trend. So in a bull trend, we're bullish. We remain bullish. It's back up. Was a question of time.
Is there any news? Some redemption from staking. A pump-fund-based perpetual futures trading launch. But this news — sometimes it leads to a pump, sometimes not. Just follow the trend. Hype tokens are going to be unlocked and given to the team. Okay, that's what they say. But see, it's bullish — just like when SpaceX said they're going to unlock and dump on your ass, that was the bottom of SpaceX because it was already priced in. So when it happened, there was nothing more to worry about and it could pump. Also, Kraken is doing stuff on top of Hyperliquid. So there is a bit of bullish news. But see, the Kraken news did not pump it, and now this redemption — the news that they're going to dump on your ass — that pumps it. Because those things are normally bullish when you have bearish news, because everyone already knew that. So now that the bearish news is gone, it's bullish. Fantastic.
What do you think about SpaceX? With SpaceX you've got to have a big picture view. Let me open up the chart. SpaceX — weekly bullish, very good. It got the weekly trend. Daily bullish. Four-hour going to go bear if you're trading lower timeframes. But yeah, daily bullish, weekly bullish — good.
Now there are short-term discussions about SpaceX versus Tesla. SpaceX has gone down a bit during the last few weeks since the peak on October 6th. Meanwhile, Tesla has been going up during the same time period. As we sent out to everyone in Bullmania — we sent out a long research report, like eight pages, on the SpaceX and Tesla relationship — check that if you haven't read it. But a short summary is that Tesla is in the driving seat for the merger. Tesla decides if they merge or don't merge. The market is pricing in that Tesla is going to be rewarded for that position — for being in the driving seat. That's why Tesla is pumping and SpaceX is not really pumping.
Once they merge, super bullish. This combination would be super bullish, as long as the trend is bullish — we always need to look at the trend. But just futuristically thinking, as a futurist thinking about the Musk bull case — if you love Musk, it's nice if there's one ticker. I don't like when a founder has two tickers. It needs to be one founder, one ticker, not one founder, two tickers. One single ticker. I think it would be bullish to unite the tickers so Tesla and SpaceX are in the same boat, the same community. They pump the same chart.
Some of the most well-known failures — Richard Heart, when he went from having one ticker, HEX, to like a million tickers. That was the day everything started to go downhill. You never want to have many tickers. It needs to be one founder, one ticker, one chart, one pump, one community. So I think for SpaceX it would be good if they merge.
Now let's see Tesla on the weekly. It's going to close bullish on the weekly. But the chart is quite ugly — it's up and down, not so much volatility. If they merge, good — it would be good for both. Short-term, Tesla is gaining a bit more because they are kind of the bride. SpaceX is the groom. He needs to pay for the bride. How many goats he will pay for the bride — that is what is being discussed now. Ultimately it cannot be too many goats. Why? Because if Elon says, "Guys, if we don't merge I don't want to continue Tesla — I want to work with SpaceX — so either we merge or I'm out of here," the bride is going to come. Where do you go without Elon? So SpaceX has a bit less leverage than Tesla. Tesla has more leverage. But finally, Elon has leverage over everything. So yes, a bit up now in Tesla. A few more goats here and there. Everyone needs to be reasonable. They will figure stuff out.
Democrats are threatening to nationalise. Yeah, that would be bad. That would be very bad. There's a political risk. With everything Elon is doing, there is a political risk. That's why he should have a big Bitcoin bag so that it's not easily taken from him — in self-custody. I'm just thinking about what the best strategy is. We have kind of an industrial revolution here. And the industrial revolution last time produced some communistic ideas that took all of your wealth. With AI, it is an industrial revolution. If the plebs want to seize the means of production — which is currently AI — and of course all the space stuff is going to follow with it, SpaceX, AI, they're going to take the rocket also. So if the plebs want to seize the means of production of AI, man, in the US you don't want to be a billionaire. You want to ensure you have a plan B and C and D. At the same time, Elon is not that kind of person. He's not the kind of person with many plan C's and D's, and that's why he's successful. Sometimes if you have a backup plan and you hedge, you cannot go all in. So yeah, interesting question. Very interesting.
What's going to happen if the power changes? They obviously don't like Elon. The Democrats don't like Elon. What was the recent thing from California? Elon said "message received" — he said that to Lorena Gonzalez and then just moved out and became pro-Trump. And what happened?
Kara Swisher on Elon Musk and political risk
Ivan: Kara Swisher says Elon Musk might be in jail right now if Kamala Harris was in office. She says he knows what's coming. Let's see.
Kara Swisher: "An entrepreneur like a Henry Ford. Important. Really good at clocking businesses, how to create businesses. Really talented, very aggressive. All that is interesting and possibly good in some cases. But he's a flim-flam man with the stocks. He makes promises — his mouth makes promises he can't deliver in any way. He's become toxic. He's become hateful. And he has enormous power throughout society. It's not just any old crank screaming away. It is someone with the most money, the most power, the most influence over communications."
Ivan: Yeah. Interesting.
Kara Swisher: "He might be in jail right now, right? He is correct. And that's not because she's some avenging fury. It's because there are a lot of questions around different companies of his. If Donald Trump loses the House and the Senate—"
Ivan: But what are the questions?
Kara Swisher: "I would worry. I'd be worried if I were him, no matter how rich he is. There were all these agencies — some of which he put a knife in and killed in DOGE — many of whom were investigating him. He stopped like half a dozen investigations of his various companies. So they're going to start investigating again. You think he's not on the list? He's at the top of that list. Donald Trump obviously is at the top, and his family, but Elon Musk is right up there for that. And you have to — he knows what's coming. Like, he's not stupid."
Ivan: See, that's why we're apolitical. If Democrats come — just for the record, we're apolitical. Okay. Elon should have been like us. Apolitical. But yeah, let's see what's going to happen with the Starlinks and everything.
Here's the thing — SpaceX and Tesla is the biggest defence Elon has. Because you are a politician, you come after SpaceX, you come after like half of the country. You're going to ruin SpaceX. Really? You know how many people have SpaceX? You know how many pension funds have SpaceX and Tesla? You're going to come after that? Very interesting. Very interesting.
Closing — Bitcoin clarity in a bull market
Ivan: Guys, let's wrap it up. Bitcoin sideways. Nothing has happened. The crazy black swan of minus 8% has happened in some people's brains. But we're here to give you clarity. We're bullish in a bull market. Even if you have this crazy scenario of Bitcoin going down 8% — in this insane bearish scenario, I'm telling you, I'm still bullish.
Now, what you do is up to you. Not a recommendation. Everything can go to zero. You buy Bitcoin, it could go to zero. You buy anything, it can go to zero. You buy anything you hear here on this stream, everything can go to zero. You lose all your money. You go to zero. Maybe you become even in debt. You cannot pay the mortgage. Things can go down very fast. It's a warning. If you don't agree, don't watch. You can lose everything in crypto and more. Sometimes, let's say you short and it goes against you — on some platforms you can have a negative balance. So yeah, financial markets are like that. Capital at risk. Everything super volatile. Some people say that's what makes it fun. It is fun. That's why we call it infotainment. I give you entertainment.