FTX, The Fed, And A $10 Billion Blowup: The Banking Elite Ran The Same Play Three Times

This week we had a 25-year-old lose $10 billion in 5 days. The Federal Reserve's new boss actually just picked a fight with the entire market, and FTX victims are finally getting paid back in full. We got 3 different stories all colliding, and I'm going to show you why they're all secretly the same story with the banking elite. It's not a coincidence It's a collaboration. By the end of this video, you'll know exactly who actually makes money when the market implodes and breaks, and why Bitcoin was the quiet winner of the worst week this summer for crypto prices. And I don't know if you guys knew this, but we actually give away an automated AI trading platform. It buys, sells, and does the research for you. Go to the link in the description below, take advantage. It's really, really cool. I actually do automatic trades, so I'll say something verbally, I'll be like, hey, buy this coin. This much at this price level, and it'll go do it for me. It also does risk management automatically. It is really, really cool. We actually give it away for $1, legitimately $1 too. It's not a joke. And obviously we have other stuff that's really, really cool too that we price at a higher ticket, but $1 for that trading terminal and an automatic altcoin research system is really, really cool. Go to the description below or the pinned comment and grab it for a dollar. So I don't know if you guys knew this, but we actually have a new Federal Reserve Chair. Uh, Powell, Jerome Powell, has been the Fed Chair, but he's still actively sitting on the board. We haven't seen that in a long time, I think since like 1958. So it's very interesting times for the economy, but Kevin Warsh took over in May, which is Trump's pick. Now if you remember all the news that was happening around that time, Trump was trying to get him in there so that he can actually cut interest rates. Right? And so Kevin Warsh is interesting because he actually has a lot of cryptocurrency, a lot of degen products too, like very, very rare products that I don't think a lot of people know about. He actually has— he's in there, like his hands are really in crypto. So Trump hired him to cut rates, supposed to be a crypto-friendly guy. Instead, he's actually debating the first hike in 3 years. So rate hikes will actually put pressure on the economy short-term. It will actually dry up the liquidity if they hike rates, okay? So Trump's like, hey, I'm putting you— I'm gonna like basically incubate you and put you into office so that you decrease rates, inject liquidity into the market, and make all assets go up, crypto included, because I have a lot of my net worth in crypto. But what's happening now seems like it's the opposite. Now, they didn't raise interest rates, they actually kept interest rates the same, but it's just interesting how the dynamic is playing out. If you ask me, I believe that Kevin Warsh is trying to build credibility and trust with the Federal Reserve Board members. So this is kind of playing out a little bit, but the ultimate agenda, I believe, is to do what, you know, Trump is saying. This is Trump's pick, right? So I'm sure there's some collaboration on the back end, Remember, this is politics. People say things, but then they do things and they have hidden agendas. So I want to keep my eye on that. It's probably one of the most interesting subjects when it comes to crypto's price. So the main question is, why are they even thinking about raising interest rates in the first place? Why is the Federal Reserve having an argument about raising interest rates, right? It's always been about cutting. In recent history, there's been pressure from the president about cutting interest rates, like a lot. Like there's been so much pressure. Everybody's trying to get interest rates cut. So that the market can go up in value, because when interest rates cut, it's actually cheaper to borrow money. Typically, a lot of people borrow money and all asset prices go up. This is why Trump's been pushing it. He wants the market to go up, and I think the main reason is because of the Iranian war. So Iran sent oil up 50% since March, right? Gas, goods, and pretty much everything got pricier. And so the way that they calculate inflation, this is going to get inflation up. So if you understand what the Federal Reserve is, the Federal Reserve, the whole purpose of the Federal Reserve is literally to lower inflation. That was one of the original reasons it got, you know, put into place, is to try to keep inflation down as much as possible. So if we have rising inflation, then of course they're gonna react in a way to try to drop inflation. That's their— one of their main goals, not Their only main goal, but one of their main goals, right? And so they're now thinking about raising interest rates to make the cost of borrowing money a lot more expensive so that inflation goes down. That is the whole purpose of it. So the decision was actually held at 3.5% to 3.75%. They didn't raise it or they didn't drop it at all, right? But the vote was actually 9 to 3, and all 3 no votes wanted to raise interest rates. This is the most dissents in one direction since 2016, right? So this is obviously a very important thing, and a lot of people are saying that the next time we have an FOMC meeting, they're going to probably raise interest rates, and the market's kind of reacting to that, right? So we have to understand what's going on. This dynamic is kind of important for your portfolio, right? For crypto's prices and things like that, right? So we're going to talk about that in this video. We're going to try to dissect this. What does this mean? Because at the same time, we have FTX exchange, you know, paying a whole bunch of people. What was it like? I think it was $900 million being paid out to people, which is kind of like a little bit of a liquidity injection. It's a whole bunch of liquidity coming into the market. And at the same time, okay, we have a big, big entity Citadel buying a position of an AI trader. I'm going to go into details, but this AI trader, how? Was one of the original FTX people. It's really, really crazy when you really unveil what's going on. It seems like there's a power move happening behind the scenes, if that makes sense. So let's talk about this guy named Leopold, okay? I'm not gonna try to pronounce his last name. Let's call him the AI kid. 25 years old, he's a Columbia graduate, actually a valedictorian at 19, and he was actually fired from OpenAI, the creators of ChatGPT, and he wrote like a famous AI essay that a lot of people talk about. Um, and then turned that fame into a hedge fund. All right, he has zero trading experience, but obviously he's, you know, going with the boy genius thing. He has 8 employees backed by Stripe's billionaire founders, and he basically took $225 million and he traded like AI stocks specifically, and it became $20 billion in 18 months. It's up 439% in the first half of 2026. Nobody on Wall Street had numbers like that at all. Now the question is, how did he do this, right? So this kid is coming in, he's like a boy genius, knows a lot more about AI than we do, obviously, because he's a part of OpenAI, right? He got fired and everything, and he's super smart, and he gets these crazy returns, and he's doing it primarily with leverage. He borrowed Forex's money. At Forex, if your stocks drop 30%, guys, your money's gone, and you know this. All of it. That's not a maybe, that's math. And 76% of his book was just 5 stocks, which is primarily AI infrastructure. Bitcoin miners that pivoted to AI data centers. This was a big hot topic, you know, a couple months ago where a lot of Bitcoin mining companies have the power capacity, right? So essentially, uh, you know, these Bitcoin miners, they had the contracts to the power grid, uh, they already had building spaces and a lot of infrastructure that AI data centers needed. And so a lot of the Bitcoin miners, because it was more profitable in AI, they were transitioning to AI data centers because, as you know, these AI data centers were really, really hard to get because of the power grid struggle, right? So then Trump put out, like, I don't know if it was a bill or whatever the case is, I know he had a speech on it where he basically said that if you want to make an AI data center, you have to, like, create your own power source because our power grid couldn't really handle it. So as you can imagine, it's kind of like this unique area for a lot of the Bitcoin miners that already have the energy contracts. And so he started investing into these and he got a 4x on his investment. He did pretty well, but a lot of it was leverage, unfortunately. And then there was a massive crash. Late July, AI stocks cracked. His names, the one, the companies that he was holding fell 27% to 56%. In just days, South Korea's market, the heart of the AI memory trade, had its worst month in history. Back-to-back circuit breakers, and this guy has a whole bunch of leverage, right? July 24th, 6 days before the fire sale, he actually emailed investors calling the crash a buying opportunity. Asked for new money by August 1st. 6 days later, he had a very different story, a very different letter, and he was basically telling them that, you know, we let you down this month and things like that. Of course, there's always that kind of like buy the dip moment. You know, I've been there before where it's like, hey, this is a fire sale or whatever the case is, and it could be, it could be. But in his case, because he's in leverage, this is exactly— listen to what I'm saying. As a trader, I actually have trading experience. I've been trading for a very long time. I'm not a boy genius by any means necessary. But this is exactly why I love position trading, because I don't get liquidated. That is the point. One of the core pillars of my strategy is position trading, spot buying coins. Spot buying means you actually own the asset. There is no leverage involved. So yes, it might take longer. I don't have $20 billion to trade in my fund, in my hedge fund, but I do take my time. It's a slower path, right? But you know, this doesn't happen to me. I do not get liquidated because I do not buy leverage at all. That's one of the massive strategic advantages of crypto is that you get leverage returns because of the upside of the actual project, right? With low liquidity projects, you get massive high multiple upsides where you'll see 10 to 20x. But as a position trader, I Spot buy means I do not use leverage. I buy the assets directly. And so this is a learning lesson for a lot of people. Like everyone that gets wrecked in crypto, including FTX Exchange last cycle, which we're going to be talking about in this video. But FTX Exchange last cycle died to leverage as well. I'm telling you, leverage is great until you have to really like last, right? Leverage, it doesn't last. When the going gets tough and the entire market is tanking, right, things like this happen, which we're going to talk about in this video. We're going to show you the person that didn't take leverage and what they did to the person that does have leverage, right? And you understand what I'm saying? But yeah, bro, like, you, you, uh, don't use— like, this is why the wisdom of being in bear markets, you can't really— there's no intelligence. I'm just being honest. There's no intelligence behind that in some cases, just pure experience. Because I've been liquidated many times, because I've lost all of my money many times, I have come to the conclusion that spot buying crypto assets is the best possible way, especially in crypto. You know, we can make the argument for other asset classes like gold and stocks, maybe, you know, leverage and derivatives there are cool, maybe, I don't know, I don't do that, but at least in crypto, the answer is holding the coins. It is. It's not leverage at all. So if you want leverage, go to another market. Like, the leverage in the crypto combination is devious. You will probably lose all of your money. Like, it is destructive. It's like, I don't know any leveraged crypto trader right now that's currently profitable. I've seen short-term profitability, but I've never seen a long-term, full-time leveraged crypto trader. I've seen leveraged regular traders in other markets that are actually full-time right now. I actually know a couple, but not crypto leverage. Never seen it. That's devious. You'll probably lose all of your money. So this is one of those lessons where he got burned on his leverage really, really bad. So on July 30th, before the market opened, his entire $16 billion portfolio was actually sold to Ken Griffin's Citadel in one trade. To Ken Griffin's Citadel, which is so funny because the mayor of Miami has been coming after him, right? This is like so weird, right? And so down 67% in July. And get this, he's still up 80% on the year. So he sold— essentially what happened is he bought like, you know, high risk, high leverage, the market collapsed, and he sold his position to somebody else. That's how insane all this is, is, you know, up 80% on the year. This is what like this AI bubble— or we don't know if it's a bubble, we don't know like whatever the case is, if it's providing real value, etc., etc. Like we don't know for sure, but what I do know is that the craze is real and there's opportunities to make money, right? So the proof, it was actually forced selling. The second he was gone, okay, the second that this position was sold, okay, stocks went up 20 to 28% in one day. So he does this high-leverage play, AI gets hit, he goes down like 60, 70%, he sells his position to Citadel, and then literally the next day, stocks ripped up 20 to 28%. Even stocks he never owned actually bounced. The AI crash was partly one guy's margin call. He was dealing with massive amounts of funds that was similar to the size of FTX exchange when it went bankrupt, right? Super interesting. This is why, like, people don't get this. It's a financial war, okay? It's not always like I called the market direction wrong. It's There's forces and powers that be that will force you in a situation because you have no wisdom and you don't understand how this operates. They'll force you in a position because you took out leverage and you think that you're a good trader and you're intellectual, and then they'll force you to sell and take advantage of you. This is where wisdom comes into play. You cannot replicate wisdom. You can replicate knowledge and understanding. We clearly see that with AI, but wisdom, that's a whole nother— you need experience, right? And so this got it. This I'm not going to sit here and say I know every detail behind him, but it just looks like he got taken advantage of. So here's the 2-step kind of process that happens. And I'll say this carefully, okay? I want to say it carefully because I don't know all the details. But weeks earlier, Citadel Securities, the sister company, publicly floated that the Fed might surprise hike. So it's a sister company to Citadel. They're like, hey, we might see a surprise hike, even though that wasn't even a topic at all. That fear pressured exactly the stocks, those stocks that were hit. Then Citadel, the hedge fund, bought the crash portfolio at a massive discount. Okay, so legally they're separate companies. Nobody is accused of anything, but analysts call it the story of 2026. And Griffin had sold 79% of his Nvidia early this year, then bought the dip. This is when you don't play with the big dogs. You don't do that. You don't play with the big dogs, especially if you don't know what you're doing. And so this is one of those stories. I always tell people this all the time. It's not— especially the technical traders, I tell them all the time— it is not— I repeat, it is not about just being right. People don't get this. It is not about your technical indicators lining up all the time, right? We see— I don't know how they connect, but we see the 2 entities that are legally separate, but it's obviously their name Citadel, right? And one of them is a perception engine. He created a perception that led to discount. So it was a— it was like he was making an aspect of the market. I tell people this all the time, you can't research coins unless you know marketing. You can't. It's like saying that you're going to be able to accurately Understand business without ever doing business? It doesn't— how could you accurately predict what business is going to be the best if you don't even know what marketing is? So we have this one aspect where they're creating perception. They're instilling a perception into the market, and again, this is not directly connected. There's many other perceptions and many other things, but it's a good case study. It's a good situation to analyze. But we have— they're putting up this massive perception that instills fear into the market, and then making money off of that. So how was he technically right? What technicalities does he have to make it right, right? What technical analysis did he do there to secure this massive position at a massive discount, right? Think about that. I think that's crazy. You know what else I think is crazy? The kid, the AI kid that we talked about, is actually an FTX kid. He worked at FTX's Future Fund before the collapse. The same playbook as Sam Bankman-Fried, a young genius using other people's money with a whole bunch of leverage. Okay, now this AI kid, he actually didn't sell his one position, which was $5 billion in Anthropic stake. Um, but yeah, I mean, we even know that FTX was invested in Anthropic early on, right? FTX literally invested in Anthropic. They were you know, forced to sell too early because they had to file for bankruptcy and pay a whole bunch of people back. But it just seems like everything is so familiar, right? It's so crazy. And so everybody's calling the AI bubble pop. I don't believe it's the AI bubble popping at all. It got leverage flushed, right? One person got taken advantage of that was a little bit too cocky, okay? The, the, the wise guys took their share of this situation. All right, that's what it looks like. I don't think the AI bubble is popping. Okay, now what really puts the cherry on top of this crazy story is that today FTX sent its 5th payout, $900 million, through Kraken and BitGo, 2 crypto exchanges with crypto lost funds. What the heck is going on? Victims are now at 105% recovered. All of the victims got paid back. It sounds like justice, okay? I'm not going to ruin it for you, but like, put this stuff together. Here's the dirty math. Claims were frozen at November 2022 prices, which is the bottom. That's when the claims started. Bitcoin was— you're gonna laugh— $16,871. So 105% of 1 Bitcoin is $17,700 for a coin worth $64,000 today. Victims really got 28 cents of their Bitcoin, to be honest. Solana holders, 18 cents. Paid in full is only true in 2022 dollars, man. Put this together, bro. Just put this together. They're forced— like, people had a whole bunch of money on FTX exchange and they're forced to sell at the exact bottom of the market, and they get reimbursed of the same price that happened at the exact bottom of the market. Again, I tell you, those people that have money on FTX exchange, you could be the most sophisticated investor in the world, but you just got forcefully shaken out of your position and the entire market goes up without you. Right? Again, you have to listen to what I'm saying. And I laugh because I've seen this so many times and people just don't know what they're talking about. I'm telling you, it's not about technical indicators or being super perfect. It's about understanding the powers that be and aligning yourself. Okay? So the question is, where did that money come from? They actually found $7.3 billion scattered in cash. Then the forced sales, the Anthropic stake in FTX Exchange sold for $1.3 billion. which is actually worth $30 billion today. These guys are sharks, bro. They're sharks. You got to ask the question, who's buying all these super cheap coins and super cheap stakes, right? Who's doing that? Like, how— like, get a whole bunch of people that— think about it— a whole bunch of people forced to sell at the exact bottom of the market. And then who— you gotta ask the question, who's buying all of that, right? Because I want to be the guy That's buying all of that forced sale at the exact bottom of the market. You got to catch this, okay? 41 million Solana sold at $64 while it traded at $172. The IRS wanted $24 billion, but it settled at $885 million. So the real winners is the flippers. In 2023, scared victims have sold their claims for 8 to 13 cents. On the dollar. Hedge funds bought over $5.8 billion worth, okay? That's— those are the winners. They're now collecting 105 to 120 cents plus 9% interest. That's like a 5 to 30x on their investment made off of a fraud recovery captured by funds, hedge funds, not victims. You have to catch this. This is where it gets crazy because people don't understand finances. And just when you thought it was over, it gets crazier. So the payment companies don't even operate. The ones that are paying 82% of that money is Chinese creditors, and a 6-month forfeiture clock started today. If you miss it, your claim gets split among everybody else, so they have to collect the money. And the crazy part about it is that $900 million just landed inside crypto exchanges. They could buy cryptocurrency with one click. One click on the day Bitcoin dipped below $63K at the same time. And there's still $4 to $6 billion left in the machine, plus a live $1.76 billion lawsuit against Binance. Man, what the heck is going— it's like a massive exchange of money. Right? It seems like the financial system is trading hands or something like that. Doesn't it seem like that? So I want to try to, you know, summarize everything that's going on. So here's the whole week in one sentence: the Fed made money expensive, expensive money exposes everyone using leverage, and AI Kid got forced to sell in one morning, FTX got forced to sell over 4 years, and in both cases The patient guys with cash, with real cash, Citadel, Galaxy, Pantera, the claim funds, bought the bottom and kept the upside. Wealth didn't move from the bad ideas to the good ideas. It moved from the forced sellers to the patient buyers. So I guess what's the lesson in all this, right? Because like the goal is to make money off of this. Here's the lesson in my personal opinion. I don't want to be a forced seller. I don't want to be a guy that gets shaken out when things get tough, right? There's nothing wrong with selling a coin and switching a position to another coin. I don't think there's anything wrong with that. I think where it becomes a problem is when you are forced to get liquidated completely, right? If you take too much leverage, you'll get force liquidated. Or in fear, what people could do because they lost so much money is they can sell their coins and leave the market forever. In any situation, and this is wisdom, this is something I've learned myself, in any situation where you completely remove yourself from the market is when you lose, okay? You want to have cash for the worst possible scenarios. You don't want to be the guy that is trying to chase every 100x at the exact top of the market. Actually, you should probably be switching your entire focus to just simply— if everybody just simply had cash in the worst possible crypto dips and throughout history, you'd be like the best trader ever. That's it. If you focus your existence in trading crypto of just simply being able to things, to have cash or generate cash under worst conditions, you won the game. That's literally it. Survive the worst conditions, don't leave crypto ever, and have cash for the worst conditions. Because that's what the big dogs do, okay? That's what the big hedge funds do. And then sometimes, I don't know for sure, you can't put two and two together. I'm not basically, um, I'm not like accusing anyone of doing this. But sometimes they even have control over the market by its perception. They're just— seems like they're really good at marketing and they have their hands in the marketing. So they can even instill some type of, I don't know, fear or psychological belief that they can profit off of. If they control the perception of the market, then they can control the feelings and move the market direction the way they want to. So essentially what they're trying to do is line people up. That's this game. It's a financial war. Is you're not in a closed vacuum. If you're trying to trade, whoever you are, even day traders, doesn't matter. Doesn't matter what type of trader you are. You need to understand the entirety of the picture and operate your strategy with the entirety of the truth. So I'm not going to make my strategy based off of like some short-term kid that looks really cool. Like I see it all the time with these people, these crazy indicators, livestream traders on YouTube, and they're like doing these free signals. Like, ignore that. Why don't you trade like Citadel? Be patient, accumulate assets, and find ways to get more cash to buy those assets at cheap prices and survive the winter, right? That's what we do. We survive the winter. This is why I've ultimately chose a position trading strategy. Position trading means we hold for long periods of time. We do not sell. We're holding a position. If we sell, we're immediately taking that capital and putting it into another option in crypto. You could do that type of exchange. There's nothing wrong with that. It's what I mean sell is you sell and you get out the cash and then you just leave the market. We do not do that. We're here. We're here. We stay for the long run because that is the most lucrative strategy on the face of the planet according to every sophisticated real wisdom investor in the world. It might not logically add up for you, but that is what I do. And so just to give you some backbone, that is why this automated AI bot that we have I'm not trading on a short-term time horizon. The automations that we are currently doing with my automated trading bot is a position trading strategy, meaning holding positions for a long time, diligent research, understanding market dynamics. It is a position trading strategy I chose to automate because it's the best one you could possibly do. I think it's the most lucrative and it will make people the most money. The question is, how patient can you be? Because we know for a fact that crypto is not only here to stay, but it's an avalanche. On the back end, the avalanche of integrations into our financial system is absurd. It's overwhelming. It's overwhelming. Actually, let me show you what I mean by that. So here's one of the features in our community. It's called Timestamp. And pretty much what it does is it tries to look at every important piece of fundamental news, not regular news, not like hype news. We're talking about fundamental serious changes like the CLARITY Act, Iran, Federal Reserve, etc., etc. We have 500 different points. And if you click on any of these points like a market mover, what it does is it looks at the last time this was a big news event in the past, like when the news officially broke, and it essentially looks at how the market reacted to it, right? And so it basically just weighs out how much impact this piece of news has on the market, right? And then we look at literally everything. Right now, all you're looking at is the big movers. So some of these things, we don't really— it's not like official dates. They're like, you know, public announcements that they're saying it's gonna happen this month, etc., etc. And so you could essentially go into every single event and see like a typical move before the trend turns, right? Estimated windows, etc., etc. And, you know, this is what I mean by an avalanche. We have an avalanche Of adoption that's happening from almost every perspective. I mean, you could go through it yourself. It's absurd. This is in the community, by the way. Go to the description below. We talked about it. You know, take advantage of it. But we have an avalanche. Like when I mean an avalanche, like it's not a joke, bro. I'm not making this up. Morgan Stanley's proprietary digital wallet launch. That's Morgan Stanley, man. That's Morgan Stanley. Like right, that's pretty important, right? And then you could see all. All of the variables. You can read the full research if you want to and really look into it yourself, right? And this is not— we even had research pillars. I'm going to go into it in another, you know, video, I'm sure. But there's research pillars as well, like deep dives, where we had hundreds and hundreds of AI agents rigorously, you know, check every single aspect of this report that was generated. And then it was used to essentially determine the direction of the market. And as you can see, again, this is not I'm gonna be very clear with you. This is not, I repeat, this is not, I repeat, this is not a prediction on the market. It's simply according to the news, general direction of what could happen. So right now it's very quiet, leaning bullish in the next 30 to 90 days. And so we have an avalanche of adoption currently happening. And we have the big players doing these funny moves to take companies from people that don't know anything. And I'm not gonna say don't know anything, but they're taking companies for— or they're taking positions for people that just don't have wisdom in the market. And so yeah, when you see things like that happen, like FTX exchange, like that's the bottom. Like, not— we don't know. I'm not— I am moving like it's the bottom. I do believe it's the bottom. I'm not going to sit here and say I don't believe it's the bottom. We've been talking about this in a lot of my short-form content and in my group. I do believe it's the bottom, and I'm moving at like that. I'm okay with being wrong though. I'm okay with being wrong because I have a lot of cash. Right? I have a lot of cash. I've fortified myself. I'm ready for them to be wrong. And when I'm wrong, I'll make a whole bunch more money. So yes, I believe when you see events like that where you see somebody being forced out of his AI position because he had too much leverage and then another company buying it up 28%, these savage moves only happen in bear markets. That can only happen in a bear market because they have to bring the prices down. Right? And so that, like, that is a sign. That is a big sign that the market's gonna reverse and that it's a bottom, right? They're milking the bottom. Listen to what I'm saying. They're milking the bottom. When you see them milking the bottom, that means that, hey, market might actually turn around. So focus and pay attention. Don't get scared and don't be the guy that's shaken out of his position because he got greedy. I'll talk to you guys later. Thank you for watching this video. If you don't get with it, you will get left behind. Be easy.