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I'm seeing that interest from people who actually have money to protect.

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I haven't been on this Bitcoin wave, but like they're watching this low volatility

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climb and they're going, I think I actually need some exposure now.

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There's just a lot of things that are starting to feel a little bit like we're in a

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bulletproof bull and that's okay, right?

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This is normal for this kind of cycle, but things can really start to accelerate from

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this point forward.

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There is a good chance that we get some serious momentum to the upside.

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But as that happens, if we leave this stair-stepping pattern, we do move into more unsustainable territory.

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And then you start getting closer to a meaningful top.

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If you already self-custody of Bitcoin, you know the deal with hardware wallets.

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Complex setups, clumsy interfaces, and a seed phrase that can be lost, stolen, or forgotten.

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39
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That's ledn.io forward slash WBD.

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Checkmate.

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My favorite person to interview, I think.

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I always love talking to you.

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You're the person I bug offline the most,

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asking questions, saying, am I being stupid here?

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But vibes are good right now.

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Bitcoin is at 117K.

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Yes.

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I was just commenting on how much I like that little dashboard

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you've got floating behind you.

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It's pretty neat.

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Yeah, yeah.

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Shout out to Chester.

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so chester was i think he's our was our longest subscriber on the patreon on the old what bitcoin

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did when we had one um he's an absolute legend he's making these called the blocktron i like it

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i don't know if they're for sale yet but they're pretty fucking cool but i've got this like janky

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setup behind me because about a week ago i was upgrading the studio i was going to put these

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like nice shelves i got in and i drilled straight through a water pipe right behind me nice so that's

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put on hold yeah you need to find yourself a stud finder or something mate well i had a stud finder

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and i was using it and it said there was like something there oh you said you thought it was

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a stud and you went well i drilled through the stud and then through the water pipe and so

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this place was a fucking mess so i'm on a bit of a janky setup right now but we will make it happen

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it's worth it yeah that's that's the joy of uh of home ownership and uh you know making a mess of

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things exactly um i'm probably not going to touch a drill again for a little while but we're here

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Anyway, checkmate. I probably spend about 10 minutes a week looking at charts. It's really like, what's the Bitcoin price? Do I feel rich or poor? That's about it. But I do think even still, like when you've been in Bitcoin for long enough, you just get kind of a vibe of what's happening, like where the market's at. And right now I'm feeling pretty fucking bullish. What's your kind of just give me your vibe take on what's happening?

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Yes. So strangely enough, this is actually why on-chain data is so interesting to me,

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because it's all about vibes. It is literally all about, you don't look at charts, but you have a

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feeling, right? And it's generally based on the price. It's based on how long you've been in the

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market. It's based on your average cost basis. It's also based on your last buy. There's nothing

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quite like buying and immediately goes red 10%. You're like, God, that sucks. Even if you've been

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in this market for like eight years, you buy and it goes down, you're like, oh, I should have

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weighted, right? But that whole aggregate sentiment, that's really what we're looking at.

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We're looking at all the profit, all the loss. Now, I think the numbers at the moment in aggregate,

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the unrealized profit. So this is everyone's obviously got their cost basis. You've put

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X amount of money into the system. And what is your cost basis delta between where the price

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currently is and where the average guy is? There's $1.4 trillion, $1.4 trillion worth of

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unrealized profit in the system. An incredible number, right? When you really think about it

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and the market, the metric that I look at, in my opinion, it's the most important metric in Bitcoin.

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Whenever someone asks me about, is Bitcoin being adopted? Is it growing? All this good stuff.

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You can point to transaction counts. You can point to the ETS, but at the end of the day,

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it all boils down to the realized cap. So let's value every single coin when it last transacted

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on chain. This is the backbone metric and it just crossed a trillion dollars. And the cool thing

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about this, if you've been around for a long time, you've been stacking coins since 2019, 2020, 2021,

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you've bought it 10K, 15K, 20, 50, 100, all of those coins. If you just DCA and just like stick

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it in your cold card, all of those coins are saved at that price. The last time that you

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transacted them. Now, yes, there's imperfections here or there for individuals, but like in a broad

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scale, it actually shows us how much wealth has been saved and stored in Bitcoin. So for this

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thing to cross over a trillion dollars, you're basically seeing that all of these investors have

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trusted a trillion dollars worth of their hard-earned savings, granted, denominated in fiat,

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but that's what most people earn. We've trusted a trillion dollars to the system to look after it.

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And there's then 1.4 trillion worth of total paper gain. So the whole market is really,

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really up feeling really good that's great now if you imagine that let's make that you know keep

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the cost basis there at a trillion bucks let's push the price up another 2x 3x 4x suddenly that

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that paper gain it starts getting a bit stupid so that's why you actually end up getting a top

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eventually is because too many people go it's just a big number but uh you know i don't think we're

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there yet um certainly a lot of like when you normalize this stuff because like yes there's a

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trillion worth of wealth. There's 1.4 of paper gains, but that's actually a fairly normal statistic.

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So this is where we look at things like MVRV ratios and basically how in profit is the system.

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It's nicely in profit, but it's not at some kind of extreme level. We're still within the bell curve

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of normal Bitcoin bull market environments. Once we start getting to the right tail where things

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get a little bit stupid, you've really got to get up into the 160, 180k type range before those

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kind of levels get hit. But we saw that 80,000 Bitcoin come back to life. I mean, people are

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saying, why would you sell now? It's like, bro, he's up $10 billion. It literally doesn't matter.

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But the market took it like a champion. It's amazing. That 80k is one of the other, 80k Bitcoin

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sold is one of the really bullish signals, I think. There was a ton of speculation on who it

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was selling. I don't know where the Roger Verr came from. I think it was literally,

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someone just guessing on twitter oh people people love to just throw random guesses out there and

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they say it with such conviction you're like oh what if it is and then i i kind of fell for the

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narrative that it was maybe going to be used to fund one of these treasury companies but it's

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that's officially been sold now right i believe so so they went through galaxy um and this is one

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of those things like everyone's speculating and saying oh was it sold was it not sold and meanwhile

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the realized capture says yeah we've just seen a coins have just changed hands move on and so

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80,000 Bitcoin sold on the market.

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It made like, what was it?

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What was it?

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Like a 3%.

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3.5%.

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Yeah.

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It was basically nothing.

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Really, I mean, on a weekend too.

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So pretty amazing stuff.

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Is that the most substantial single sale of Bitcoin that we've ever seen?

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I don't know if the most it could be.

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I think it's definitely in the, it'll be in the top 10 for sure.

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I did write a piece on this.

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I'm just trying to remember the numbers.

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Certainly in terms of the on-chain world, the metric that it did hit an absolute all-time

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high for was CoinDay destroyed.

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So every Bitcoin in the supply accumulates one coin day per day that stays stationary.

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And when that was spent, because I mean, they're 2011 coins, right?

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So you've got 80,000 every day since 2011, just chunking up all these coin days.

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So it was the largest expenditure of coin days that we've ever seen.

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The only one that comes close to that was when the Mt. Gox trustee moved their coins in 24.

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I think it was like July or August or something.

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and they were held since I think 2017 because they did a couple of tranches where they moved

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them to the trustee and there's a few transactions there. So that's 140,000 Bitcoin, but held for a

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shorter period of time. So it definitely blew that out in terms of like realized profit metrics. I

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mean, very rarely do you just see someone just like move $9.6 billion worth and just like, yeah,

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it's just one transaction. I mean, it's pretty wild that someone stuck around that long.

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It's insane. But like when you say, of course he sold like it's $9 billion, but what, like,

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I don't understand what he's selling for.

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Who needs $9 billion right now?

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Yeah, well, it's a good question because,

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and if I believe in Galaxy's press release,

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they basically said it was part of the client's

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inheritance planning, which, you know,

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when you really think about it, look,

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there's every chance that it could be just like

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they sold it, they wanted to realize it,

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they lock in that cost basis,

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there's obviously a tax implication,

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they may want to move it to somebody else,

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they may want to move it from them to a trust,

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there's all sorts of reasons why they might do this.

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But when you're moving that kind of money, how often do you think about what you've got to do with your cold storage, right?

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If you just don't come home one day, imagine having to do that with a $10 billion lock.

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There's a whole legal structure involved in doing something like that.

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So who knows? There's a thousand and one reasons why they might have done it.

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But to me, I just think it's really, really cool that A, we can see that these coins are back alive.

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and strangely enough that i actually i'm going to use this as a bit of a a talking point because i'm

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still thinking through and writing my piece on quantum it's just taking me ages to get my head

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around it but there's obviously this debate around should we freeze coins right this is one take of

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it i'm i've the more i've thought about this the more i'm like no we can't because what if they

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were considered to be lost and then someone comes back and by the way we don't know if quantum moved

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it or if someone just decided yeah now's the time for me to upgrade my cold storage so we can

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never know that a coin is lost. We can only estimate how many coins are lost because really

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the owner is the only person that actually knows they don't have the keys. So we can measure things

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by coin day destruction and coin day accumulation. This is what Dave Puel and I did with Coin Time

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Economics. We built a fairly simple, I mean, it is simple. It's quite a simple, elegant system

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to not actually need to know how many coins are lost, but we can still discount them based on the

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aggregate amount of coin day destruction and holding, you can correct a lot of our metrics

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to adjust for those lost coins in a fairly simple way, but we don't actually need to know which ones

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are lost, which was a really, really cool innovation from that little study.

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I think the quantum argument is super interesting. I can't remember if we spoke about this on the

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podcast or privately, but this idea of whether we need to freeze coins or not, I'm just,

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as of right now, I'm 100% sure that my belief is that we cannot freeze any coins.

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I agree. And I don't understand the argument of we should steal them before a bad actor steals them.

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But I do think that this is going to become a very kind of hot topic in Bitcoin over the next few years.

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And I also think I might end up being on the losing side of that argument, even though I think morally it's the right stance.

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Yeah. I mean, from my perspective, if let's just use Satoshi as an example here.

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if we freeze the coins for the petoshi entity if we are freezing the our decision right the network

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has chosen and the debate really centers around what is the actual risk is somebody getting into

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the quantum field and actually extracting the private key and then being able to spend those

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coins is that a breakdown of bitcoin's security assumption or are bitcoiners freezing someone's

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coins on their behalf a breakdown of the security assumption and you know from my perspective he who

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have the private key has the coins. How they come across that private key, now that doesn't

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necessarily mean it's a legal ownership because you can steal someone's private key. Legally,

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they are the original owner's coins, but you have possession of them. So, you know,

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where's the possession is nine-tenths of the law, something in that ballpark. So if we are freezing

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somebody else's coins, we are making a decision for them. Yes, there's the argument that we can

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have like flag days and say you have to upgrade by this time, but if they choose not to upgrade

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to a quantum resistant system and their coins get stolen, that is their decision. That is their

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choice. We didn't make that choice for them. And the other thing I come at this from,

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and maybe this is just where I sit as a Bitcoiner, I do not believe that price is a relevant metric

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for consensus code. I think that the market price is completely irrelevant when we're talking about

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consensus level code. So from that perspective, what is the actual impact? If you're the Potoshi

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entity, your coins get stolen either by Bitcoin as freezing them or by quantum stealing them,

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right? Or you come back and spend them. So in either way, unless you're the one that spends

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them, you lose your coin. So the outcome for Potoshi is identical, no matter what happens,

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their outcome is exactly the same unless they come in and take them themselves. So in that regard,

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if the rest of the system is then saying, I'm going to freeze your coins,

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what is our motivation for that? It's actually because we're afraid that the price is going to

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go down. The other one is, you know, maybe the Bitcoin security system is broken, but this is not

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a like out of left field thing where people are starting to talk about this, which is, by the way,

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is really good. This is not like a surprise. And honestly, when I think about it, if a million

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coins came back on the market or one point, whatever it is, one point, I think it's 1.2 or

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something, what we call zombie coins, coins from the old addresses that haven't moved since there's

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been a Bitcoin price, most likely lost early miners, Potoshi, all that. If those coins come

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back to market, there will be a line out the door of Bitcoin saying, yeah, I'll step in and buy a

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million sats of Satoshi's coins. Absolutely. Of course I would. So I think the market will actually

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absorb that. There's another claim. I think Jameson Lopp talked about this, and I disagree

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with this point, that there's address reuse in exchanges. And if Binance doesn't upgrade their

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system full well knowing that there's a quantum threat coming, I mean, that's on you really.

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and then what are you going to do launder 500 000 coins from binance through what right so unless

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like north korea or one of these actors gets them i mean like the odds are it's going to be either

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you know us or chinese government it's going to be a high-flying tech company what are they going

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to do steal some steal binance's coins and launder them through the dark market like you know there's

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a bunch of things that just don't really make sense so from my view yes it's a threat yes it's

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probably a long way away um in my view yes we have to start thinking about it soon but honestly

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freezing someone else's coins, I think is actually far worse than just allowing the market to deal

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with it. So that's where I sit on the general issue. And just to add to that, Bitcoin as a

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system enshrines property rights. And if we break those property rights because we're scared of what

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happens to the price of Bitcoin, I think you can't have that conversation without acknowledging that

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the price of Bitcoin is because it enshrines property rights. This is all reflexive. And

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And without property rights, is Bitcoin worth $117,000?

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The idea of Bitcoin, in my opinion, is more important than a known technological bug that

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we can all see coming.

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We can all start thinking about it in advance.

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We can all do something about it.

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Solve it for, give everybody the choice and the option.

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Once you break the social contract, you're a shitcoin like everybody else.

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And you can't repair that.

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There's no recovery for that.

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So in my opinion, the Bitcoin idea is far more important than the Bitcoin code, actually.

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So really, you have to protect the idea the most.

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And that is that they are your coins and I cannot take them off you.

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So in my view, it's actually in my best interest to say, no, you cannot freeze that guy's coins because otherwise you could freeze mine too.

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So stuff here.

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But there is the kind of market participants where price is hugely, hugely important, even short term price.

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And I'm thinking of like the sailors of the world here.

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And they obviously have a massive kind of social pull.

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And I think whatever Saylor comes out and says is going to resonate with a lot of Bitcoiners.

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I don't know where Saylor will stand on this, but I would assume his incentive is to freeze

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funds to make the price move as little as possible.

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So I would go down the path, and I think this is interesting because we start getting into

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consensus code.

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I also just look at this thing and say, what is the most likely outcome?

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like realistically, let's peel away all the narrative. What is the most likely outcome?

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The most likely outcome is that we're going to do nothing. That Bitcoin will not change because

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not enough people will get on board. So therefore the most likely outcome is that people can shout

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and yell and scream and run nodes and all this kind of stuff. But the truth is that I just do

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not think that we're not going to get some kind of a hard fork out of this and we're going to get

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two coins I don think that how this plays out So you know we all part of the same system and I think the most likely outcome is that we actually don do anything We probably implement some kind of quantum resistance scheme People can optionally move across

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but I do not think we're going to get broad-based consensus for everybody to free someone else's

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coins. And in that regard, people are going to, they can yell and scream and they're not going

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to achieve any ground whatsoever. I think that's how Bitcoin most likely plays out because the

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rules are hard to change by design. Well, I think we're on the same page with that.

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But back to the 80,000 coins have moved.

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Does that change anything when you're looking at on-chain?

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Did you assume that those funds were lost?

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Well, I never look at individual UTXOs, but we can basically say over a period of time,

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it's likely that there's this batch of coins.

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And I think actually this is the first time we look at the HODL waves, which is basically

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a breakdown of all the coins by age bracket, how long they've been dormant for.

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if you look at the 10-year hodl wave 10-year plus it's basically this continuously growing curve

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because as coins move into that 10-year bucket i mean most coins that haven't moved in 10 years

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are most likely lost now yes sometimes they get spent but very very infrequently and you know yes

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if you were to do like a a one-day diff you'd see that there's sometimes declines in that hodl wave

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but as a just a visual look at the chart you've never seen it go down except for this so this is

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really the first time that the 10 year old hotter wave has actually declined at a visible scale on

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the chart which is pretty cool um so you know very rare this is not a common event these kind of

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things so how many of these entities are still out there remains to be seen how many more 80

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thousands of this does this dude have you know like i often hear people talk about oh what about

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that guy who sold 10,000 Bitcoin for a piece. I'm like, the dude was mining on GPUs. He's fine.

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You know, he's got plenty of coins. Don't worry about that 10,000. So, you know, look,

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how many of these things are out there? There's not many. In fact, I was up in Brisbane recently,

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I had the pleasure of meeting a bloke who has actually-

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Thanks for telling me you were here, mate.

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I know. I was at a dinner and you weren't invited. But he was, mate, this bloke was

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mining like 25 days after Satoshi and he's got like mined block Coinbase rewards, which by the

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way. They're so old that they don't show up on mempool.space. You've got to go to other block

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explorers. But yeah, it was mining like 25 days after Satoshi. So these guys are out there and

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it's just amazing to think that this is possible and feasible. That's incredible. Is this 80,000

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Bitcoin sale an anomaly or are you seeing sort of selling pickup now? No, no. This is very much

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a unique event. Even not in size, but as a trend, is selling increasing? Yes, it is. It is. I mean,

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it always does. And this is the thing. So there's basically two ways you can interpret the data.

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When we see the market moving higher, which it has been since April, which it did in November,

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December, which it did in March last year, there's two ways you can interpret it. Lots and lots of

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people decide to consolidate their UTXOs when the market rallies, or lots and lots of people like to

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take profit when the market goes up. It's funny. So the way I look at it, like, let's just look at

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What is Occam's razor?

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Yes, somebody consolidated their wallet.

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But yes, we are seeing a lot of sell side.

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This is the reason why the market doesn't go straight up.

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This is a line I use all the time.

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And I think it's actually really instructive and useful.

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Markets are a process, not a result.

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And I think we saw today that Saylor bought 21,000 coins, right?

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Two and a half billion.

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And people are like, why isn't the price in the stratosphere?

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It's like because someone sold 80,000 Bitcoin and he bought 21,000.

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And so if you've got another four sailors, now we can equalize things, right?

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So it's one of these dynamics where it just takes time.

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Markets, like when a coin gets sold, it doesn't immediately go into like the deepest, darkest,

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cold storage in a vault somewhere.

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It goes to some guy who's now going to start trading it and then someone else is going

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to trade it.

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And these coins move around the system.

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They buy and they sell trading ranges.

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And then eventually, at some point, some hodler comes in and just DCAs out a million

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sats, puts it away.

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sayler comes in dca's out 21 000 coins puts it away but there's still all these coins like

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bouncing around there's trade ranges there's derivatives there's all sorts of stuff that's

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just how markets work but uh you know it's all in the good fullness of time i know you're joking

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there about people consolidating while price is ripping but like mempools are pretty empty

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are you surprised that the mempool is so empty as price is ripping like this is a pretty new

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phenomenon right so it is and it's it's a little bit interesting because the last time we saw the

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market at all-time high for all the intents and purposes the last time we were at all-time high

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in the mempool was this dead was the second all-time high in 2021 now which is a scam all-time

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high which is a scam all-time high now there's a number of differences uh if you look at i mean

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pretty much any metric you want to look at if you go back and look at that second all-time high in

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21 now we can't really use these metrics today because they're a bit spoiled because of um

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ordinals and inscriptions and all that shit. But you had a massive lot. We didn't have any of that

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back in 2021. So one active address was one active address. And I'll explain why it doesn't count

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today. One transaction was one transaction, right? We're all just talking about monetary

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transactions, broadly speaking. Massive lower high. That second all-time high in 21, all of

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these were like a big bearish divergence. MVRV, which is the unrealized profit held by the system,

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massive bearish divergence. So how can you have price at a higher level, $69,000 versus the first

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all-time high in April at $64,000? How can the price be higher, but everyone's unrealized profit

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is lower? It's because a bunch of people have now sold the top. You've got a pool of all these new

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investors with a very, very high cost basis. Now that part is actually true today. The average cost

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basis is much, much higher. It's like $76,000 on average per person at the moment. I use a metric

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called the true market mean. I won't go into the details of it. Short-term holder cost base is like

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105K. And I've got these heat maps I look at that show where all the supply has been bought and sold.

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That 95 to 100K region, there's like 40% of all the wealth invested. I was talking about

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RealizeCap before. It's above 90K. That's an extraordinary stat. 17% of the wealth invested

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has a cost basis in our current trade range, 17%. For similarity's sake, everything below 50K,

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if you value every coin when it last moved, literally every coin below 50K, 17% of the wealth.

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And we've got that in our current trade range. We've been here for two and a half weeks.

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So it just gives you a bit of a sense of scale of how quickly these things move. Now on the

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transaction counts and active addresses, we can't really compare them because the way that

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ordinals and inscriptions work and they play around with the witness data, you can fit more

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transactions in. So transaction counts are at all time high, but a lot of these guys are using either

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algorithms and bots to trade this stuff. Or they treat a Bitcoin wallet like an Ethereum address

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where they reuse the same address. So in order to not double count, one active address may be

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sending 20 transactions in a day. So it's still one active address. So some of those activity

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metrics are a bit bung at the moment. But the other one is on-chain volume is very, very high.

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So we've got a small number of transactions, but the size of these transactions is massive.

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So what does that really speak to? Big money. The network is being used by fewer transactions,

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like the skew has gone towards institutional size money. So we're not seeing retail punters. We're

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not seeing like in 2017, people used Bitcoin as the casino chip to go and punt on Binance.

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So in 2021, we had that retail fervor because money printing and stimulus and all that stuff.

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This cycle, it's, yes, there's an ETF component.

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Yes, there's more of these institutions moving around, but retail aren't on chain.

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That is a very, very different dynamic.

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How long it takes retail to come back?

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I mean, I see posts all the time saying, when retail, when retail.

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It's like, when retail, you don't want retail.

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Retail means end of days.

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That's the top.

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You actually don't want that.

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The fact we're not seeing retail right now is indicative of both the market structure.

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They're going in through ETFs, a lot of them, but a lot of them just don't care.

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They really just don't care.

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And really, in my last two years, I've had no phone calls from people who are no-coiners.

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I've had lots of phone calls from Bitcoiners saying how to lever up.

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But increasingly, I am getting questions, and mostly in-person, questions from people

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who actually have money.

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So these are people who've got wealth behind them and they're saying, I'm not that scared about Bitcoin anymore. Can you tell me a bit more about it? And for those kinds of things, I know a lot of Bitcoiners have the same story. I don't try and orange pill people anymore, but if you have a question about it, I've got all the time in the day.

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and I think a lot more people are in that kind of world and I'm seeing that interest from people who

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actually have money to protect increasingly a lot of retirees as well who are going yeah I haven't

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been on this bitcoin wave but like they're watching this low volatility climb and they're going I

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think I actually need some exposure now so I think all of this stuff is just it's a different system

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I think you're on the verge of saying this cycle is different but every cycle is different

382
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let's hold that for a second because I do have I was looking through your newsletter

383
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and there are a few really interesting charts that I wanted to pull up and get you to go through

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and let me just get these so yeah I mean every cycle is different no no we're coming back to

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this because this behavior pattern is the same human fear and greed is the same so talk us through

386
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this chart we've got here yeah so SOPA is my Swiss army knife I use this for everything so

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what we're looking at is short-term holders so people who've bought within the last five months

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people love to debate me and say short and long-term five months doesn't matter the statistic

389
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says five months, the probability of a coin being spent once it's been held for five months

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is diminuous. It's so small, it's logarithmically small. And actually, there's a power law. There's

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a very clean power law that Glassnode did a study on a couple of months back where they showed that

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it really is a power law between how long a coin has been held and the probability of being spent

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on any one day, which is pretty neat. And what we're looking at for short-term holders, 95 plus

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percent of the on-chain volume every single day without fail is short-term holders. So they just

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dominate all the coins, move around, move around, move around until they finally hit a cold card

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and go off market. Now, I mentioned MVRV before, which is the unrealized profit or loss. SOPA is

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the sister metric. It's the realized side of the equation. So it shows us the average profit or

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loss being locked in by coins that are on the move. So for short-term holders, there's this

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typical pattern is in bull markets, most of the time people are profitable. Short-term holder

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metrics are really, really powerful because they are literally the only ones who can buy the top.

401
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You cannot have a long-term holder buying the top because they haven't held their coins for five

402
00:29:32,210 --> 00:29:38,490
months yet. So when short-term holder SOPA goes into the red, it actually means that local top

403
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buyers, they bought the top, they watch the market go red, red, red, and then they finally go, ah,

404
00:29:43,990 --> 00:29:47,950
damn it, I've got to sell now because I'll buy back later. And they sell the exact bottom.

405
00:29:48,450 --> 00:29:52,550
So for me as a hodler, that's when I actually DCA, when I see those kinds of events.

406
00:29:53,470 --> 00:29:59,310
So what we're seeing in this bull structure is it's most of the time profitable with really

407
00:29:59,310 --> 00:30:03,770
healthy retests of that breakeven level, which shows that those top buyers are getting flushed

408
00:30:03,770 --> 00:30:08,310
out and then we spring back again. So it's got this structured bull market behavior.

409
00:30:09,190 --> 00:30:12,510
When we get too much profit taking, so the way that I think about this,

410
00:30:12,510 --> 00:30:18,150
if the dude who bought two weeks ago is looking at his portfolio and going i'm a genius then

411
00:30:18,150 --> 00:30:21,890
something like you're probably a little bit overheated in the short term so whenever this

412
00:30:21,890 --> 00:30:26,690
metric gets too high it doesn't mean that a top is going to get put in at some kind of global level

413
00:30:26,690 --> 00:30:31,950
short-term holder metrics are generally speaking they're more about local stuff but you know like

414
00:30:31,950 --> 00:30:37,410
for me as a hodler again bring it back to like how i personally dca i'm probably not going to

415
00:30:37,410 --> 00:30:42,890
lump sum a big chunk in when there's stacks of people who are feeling quite happy about their

416
00:30:42,890 --> 00:30:47,070
recent swing trade starting to sell on my head. I'm going to wait until that cools down a little

417
00:30:47,070 --> 00:30:52,090
bit and then I'll step in. So it's just a tool to help me manage my emotions. It helps me manage

418
00:30:52,090 --> 00:30:57,010
kind of where the local cycle is. And just, I've been in this market long enough. I'm just tired

419
00:30:57,010 --> 00:31:02,070
of buying high and then watching it go lower when I know it always goes lower. It always goes lower

420
00:31:02,070 --> 00:31:07,050
in the short term. So I'm just like shifting my DCA over just a little bit to try and correct for

421
00:31:07,050 --> 00:31:10,970
that. All right. I want to go through all these charts because the question I have kind of

422
00:31:10,970 --> 00:31:15,690
encapsulates all of them. So then we've got the Bitcoin realized profit and loss. So talk us

423
00:31:15,690 --> 00:31:21,510
through this one. Yeah. So we mentioned before the realized cap. So the realized cap looks at

424
00:31:21,510 --> 00:31:28,030
every coin based on the price when it last moved. Some guy buys at 10K, sells at 120K.

425
00:31:28,410 --> 00:31:32,730
Someone had to come in with the delta. And this is actually, this is one of my favorite tools

426
00:31:32,730 --> 00:31:38,550
for measuring demand. Because even though Realized Profit is a sell-side metric, that guy had to come

427
00:31:38,550 --> 00:31:44,010
in with extra money. The original cost basis was 10K. The new cost basis is 120. He's got to come

428
00:31:44,010 --> 00:31:49,930
in with $110,000 times the coin value, right? If it's half a Bitcoin or whatever it is, he's got to

429
00:31:49,930 --> 00:31:55,030
come in with extra capital. So the reason that the Realized Cap increases is because old money

430
00:31:55,030 --> 00:32:01,170
is selling to new money. There is a rotation of the holder base. And this is really, really

431
00:32:01,170 --> 00:32:06,850
important. So for every buyer, there is a seller. For every price, it literally requires a buyer and

432
00:32:06,850 --> 00:32:11,890
a seller on both sides of the book. So when you're measuring sell-side pressure, which is what this

433
00:32:11,890 --> 00:32:16,150
metric is, we're actually measuring demand because you're measuring the opposite, the inverse.

434
00:32:16,770 --> 00:32:22,010
When you see 80,000 Bitcoin gets sold, that means that someone came in and bought 80,000 Bitcoin.

435
00:32:22,310 --> 00:32:28,050
Now, it could be many someones, but someone. When a seller buys 21,000 Bitcoin and the price doesn't

436
00:32:28,050 --> 00:32:29,990
go up, I wonder why. It's because

437
00:32:29,990 --> 00:32:32,070
someone sold 21,000 Bitcoin.

438
00:32:32,370 --> 00:32:34,210
You know what I mean? This is just how the system works.

439
00:32:34,990 --> 00:32:36,070
Now, the chart

440
00:32:36,070 --> 00:32:37,930
that we're looking at here is basically that volume.

441
00:32:38,070 --> 00:32:39,970
I've normalized it to BTC terms so

442
00:32:39,970 --> 00:32:41,350
we can pair across cycles.

443
00:32:41,990 --> 00:32:43,990
And I believe I do a four-year just to

444
00:32:43,990 --> 00:32:46,010
try and look for when is

445
00:32:46,010 --> 00:32:47,950
it hot, when is it overheated,

446
00:32:48,110 --> 00:32:50,030
too much sell side. I've just

447
00:32:50,030 --> 00:32:52,010
applied a four-year standard deviation.

448
00:32:52,230 --> 00:32:53,990
So when you go above half standard deviation, you're

449
00:32:53,990 --> 00:32:55,990
usually in a ripping bull. When you get above

450
00:32:55,990 --> 00:32:57,810
two standard deviations, it's

451
00:32:58,050 --> 00:33:03,430
getting pretty steamy in the room. So really what I look at here, it's all about incentive

452
00:33:03,430 --> 00:33:08,670
and action. When people are feeling really profitable, we started this conversation by

453
00:33:08,670 --> 00:33:12,310
saying, you're feeling good. There's $1.4 trillion in the system. That's the incentive.

454
00:33:12,610 --> 00:33:18,530
If you wind that up to $2 trillion, $3 trillion, $5 trillion, suddenly someone out there is going

455
00:33:18,530 --> 00:33:23,270
to go, yeah, it's time for me to lock in that $10 billion worth of profit. At some point,

456
00:33:23,310 --> 00:33:27,210
it may not be you, it may not be your friend, but it's some guy out there is going to take that

457
00:33:27,210 --> 00:33:32,150
profit. What I'm trying to look at here is what's the incentive, unrealized profit and loss. And

458
00:33:32,150 --> 00:33:35,590
then this one is telling me, did they actually sell? Because you actually need sellers to create

459
00:33:35,590 --> 00:33:39,930
a top. If you don't have sellers, then the market just keeps climbing and climbing and climbing

460
00:33:39,930 --> 00:33:45,770
until it finds them. So really price is actually the result of that supply and demand balance.

461
00:33:45,970 --> 00:33:50,910
It's going to inflect higher when it cannot find the supply. It's going to inflect lower when it

462
00:33:50,910 --> 00:33:55,630
cannot find the demand. That is literally how markets work. And this just gives me a nice tool

463
00:33:55,630 --> 00:34:01,250
to understand when are we getting too much sell side relative to recent history? When are we getting

464
00:34:01,250 --> 00:34:04,590
too much demand, right? Trying to understand both sides of the equation.

465
00:34:05,570 --> 00:34:08,650
All right. And then the last one, we've got the bull market corrections.

466
00:34:09,410 --> 00:34:14,050
I mean, this is just such an amazing chart. I think I described it in the video for the post

467
00:34:14,050 --> 00:34:18,590
saying like, this is one of those charts that is worth a thousand words. So for those who are

468
00:34:18,590 --> 00:34:23,990
listening, basically what I'm looking at is the last three bull markets. So 2015 to 2017,

469
00:34:24,630 --> 00:34:30,950
I used the 2018 bottom all the way through to the 2021 second top, and then our current cycle

470
00:34:30,950 --> 00:34:36,730
since basically FTX blew up. So ignore the drawdown from the all-time high. We're only

471
00:34:36,730 --> 00:34:41,810
looking at the drawdown within that bull market uptrend. How deep are they? So if you go back and

472
00:34:41,810 --> 00:34:48,570
look at the 2015 to 17 cycle, getting a correction of 30, 40, 50% wasn't uncommon, but maybe not

473
00:34:48,570 --> 00:34:54,930
50. 40 was like about as bad as it gets. The key difference between 2015, 17 and today,

474
00:34:55,030 --> 00:35:00,050
because we've only had two 30% corrections. And we've got to remember that we are a hundred times

475
00:35:00,050 --> 00:35:05,190
bigger in market cap size than we were back then. And yet the drawdown profile is actually

476
00:35:05,190 --> 00:35:11,090
less bearish this cycle than it was back then, which is incredible because think about the amount

477
00:35:11,090 --> 00:35:17,150
of sell-side pressure. We're not talking about a million dollars or $10,000 worth of sell-side.

478
00:35:17,150 --> 00:35:23,310
We're talking about $10 billion worth of sell side today, and the market is barely clocking.

479
00:35:23,410 --> 00:35:26,630
The bears can't get any ground, getting a 30% correction.

480
00:35:27,350 --> 00:35:33,170
The other interesting thing about 2015-17 versus today, the drawdowns back then were

481
00:35:33,170 --> 00:35:33,610
much quicker.

482
00:35:34,170 --> 00:35:38,050
If you went away for a weekend and came back, you missed a 40% correction, and then it's

483
00:35:38,050 --> 00:35:39,370
springing back to all-time highs.

484
00:35:40,650 --> 00:35:44,470
Their corrections today may take six months, eight months.

485
00:35:44,470 --> 00:35:49,970
They're much longer, more drawn out processes, which creates a lot of frustration and boredom.

486
00:35:50,290 --> 00:35:54,190
But really, the cycle's not actually that far away from where it typically is.

487
00:35:54,390 --> 00:35:56,330
But we've got to remember that it's much, much bigger.

488
00:35:57,150 --> 00:36:00,690
But the middle period, and strangely enough, this chart's actually really good.

489
00:36:01,290 --> 00:36:03,850
I've been rethinking the idea of cycles.

490
00:36:04,330 --> 00:36:08,370
A lot of people like to use the halvings and the bull market tops and the bull market peaks and all that stuff.

491
00:36:09,090 --> 00:36:11,770
I've actually been using a very different framework more recently.

492
00:36:11,770 --> 00:36:16,910
they're not too far away from those kind of delineation points, but I use two delineation

493
00:36:16,910 --> 00:36:21,650
points and I think we've had three cycles and this chart kind of shows it. The first cycle,

494
00:36:21,770 --> 00:36:28,530
in my opinion, ended on the 2017 top. So that period was very adoption driven. You can see it

495
00:36:28,530 --> 00:36:33,950
in every metric. I mentioned the transaction counts and volumes and just you name it. There

496
00:36:33,950 --> 00:36:41,110
was a very different pattern back in that pre-2017 top era. Very organic. We barely had a trading

497
00:36:41,110 --> 00:36:45,370
view chart. There's very few hedge funds. There's no leverage. There's no stable coins.

498
00:36:45,810 --> 00:36:50,930
It was just buy Bitcoin and maybe speculate on some of these old coins. But it was a Bitcoin

499
00:36:50,930 --> 00:36:56,710
dominated organic cycle. And the psychological side of this is people were responding to Bitcoin

500
00:36:56,710 --> 00:37:09,300
as this brand new thing No one knew anything about it What is this cool thing Yep That middle period from the 2017 top until FTX blew up very volatile A great metric if you want to actually study this

501
00:37:09,640 --> 00:37:12,860
Just use the Mayer multiple, a ratio of price in the 200-day.

502
00:37:13,320 --> 00:37:16,780
You'll see back in 2017, it had this nice rhythmic pattern.

503
00:37:16,900 --> 00:37:20,140
It continued to bounce off the 200-day, and it was quite structured.

504
00:37:21,040 --> 00:37:26,520
2018 to 22, massive amplitude, straight down, straight up, straight down.

505
00:37:26,520 --> 00:37:32,060
like we just had these boom and busts 2018 was just straight down 2019 was straight up then we

506
00:37:32,060 --> 00:37:37,780
had another bear in 2019 straight down covet happened we went vertical and then we just like

507
00:37:37,780 --> 00:37:43,100
it was really high amplitude moves with leverage right this is where retail suddenly got perpetual

508
00:37:43,100 --> 00:37:51,060
swaps on you name it token now since ftx blew up i think everybody knows we can see it in the price

509
00:37:51,060 --> 00:37:58,360
chart. It is trading differently. The drawdowns are shallower. The rallies, it goes up 40%, 50%,

510
00:37:58,360 --> 00:38:03,000
sometimes 100% in a year, and then chops around sideways for eight months. So we do have a very

511
00:38:03,000 --> 00:38:05,180
different structure. It's much more of a slow grind.

512
00:38:05,440 --> 00:38:09,320
Yeah, very much so. And look, at some point, and I think we're probably on the cusp of this,

513
00:38:09,440 --> 00:38:14,420
truthfully, of moving into what I call the euphoria phase. So we've got the bear market

514
00:38:14,420 --> 00:38:19,520
recovery where there's a lot of PTSD. This is really 2023. Everyone was fearing the ghost of

515
00:38:19,520 --> 00:38:24,000
Sam Backman-Freeb was going to come back and we're going back to zero. But we just never got that

516
00:38:24,000 --> 00:38:28,720
lower high and it just kept drifting higher. Then we got the excitement phase. You start getting up

517
00:38:28,720 --> 00:38:34,860
towards the all-time high. I thought that we would have moved into the euphoria phase already because

518
00:38:34,860 --> 00:38:40,220
in past cycles we have, but I think we're getting there. Look at the treasury company trends.

519
00:38:40,860 --> 00:38:45,940
Derivatives leverage is pretty much at all-time high. We're closing on like 5.8% of the Bitcoin

520
00:38:45,940 --> 00:38:50,720
market cap for futures and options. So it's getting leverage. As I said, I've had people

521
00:38:50,720 --> 00:38:54,740
call me saying, how do I lever up my Bitcoin to buy more Bitcoin? There's just a lot of things

522
00:38:54,740 --> 00:38:59,560
that are starting to feel a little bit like we're in a bulletproof bull. And that's okay, right? This

523
00:38:59,560 --> 00:39:03,580
is normal for this kind of the cycle, but things can really start to accelerate from this point

524
00:39:03,580 --> 00:39:08,420
forward, which is exciting for those who've been bored to death. There is a good chance that we get

525
00:39:08,420 --> 00:39:14,700
some serious momentum to the upside. But as that happens, if we leave this stair-stepping pattern,

526
00:39:14,700 --> 00:39:19,880
we do move into more unsustainable territory. And then you start getting closer to a meaningful top.

527
00:39:20,760 --> 00:39:25,280
So take maybe the sentiment out of it. And just purely from this sort of analytics perspective,

528
00:39:25,820 --> 00:39:27,900
do you think there's still a lot of room to run here?

529
00:39:28,380 --> 00:39:33,660
I think so. I mean, and I think when you say a lot, that's a relative term, right? So let's just

530
00:39:33,660 --> 00:39:40,260
kind of correct what we mean by a lot. If we go up to 150K, you know, we were at 100K a couple of

531
00:39:40,260 --> 00:39:46,320
weeks ago, we got to 150. We've added a trillion dollars to the market cap. Now, we really proved

532
00:39:46,320 --> 00:39:50,160
that we're a trillion dollar asset in 24. Chopped sideways for eight months, every dip was bought.

533
00:39:50,720 --> 00:39:54,340
We then said, all right, let's try 2 trillion. And we chopped around there for six months, right?

534
00:39:54,360 --> 00:39:58,980
We had a correction back down to 75 and it was swiftly bought up amongst all the tariff tantrum.

535
00:39:59,400 --> 00:40:03,680
In many ways, we've kind of proven that, yeah, you know what? We're a $2 trillion asset.

536
00:40:04,160 --> 00:40:08,180
So the real question is now, how many trillions are we going to add? How many trillions until

537
00:40:08,180 --> 00:40:14,120
people start to sell 80,000 Bitcoin as a regular thing. How high do we have to go before people

538
00:40:14,120 --> 00:40:19,920
really start to cash in? Now, this cycle is also quite unique. If you look at long-term

539
00:40:19,920 --> 00:40:24,100
holder supply, we've had two waves of sell side, and they've both been very, very meaningful.

540
00:40:24,580 --> 00:40:29,240
I think in total, the amount of long-term supply that's come back to market has actually now

541
00:40:29,240 --> 00:40:34,960
eclipsed the 2017 cycle. So this is the largest in aggregate long-term holder sell side event

542
00:40:34,960 --> 00:40:40,960
we've ever seen. But we've got to remember a lot of that supply, people who bought in 2024 in that

543
00:40:40,960 --> 00:40:47,640
like 50K chop range, a lot of those coins got resold for a quick 50% move by hedge funds,

544
00:40:47,840 --> 00:40:52,700
trading desks, whatever else, up to 100K. Now, maybe they step back in. And in fact, a lot of

545
00:40:52,700 --> 00:40:58,340
the people who bought in the 85K range on that dip in March and April, a lot of those coins are

546
00:40:58,340 --> 00:41:04,780
now being sold up here. So a lot of folks kind of miss that there's still a large trading cohort.

547
00:41:04,960 --> 00:41:06,340
in and amongst the Bitcoin space,

548
00:41:06,780 --> 00:41:10,260
the sell side comes from people who bought 50% lower

549
00:41:10,260 --> 00:41:13,860
because 50% in like a three month period

550
00:41:13,860 --> 00:41:17,060
is astounding returns for TradFi folks.

551
00:41:17,240 --> 00:41:19,260
It's going to take them a long time

552
00:41:19,260 --> 00:41:20,780
to get used to just like buy and hold,

553
00:41:20,860 --> 00:41:23,340
but also their mandate isn't to buy and hold in many cases.

554
00:41:23,720 --> 00:41:26,500
Their mandate is to swap into Bitcoin, get out of it,

555
00:41:26,840 --> 00:41:28,680
move over to Nvidia, get out of Nvidia,

556
00:41:28,860 --> 00:41:30,640
go over and punt on Palantir.

557
00:41:30,860 --> 00:41:32,700
Like they move money.

558
00:41:32,960 --> 00:41:34,460
Their job is to move money.

559
00:41:34,460 --> 00:41:36,840
And the more they move, the more they clip the ticket, by the way.

560
00:41:36,980 --> 00:41:39,560
So, you know, in many ways, their performance is based on this.

561
00:41:40,260 --> 00:41:41,760
Bitcoin is absolutely ripping.

562
00:41:42,080 --> 00:41:44,960
And in every bull market, there's always a new wave of investors.

563
00:41:45,320 --> 00:41:48,200
And with it, a flood of new companies, new products and new promises.

564
00:41:48,760 --> 00:41:51,700
But if you've been around long enough, you've seen how this story ends for a lot of them.

565
00:41:52,140 --> 00:41:54,940
Some cut corners, take risks with your money or just disappear.

566
00:41:55,460 --> 00:41:58,840
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567
00:41:59,280 --> 00:42:01,740
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568
00:42:01,740 --> 00:42:04,820
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569
00:42:05,500 --> 00:42:09,220
With River, you have peace of mind knowing all their Bitcoin is held in multi-sig cold storage,

570
00:42:09,520 --> 00:42:12,900
and it's the only Bitcoin-only exchange in the US with proof of reserves.

571
00:42:13,320 --> 00:42:15,380
There really is no better place to buy Bitcoin,

572
00:42:15,620 --> 00:42:19,460
so to open an account today, head over to river.com forward slash WBD

573
00:42:19,460 --> 00:42:21,880
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574
00:42:22,340 --> 00:42:24,880
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575
00:42:25,260 --> 00:42:28,500
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592
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So let's get back to the cycles being different, because at the bottom here we've got the three cycles.

593
00:43:58,020 --> 00:44:04,900
um 2017 was just like parabolic upside um next cycle was like you said super volatile and this

594
00:44:04,900 --> 00:44:10,440
one's just grinding now i did a show with nick bartier very recently yes and he was saying i

595
00:44:10,440 --> 00:44:15,680
really liked his framework he was basically saying he's like 60 sure the cycle's broken which is

596
00:44:15,680 --> 00:44:22,140
a rounding error from 50 50 but like the the market is different now we have the sort of

597
00:44:22,140 --> 00:44:27,300
sailors of the world buying massive amounts of bitcoin regularly and we've got the etfs like do

598
00:44:27,300 --> 00:44:31,480
you put any credence in the idea that even if it's not sort of quote unquote super cycle,

599
00:44:31,480 --> 00:44:35,720
it is an elongated cycle that doesn't have the same four year bull and bear?

600
00:44:36,020 --> 00:44:40,060
Yeah. So honestly, I really, I aligned very strongly with what Nick was saying. I think

601
00:44:40,060 --> 00:44:45,040
that's the exact way to think about it, which is I'm extremely flexible and how I'm thinking

602
00:44:45,040 --> 00:44:49,760
about this cycle moving forward. The truth is it is different, but every cycle is different.

603
00:44:49,920 --> 00:44:53,840
They all have their own unique characteristics. The one thing that is not different is human

604
00:44:53,840 --> 00:44:59,500
beings, we all have our own decision frameworks. There's a lot of Bitcoiners out there who are just

605
00:44:59,500 --> 00:45:04,840
simply going to hit a level of wealth where they go, I can finally buy the house. I can finally do

606
00:45:04,840 --> 00:45:09,720
that thing that I could never. Bitcoin gives people opportunities that they would never have

607
00:45:09,720 --> 00:45:15,180
had any other way. I was listening to Pete McCormack on Natalie's podcast this morning,

608
00:45:15,580 --> 00:45:19,380
and he was saying very similar things. At some point, your Bitcoin, if it's your savings,

609
00:45:19,920 --> 00:45:23,180
people are going to find things to do with it because that's what money's for. It's about

610
00:45:23,180 --> 00:45:27,900
improving your life. So at some point, people are going to realize those gains. And by the way,

611
00:45:27,900 --> 00:45:33,340
that's perfectly fine. That's what savings are for. So the cycle is most definitely different.

612
00:45:34,100 --> 00:45:39,240
Human psychology is not different. Bitcoiners have this internal sense. The longer you're

613
00:45:39,240 --> 00:45:43,580
around this market, the more your intuition builds. You know when things are getting a bit

614
00:45:43,580 --> 00:45:47,340
silly. This is why there's a lot of these debates. This is why the treasury company thing is a debate.

615
00:45:47,940 --> 00:45:51,840
Every single person who's looking at this can go, I think there's some merit here because they're

616
00:45:51,840 --> 00:45:55,720
looking at what sale is doing, you're going, he's going after the bond market. That's pretty badass.

617
00:45:55,860 --> 00:45:59,740
That's pretty cool. And you can also look at it and go, it's also a bit Ponzi adjacent.

618
00:46:00,120 --> 00:46:03,180
You know what I mean? Like we're kind of sitting on this two sides of the fence. You can actually

619
00:46:03,180 --> 00:46:07,260
hold both of these views at the same time. Things are getting a little bit silly and we've probably

620
00:46:07,260 --> 00:46:12,240
got plenty of room to run. So I think that's the right framework for where we are. I'm very flexible

621
00:46:12,240 --> 00:46:19,200
and that's why I'm trying to live within the next like six months. Like I've got my models and I'm

622
00:46:19,200 --> 00:46:23,040
looking out where it is, but I'm under no illusions. The market could just totally top

623
00:46:23,040 --> 00:46:27,820
out here and just be a sad little curl over and that's the end of it. I don't think that's likely.

624
00:46:28,380 --> 00:46:33,200
I also think we may get a parabolic run, but I also don't think that will be sustainable.

625
00:46:33,360 --> 00:46:38,520
So I've got a couple of anchoring ideas and the rest of it, just allowing the market to just tell

626
00:46:38,520 --> 00:46:44,060
me, rather than me imposing what I expect to happen on the market, I just let the market,

627
00:46:44,060 --> 00:46:50,020
to the best of my ability, tell me what it wants to do and just try and listen. At the end of the

628
00:46:50,020 --> 00:46:53,300
day, the data is just information. I'm just trying to listen to the best of my ability.

629
00:46:54,180 --> 00:46:57,600
One thing that I think could be different there is, I do agree with what Pete's saying in terms

630
00:46:57,600 --> 00:47:01,000
of like, this is money. And at some point you want to do something with your money to improve

631
00:47:01,000 --> 00:47:06,080
your life. That's for sure true. But I do feel like the narrative is becoming more pervasive

632
00:47:06,080 --> 00:47:13,280
that Bitcoin is here forever, or at least for our lifetimes. And what are you selling for?

633
00:47:13,280 --> 00:47:15,140
And this is something we've spoken about a lot.

634
00:47:15,280 --> 00:47:19,300
And I think the market might be understanding that you don't just sell Bitcoin for fiat.

635
00:47:19,960 --> 00:47:20,160
Yes.

636
00:47:20,340 --> 00:47:21,480
No, I fully agree with that.

637
00:47:21,600 --> 00:47:24,160
And I do believe that's actually a unique element here.

638
00:47:24,360 --> 00:47:27,460
I mentioned long-term supply has been sold off.

639
00:47:27,540 --> 00:47:31,440
We've had two waves and we've actually just started the third wave of long-term distribution.

640
00:47:32,280 --> 00:47:33,400
What is unique?

641
00:47:33,480 --> 00:47:35,080
It's actually not the sell side that's unique.

642
00:47:35,740 --> 00:47:41,360
What is unique is that when we hit that peak in March 2024, long-term supply stops decreasing.

643
00:47:41,360 --> 00:47:44,100
and then it very, very quickly recovered.

644
00:47:44,740 --> 00:47:46,880
So when you think about long-term holder metrics,

645
00:47:47,000 --> 00:47:47,800
particularly supply,

646
00:47:48,520 --> 00:47:51,560
it takes five months for a coin to get to that threshold.

647
00:47:52,160 --> 00:47:53,920
The coin may chop around several times

648
00:47:53,920 --> 00:47:55,280
and move hands every so often,

649
00:47:55,420 --> 00:47:57,280
but eventually it hits that threshold.

650
00:47:57,960 --> 00:48:00,460
We have not seen in previous bull cycles,

651
00:48:00,460 --> 00:48:02,200
we see a massive sell-side event,

652
00:48:02,580 --> 00:48:03,740
the top gets put in,

653
00:48:03,980 --> 00:48:05,920
and then those coins recycle themselves

654
00:48:05,920 --> 00:48:09,200
for ages and ages and ages in the volatility of the bear

655
00:48:09,200 --> 00:48:11,500
because no one actually wanted to buy and hold it.

656
00:48:12,080 --> 00:48:14,800
This cycle is unique because we've actually almost recovered

657
00:48:14,800 --> 00:48:16,780
back to all-time highs twice now.

658
00:48:17,160 --> 00:48:19,060
And that is actually showing you about the buyers.

659
00:48:19,580 --> 00:48:22,280
We saw the sell side when the long-term supply decreases,

660
00:48:22,280 --> 00:48:24,060
but we actually see that the coins they got,

661
00:48:24,380 --> 00:48:27,060
the people who bought those coins are hodling them.

662
00:48:27,240 --> 00:48:29,360
Now, some of it's the ETF, some of it is hodlers,

663
00:48:29,460 --> 00:48:30,240
some of it is sailor.

664
00:48:30,540 --> 00:48:31,580
That is what's different.

665
00:48:31,940 --> 00:48:36,540
We've got a cohort of people who are now acclimatized to 100K.

666
00:48:36,540 --> 00:48:39,940
and I know people may not like a lot of Udi's views,

667
00:48:40,040 --> 00:48:41,840
but he's had these on this tirade recently

668
00:48:41,840 --> 00:48:44,020
saying this rotation of holders.

669
00:48:44,120 --> 00:48:45,540
And I think this is very, very real.

670
00:48:46,300 --> 00:48:49,240
I'm not quite there on the we're going to 400K this year,

671
00:48:49,560 --> 00:48:53,680
but there has genuinely been a rotation of capital

672
00:48:53,680 --> 00:48:57,900
from a 2011 whale to modern buyers

673
00:48:57,900 --> 00:49:02,180
like sailor, treasury companies, ETFs, retirees.

674
00:49:02,660 --> 00:49:06,120
My old man, my old man been in the Bitcoin world since 2020.

675
00:49:06,540 --> 00:49:11,180
um that was his first kind of entry to the market so he rode the up he rode the down and i heard all

676
00:49:11,180 --> 00:49:18,620
about it now he's riding this low volatility grind up um he is sold during this market cycle to get

677
00:49:18,620 --> 00:49:24,860
his initial capital out and he's now going should i what's the best way to maybe i don't know get

678
00:49:24,860 --> 00:49:28,920
back in he doesn't care that it's a higher price because he's got his risk out now he's willing to

679
00:49:28,920 --> 00:49:33,980
take that risk again because he's become comfortable with it there's a whole plethora of people out

680
00:49:33,980 --> 00:49:42,760
there who now they don't know anything except Bitcoin going from 50k to 73k to 110k to 120.

681
00:49:43,040 --> 00:49:46,960
And every time it does it, it goes there and it stays there. That's the history. They know the

682
00:49:46,960 --> 00:49:51,620
Ibit chart. They have no idea that Bitcoin came from two cents. They don't care about that period

683
00:49:51,620 --> 00:49:56,720
because it's not relevant to them. They see the Ibit chart, which is just an uptrend. It's only

684
00:49:56,720 --> 00:50:01,720
ever been in an uptrend. So you've got to think about where these people are coming from. We have

685
00:50:01,720 --> 00:50:09,580
acclimatized to these price ranges. I have long since given up 80% drawdown, what, to 30K?

686
00:50:09,840 --> 00:50:14,900
Good luck with that. It's just not happening. So I've given up on that idea. So I do think that is

687
00:50:14,900 --> 00:50:21,080
different. And actually, this is a bearish sign for all the other shit out there, all the altcoins,

688
00:50:21,180 --> 00:50:27,420
because people know that Bitcoin is the winning ticket. And I can only imagine how many shit

689
00:50:27,420 --> 00:50:31,640
Bitcoiners are out there and they've got big bags of this stuff. They are looking for every exit

690
00:50:31,640 --> 00:50:36,420
pump they can because they know that everyone now knows you have to go back to Bitcoin. So

691
00:50:36,420 --> 00:50:42,020
the sell side actually is going to show up everywhere else because the rotation is towards

692
00:50:42,020 --> 00:50:46,720
Bitcoin. I like that take. We started this talking about vibes and we've gone through all the sort of

693
00:50:46,720 --> 00:50:51,500
positive vibes on the Bitcoin price at the moment. But there are a couple that stand out to me as

694
00:50:51,500 --> 00:50:56,460
being like potentially toppy signals. One being the fact that we're just getting a new treasury

695
00:50:56,460 --> 00:51:02,320
company every fucking day. And then the other is that shit coins are pumping again. Like ETH's been

696
00:51:02,320 --> 00:51:08,020
flying over the last few months. Do you see that as a sign that maybe the top is closer than we

697
00:51:08,020 --> 00:51:13,780
think? No, honestly, like when you look at any asset, whether it's a bankrupt company or a shit

698
00:51:13,780 --> 00:51:18,000
coin, they do not go down in a straight line, just the same way as they don't go up in a straight

699
00:51:18,000 --> 00:51:22,900
line. Every single one of these things is going to get a relief bounce. Now, I think it's actually

700
00:51:22,900 --> 00:51:26,740
quite interesting because the core reason I would say, the narrative I would describe,

701
00:51:26,880 --> 00:51:31,260
so for ETH, for example, they've been getting quite a bit of inflows for the ETFs. What is the

702
00:51:31,260 --> 00:51:35,600
event that might have happened? The genius bill. So there's a bunch of folks out there who are

703
00:51:35,600 --> 00:51:42,420
betting on usage of stable coins is going to benefit the underlying token. And something,

704
00:51:42,580 --> 00:51:44,940
actually I was talking, I can't remember who I was talking about this with yesterday.

705
00:51:45,760 --> 00:51:49,820
It was actually Peter Dunworth. I was having a phone call with him. And we were talking about,

706
00:51:49,820 --> 00:51:56,320
my view is that we're in a hard money world now not hard like you know gold or bitcoin hard

707
00:51:56,320 --> 00:52:02,160
but interest rates aren't zero we're no longer in a zerp world i've had this long-running thesis

708
00:52:02,160 --> 00:52:07,340
and we've seen this with altcoins they've really struggled to catch a bid this really is the first

709
00:52:07,340 --> 00:52:11,820
like actual bid they've had yes solana had a period of time but like even it's rolled over

710
00:52:11,820 --> 00:52:17,780
and its btc chart looks just the same as eth does um just earlier in that cycle i think the market

711
00:52:17,780 --> 00:52:23,780
it. Generally speaking, yes, there's plenty of stupid stuff happening in the world. But if you

712
00:52:23,780 --> 00:52:28,480
look at the Russell 2000, it's doing pretty shit. If you look at the not so magnificent 493,

713
00:52:28,680 --> 00:52:33,420
that's doing kind of average. Really, we're seeing this like concentration towards the winners.

714
00:52:34,080 --> 00:52:37,260
It's very much a winner take most, winner take all type environment at the moment.

715
00:52:38,060 --> 00:52:43,120
This is anti-ZERP. This is people actually being more discerning with their capital.

716
00:52:43,800 --> 00:52:46,040
I would say we're even seeing this with treasury companies.

717
00:52:46,560 --> 00:52:47,800
I did a study the other day.

718
00:52:48,220 --> 00:52:52,360
The drawdown most of these treasury companies have had from their IPO, I guess you call it

719
00:52:52,360 --> 00:52:53,860
like, I'm going to call it like an IPO pump.

720
00:52:54,000 --> 00:52:57,540
When they announce, oh, look, we're a treasury company, they go up 5,000% and then they've

721
00:52:57,540 --> 00:52:59,840
just been in a horrendous downtrend ever since.

722
00:53:00,220 --> 00:53:01,260
It's kind of that initial pump.

723
00:53:01,800 --> 00:53:07,420
Strategy, yes, it hasn't blowing through all-time highs, but it's also not down anywhere near

724
00:53:07,420 --> 00:53:08,760
as much as most of these other companies.

725
00:53:08,760 --> 00:53:14,820
So I've had this long running thesis that more and more people are going to be more discerning with their capital.

726
00:53:15,060 --> 00:53:16,280
We're not in a ZERP world yet.

727
00:53:16,340 --> 00:53:18,940
I also don't think we're going back to a ZERP world anytime soon.

728
00:53:19,660 --> 00:53:20,720
Maybe if Trump gets his own way.

729
00:53:20,920 --> 00:53:21,480
Yeah, maybe.

730
00:53:21,680 --> 00:53:22,000
TBC.

731
00:53:22,240 --> 00:53:26,440
But I think, I mean, I have zero edge in this, but I would assume that power is probably going to stick it out.

732
00:53:26,500 --> 00:53:27,860
And this is all just narrative, TBC.

733
00:53:29,020 --> 00:53:29,940
But yes, you're right.

734
00:53:30,080 --> 00:53:31,300
Eventually, maybe.

735
00:53:31,500 --> 00:53:32,640
Maybe we get to that point.

736
00:53:32,640 --> 00:53:39,920
but the genius bill just because people are using stable coins doesn't actually mean the

737
00:53:39,920 --> 00:53:44,280
eth price benefits doesn't mean that sole price benefits you know and i've run this exercise

738
00:53:44,280 --> 00:53:48,820
before go and look at your all-time high gas consumption and compare it to your all-time

739
00:53:48,820 --> 00:53:54,280
high holdings i did this back when i had my my eth back in 2022 i ran this experiment i realized

740
00:53:54,280 --> 00:53:58,080
i'd bought 250 years worth of excess usage i sold it all the next day and i was done

741
00:53:58,080 --> 00:54:02,240
right so that was just the end of it um so if you look at all those different dynamics

742
00:54:02,240 --> 00:54:07,320
i just i think that a bunch of analysts are going to realize that there is actually no

743
00:54:07,320 --> 00:54:12,280
underlying demand for these tokens and just because someone's using it doesn't actually

744
00:54:12,280 --> 00:54:17,900
translate into value right i think it's tom lee he's saying that they have to buy the eth to secure

745
00:54:17,900 --> 00:54:21,840
their network i'm like that sounds like you probably don't want that system right that's

746
00:54:21,840 --> 00:54:25,420
is that really the kind of world that we want to live in like in that case just run a database

747
00:54:25,420 --> 00:54:30,140
if that's the case just use jpm servers why do you need a token to go alongside this thing

748
00:54:30,140 --> 00:54:33,780
and i i think a lot of these institutions are going to work this out pretty quick so

749
00:54:33,780 --> 00:54:39,820
it's an interesting point um i think if eth rolls over in the next like couple of months and just

750
00:54:39,820 --> 00:54:46,540
really struggles to punch a new all-time high i think the red candles that come for alts if that

751
00:54:46,540 --> 00:54:51,860
happens and again i don't know maybe maybe the world animal spirits just comes back but if it

752
00:54:51,860 --> 00:54:58,440
rolls over i think that is going to be just a the reddest candle you've seen because i that's the

753
00:54:58,440 --> 00:55:02,940
world realizing that there really is no demand for this stuff and you know good luck to the true

754
00:55:02,940 --> 00:55:08,940
believers yeah um i do want to talk about treasury companies because you tweeted recently um the

755
00:55:08,940 --> 00:55:13,540
drawdowns most these treasury companies will experience will be epic 2012 bitcoin grade depth

756
00:55:13,540 --> 00:55:18,600
but with gold grade duration yes um why do we start with just your general take because i think

757
00:55:18,600 --> 00:55:22,320
we align we talk about this quite regularly offline and like i think we align quite closely

758
00:55:22,320 --> 00:55:26,600
and that there's there's sailor and then there's everyone else yes that's pretty much where i see it

759
00:55:26,600 --> 00:55:42,490
so and interestingly enough and again people people are going to find all the nitty reasons why arguments are wrong But think about things from a general perspective We have seen this process before in shit coins in penny stocks and you name it

760
00:55:43,830 --> 00:55:47,190
I use a framework of extremes inform the mean.

761
00:55:47,410 --> 00:55:50,070
So let's go to the most extreme example and see where that puts us.

762
00:55:50,590 --> 00:55:54,930
If you look at strategy, if there was only one company doing this strategy,

763
00:55:54,930 --> 00:55:59,410
strategy. It makes sense that everyone has to buy that firm for it to do well.

764
00:55:59,990 --> 00:56:05,390
If everybody's doing this strategy, then what's your differentiator? Probably your size,

765
00:56:05,550 --> 00:56:11,170
your liquid options market, your access to debt. The truth is when you've got so many of these

766
00:56:11,170 --> 00:56:17,110
things, when you're printing a million shit coins a day on pump.fun, there's literally not enough

767
00:56:17,110 --> 00:56:23,390
money to buy this stuff. I also think about it from the smaller you are, the more your only

768
00:56:23,390 --> 00:56:27,930
option is to sell equity. That's the only option you actually have. All the other companies,

769
00:56:28,010 --> 00:56:32,130
if you look at strategy, for example, they can do all sorts of exotic preferred stocks and debt

770
00:56:32,130 --> 00:56:35,850
financing and you name it. That's going to benefit them in both the bull and the bear because they

771
00:56:35,850 --> 00:56:40,370
literally have more access to capital. There's obviously a spectrum, by the way, between all

772
00:56:40,370 --> 00:56:45,490
these things and different companies at different distances. But the chasm between strategy and

773
00:56:45,490 --> 00:56:48,950
literally everything else is, it's like saying, what's the difference between a billion dollars

774
00:56:48,950 --> 00:56:54,070
and a million dollars, it's about a billion dollars. So the chasm is so large between strategy

775
00:56:54,070 --> 00:56:58,510
and everything else, it kind of doesn't matter to compare them. So then you've got this kind of

776
00:56:58,510 --> 00:57:03,570
middle bucket, Metaplanet's probably the leading example of those, and then you've got the long

777
00:57:03,570 --> 00:57:09,650
tail. What is the differentiating factor between the long tails? I really struggle to see it. And

778
00:57:09,650 --> 00:57:15,590
there is a reason that these companies are hiring Bitcoin podcasters as their front men,

779
00:57:15,590 --> 00:57:18,850
because if they do not attract retail speculator capital,

780
00:57:19,630 --> 00:57:20,790
there is no other demand for this.

781
00:57:21,010 --> 00:57:23,170
In my opinion, there is no serious institution

782
00:57:23,170 --> 00:57:24,790
buying a penny stock with a cold card.

783
00:57:24,890 --> 00:57:25,950
I just don't see it happening.

784
00:57:26,610 --> 00:57:28,810
So if they can't access debt,

785
00:57:28,930 --> 00:57:30,190
if they can only sell equity,

786
00:57:31,650 --> 00:57:32,790
eventually people realize,

787
00:57:32,910 --> 00:57:34,170
why the hell am I holding this thing?

788
00:57:34,590 --> 00:57:36,230
If there's Ponzi adjacent,

789
00:57:36,570 --> 00:57:38,350
unless there's more money coming in,

790
00:57:38,370 --> 00:57:40,750
and this is the thing with these MNAVs and these premiums.

791
00:57:42,270 --> 00:57:44,750
And by the way, this is not throwing out every single company.

792
00:57:44,750 --> 00:57:48,190
This is like a broad statement that we look at extremes and then there's going to be outliers.

793
00:57:48,850 --> 00:57:53,730
But if everybody's doing this and your premium expands very quickly, right?

794
00:57:53,730 --> 00:57:56,290
Let's just say a company has a premium expanded to 10x.

795
00:57:56,530 --> 00:58:01,850
They can either 10x their Bitcoin balance or the Bitcoin price can 10x or some combination

796
00:58:01,850 --> 00:58:04,490
of the two and your price can stay flat.

797
00:58:04,590 --> 00:58:05,830
And now you're an MNAV of one.

798
00:58:06,210 --> 00:58:08,350
Now, yes, can they sustain a premium?

799
00:58:08,470 --> 00:58:09,990
Well, that depends on their growth metrics.

800
00:58:10,330 --> 00:58:14,610
When the Bitcoin price rolls over, the speculative capital will slow down and you will

801
00:58:14,610 --> 00:58:19,310
not get people going out on the risk curve. So this all works very, very well when Bitcoin is

802
00:58:19,310 --> 00:58:24,370
in an uptrend. By the moment it goes into chop solidation, where it's frustrating and boring,

803
00:58:24,610 --> 00:58:30,330
or it goes into a downtrend, which eventually will happen, I just can't see how these companies

804
00:58:30,330 --> 00:58:37,910
continue to attract capital. And as a result, once the engine goes out and this plane's flying

805
00:58:37,910 --> 00:58:42,050
in midair and your engine goes out, you've got no fuel to turn this thing back on because suddenly

806
00:58:42,050 --> 00:58:46,330
nobody wants to buy your stock and then you're just like every other penny stock with a cold

807
00:58:46,330 --> 00:58:50,190
card now someone's tweeted at me and i think it's a valid point it's better than penny stocks without

808
00:58:50,190 --> 00:58:55,670
a cold card agree agree but the problem is that once their m nav goes below one and i do believe

809
00:58:55,670 --> 00:59:00,250
a lot of these companies will once their m nav goes below one because there's just not enough

810
00:59:00,250 --> 00:59:05,870
money to sustain a premium they can't sell equity to buy the bitcoin but they can buy sell the

811
00:59:05,870 --> 00:59:10,930
bitcoin to buy the equity and buy their shares back and then you realize well you know if you're

812
00:59:10,930 --> 00:59:14,850
just a company who's like a shitty hedge fund who buys Bitcoin at the top and sells it at the bottom

813
00:59:14,850 --> 00:59:19,390
to buy back your own stock? Do I really want to share in that? Yeah, it's Bitcoin accretive,

814
00:59:19,470 --> 00:59:23,190
but I can also just borrow money and buy iBit or borrow money and buy Bitcoin.

815
00:59:23,750 --> 00:59:28,110
So I think that people are over-indexing on this idea that we need a treasury company in

816
00:59:28,110 --> 00:59:32,330
every jurisdiction. They're basically taking Metaplanet's success in Japan, which by the way,

817
00:59:32,370 --> 00:59:37,630
is a unique selling point. And they're saying, oh, well, there's one in Sweden and there's one

818
00:59:37,630 --> 00:59:42,390
in Denmark and there's one in Vietnam. And let's put a treasury company everywhere. It's like,

819
00:59:42,670 --> 00:59:46,930
if we talk about it here in Australia, what is the real trapped capital here in Australia?

820
00:59:47,830 --> 00:59:51,950
People say, in fact, I was talking with Pete about this yesterday. He's like our superannuation funds,

821
00:59:52,050 --> 00:59:56,910
which is like 401ks for people in America. All this retirement money, it can only buy Aussie

822
00:59:56,910 --> 01:00:03,710
equities. And my point was, truthfully, if you're actually buying, like for me, I've got some of my

823
01:00:03,710 --> 01:00:09,570
investment that my superannuation fund in mstr why because it's really not hard to access so if

824
01:00:09,570 --> 01:00:16,410
we're talking about trapped capital that can only buy aussie equities are they really really that

825
01:00:16,410 --> 01:00:21,690
far down the risk curve they're going to go and buy a penny stock with a cold card no they're not

826
01:00:21,690 --> 01:00:27,570
like the truth is once these this trapped capital it's either not engaged in bitcoin at all or

827
01:00:27,570 --> 01:00:32,430
barely even looking at buying the ETS so early in that journey.

828
01:00:32,610 --> 01:00:36,250
And anybody who is smart enough to know that this trade even exists

829
01:00:36,250 --> 01:00:40,330
is smart enough to open an account with a brokerage that can buy US stocks.

830
01:00:41,910 --> 01:00:47,450
I'm just really struggling to see this long-term sustained trapped capital thing.

831
01:00:47,670 --> 01:00:49,690
People have taken the Metaplanet journey and said,

832
01:00:49,790 --> 01:00:51,010
we can replicate that in every country.

833
01:00:51,050 --> 01:00:51,810
And I think that's wrong.

834
01:00:52,310 --> 01:00:55,690
For me, I think that unless you have deep options,

835
01:00:55,690 --> 01:01:00,610
unless you have deep debt markets, unless you can finance without selling equity.

836
01:01:01,430 --> 01:01:07,650
Most of these companies are absolutely reliant on this speculative, retail-driven gambler

837
01:01:07,650 --> 01:01:08,210
pocket money.

838
01:01:08,730 --> 01:01:12,050
When you run out of that, the engine goes out and this whole thing.

839
01:01:12,670 --> 01:01:14,290
I just think these MNAVs get crushed.

840
01:01:14,510 --> 01:01:17,710
And by the way, this is not saying these companies are going to go bankrupt.

841
01:01:17,890 --> 01:01:19,010
I think a lot of these companies are going to be fine.

842
01:01:19,410 --> 01:01:24,630
But I think the people who bought the shares at the high premium, you're going to experience

843
01:01:24,630 --> 01:01:31,490
to 2011 Bitcoin bear market, which is down 95 in like three weeks. And then I don't think they come

844
01:01:31,490 --> 01:01:37,070
back. So I think then you get your gold level duration because how do you distinguish between

845
01:01:37,070 --> 01:01:42,450
literally every other treasury company? You don't. Once your engine goes out, rebooting that thing is

846
01:01:42,450 --> 01:01:47,510
going to be very, very difficult. Yeah, I totally agree. And I do think Metaplanet is different. I

847
01:01:47,510 --> 01:01:51,270
think that one probably will sustain. I think I spoke to Dylan recently on the podcast and

848
01:01:51,270 --> 01:01:53,070
And he's definitely doing some interesting things.

849
01:01:53,210 --> 01:01:57,850
But the thing you hit on there, which I think is the most relevant, is the fact that Saylor

850
01:01:57,850 --> 01:02:01,550
is not only the largest in size, but he's also doing the most interesting things on

851
01:02:01,550 --> 01:02:04,130
kind of like the financial engineering side with these preferreds.

852
01:02:04,390 --> 01:02:09,030
And if he's being both the innovator and he's got the size, like how can you compete?

853
01:02:09,110 --> 01:02:12,330
And I think just selling equity to buy Bitcoin is probably done already.

854
01:02:13,150 --> 01:02:13,350
I agree.

855
01:02:13,510 --> 01:02:15,030
No, that's my base case.

856
01:02:15,030 --> 01:02:19,330
I think that's a line I've been using to try and summarize a lot of these ideas.

857
01:02:19,330 --> 01:02:24,730
the Bitcoin in the treasury isn't the product. That's not the product. It's a means to an end.

858
01:02:25,030 --> 01:02:30,550
The product is the means by which they accumulate the Bitcoin. For strategy, for example, the means

859
01:02:30,550 --> 01:02:34,450
by which they accumulate the Bitcoin is they construct bonds. They sell bonds. They're bond

860
01:02:34,450 --> 01:02:40,250
salesmen. They sell bonds to a market that wants to buy bonds, that is big enough to make it a

861
01:02:40,250 --> 01:02:45,630
justifiable market to go after it. The treasury is simply a means to an end to make it different

862
01:02:45,630 --> 01:02:50,530
to all the other bonds. MetaPlanet, the unique selling point there is that they haven't quite

863
01:02:50,530 --> 01:02:54,810
got to the sailor level of innovation, but they are providing a Bitcoin exposure. There's a tax

864
01:02:54,810 --> 01:02:59,670
arbitrage as well between spot Bitcoin and equities. They are tapping into a very unique

865
01:02:59,670 --> 01:03:05,610
set of circumstances in Japan, which by the way, is a massive economy. It's a massive, massive market.

866
01:03:06,690 --> 01:03:12,470
Australia doesn't register anywhere on the blip of anything. Now, I think I should also make a very

867
01:03:12,470 --> 01:03:18,650
clear clarification here. When we talk about treasury companies, I'm not talking about

868
01:03:18,650 --> 01:03:23,670
businesses that sweep excess profits into Bitcoin. That's two thumbs up. Be a penny stock with a cold

869
01:03:23,670 --> 01:03:29,230
card in that circumstance. There's no issue there whatsoever. This is all about the sale of all-in

870
01:03:29,230 --> 01:03:34,830
playbooks. And I'm very confident that if you do not go hard, you will go home. We saw this with

871
01:03:34,830 --> 01:03:39,870
GameStop. They kind of like half-assed put a quarter of a toe in and the market said, get out

872
01:03:39,870 --> 01:03:45,070
of here and wiped out their stock and i think this is the game you are either all in with a very good

873
01:03:45,070 --> 01:03:50,130
unique selling point or your m nav premiums are going to one like everybody else and this is what

874
01:03:50,130 --> 01:03:54,550
happened to shit coins they dilute themselves out of existence and then what's your differentiator

875
01:03:54,550 --> 01:03:59,470
ah i'll buy strategy because at least they're doing something interesting yeah i want to just

876
01:03:59,470 --> 01:04:04,910
share this chart because one thing that i have probably said in the past but i actually don't

877
01:04:04,910 --> 01:04:09,790
think i was right if i have and what a narrative that i would fade is that this has any meaningful

878
01:04:09,790 --> 01:04:16,610
impact on Bitcoin. So I pulled up this earlier. And let's say you take even the top 15 companies

879
01:04:16,610 --> 01:04:20,870
out of this, assuming that some of those, like some of these are different. We've got like Galaxy

880
01:04:20,870 --> 01:04:25,290
in here, CleanSpark, like they're not doing necessarily the Saylor playbook. But then if

881
01:04:25,290 --> 01:04:30,510
you go below 15, the amount of Bitcoin that these companies hold is only, quote unquote,

882
01:04:30,590 --> 01:04:34,650
only 70,000 Bitcoin in total. Yeah, superior distribution, like most things.

883
01:04:34,650 --> 01:04:41,970
and and like again in here you have people like i don't know hive uh bit deer canaan like cypher

884
01:04:41,970 --> 01:04:45,130
like these these aren't companies doing the sailor playbook these are just companies that

885
01:04:45,130 --> 01:04:50,710
have stacked bitcoin fold in there yes and so like if you even took 70 000 bitcoin like that's not

886
01:04:50,710 --> 01:04:55,950
going to make a material impact on the bitcoin price i don't think so do you see this as being

887
01:04:55,950 --> 01:05:01,110
just bad for bitcoin treasury companies not necessarily for bitcoin yes yes correct so so

888
01:05:01,110 --> 01:05:05,870
I am wildly constructive on Bitcoin. I think Bitcoin is, I mean, it's just an idea whose

889
01:05:05,870 --> 01:05:12,350
time has come. That's very clear. So I'm wildly bullish on Bitcoin. I'm also by, and let's just

890
01:05:12,350 --> 01:05:17,230
keep going down the risk curve here. If I'm wildly bullish on Bitcoin, it kind of makes sense to be

891
01:05:17,230 --> 01:05:22,230
wildly bullish on the entity that's got 620 something, I don't know if this website's updated,

892
01:05:22,330 --> 01:05:27,410
620,000 Bitcoin. That's like a beach ball that's just going to inflate that company. Now, again,

893
01:05:27,410 --> 01:05:32,910
I should be very clear. It is much better for a company to have Bitcoin than to not have Bitcoin.

894
01:05:33,090 --> 01:05:37,470
So sweeping profits into Bitcoin is great. What I think is going to be a challenge is a lot of

895
01:05:37,470 --> 01:05:43,030
these companies, they come out the gates, they develop a massive MNAV premium. They may stack

896
01:05:43,030 --> 01:05:47,830
a couple of Bitcoin for the first couple of months. Investors get very excited. They buy

897
01:05:47,830 --> 01:05:54,490
into the stock price. This is Ponzi adjacent because if you buy early in that trend, if you're

898
01:05:54,490 --> 01:05:59,370
in that telegram group realizing that they're getting one of these scammy pipe deals, if you're

899
01:05:59,370 --> 01:06:03,650
in that telegram group, you're going to be fine. If you buy early in the trend, you're probably

900
01:06:03,650 --> 01:06:10,150
going to be fine. If you buy late in that trend, you are being sold a dream and it's going to hurt

901
01:06:10,150 --> 01:06:16,830
a lot when it reverses. So I think that's the thing. It genuinely relies on old money exiting

902
01:06:16,830 --> 01:06:21,650
out to new money. I know this is how markets work, but these premiums are unsustainable for

903
01:06:21,650 --> 01:06:28,030
most of these companies. So it totally depends what premium you get in, what premium you get out,

904
01:06:28,450 --> 01:06:33,390
where you buy on that curve. So these are very, very dynamic systems, but you've got to think

905
01:06:33,390 --> 01:06:39,350
about the MNAV premium. That is actually the price you're trading. And buying those MNAV premiums at

906
01:06:39,350 --> 01:06:45,250
very, very high levels means the Bitcoin price can rip, their treasury can rip. And what we've seen

907
01:06:45,250 --> 01:06:48,750
is that the MNAV always has a gravity towards one.

908
01:06:49,470 --> 01:06:50,830
The bigger the company gets,

909
01:06:51,110 --> 01:06:54,070
the more their MNAV drifts down towards one.

910
01:06:54,410 --> 01:06:56,470
Even MetaPlanet, they blew up to like 10X.

911
01:06:56,870 --> 01:06:58,250
They're now pulling back down to what,

912
01:06:58,270 --> 01:06:59,590
I think it was like three last time.

913
01:06:59,590 --> 01:07:00,610
Three and a half or something, yeah.

914
01:07:00,610 --> 01:07:01,070
Three and a half.

915
01:07:01,310 --> 01:07:03,670
So people who have bought the top of that MNAV premium,

916
01:07:03,790 --> 01:07:04,870
they're down 50%,

917
01:07:04,870 --> 01:07:06,810
despite the fact they've probably added Bitcoin

918
01:07:06,810 --> 01:07:07,590
to their balance sheet

919
01:07:07,590 --> 01:07:08,790
and Bitcoin's probably about to go on a run.

920
01:07:09,130 --> 01:07:10,190
It's going to take them a long time

921
01:07:10,190 --> 01:07:11,350
to get their money back, in my opinion.

922
01:07:11,570 --> 01:07:14,650
So the gravity, we get small companies

923
01:07:14,650 --> 01:07:21,450
with a large MNAV, large companies with a small MNAV, and the gravity is pointing from one to the

924
01:07:21,450 --> 01:07:26,610
other. The bigger you get, the smaller MNAV is going to get. So if we fast forward 10 years,

925
01:07:26,770 --> 01:07:32,250
what kind of MNAV do you think strategy will be sat on? As this market matures, what do you think

926
01:07:32,250 --> 01:07:37,910
the sort of, I guess, because I assume Saylor is going to sit at higher than one.

927
01:07:38,410 --> 01:07:43,310
Yes. No, I think they, and they have deservedly stayed at a premium above one. I mean, look at

928
01:07:43,310 --> 01:07:45,030
JP Morgan, look at their book value.

929
01:07:45,490 --> 01:07:50,190
Like in my view, it makes sense to be like, you know, 2X, 3X at a bull run and, you know,

930
01:07:50,750 --> 01:07:53,090
at book value in a nasty bear market.

931
01:07:53,090 --> 01:07:58,450
So, you know, what we're not going to see is thousands and thousands and thousands of

932
01:07:58,450 --> 01:08:00,130
companies with an MNAV of 50.

933
01:08:00,430 --> 01:08:05,450
It's, this is, you know, how many people have you managed to convince that Bitcoin is an

934
01:08:05,450 --> 01:08:06,110
important thing?

935
01:08:06,430 --> 01:08:07,290
Very, very few.

936
01:08:07,430 --> 01:08:07,930
Most of us.

937
01:08:07,930 --> 01:08:13,470
assuming that this is like the we overestimate what we can do in one year and underestimate in

938
01:08:13,470 --> 01:08:18,930
10 years bitcoin can hyper bitcoinize the world and the m nav of these companies can still be two

939
01:08:18,930 --> 01:08:25,470
right can still be 1.5 because the more normalized these things get the less of a premium because

940
01:08:25,470 --> 01:08:29,990
it's new and unique and interesting and by the way the bigger the pre this is the other thing

941
01:08:29,990 --> 01:08:35,050
extremes inform the mean if your premium is 50x what's the company incentivized to do

942
01:08:35,050 --> 01:08:40,450
sell a boatload of stock they want to dilute the price yes they're going to buy a bunch of bitcoin

943
01:08:40,450 --> 01:08:44,070
that's going to generate a bunch of hype but what are they actually doing they're compressing that

944
01:08:44,070 --> 01:08:49,110
m nav now if you buy when that m nav is small and you ride the wave up you are relying on other

945
01:08:49,110 --> 01:08:54,930
people bidding the stock up to keep this game going until the engine goes out and when that goes

946
01:08:54,930 --> 01:09:03,690
then it's it's just down only from there so 2011 bitcoin depth and i do believe gold level two

947
01:09:03,690 --> 01:09:07,290
decades of bear market when it finally hits because there's no distinguishing factor for

948
01:09:07,290 --> 01:09:13,610
most of these companies ponzi adjacent i like it all right checkmate let's um let's close out with

949
01:09:13,610 --> 01:09:17,970
the price prediction so every time we do this you you give me a price and i tell you it's

950
01:09:17,970 --> 01:09:22,330
disappointing i'm not going to do that this time and where do you think bitcoin is by let's say

951
01:09:22,330 --> 01:09:27,210
the end of the year well this is important because you pete and i have a bet on this right and i

952
01:09:27,210 --> 01:09:32,630
think i think you're gonna win it i know yes so so at that level and again what was that 2023 we

953
01:09:32,630 --> 01:09:37,850
made that. I think my price was $250 is like the top level that we can get to in 2025.

954
01:09:38,630 --> 01:09:42,290
And fortunately, I have all the optionality of the downside because it's closest to the pin.

955
01:09:44,110 --> 01:09:49,430
Look, we could get to, if you want the most bullish level, and again, none of this is

956
01:09:49,430 --> 01:09:54,710
prediction. This is looking at where investor behavior changes. The 200-day moving average

957
01:09:54,710 --> 01:09:59,930
is just like a long-term price anchor. There's only so far you can stretch the elastic band away

958
01:09:59,930 --> 01:10:04,350
from that mean before it wants to revert. Mark, it's a mean reverting phenomena. So that's the

959
01:10:04,350 --> 01:10:08,970
simplest one. How far above the 200-day moving average have we got in previous cycles? And the

960
01:10:08,970 --> 01:10:13,970
answer is about 2.4. Sometimes it goes higher than that, but we're in very rare air at that point in

961
01:10:13,970 --> 01:10:19,110
time. Now, the 200-day moving average is obviously a moving target. It's evolving as the price evolves,

962
01:10:19,290 --> 01:10:26,190
but as it stands today, it's about 236k from memory. So 236, if we teleport tomorrow into a

963
01:10:26,190 --> 01:10:32,970
parabola, you know, 236 might be 240 by the time we get there. 250, I may end up in the money almost

964
01:10:32,970 --> 01:10:39,210
on the dot, TBC. The other ones we can look at, which I put a lot more credibility into, is just

965
01:10:39,210 --> 01:10:45,370
looking at MVRV levels. And I use different variants, short-term holders, coin time adjusted

966
01:10:45,370 --> 01:10:50,190
with AVRV. There's a whole bunch of ones. It doesn't matter. The point is, show me at what

967
01:10:50,190 --> 01:10:56,170
price level. We know where everyone's cost basis is. How high do we have to go before the average

968
01:10:56,170 --> 01:11:03,370
guy is feeling so bullish and so excited that the smart money is going, there's my target audience.

969
01:11:03,450 --> 01:11:08,190
I'm going to sell exactly to that guy. People eventually sell. How high do we have to go before

970
01:11:08,190 --> 01:11:13,130
they start selling? Now, I have to remember here that those levels, we then have to say, well,

971
01:11:13,170 --> 01:11:17,190
are they actually selling? They have in every single previous time, but we've always got to

972
01:11:17,190 --> 01:11:21,570
check. There's the incentive. That's my idea. That's my concept. Do they actually sell? My

973
01:11:21,570 --> 01:11:27,270
assumption is they probably will. We get to 130, 140, that's where short-term holders are starting

974
01:11:27,270 --> 01:11:32,090
to get fairly juiced up. Now, that doesn't mean we probably top out there, but I wouldn't be

975
01:11:32,090 --> 01:11:35,470
surprised if we bump our head and it takes a bit of time to get through that period.

976
01:11:35,950 --> 01:11:41,410
If we just keep going and we get up to like 160, 170, 180, we're now moving into the territory

977
01:11:41,410 --> 01:11:46,550
where less than 10% of all trading days have been that stretched. Now, we could then go through a

978
01:11:46,550 --> 01:11:51,510
period of chop solidation and that would allow all these means to come higher and start to mean

979
01:11:51,510 --> 01:11:57,270
revert and cools things down just by consolidation or even a correction um all those things so 150

980
01:11:57,270 --> 01:12:04,450
160 170 we're starting to get into thin air 180 at the moment is like sub five percent of all days

981
01:12:04,450 --> 01:12:09,510
can it happen yes five percent of the time it does happen do we stay there no so there's 95

982
01:12:09,510 --> 01:12:13,950
chance that we're probably not going to stay there and i think this is also very important

983
01:12:13,950 --> 01:12:19,610
don't worry about trying to pick the absolute top wick nobody can do this it's just like it's

984
01:12:19,610 --> 01:12:20,150
It's nonsense.

985
01:12:20,270 --> 01:12:20,810
No one can do it.

986
01:12:20,810 --> 01:12:21,090
You did it.

987
01:12:21,110 --> 01:12:22,190
You bought it in 2017.

988
01:12:22,830 --> 01:12:23,830
Yeah, that was different though.

989
01:12:23,950 --> 01:12:24,730
That was different though.

990
01:12:24,830 --> 01:12:26,650
That is actually the counter signal.

991
01:12:26,810 --> 01:12:27,290
No, you're right.

992
01:12:27,330 --> 01:12:28,430
I did buy the absolute top.

993
01:12:28,550 --> 01:12:29,710
No, but that's the inverse.

994
01:12:29,850 --> 01:12:31,610
You're supposed to sell the top, not buy the top.

995
01:12:32,270 --> 01:12:35,370
So yeah, no, I got smoked in 2017, but that's part of the learning journey.

996
01:12:35,890 --> 01:12:38,270
So if we get to 180, we're getting really hot.

997
01:12:38,990 --> 01:12:40,570
Just every metric is going to be overblown.

998
01:12:40,650 --> 01:12:41,890
And again, I use my two personas.

999
01:12:42,030 --> 01:12:42,710
Check the analyst.

1000
01:12:42,930 --> 01:12:46,430
Cannot in good faith say that we're at the bottom at 180K.

1001
01:12:46,430 --> 01:12:48,630
I just can't because it would be dishonest.

1002
01:12:48,630 --> 01:12:53,950
so again they're moving targets they'll continue to evolve but that is where i expect investor

1003
01:12:53,950 --> 01:12:59,130
behavior will really start to shift and change um and none of this is to say that bitcoin is not

1004
01:12:59,130 --> 01:13:02,550
going to go to a million bucks it's just going to take a lot longer than people expect and if you

1005
01:13:02,550 --> 01:13:07,850
wake up one day and bitcoin's at a million dollars um either the world is in a really really bad spot

1006
01:13:07,850 --> 01:13:12,290
and it's it's happening or it's probably a scam wick and we're coming down 80 percent

1007
01:13:12,290 --> 01:13:17,810
well i think i might just send you the 100k sats now i don't i think i said 282

1008
01:13:18,230 --> 01:13:19,590
I've already got it in my spreadsheet, man.

1009
01:13:19,610 --> 01:13:21,470
It's already accounted for in my inheritance planning.

1010
01:13:21,810 --> 01:13:23,330
And Pete definitely needs to send you his.

1011
01:13:23,390 --> 01:13:24,090
He said 350.

1012
01:13:24,370 --> 01:13:25,270
Yeah, yeah, that's not happening.

1013
01:13:25,670 --> 01:13:26,430
That's not happening.

1014
01:13:27,030 --> 01:13:28,470
Checkmate, I appreciate you, man.

1015
01:13:28,550 --> 01:13:30,270
You're one of my favorite people to talk to.

1016
01:13:30,450 --> 01:13:32,150
Where does anyone go to find the newsletter

1017
01:13:32,150 --> 01:13:33,070
and follow what you do?

1018
01:13:33,630 --> 01:13:35,090
If Pete wins that bet,

1019
01:13:35,930 --> 01:13:38,030
I'm just thinking about it now.

1020
01:13:38,130 --> 01:13:39,150
I mean, that's going to be the ultimate

1021
01:13:39,150 --> 01:13:40,410
egg on the face moment, isn't it?

1022
01:13:40,810 --> 01:13:43,190
I will be very happy to send him 100k stats if he wins.

1023
01:13:43,190 --> 01:13:44,550
Truthfully, I'm perfectly hedged

1024
01:13:44,550 --> 01:13:45,930
because I'll be a very happy man as well.

1025
01:13:45,930 --> 01:13:49,690
you'll find me over at checkonchain.com we've got our newsletter and

1026
01:13:49,690 --> 01:13:54,730
charting website so check us out over there all right man appreciate you thanks for the time

1027
01:13:54,730 --> 01:13:55,410
thanks mate