Host: We are continuing our conversation with Bilal Little, global ETF strategist with Direction. So Bilal, just before the break you were telling us essentially where investors were putting money to work because even though the equity markets seem like they're very risk off, you said that's not entirely true. So I have to bring up this isn't the equity market, but I have to bring up Bitcoin because it seems like that's where investors are putting a lot of their money to work. So just really quick, Bitcoin has now broken above 85,000, that is its highest level that we've seen since January. Is this what you're seeing right now, this sort of, as you were mentioning, investors kind of taking a step back, taking a bit of a pause, a bit of a breather? Is that really fueling this sort of debasement trade? Are you seeing them say, OK, we're going to turn instead over to crypto, to commodities?
Bilal Little: Yes, so Bitcoin has caught a bid, right? So in the wake of its catching a bid, it actually sold off slightly going into last week, obviously with the Clarity Act as well as rates. Those two things you saw a short sell-off a year ago. You would have saw a 10% selloff because it would, it was a structural headwind. Right now you see a ton of support because one, the market is looking for diversification. Two, you have geopolitical risk. So those two things, as well as I would argue the US government and the treasurer called into question because of the $40 trillion debt handle. And again, no clear path of getting in front of inflation, so those two or three structural stories are actually tailwinds for Bitcoin. At the same time there was actually a trading pocket that was opened up at 82,500. You saw Bitcoin catch a real bid and basically hit its new price target or level of 86,000. And right now I think it's another possible structural tailwind for it to continue to move forward.
Host: Supporting picture that you're sort of mentioning, right, which was able to provide a cushion despite the Clarity Act failing.
Bilal Little: Yes.
Host: Do you see that as sustainable or do you see this as a really a short term picture for a short term rally in Bitcoin?
Bilal Little: I think it's actually a structural short term picture, and I'll tell you why. Going into October 20th, so the Fed is going to meet October 7th, October 20th, there's another meeting around crypto clarity. Now although it failed in the Senate, I think it was 49 to 50, and it needs 60 votes to do so, there's still structural support behind this. Again, you gotta remember the challenge is the Fed, the Treasury, and the US dollar are in question globally, and those are reasons why I think you see the global macro picture really supportive because of uncertainty for Bitcoin. And I think that's actually a strong tailwind right now.
Host: OK, so let's look at something else. Let's talk about Bitcoin and gold. We have a chart, IB versus GLD. Talk to us about how you're thinking about Bitcoin as it relates to gold. Do you think that there's something changing in the way that Bitcoin is sort of being traded right now?
Bilal Little: Absolutely unequivocally, um, they should be considered right now one Bitcoin decoupled from other asset classes. Right, so this move to the upside while other asset classes were selling off is one. The second point that I want to point out is, um, it's had its highest correlation to gold in nearly 6 years. The other thing that I want to point out is I think this is not a competition between gold and Bitcoin. It's a complementary asset class today, and I'll tell you why. Gold is the hedge against everything globally. Bitcoin is the hedge against anything that you can't see and that the market is really questioning, and I think that's where you get into what's happening obviously with the Strait of Hormuz and the Middle East at the same time, OK, has energy reached its peak levels? You remember last week I said if you see energy start to trade away from the headlines, that could be a telling sign that we might have gotten long in the tooth in that trade. So I think right now if you're looking at real assets, you have Bitcoin and gold and you sit it and then you're waiting out for the back half of the year.
Host: Do you think you said that Bitcoin right now is a compliment to gold?
Bilal Little: Yeah.
Host: When does that change and they start actually becoming competing assets?
Bilal Little: I don't necessarily know if they do because of what they're trying to address, right? So let me just say it this way when you start thinking about inflationary hedge and you start thinking about the ability to move that capital, that's the difference between gold and Bitcoin. It's literally that one piece of the fluidity in which you can move it as uh as quickly versus central banks that are just hoarding gold in hopes or in concern of geopolitical situations right as well as diversifying away from the US dollar, right? So as you continue to see that, I don't necessarily know if it goes away. I think this is a long term structural opportunity, especially going into the election. After that, I think going into 2027 and moving forward, there's a huge upside story around Bitcoin.
Host: OK, so let's call it, I don't know if we want to call this question Bilal's trade of the week.
Bilal Little: OK, let's go.
Host: But maybe we could call it that. Maybe we could get graphics going for next week. But so right, OK, let's, let's recap this. Oil falling, volatility has eased, Bitcoin breaking out, markets. Really kind of figured out what's going on, at least with the last Fed hike. So where's your highest conviction opportunity right now for any investor that's out there they're like, I actually do want to put some money to work. Ad rates are up.
Bilal Little: OK, so I'll tell you 31, I think equally weighted queues, and the reason that I think equally weighted queues is because the peak the trough sell-off between the concentration in those names is over 40% year to date. That is extremely high, so you want to spread out that risk, especially in your technology centric holdings. The second, again, I think Bitcoin is a real story for traders. We have BTCU, which basically gives you leverage on Bitcoin, but right now I think Bitcoin is a true complement to gold as well as the other issues that I structurally mentioned. I also will add I think AGG starts to make sense right now in this market. I'm gonna tell you why. Once we get to that again, we focus on that 5% handle, traders, investors, institutions, they're going to start making that decision from a from a concession perspective, and I think those three stories right now, so much volatility, so many headlines long in the two trades, then you pick and choose your pockets.
Host: All right, and there it is, Bilal's picks of the week. Bilal Little Global ETF strategist in that direction. Thank you so much.
