Stealth Bear Market?📉Fear Rising, Alts Bleeding, AI Cracking👀

Source: YouTube

Opening, sponsorship, and market sentiment

Speaker 1: 00:00

Let's get into it today. We could have a stealth bear market or a stealth rally all playing at the same time.

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00:42

Let's get started. I want to start with the fear and greed for the traditional markets. This has been hovering into the extreme fear zone all morning as we were recording on this, holding it around 25. It had bounced down, I think, sub-25 just earlier.

When you look at the crypto market, a little bit different. It's sitting in a little bit better position, holding a neutral position right now at 48.

Are you guys right now, if you look at the way you're making trades—whether you're going into stocks, maybe you're buying gold and/or crypto and you're diversifying—tell me where you are right now. Are you in more of a neutral mode or more in a fearful mode in the market? Just hit it in the comments down below. I want to get your feedback.

Let's get into a clip here, because this clip will go into Gareth Soloway, who's been on the show many times, talking about this is the month that makes or breaks it. Take a look.

October's historical market shocks

Gareth Soloway (Speaker 2): 01:35.960

The month that breaks markets: the 1907 panic. This is actually what triggered J.P. Morgan back in the day to bail out the stock market and ultimately began the Federal Reserve.

1929: Dow falls 89%. Then you have 1987, Black Monday; 1989, Friday the 13th; 1997, down 7.2%, trading halted. And 2008, worst week ever on record, down 18%. This is when Lehman failed, panic spreads, and everything changed.

Bottom line is, what we know is October tends to be a very violent and potentially negative month. Certainly what we've seen thus far has set the possibility in motion we could be on the verge of this.

AI concentration, macro risks, Bitcoin, and altcoins

Speaker 1: 02:28.200

All right. A lot of people looking at this market right now in two veins. You have some who still believe this bull market is holding. If you look at AI-related stocks, you would probably agree with that: 49% of the S&P 500 right now, above every bubble peak except for what happened during the railroads.

This gets into the issue of the centralization of where TradFi is right now, and that is anything that's AI. That's the trade. The real question is, how does this play out? Because you've got credit pressure markets coming in hard. The question is how that plays into what the Fed is going to do, not only in this month but also in December as we get into rate structures.

Then you look at this statement right here, and this is where we get into this stealth bear market, and it might be a historic opportunity. There's a couple of points within this I want to highlight.

03:20.400

We're now witnessing a historic market paradox, a bull-bear market that is in play. Within it, you can see where we've had hits, where the S&P has had its record high, what we saw in terms of the bottom, and then other key indicators right here.

This was a major component of the bullish thesis for equities, and this all centers around investors expecting cheaper capital. Remember, this is a big deal, because if cheaper capital is truly coming in, you'd have more investment and record capex by tech companies. Not all of that is completely translated just yet.

One other thing was this right here: that the S&P should be above 9,000. That is providing that the war didn't happen—nothing happened in the Middle East, Iran wasn't attacked, we didn't have any of that occur, and oil prices were regular.

I don't necessarily agree with this. I'm not sure that this would be a factor, because I'm looking at the way that the AI trade is playing out. You would need much more broad participation in the rest of the S&P 500, and I just don't know that that would be the case.

Software is already taking a hit. SaaS companies—I think you'll see a lot of companies in general, because of AI, that will continue to see less performance. The real core is that AI has already been performing against what's happening globally. Maybe it performs a little bit better, but I don't see it at 9,000, for sure.

04:45.740

This happened over the weekend: Putin floats a summit deal, and this is coming in with both Trump and Xi. If this comes together and they can put a deal together with the Ukrainians, this could change things again, more on a global macro side.

Remember, Russia and Ukraine both now harbingers of what's happening around energy, almost as much as what's going on in Iran. One factor that has been played out here recently is that Trump has continued to push Zelensky to do a surrender. I just don't see that happening.

Could we see some sort of maybe militarized zone or some détente at some point that would set this up? Maybe that would be the case. But this will be interesting if this summit actually occurs. There's going to be some pressure here, obviously by China and Trump in general, to get this done.

05:40.220

You have Tom Lee's tracker coming in: oil is trading at levels not seen since the 2008 financial crisis. For you young people out there, that was the last time that we really saw a major hit on the market. If you go back and look at what happened in 2008—October 2007, actually—2008 was the year that we really started to see impact.

I think that's the same addition that we're dealing with right now, is oil and its concern on where inflation is playing out. Remember, energy is one of the key things that's driving the core inflation. Does that stick around if things cool off in the Middle East? That's the real question.

06:17.280

Bitcoin, though, could be setting up for a quelling impact on the market. If you look at a couple of notices here on the Bollinger Bands, you'll see these touch points, and we're seeming to come back in on them after significant moves up in both of those last two pumps. Maybe this is the time.

I'd still defer a little bit to what Gareth was saying, is that October's cycle—because remember, this is still investors, and you have to be able to have something happen in the major market to see any kind of rotation. That's where the capital is going to come from.

My concern is, if the dollar holds a lot stronger, does it in fact start to slow the issue of excess capital starting to go into risk markets like crypto? That's a concern right now that we're dealing with.

If you watch how credit and the Fed are both going to interact in the next, really, 30 days, you're probably going to get a much bigger signal in being able to understand that. Be on the lookout there.

07:16.660

Bitcoin dominance, though, is pumping right now. Short-term bearish for alts. This was something I talked about on Friday with Evan: this could be a market sell-off. In fact, over the weekend, we did have a little bit of hits on the traditional alts.

I think this is maybe short-lived, but at the same time, there will only be a few winners here. Here's a clip from Ansem that talks about that. Take a look.

Clip: altcoins and fundamental inflows

Ansem (Speaker 3): 07:43.080

A lot of people missed HYPE because they were looking at majors, Bitcoin and ETH. But Bitcoin and ETH went down like 30%, 40% from there, and HYPE was, as we know, has been up only.

How you would in previous cycles, you're never buying alts when majors are going down. You're just absolutely not doing that. The industry—altcoins don't trend all at one time. They trend based on the actual fundamental values and inflows.

Altcoin sentiment, Circle, and JPMorgan's tokenized products

Speaker 1: 08:04.360

Yeah. He's right. This is a typical signal that everybody has followed in crypto, I think, forever.

But if you look at it, the weekend selling did hit altcoins hard as fear from equity spills into crypto. Typical altcoin now down over 5% in the weekend close. This could be the largest weekend drop since April.

If you were going to buy an altcoin right now, and you buy these dips, you could still see this and say, “Hey, there's maybe another 10%, 15% in the market that could come off of these coins.” Which ones would you buy? Let me know in the comments. Which ones would you buy right now, maybe in a dollar-cost-average scenario, if you're a believer in those specific altcoins?

One other thing I want to touch on in Anselm's clip there was looking at fundamental structure around most of these altcoins. That is a core thesis that we talk about all the time.

However, sentiment is a major influence when the majors are moving. What I mean by that is Bitcoin and Ethereum—if they are moving—and to a certain extent, maybe even Solana, if it's moving to a certain extent, then it has an influence on sentiment in the market.

Sentiment in the market can now start to correlate even on altcoins that don't necessarily have the narrative there and the fundamentals there. You have to understand that.

Most people will say, “Well, no, I'm just going to trade on the side of fundamental altcoins.” Yes, no problem there. Some people want a higher risk appetite, and they're looking at those alternatives. Usually sentiment-driven tokens, just like meme coins, are going to be the ones that see the most gains. But it really depends on your risk appetite.

I'm not telling you guys to go out there and trade on more high-risk assets. But just be aware that that's how the market moves. I think this is something that a lot of people understand that have been in crypto. But there's a lot of you that are brand-new to the channel that have not been in crypto, and this is a new thing for you, so pay attention.

10:07.040

Speaking of fundamentals, you've got to take a look at one of the biggest altcoins out there, I feel like, and that is Circle. Kind of moves like an altcoin in terms of volatility, but it hits back at rival stablecoins.

This has been moving in a direction that I think many of you guys know we've been looking at for quite a while. We've talked about it quite a bit. This is one of the top movers. We think it will continue to be that way in terms of a representative on traditional finance as a stock for the crypto entities that are out there. Just pay attention.

Circle is being able to do it. It brought in about $1.4 billion in revenue. Jeez, $1.4 billion in revenue. That's the first half of 2026. We haven't seen an adoption boom, so imagine what this company is going to do when we do see an adoption move.

Last week, they also went out to 40 different countries. A lot of news that's going to help, I think, USDC become the de facto stablecoin and maybe rival USDT. I don't know if it will happen, but things are moving fast for Circle. Pay attention.

11:08.520

Other things you've got happening right now: JPMorgan has now three tokenized products on ETH. This is on ETH mainnet. You've got JPMD. This is their U.S. deposit token on ETH and Base. I don't know if you would use that, but it's up to you. I'm just wondering, would you use a bank deposit token, or would you use something like a traditional stablecoin?

Then you've got MONY, which is a tokenized money market fund. That's something I'm not necessarily interested in. Then you've got JLTXX, which is a tokenized money market fund also. All of these are riding on Ethereum.

The thing is, there's going to be a lot of investors out there that are coming over from traditional finance that most likely will take part in those kinds of transactions and funds.

One point on this is that when you compare the two, you've got JPMorgan and Circle almost on an intersection for a head-on collision here. The real question is who's going to win that race.

I still think it's going to be Circle because of their native introduction into crypto in general, their blockchain dominance that they've had in trading pairs, and the extension that they have globally already. That's a big, powerful play compared to what JPMorgan is going to be doing here in the United States by itself.

I think this is a failed effort. It's a good effort in the sense of them trying to play in the game, but I don't think these kinds of companies are going to win the race overall. Prove me wrong.

Let me go to a clip real quick. It's an interesting theory, that institutionalization has actually spoiled crypto. I have some thoughts on this, but take a look.

Clip: institutionalization and crypto's branding

Speaker 4: 12:43.960

I will say institutionalization is absolutely the worst thing, I think, that happened for you guys, for people that truly believe in it. Because the value proposition of decentralization and liberty and all that kind of stuff has all become really, really badly—at least in the short term, it's a branding problem for crypto.

Are there enough 18- to 25-year-olds that are going to be true believers? Maybe. I don't know. I feel like the brand has been really badly hurt by this administration and just by the general Wall Street—Wall Street inhaling crypto.

Adoption, Ledger, and self-custody security

Speaker 1: 13:24.140

All right. My argument to that is this. When you look at major adoption cycles—and I've seen a few of these in my past, been in tech for a long time—and I'm not saying that I'm right. I'm just saying that you look at human behavior, and that's the thing that I think we're going to get into.

This is legitimizing it to a certain extent. What I'm talking about is institutional adoption into crypto and blockchain. Fair enough, you definitely will have pushback from this next generation. But I think that it's going to go the opposite way. I think it will only say, “Because it was adopted over there, the OGs, the boomers did this, we can do it better.”

I think we'll see maybe a whole new era of blockchain, crypto projects, et cetera, that will start to dominate that younger generation. It will only explode them because they understand now they have detached from the system. That, to me, is a great opportunity.

The advantage that the institutions brought to this is the fact that they made it happen. In essence, you push that market away by getting into it. I think it's the flip. I think it's a completely different way of how investors are going to look at this in the future.

Now, do I think this is going to be next-generation investors going into banks? No. I think banks are done. We're not going to see banks the way you and I have seen them in the last two, three, four decades. This is going to be a complete revolution in finance. Mark my word, this is going to happen. I think it's going to be let in because institutions came in to spoil the game. Pay attention to that one.

15:04.900

You've got another guy spoiling the game right now, and that is Ledger. Ledger is now going out with their new Ledger Atom. This is going to contain Ledger's most advanced anti-tampering and tamper-evident solutions to date.

I'm glad that companies are out there trying to do that, and they should be. But I think they're in a bit of trouble right now in terms of hardware wallets.

This is one of the things they're proposing, which is a device that won't necessarily be a phone. They partnered with Solana. I saw that over the weekend. I'm sorry, Solana, I didn't think that was a good partnership. I understand that was probably months, maybe years of business development that had to culminate there.

But this, I don't think, is a solution that anybody that has been in crypto for a long time is going to use. It is a device that is kind of like a phone. You need to connect to Wi-Fi, but yet at the same time you're still dealing with agentic issues. Those kinds of things I'm not really interested in.

I think you've got to retain control in some sort of self-custody solution. That's the only model to use. I think privacy is going to be paramount going forward. That's the key to watch right here, is how these companies play into this.

16:11.760

This is another thing: why do you have to have an open market out there trying to create devices to see if your devices have been attacked by other devices? This is an example, and this is trying to detect a spy implant, basically.

You've got hardware out there, which was the problem. If you guys don't know the news, there were devices that were somehow vector-attacked by a supply chain through a distributor. Not necessarily—I won't name countries or anything of that nature—but basically a distributor was the one where the vector occurred.

Now they're trying to get in and actually—and this was a hardware change in the actual devices themselves. Now they're going and trying to build something to be able to detect this.

These are the kinds of things, guys, that just should not happen. These are company killers. I've seen this in the tech industry and in the compute industry a lot.

The opportunity here, I think, for a real new solution is here. Be on the lookout. We may see some very interesting solutions coming up very quickly, because you're going to see a major part of the market starting to look elsewhere for self-custody solutions. Pay attention to that.

We're going to cover this and a lot more this week, so stay tuned.

17:34.450

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