Bitcoin Erases 2025 Gains as Crypto Bear Market Deepens

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0:03:13 Welcome to Prof G Markets.
0:03:14 I’m Ed Elson.
0:03:16 It is November 18th.
0:03:18 Let’s check in on yesterday’s market vitals.
0:03:25 The major indices all fell, with tech leading the declines ahead of NVIDIA’s midweek earnings.
0:03:28 Google stock was the exception, rallying 3%.
0:03:29 More on that later.
0:03:34 Meanwhile, the yield on 10-year treasuries slid in anticipation of the September jobs report due Thursday.
0:03:38 And finally, the dollar climbed while Bitcoin dropped.
0:03:42 Okay, what else is happening?
0:03:45 Crypto has fallen into a bear market.
0:03:49 Late last week, Bitcoin crashed below the key $100,000 level.
0:03:55 And yesterday, it officially erased all of its gain for the year as it moved towards $90,000.
0:04:02 All told, it has fallen more than 25% from its peak in early October to its lowest point in six months.
0:04:04 And other currencies have followed suit.
0:04:07 Ethereum is also down more than 20% in the past month.
0:04:12 And an index of smaller coins just dropped to its lowest level since the pandemic.
0:04:15 Meanwhile, crypto-related stocks also slid on Monday.
0:04:18 Michael Saylor’s strategy closed down 2%.
0:04:19 Robinhood was down 5%.
0:04:22 And Coinbase was down 7%.
0:04:27 Okay, here to break down what is driving this unwind and what else might be impacted,
0:04:31 we are speaking with Luke Cower, markets editor at Sherwood News.
0:04:35 Luke, thanks for joining us again on ProfG Markets.
0:04:36 Hey, glad to be back, Ed.
0:04:37 Thanks for having me.
0:04:42 So, looking at the crypto markets right now, pretty bad week, pretty bad month.
0:04:51 Bitcoin is down almost to $90,000 at the time of this recording, crashed below its key level
0:04:52 of $100,000.
0:04:54 Let’s start with your broad reflections.
0:04:57 What do you make of what’s happening in the crypto markets right now?
0:05:03 First off, I, you know, it’s very hard to look at the crypto markets and try and pin down
0:05:05 why things are happening.
0:05:07 So, I always like to try and take the what.
0:05:10 The what is the takeaway from this to me?
0:05:15 Because when you have an asset that’s basically an id asset, it trades on risk appetite, momentum,
0:05:16 degree of speculation.
0:05:20 Then that really, it’s, you know, telling you a lot about the rest of the ecosystem.
0:05:25 For Bitcoin, the reasons I’ve heard attributed for its sell-off, you know, include things like,
0:05:28 as you mentioned, you break through under $1,000.
0:05:31 There’s, you know, obviously, that’s a key psychological level.
0:05:36 We’re all kind of evolved monkeys who are very attracted to round numbers.
0:05:42 And beyond that, I’ve heard 400 to 600 days past a halving, which is, you know, a range
0:05:48 of over half a year that you tend to get peaks in Bitcoin around that time.
0:05:55 I think things like strategy halving, the value of its equity fall below the net asset value
0:06:00 of its Bitcoin is kind of another sign of, hey, well, if this big buyer is facing stress,
0:06:05 I think it’s somewhat of another sign or at least an indication that people and institutions
0:06:11 that bought Bitcoin on leverage, negative things happen when it goes down and that in itself
0:06:16 is a catalyst or an acceleration for even more declines happening.
0:06:20 Beyond that, you know, you’ve seen kind of the normal things you would expect in a market
0:06:21 where things are going down.
0:06:26 You’ve seen a lot of outflows, for instance, from Bitcoin ETFs.
0:06:29 And you’ve seen, I’ll call them, you know, synonyms for poop coins.
0:06:36 Those are basically wiped out, you know, they’re back to like pandemic era level trading.
0:06:42 And you would expect to see more volatile, less high quality assets in as much as, you know,
0:06:46 whether you can describe call the D to the space underperform at times when things are
0:06:48 going down and act in a more volatile fashion.
0:06:49 So much in there.
0:06:56 My first reaction, you know, we’re also seeing kind of a broad-ish tech sell-off right now.
0:07:01 And it appears that, you know, maybe there is a little bit of fear in the market right now.
0:07:05 People are trying to de-risk, trying to get out of risky assets.
0:07:10 And I guess that might explain what’s happening with Bitcoin right now.
0:07:16 But I am reminded again of this dynamic where it’s like, Bitcoin’s supposed to be the safe
0:07:16 asset.
0:07:21 Like, that’s supposed to be the place, at least in theory, where you go because you’re afraid
0:07:22 of everything else.
0:07:28 And so the idea that people are selling their Bitcoin, you were seeing these mass outflows
0:07:31 because they’re frightened about the price going down.
0:07:36 To me, that just doesn’t really fit with what Bitcoin was supposed to be.
0:07:40 You’ve got gold, which is up more than 50% year to date.
0:07:42 Bitcoin’s now down year to date.
0:07:44 How do you explain that?
0:07:49 The great thing about correlations and narratives and regimes is that they change.
0:07:56 For a lot of time of its history, Bitcoin has primarily been, I would say, more so than
0:07:56 a store of value.
0:08:00 It’s been a hyper-leveraged play on the NASDAQ.
0:08:05 That has been a more reliable way to describe Bitcoin’s price rather than some kind of
0:08:07 store of value in the financial sphere.
0:08:15 So to me, a lot of this is really Bitcoin reconnecting with what it has generally and more predictably
0:08:15 been.
0:08:23 And it’s been effectively a hyper-leveraged, low fundamentals tech stock that behaves as such
0:08:24 in most cases.
0:08:30 So to me, that’s kind of more the takeaway from this is that the store of value narrative
0:08:37 has, I would say, not had that much empirical validity throughout time.
0:08:39 And it certainly isn’t showing any at this juncture.
0:08:49 You mentioned the rest of crypto, the poop coins, we’ll call them shit coins, the alt coins, which
0:08:52 are down to sort of pandemic, pre-pandemic prices.
0:08:57 It looks a little bit like this is sort of the beginning of the end for the alt coins and
0:08:58 the meme coins.
0:09:04 Is that a step too far or do you think these cryptocurrencies, aside from Bitcoin and Ethereum
0:09:10 and the big names, do you think that these tokens are here to stay or is this going to
0:09:13 be a big problem for Cum Rocket and PepeCoin?
0:09:19 I look at it kind of the same way as I do with highly speculative stocks in that these things
0:09:28 have been washed out very hard and nobody asks questions when they’re going up 5, 7, 10% a
0:09:28 day.
0:09:31 Nobody’s asking at that time, you know, what’s happening?
0:09:32 Why is this happening?
0:09:33 Is this ever going to stop?
0:09:34 I feel at the same juncture.
0:09:36 It’s the same thing in reverse, right?
0:09:41 All it takes is a flip in risk appetite for these things to start working again.
0:09:45 And I would kind of look to or point to if you’re looking to events on the horizon, both
0:09:52 for speculative stocks generally and for crypto, which I believe behaves a lot of the same way
0:09:56 would be you have a NVIDIA’s earnings coming up on Wednesday after the close.
0:10:04 There’s been a lot more, I would say, not broad concern, but a lot more nuance in terms of how
0:10:09 we’re treating AI winners versus potential non-winners versus potential losers lately.
0:10:15 And, you know, that has the ability to at least reignite some kind of animal spirits broadly
0:10:17 throughout the space or not, of course.
0:10:23 And beyond that, we’ve been living in this very deep fog in terms of the U.S. economy now
0:10:27 for well over a month where we’ve had very, very limited data to go on.
0:10:32 And during this period where we’ve had the government shutdown, I feel like every one or two or three
0:10:38 days through the shutdown, there was a 9, 10, 11 figure announcement about an AI spending
0:10:43 commitment. So if you think the stock market has been, you know, one half AI this year and
0:10:49 one half kind of macroeconomic outlook, we’re about to get the deluge in terms of the macro
0:10:52 outlook, both with jobs figures coming on Thursday.
0:10:55 More inflation data will be coming out again.
0:10:58 And that has the ability to change two key things.
0:11:02 The first is how do we actually feel about the economy?
0:11:08 Is job growth really slowing dramatically or is it leveling out more in an area where you
0:11:13 could say is roughly consistent with with population growth and not not enough to keep
0:11:16 the unemployment rate somewhat in check in a firmer space?
0:11:21 And then it also has the ability to change the the view of what, if anything, will the
0:11:22 Fed do in December?
0:11:28 Because one another reason why I think that speculative stocks and Bitcoin have come off
0:11:34 the boil is the the odds of a Fed cut have gone in December have gone from, you know, roughly
0:11:38 80, 85 percent to about a coin flip at this time.
0:11:39 Yeah, absolutely.
0:11:45 Just just before you go here, just to go back to Bitcoin for a moment, you know, we’re
0:11:48 down 2 percent year to date.
0:11:52 We’re kind of where we were when Trump was elected.
0:11:58 And really, this was supposed to be, I mean, the tailwind for Bitcoin.
0:12:02 It was this mainstream adoption, which we did start to see.
0:12:06 We started to see more acceptance on Wall Street, more ETF participation.
0:12:09 But then most importantly, support from Trump.
0:12:14 And yet we’re kind of back to where we were.
0:12:17 How do you what do you make of that?
0:12:21 I mean, is the is the learning here that Trump really didn’t do much for Bitcoin?
0:12:28 Where does Trump play in the Bitcoin story now that we look at the price near 90,000 down
0:12:29 2 percent year to date?
0:12:34 I think I’ll I’ll draw the direct connection between crypto and quantum computing here.
0:12:41 I think that what this shows us is that speculative assets that don’t have a lot in terms of near
0:12:42 term fundamentals.
0:12:46 Yeah, they need persistent catalysts to keep working for.
0:12:48 So, you know, there is a lot.
0:12:54 I think you can say that Trump did do for crypto in terms of easing institutional adoption, things
0:12:55 that help.
0:12:59 There are also other things that institutions have have done on the other side, which we’ve
0:13:05 talked about recently in terms of perpetual futures, things that kind of help engender and
0:13:09 encourage volatility, which is now what we see on the downside a lot more.
0:13:19 But just in the same way that quantum computing companies fell out of bed after basically the rumors that they were going to get the government to buy and take a direct stake as
0:13:20 soon as those were poo pooed.
0:13:35 It’s kind of the same with me for Bitcoin, that if you don’t have that consistent degree of momentum helping you, then sooner or later, either momentum breaks and you don’t have anything in terms of fundamentals to really fall back on.
0:13:36 That would encourage fresh buyers.
0:13:41 So it’s a it’s not a matter of what has Trump done for Bitcoin or not.
0:13:43 It’s a question of what have you done for me lately?
0:13:43 Yes.
0:13:44 All right.
0:13:47 Luke Cowher, Markets Editor at Sherwood News.
0:13:48 Luke, really appreciate your time.
0:13:49 Thank you.
0:13:49 Pleasure.
0:13:54 After the break, a look at the Warner Brothers Discovery sale.
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0:17:01 First round bids for Warner Brothers Discovery are due on Thursday.
0:17:07 And this officially kicks off a high-stakes auction featuring Paramount, Comcast, and Netflix.
0:17:10 Warner Brothers hopes to wrap up this process by the end of the year.
0:17:14 But they have already rejected three bids from David Ellison’s Paramount Skydance.
0:17:22 Meanwhile, Netflix and Comcast are reportedly working on offers for Warner Brothers studio and streaming businesses.
0:17:22 Okay.
0:17:26 Here for an update on this auction and what is going to happen.
0:17:30 We are speaking with Bill Cohen, founding partner of Puck News.
0:17:33 Bill, thanks for joining us on Prof G Markets.
0:17:34 Great to see you, Ed.
0:17:35 Thank you for having me.
0:17:36 Absolutely.
0:17:39 We want to get your take on what’s happening with Warner Brothers.
0:17:44 The deadline to make a preliminary bid is Thursday.
0:17:48 We’ve been talking a lot about Warner Brothers recently.
0:17:49 We’ve seen it a lot in the news.
0:17:52 Can you just briefly explain, like, where are we today?
0:17:54 How did we get here?
0:17:59 Well, Ed, every public company is for sale at a price.
0:18:03 I mean, some aren’t because they’re just too big.
0:18:06 Like, I don’t think anybody’s going to come along and pick up NVIDIA.
0:18:11 But, you know, Warner Brothers Discovery is not in that category.
0:18:20 It now has a market cap of $60 billion or so, plus another $30 billion of debt.
0:18:34 So, David Zaslav, who engineered this deal to buy it in April 2022 from AT&T, I think was always somebody who, you know, he’s a deal guy.
0:18:38 He’s been a deal guy for a long time, ever since he was at GE.
0:18:41 So, I think this was probably an inevitable outcome.
0:18:57 But what really kicked it off was, of course, the three bids from the Ellisons via Paramount Skydance, as it’s known now, that were rejected, putting the company effectively into play.
0:19:01 So, you say every company is technically for sale.
0:19:04 I mean, you can buy any company, really, if you have the money.
0:19:09 But they’re saying that the deadline to make the bid is Thursday.
0:19:12 I don’t fully understand what that means.
0:19:14 Like, what does that actually mean?
0:19:16 They say it’s a preliminary bid deadline.
0:19:16 What does that mean?
0:19:21 Well, I think they’re trying to create a process here, Ed.
0:19:32 I think they’re trying to instill some sort of discipline on the Ellisons so that they raise their bid beyond the $23.50 that’s already on the table that was rejected.
0:19:52 And the way they show the Ellisons that they need to raise their bid is by attempting to impose some discipline on the process and say to other potential bidders that, you know, we want to know what you’re thinking about potentially preliminarily, you know, by this Thursday.
0:20:03 Otherwise, you know, and if no one shows up, by the way, which is a possibility, I mean, you know, we’ve been led to believe that Comcast is kicking the tires.
0:20:11 We’ve been led to believe that Netflix is interested, maybe even Amazon, maybe even Apple.
0:20:13 Those seem like longer shots.
0:20:20 You know, don’t forget, Zaslav in June also proposed a plan to split the company into two pieces.
0:20:35 That is also, in effect, a competing bidder because a bunch of Wall Street research analysts have come out and said that at some point, the two pieces of this company, when split, might generate as much as $30 a share.
0:20:48 So there’s sort of this $30 a share boogeyman out there, future value, split the company up come next April, and it might at some point in the future be worth $30 a share.
0:21:01 So that’s sort of hanging out there against anything that the Ellisons might propose for buying the whole company because they’re probably the only ones who are interested in buying the whole company.
0:21:07 Comcast is, of course, spinning off its linear TV assets into something called Versant.
0:21:17 So it’s not going to be interested in buying Warner Brothers Discovery linear TV assets, but it would be interested in buying its streaming and studio business.
0:21:30 And so, you know, all of these pieces, there’s a lot of moving parts, a lot of valuation exercises that are going to have to be undertaken.
0:21:40 And so it’s a question of, you know, what is going to be the fairest value?
0:21:50 What is going to produce the most value from a financial point of view to the Warner Brothers Discovery shareholders?
0:21:57 Is it this whatever it is that the Ellisons come up with in a cash and stock deal?
0:22:02 Is it the split up of the company that Zaslav has proposed?
0:22:13 Is it a combination of Comcast buying the streaming and a studio business from Warner Brothers Discovery?
0:22:29 So all of these pieces have to be put into context and valued by the three bankers that the company has hired.
0:22:36 And that has to be all presented to the board and the board can pick what it wants.
0:22:46 My view is that essentially what David Zaslav wants the board to do and its bankers to do is what will happen here.
0:22:47 Yeah.
0:22:53 And yeah, I mean, all of these moving pieces, all of these players, and yet we’ve only seen bids from one player.
0:22:53 Right.
0:22:57 And we’re two days away from the deadline.
0:22:58 Well, hopefully it doesn’t leave.
0:23:04 Which leads me to at least, right, it leads me to question how serious these other bids actually are.
0:23:10 I mean, we keep hearing about Netflix, we keep hearing about Comcast, and yet no bid has been made.
0:23:12 At least it doesn’t appear that way.
0:23:16 Do you believe that they’re really looking to make a bid?
0:23:20 Well, look, just because we haven’t heard about it doesn’t mean it’s not happening.
0:23:24 In fact, that would be good corporate governance activity.
0:23:25 Yeah.
0:23:29 It’s bad corporate governance activity to have leaks.
0:23:30 Yeah.
0:23:30 Right.
0:23:37 So the fact that we have, there’s no leak here other than, you know, we know Comcast has gone to Saudi Arabia.
0:23:42 We know that to try to raise some money or whatever it is they did over there.
0:23:44 We know that Zas has met with Comcast.
0:23:49 We know that Zas has talked to Netflix and probably Amazon, too.
0:23:56 So we know that they’re trying to gin up a serious process to be competitive with the Ellisons.
0:23:56 Yeah.
0:24:00 But we don’t know whether they’re going to step to the plate.
0:24:00 You’re right.
0:24:03 It’s one thing to look at something.
0:24:09 It’s another thing to actually put forth a bid and put your reputation behind a bid because that’ll all get public.
0:24:13 And then, you know, you’ll be held to account for that.
0:24:25 Again, if Comcast doesn’t show up, if Netflix doesn’t show up, if Amazon doesn’t show up, then it’s going to be the Ellisons versus the split up plan.
0:24:35 Yeah, if that happens, let’s say we get to Thursday, the deadline has arrived, we don’t see any new bids, we don’t even see Paramount make a new bid.
0:24:38 What does that mean for Warner Brothers?
0:24:43 Because, I mean, before this was all happening, we were looking at like $11 per share.
0:24:45 Then it’s in play.
0:24:47 People think it’s going to get acquired.
0:24:49 We’re up to around $24 per share.
0:24:56 Could that just totally tank the valuation of the company, or do you think it’s still going to be considered in play?
0:24:59 It depends how the company handles it at this point.
0:25:07 If Comcast doesn’t show, if Netflix doesn’t show, if Amazon doesn’t show, okay, fine.
0:25:17 But if the Ellisons are still there, and I’ve been led to believe that they are seriously still there, they’re, you know, at least at $23.50, and they’re going to be at $23.50.
0:25:20 Do they have to raise their bid beyond $23.50?
0:25:23 If there’s no one else, I wouldn’t.
0:25:26 But, you know, maybe they will just to get it done.
0:25:32 And if they’re still at $23.50, then the stock will hold up.
0:25:46 If they’re gone, I mean, if they’ve decided, you know what, you guys had your chance, you blew it, we’re just going to work on fixing Paramount Skydance, and we’re gone now, then that stock will tank back to $11, yes.
0:25:48 Yeah, that seems to be the question.
0:25:51 They’ll be shareholder lawsuits, and then it’ll get ugly.
0:25:53 Be the end of Zazz, perhaps.
0:25:59 Just before you go, if you had to make bets or make predictions, how do you think this will all play out?
0:26:03 Let’s say 12 months from now, what do you think Warner Brothers looks like?
0:26:14 If I put my Scott Galloway hat here on for a second and make a prediction, you know, I’d say that, you know, Warner Brothers’ discoveries put itself into Revlon mode.
0:26:19 What that means is they basically have to sell the company to the highest bidder in effect.
0:26:34 And if the Ellisons are there and serious, and I kind of think they are because I think they may see that the problems at Paramount were a little more in-depth than they bargained for.
0:26:37 I think they go through with it.
0:26:41 Of course, it’s up to Larry because Larry’s the one with the money, not anybody else.
0:26:48 His fortune took a bit of a hit in recent weeks because of the sell-off, you know, at Oracle.
0:26:54 He could be having second thoughts, but assuming—don’t you wish you just got a quick answer on this thing?
0:27:06 Assuming that they are still there, I think it goes into the Ellisons buy it and then the fun begins.
0:27:07 All right.
0:27:09 Ellisons buy Warner Brothers.
0:27:10 We’re locking it in.
0:27:13 We’re going to check back in 12 months, Bill.
0:27:14 We’re going to hold you to it.
0:27:15 Or fewer.
0:27:16 Or fewer.
0:27:17 Maybe in a week.
0:27:18 Right.
0:27:19 Bill, really appreciate your time.
0:27:22 Bill Cohen is the founding partner of Puck News.
0:27:24 I read your newsletter all the time.
0:27:26 Highly, highly recommend to our listeners.
0:27:27 Thanks, Bill.
0:27:28 Thank you, Ed.
0:27:38 Google stock hit a record high after Berkshire Hathaway revealed that it bought roughly $5 billion worth of shares.
0:27:46 This move could be the last major investment made under the leadership of Warren Buffett, who, as we’ve discussed, will be stepping down at the end of the year.
0:27:49 Meanwhile, Berkshire trimmed its Apple stake.
0:27:55 Again, the firm’s Apple position is now 75% smaller than it was at its peak.
0:27:58 Google stock closed up 3%.
0:28:01 So, Berkshire Hathaway is buying Google.
0:28:02 They are long Google.
0:28:08 This is a big win for the Google bulls and also a big win for us.
0:28:13 Because if you’re a regular listener, you know that Google was our number one stock pick at the beginning of the year.
0:28:17 We recommended Google when the stock was trading at less than 160.
0:28:20 It’s now trading at nearly 290.
0:28:22 It is up more than 80%.
0:28:24 This is a huge win for us.
0:28:26 And our view on Google was quite simple.
0:28:30 Just as a reminder, our view was it was undervalued.
0:28:33 People thought that OpenAI was going to eat Google’s lunch.
0:28:35 It was kind of seen as this AI loser.
0:28:38 Gemini was not being taken very seriously.
0:28:42 Nor were the other growth assets like YouTube and Waymo.
0:28:53 And all of this was translating to a historically low multiple that was really striking compared to Google’s historical multiples and also compared to the rest of the market.
0:28:58 Well, it appears that Berkshire Hathaway agrees with us, which means one of two things.
0:29:06 Either one, Warren Buffett independently came to the same conclusions, or two, and I prefer this reading, Warren Buffett listens to the show.
0:29:08 We are going to go with number two for now.
0:29:13 Aside from all of this, why else is this news important?
0:29:22 Well, more than anything, this is just a bullish signal in what has really been kind of a bearish week, especially for big tech and for AI.
0:29:23 Bubble fears are rising.
0:29:25 The tech stocks are falling.
0:29:32 So for Berkshire Hathaway to come in and say, actually, no, we still believe in tech and we still believe in AI.
0:29:33 We still believe in Google.
0:29:36 Well, that can only be good news for investors.
0:29:42 And it is especially good news when you consider the type of firm that Berkshire Hathaway is.
0:29:45 Because remember, Berkshire is not a hype machine.
0:29:48 They’re not an early-stage VC.
0:29:51 This is not a firm that just invests in the next big thing.
0:29:54 This is Warren Buffett’s firm.
0:29:55 They don’t care about the hype.
0:29:57 They don’t care about sexy technology.
0:29:59 They care about the simple things.
0:30:05 They care about cash flows, fundamentals, wonderful companies at reasonable prices.
0:30:06 That’s how they talk about it.
0:30:08 That’s what Berkshire is about.
0:30:15 So the fact that Google now meets those definitions for Warren Buffett, that is a promising signal.
0:30:17 That’s not everything, but it’s something.
0:30:20 There’s been a lot of doom and gloom in the markets recently.
0:30:23 People are very worried about this AI bubble right now.
0:30:28 But at least, according to Buffett, the bubble hasn’t gotten to everything.
0:30:31 Or at least it hasn’t gotten to everything quite yet.
0:30:33 It hasn’t gotten to Google.
0:30:36 And that, at the very least, should be promising.
0:30:41 Okay, that’s it for today.
0:30:46 This episode was produced by Claire Miller, edited by Joel Patson, and engineered by Benjamin Spencer.
0:30:48 Our associate producer is Alison Weiss.
0:30:52 Our research team is Dan Chalon, Isabella Kinsel, Chris O’Donoghue, and Mia Silverio.
0:30:54 And our technical director is Drew Burrows.
0:30:57 Thank you for listening to Prof G Markets from Prof G Media.
0:30:59 If you liked what you heard, give us a follow.
0:31:00 I’m Ed Elson.
0:31:02 I will see you tomorrow.
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