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So from my perspective, there is no one left to sell. We've just exhausted those people.

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People want to see all-time highs again. They're fully positioned. They've taken action.

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My son is probably not going to view it as an investment. He's probably going to view it more

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as money. Eventually, right? The only thing left to do is to want for something, to hope for

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something. And hoping is not taking action. Hoping is not buying Bitcoin. Bitcoin will progress like

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science one funeral at a time. It's very different than the excitement that you see when people are

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be still taking out positions there's a ton of really really big ideas in bitcoin you know one

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of the biggest is guys the fucking financial system is a ponzi scheme that's a really big one

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but whether or not that happens in two weeks from now i don't know but like over the long term i'm

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just so insanely bullish and it's actually really really hard to like hey um i want to tell you

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about bitcoin so have you heard that the whole world's a scam right it's a really hard to tough

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opener it seems very clear this scarcity thing is one of the most important innovations to humanity

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To me, that's what makes Bitcoin really, really special and unique.

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It is unique in the world in terms of scarcity, but it's the UTXO set that makes sure that

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we preserve that long term.

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And you really can't say that about anything else.

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All right, we are back and we are live.

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James Check, Checkmate, Michael Sullivan, both of you on the show individually before

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and now both of you on the show together before. Last time I had you on, we discussed peak apathy.

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We were at a point where truly it seemed that nobody cared about Bitcoin and I guess the data

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backed it up. But as you guys both pointed out at that time, it seemed like a pretty good time to

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buy. And I think the data has supported you guys pretty strongly in that since then. First of all,

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how are you guys doing? I assume neither of you have been apathetic this entire time,

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clearly uh life's good you guys doing well all good on my end mate it's uh yeah no we're going

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to summer now so it's nice and nice and warm and uh yeah it fit honestly the weather in australia

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started to feel like the bitcoin price where like it's spring it's sunny it was raining and shitty

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and whatever it was like you know three four weeks ago it's starting to get really nice you can even

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get to the beach so it's uh it's starting to feel like the bitcoin price down down under i'm doing

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great over here too, man. Like one of the natures of this work is that it's kind of just constantly

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contrarian. So despite the moods being bad and stuff kind of being depressed a little bit,

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it's gotten me consistently bullish. It's like, I get to play this role of constantly kind of being

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against the crowd and positive, which I quite enjoy. Well, and you know, the crowd has been,

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the wisdom of the crowd has seemed to be a bit lacking, let's say, throughout this bull market.

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But perhaps, you know, it's the, let's say the counter crowd that ends up being right in these things.

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It seems that the herd tends to follow a similar pattern, whether that be emotionally or just, you know, how they actually behave from a like an on-chain perspective even.

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But I think what I love about you guys, we were just talking about this off camera.

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People love the last episode with both of you.

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We talked about PCAP.

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We talked about this great kind of research piece that you guys have put out.

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And for people who aren't familiar, check, you are the guy who does Bitcoin on-chain analysis.

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I often tell people it's the only Bitcoin subscription that I pay for because I think that it's worth it.

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So check on-chain, go check it out.

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Michael, you're newer on the scene.

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Check's been doing these sorts of things for a while.

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You're newer on the scene, but you made quite a splash.

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And you've done it on a sort of related but different set of metrics, which is you're not looking at the on-chain data.

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You're looking at sort of the social graph data.

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So maybe we can start there a little bit.

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Michael, can you just sort of break down for us?

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Like what were you seeing at the peak apathy time when we recorded last versus what are

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you seeing now?

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What has been what, you know, what's, what's different?

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What's the same?

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And like, more importantly, what's jumping out at you?

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The biggest thing for me is that I still stand by the peak apathy thesis on the last one.

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Like things were very checked out consistently and we had just broken below lows on a lot

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of the more consistent emotions that I track, some of the more interesting ones. And we kind of just

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tumbled into this period of just absolute depression, essentially, where historically,

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even me looking way back in some of the data that I have, almost everything was just like really,

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really low, crazy levels of boredom, crazy levels of just people no longer confident about anything.

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And that kind of persisted despite really consistent price increases here, which in my

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opinion is just like one of the most bullish things right now. Like we've seen like a move

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from roughly 58K to like 87. And during that time period, I was really anticipating that we were

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going to see more euphoria, lots of people coming back in, lots more activity, all of these things.

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And so far, I have seen very little of that. There's little peaks in excitement during the

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bigger moves. I mean, even today, like Bitcoin's at 82K, we're up quite a bit from back when we

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wrote the original piece but still it's just like moods are bad and again it kind of has me

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optimistic about that because people i feel like are kind of not are discounting how positive things

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are for bitcoin right now potentially i mean the way i've been thinking about it is this like

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oh sorry okay no go ahead uh the way i've been seeing it uh it takes time for people to let go

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of what is frankly a period of months and months of beatings right the the downtrend will continue

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until mood improves.

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And like, we're just getting beaten and beaten and beaten.

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And what happens is by the end of the bear,

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everyone is so fixated on it can only get worse.

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And they start actually almost,

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even though they don't want it,

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like deep down, you don't want the price to go lower,

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but you kind of do

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because then you feel like you're getting closer to the end.

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And when the end finally comes,

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people are still, they've got that momentum.

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Their mood is to the downside.

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And then when it springs higher,

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this is quite literally why it's called the disbelief rally.

86
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And this is not a Bitcoin thing.

87
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This is a markets thing.

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that early chapter of the bull. Most people cannot let go of their bearish bias that's been

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hammered into them for the previous months. And it takes time to get over that PTSD. And there's

90
00:06:14,820 --> 00:06:22,220
a bunch of reasons for this. Some people might've sold at 90, 85, 70, 65, thinking it was going

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lower and they're going to buy back. And they need the market to convince them that they did

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the right thing. No one wants to feel really wrong. And having sold too late in the bear market

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and then being like, but if I buy back now,

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all that I have is a tax bill and less Bitcoin.

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No, that cannot be, it must go lower.

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And they want the price to go lower.

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That's one reason.

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But you get this kind of like inertia of bearishness.

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And it generally takes months, many months to recover from that.

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If you look at 2023, we kind of chopped sideways.

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We went from 15 to 30 and we chopped between there and 25

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for the best part of the year.

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2016, it was the same.

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We kind of rallied off the bottom and then it was just dead quiet.

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sideways so you kind of get the second i call it the reaccumulation period it's this second floor

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that is higher than the bear market low people want the bear market low prices again but they

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start to realize they may not get them so they start bidding it a little bit higher but they're

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also still kind of you know this mood is still tepid we're not seeing like headlines when bitcoin

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approaches 100k new demand is going to start coming in the bloomberg terminals and headlines

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and all that stuff.

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Where we are now,

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it's kind of just people

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who are aware that Bitcoin,

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you know, they were buying

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in the bear market.

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They survived.

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They're still on the bid.

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There's a few more people.

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And as a good example,

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this is like an anecdotal example.

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We've got a set of friends

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that we caught up with

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over the weekend.

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Now, this is literally people

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that we did the, you know,

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how to birth a child class with.

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So it's a perfectly random

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cross-section of people

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who are not Bitcoiners,

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not market people.

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This is like your jury duty

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average of people.

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And I find, like,

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they asked me what I did

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and I explained it.

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And this is back in April.

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Price was 70K.

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We hadn't had the rally and then the final sell-off yet.

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But I was saying, look, should I buy?

140
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I was like, look, I hate recommending Bitcoin

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because people just come back to me

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and complain about the volatility.

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However, in this particular instance,

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I think if you were to start buying

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for the next six months,

146
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and I explained what dollar cost averaging is,

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I think you will look back in several years

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and you'll be very happy with it.

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Anyway, we caught up over the weekend.

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Price is 87.

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And I didn't raise it.

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They raised it with me.

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Like, oh, it looks like Bitcoin tanked again.

154
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and i was like you sure i mean yeah it sold off but like they had no like they didn't buy anything

155
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they didn't they didn't put any in they didn't dca like i'm glad i didn't because it went down i was

156
00:08:37,960 --> 00:08:44,140
like it's like up 50 you know what i mean like it's up 30 40 since i was talking about it so

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this is kind of the state of play there no new demand coming in it just the people who survive the bear and we trying to shed this inertia of it got to go low it can be bullish there no way i didn buy enough all those things my main takeaway is that i clearly need

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to better track the sentiment of pregnancy classes yeah i was gonna say how do we get

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access to that focus group right there the focus group are you gonna kids yeah well there you go

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00:09:09,086 --> 00:09:38,766
Yeah, we're both. Yeah, I think we're all contributing to the gene pool that way. Thank goodness. So I'm curious then, because what it sounds like is checkmate from from your side and correct me if I'm wrong here, but you're still seeing you're seeing indicators that still give you a very like from your seat. You have a very positive outlook, probably both both short term, but I mean, obviously long term, but you're not like short term bearish right now. Is that am I correct?

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00:09:38,766 --> 00:10:05,826
I know. And the main reason, yeah, so that's kind of anecdotal of we haven't seen new demand coming in yet. But if you think about the people who are still here, who survived the bear market, who did stack sats at the lows, even if they're feeling sidelined, they want to get back into the market. That's a very popular question I've had asked. Like, hey, man, kind of 10% allocated, not 90. I'm kind of the opposite of where I should be. What do I do? Like, we're at 80. How do I think about this? Very popular request.

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00:10:06,546 --> 00:10:10,546
So from all of those different angles, the thing that I find on a, let's call macro,

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which is like, is the bottom in type question, and then there's the micro as well.

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And the piece I wrote yesterday was about this.

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On the macro, as we came off the bottom, so at 58K, about 12% of all the dollars,

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if you measure every coin when it last moved on chain, right?

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What is the dollar value?

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00:10:26,966 --> 00:10:29,486
So 100K Bitcoin is 10 times more than a 10K Bitcoin.

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only 12% of all the dollars invested in Bitcoin were in profit at 58k 12%. Now this is fairly

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consistent across all bears we typically get down to that like you know 90% is in loss

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00:10:41,506 --> 00:10:48,266
so that's fairly consistent but the jump from there we've jumped from whatever it is 12% being

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in profit up to 56. So to put into context about $460 billion worth of capital has gone from in

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lost in profit. And every time we see these really powerful bounces, it shows you how many people

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sold the bottom to somebody else. And those somebody else's are feeling much, much better.

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They are much more likely to step in and buy the next dip. So then on the micro, when you get a

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pullback or a correction, there's a bunch of people who are sidelined and they wait because they're

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like, oh no, no, no, it can't be a bull. And then it goes up to 85. And they're like, it can't be a

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bull. Then it goes to 87. Like, oh shit, I got to buy. And then they buy. And then of course,

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they've bought the local top. And then you get the correction. And what we really want to see

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is do we get people who bought the local top go,

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oh man, my bear thesis, it actually is going lower.

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I should sell now at 80 or 75 to buy back lower.

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And of course they're selling the bottom again.

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So it's like mistake after mistake after mistake.

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On the macro, everything looks really good.

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Like every single past bear market,

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we've had this kind of massive return

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of just like coins and capital

189
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and just people are feeling way better.

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That's a massive tailwind

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00:11:48,806 --> 00:11:50,426
that Michael would see in your sentiment data.

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We just get this tailwind of people feel better

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because they're no longer as wrecked.

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then you've got the short-term stuff where people feel incrementally more wrecked and especially in

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the early bull people might have coins from 190 and 85 and like the average of their portfolio

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00:12:05,286 --> 00:12:10,626
is like a little bit better but they're kind of around break even i'm sure most people even if

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00:12:10,626 --> 00:12:16,506
you think the bottom is in if you get one more big green candle 90k there's the sigh of relief

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00:12:16,506 --> 00:12:21,226
is going to be massive because then everyone goes okay now we're in a monthly uptrend now it feels

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00:12:21,226 --> 00:12:25,846
like the bulls in now i can actually like go and get the stakes out of the freezer like people will

200
00:12:25,846 --> 00:12:29,906
feel better with one more green candle but we haven't got it yet and that's what people are

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00:12:29,906 --> 00:12:36,246
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So, Mike, I want to ask you, because this is what I think is really interesting right

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now, is that at the kind of peak apathy time, right, you could argue that, granted, while

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like so many bottom indicators that Checkmate has were flashing and everything, it was sort

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of like price and sentiment seemed to be sort of in lockstep, right?

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Price was down.

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Sentiment was down.

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Apathy was through the roof.

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now were up significantly from that 58K bottom, significantly up.

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And Checkmate, just hilarious.

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If that's not the most classic story that every Bitcoiner has gone through,

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where it's like Bitcoin may be up however much when you told somebody to buy,

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but they saw that the price was down 2% the previous day.

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So that's what's in their head, that Bitcoin's down.

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Absolutely.

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But Michael, if you're looking at this now, given what Checkmate has said,

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where we're clearly in a more from an on-chain indicator perspective, a more, let's say,

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bullish time.

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Like it's like, Hey, look, this, this thing looks like it's, it's, it's starting to move

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up, right?

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Like this, this looks pretty good.

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It looks like buying down there around 58 K was indeed a great move but you still on your side see sentiment just sort of in the toilet Is that just is that mismatch something you kind of look for where it like Hey look there is an outsized difference between what the reality is and like what happening in the moment

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and how far you are off the bottom versus how people are still feeling, which is they're still

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acting like it's at 58 K from a sentiment perspective. Is that like a fair, a fair thing

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to say? Yeah, I'd say roughly one of the interesting things about this is how many

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commonalities I found between just the raw language data comparatively the on-chain stuff

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that James does. Like I can't remember exactly, I think it's supply and profit and loss ratio or

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something like that. It looks so similar to what I'm seeing in like excitement and conviction and

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desire, which are some of the signals that I look at a little bit more closely. These things were

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just like, we're slowly starting to see them peak back up again outside like the bottom quartile

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roughly, but it's just like slowly, slowly coming up after this like historically depressed state.

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And to go back to what we talked about previously with this like psychological momentum, people get

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so locked into the current state, whatever's happening right here, right now in front of you.

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And they take that view and they extrapolate that into the future. It's like a really common

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recency bias that humans do just consistently, right? Very predictable. It's at the underlying

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core of why short-term holders are such an interesting cohort to study because they're

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very focused in the here and now, right? I've done similar attempts at this in my own data,

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looking at like traders and people focused on short-term price. But like, because of that,

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like watching some of these groups, how they've just changed here, they've started to see like

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this upwards inflection, but it's not like this committed view yet. So to reference the traders

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again, I've really been watching them closely because they talk about short-term price action,

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right? And specifically looking how confident their language is, because these people are

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constantly saying, I think Bitcoin is going to go to 75K or I think we're going to see 90K next

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week. They're very, very frequently talking about concrete moves. So I like to look at their language

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because they'll use more hedging when they're less confident. And one of the big interesting

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things to me this entire last couple of months is that this group in particular has had no

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confidence whatsoever. Bitcoin is starting to go up, but they still just don't really trust it.

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They're kind of checked out. It's like a lot of their emotions are muted generally, but the amount

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of hedging they're doing is very high, like historically high, even more so than previous

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bears, which is just so interesting to me. And it's to me exactly the kind of thing you'd expect

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to see during kind of a disbelief rally as we're really starting to move up and people are just not

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trusting it yet. There's like this distrust. And I think that's something a lot of us are feeling,

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but it's really being expressed in this group in particular.

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If you think about it, one good analogy, it's like the tide, right? Bear markets,

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tides at low tide, and then bull markets at high. And during slack tide on either side,

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where it's just like it's slowing down momentum to the downside and then coming back up it's very

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hard to kind of gauge has the tide finished going out or have we started going up again because like

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if you look at the shore or any kind of marker it's more or less the same level but you're like

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i know it's i know it should be around this time but if you don't have a you know a timing device

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or whatever you don't actually know when the tide has changed and it feels very much like this

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environment it'll be the same at the top when you're at the top you're also going to have people

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were like, oh, it kind of looks bearish.

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And I went through this myself,

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trying to assess,

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are we really seeing momentum breaking down?

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And like, you can read my pieces into the bull top

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and they were bullish

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because we literally hit all-time highs.

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But within 10 days after it,

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my words started to change

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and the piece was saying,

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I just, this looks like it's cracked.

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This looks like it's cracked.

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And I started explaining like,

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look, we may still bounce higher

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because I don't know the future.

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However, every single one of these levels we lose,

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your bear market probability should go up 10x and exponentially go higher.

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So it's more about framing up.

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Like we don't know, but that changing of the tide period on both downside and upside,

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it is very difficult to read because a lot of people still have that inertia.

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If you go on X, you're going to be full of bullish news,

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even if things are starting to crack.

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And people really didn't realize it was a bear market.

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We hit 80K in November.

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That was the point where people go, oh shit, what if it's not a bull anymore?

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You know what I mean?

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but you need to have been prepared for it long before that event took place.

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So yeah, that slack tide period at the top and the bottom,

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it's very difficult to read because of that inertia.

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And that's why I think data, whether you're looking at sentiment or on-chain data,

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I think it's both of them, a representation of what people are actually doing.

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And the way I frame up my data, there's two core,

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and there's tons of different metric types, but one set is called unrealized.

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So like supply and profit or loss, unrealized profit or loss,

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dollars in profitable show me the incentive how are people feeling based on their portfolio value

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that they hold and then the other one is what are they doing which is the realized component are they

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taking losses are they taking profit are we getting a switch over where profit's now bigger than loss

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that's starting to move into bull market territory so we're looking at the incentive and then what

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they did and when they tell a very very similar story you put them together and you go hey that's

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interesting now i've got a pivot point in the momentum of people's mood and then what they're

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actually doing with that information it's so interesting to me because there's like similar

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ideas that i've explored but from a totally different angle where two of the main emotions

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i've looked at a lot are excitement and desire and they kind of have a relationship with time

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in interesting ways too where like i consistently see excitement language how enthusiastic people are

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like spike really early it's like the cue that you normally see like very early bull markets going

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back historically too it's like the the perfect example of this is right after the elections in

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the u.s like there was insane amounts of excitement fast forward about a year into the bull of 2025

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and there we were like at all-time highs but the excitement was lower later you see like more desire

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language people really like desperately want for the price to keep going up but it like doesn't

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keep going and all these things like in isolation are kind of like they're interesting but in

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combination you kind of like see like all right well that's maybe a sign that people are getting

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a little bit too it's like consistently overheated right um that exact 80k level that you mentioned

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james like that was a huge one across the sentiment data where like at price started to run up people

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were still convinced it was a bull market their excitement levels there were actually higher than

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they were the entirety of 2025 and then we dropped down and it was like historically flushed out

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immediately overnight just like massive switch and that's like february right one of the more

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interesting ones i've seen in the last couple years so the and so it's interesting when you

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at first said excitement and desire the excitement one made sense just without you explaining it the

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desire when i was curious which like way that was going to go so that's kind of like the yearning

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for things to be as you wish they would be is that fair to say it's a rearview mirror thing isn't it

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it's like yeah the market that's in front of me is not what i want it to be so therefore i express

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a view that maybe it will be better in the future and it's going to be okay so it's there's a there

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you're right there's a time component their excitement is in the moment whereas desire is a

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bit of a rear view mirror type dynamic. And this was, this was a weird one. I realized my work is

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kind of funky and different. So I should have queued this up slightly better, but this was

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actually the highest correlating emotion that I found to price movements where I was like very

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expecting like optimism, fear, those sorts of things to have quite relationships with the price

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over time. Right. I did a boatload of statistical analysis when I started like looking through this

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data and I kept like seeing desire, like why is desire so consistently flashing here? Typically

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more often like after rallies and people really want the price to go higher.

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But you're totally right where it's like people want to see all time highs again.

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They're fully positioned.

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They've taken action.

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The only thing left to do is to want for something, to hope for something.

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And hoping is not taking action.

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Hoping is not buying Bitcoin.

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It's very different than the excitement that you see when people are maybe still taking

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out positions.

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So that one's been so fascinating to study.

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I would imagine desire just instinctively.

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I would think desire is actually not overly prevalent in bear markets,

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late stage bears.

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Is that correct?

384
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Does it really drop off the map?

385
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I don't imagine people are yearning for higher prices.

386
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You know what I mean?

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I think in a bear market, people are just like,

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I'm just going to bunker down and just get through it.

389
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He's going to white knuckle it.

390
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So I would imagine desire doesn't have a big component.

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What would be the, I mean, to my view,

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excitement into the top being instantaneous

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and then desire being backwards looking.

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Is there an equivalent on the downside?

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I guess it would be like an anger or a fear would be the instantaneous.

396
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And then what's the rear view, Mom?

397
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What are those two dynamics?

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Fear is an interesting one.

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That also peaked right around the same move.

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People very frequently talk about the fear and greed index,

401
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and people are fearful right now.

402
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People are not fearful right now.

403
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That's absolutely not what I'm seeing at all.

404
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People are actually, like on the fear is in like the lower 50th percentile range.

405
00:26:17,212 --> 00:26:35,139
overall it like pretty low but after that move down from 80k it was really really high anger in general has been very consistently elevated there a lot of circumstances for that the bit 110 thing really flared that up a lot There were some of these things going on but even still specifically newer Bitcoiners are disproportionately angry right now

406
00:26:35,139 --> 00:26:40,559
have been for a little while and that still has not gotten cooled at all despite the positive

407
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price movement. So there's kind of like a cyclicality to these things that for sure is like a

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relationship and like, okay, well, Bitcoin didn't do what I wanted it to do. So now I'm going to be

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mad about it rather than take ownership of this. I'm just gonna be pissed off at the market for

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doing what markets do. You know? So I'm curious to guys at first of all, like this is, you know,

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really, I'm just like a guest here, uh, cause you guys can go back and forth. And I think there's

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00:27:02,939 --> 00:27:07,839
like, this is why this is so fascinating to me because there are so many, like so many cross

413
00:27:07,839 --> 00:27:11,939
sections here between the data that you guys look at. They may not be readily apparent, but check

414
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even just the way you asked that, that question, as soon as you said that, I was like, Oh shit.

415
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It just makes perfect sense.

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00:27:17,619 --> 00:27:27,119
I think, again, you guys are so well-suited to do this sort of stuff in tandem because it's two pieces of the same puzzle that sort of tell the story from a different side, right?

417
00:27:27,779 --> 00:27:28,499
And I'm curious.

418
00:27:29,239 --> 00:27:33,259
I mean, how much of this do you – I mean, check me.

419
00:27:33,339 --> 00:27:37,719
Obviously, I know from your side, you're able to do a little bit of forward-looking stuff.

420
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You always say – preface, say, look, I don't have a crystal ball.

421
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I'm not going to give you this.

422
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I can tell you directionally where we're going.

423
00:27:43,819 --> 00:27:46,359
Michael, how much are you able to ascertain?

424
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And I know your research has obviously evolved a lot.

425
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You've been adding in new components to it.

426
00:27:50,919 --> 00:27:53,579
You've been looking at this thing from new angles, looking at new metrics.

427
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Has it changed in terms of your ability to not just kind of look to look back, but to

428
00:27:58,759 --> 00:28:02,999
look forward a little and say, okay, this is what I sort of think is coming down the

429
00:28:02,999 --> 00:28:05,239
pipe versus this is where we are.

430
00:28:05,359 --> 00:28:06,079
This is where we've been.

431
00:28:06,139 --> 00:28:06,979
This is what I can tell you.

432
00:28:07,179 --> 00:28:08,479
Has that changed at all?

433
00:28:08,479 --> 00:28:12,719
or are you still a little hesitant in that regard to make sort of more forward

434
00:28:12,719 --> 00:28:13,539
looking judgments?

435
00:28:14,319 --> 00:28:18,319
So we have evolved this a ton since the last time we talked to you.

436
00:28:18,399 --> 00:28:20,899
And I feel as though I'm kind of like exploring a new domain in some ways.

437
00:28:20,959 --> 00:28:24,699
I've taken tons of cues from people like James and like learned a lot from the

438
00:28:24,699 --> 00:28:25,679
way other people are doing analysis.

439
00:28:25,679 --> 00:28:29,079
But there's just this like very novel component to what I'm doing where I've

440
00:28:29,079 --> 00:28:32,319
had to just explore things, make mistakes, analyze things where I was wrong,

441
00:28:32,439 --> 00:28:33,199
follow different paths.

442
00:28:33,479 --> 00:28:34,699
And the largest,

443
00:28:34,699 --> 00:28:39,979
most interesting thing I've been pursuing is comparing these things to like tools like DCA,

444
00:28:40,099 --> 00:28:45,099
looking at like times where historically you could have seen like, all right, well, this,

445
00:28:45,099 --> 00:28:49,799
this emotion was flashing this thing. How was this entry looking forward to that kind of idea?

446
00:28:50,059 --> 00:28:55,279
I just did a piece about like comparing sentiment, traditional DCA tools. And like,

447
00:28:55,919 --> 00:29:01,739
by far the most statistically interesting thing I found is like essentially looking for good

448
00:29:01,739 --> 00:29:06,659
opportunities to buy Bitcoin and periods that Bitcoin has overperformed after them. And the

449
00:29:06,659 --> 00:29:10,779
ones we've already talked about today have been some of the higher signal ones in conviction,

450
00:29:10,999 --> 00:29:16,659
desire, and excitement. Historically, when any of those is muted, it dramatically outperforms in

451
00:29:16,659 --> 00:29:21,919
the next six months, 12 months, 18 months, et cetera. That's been very consistent. And if you

452
00:29:21,919 --> 00:29:27,079
look at them in tandem, they're arguably even more high signal. So part of the reason for that

453
00:29:27,079 --> 00:29:30,239
is what we've already discussed about like excitement being like more kind of here and now,

454
00:29:30,239 --> 00:29:34,219
like earlier desire a little bit later, but like if you really see a lot of these things happen and

455
00:29:34,219 --> 00:29:40,199
start to heat up, they can be very good signals that stuff might be getting overheated or contrarian

456
00:29:40,199 --> 00:29:44,219
signals that when these things are all low, it's really, really, really good times to buy. Um,

457
00:29:44,219 --> 00:29:52,139
even in the shorter term, uh, price ranges. I mean, all of this is just like, it's so fascinating.

458
00:29:52,259 --> 00:29:58,979
I've seen a lot of, there's a lot of people who have been very confident in making the like

459
00:29:58,979 --> 00:30:04,759
explicit prediction that like well look uh every all these past cycles point to the fact that i

460
00:30:04,759 --> 00:30:08,659
forget you guys probably know better better than i do on this there's like specific date when

461
00:30:08,659 --> 00:30:13,119
actually the bottom is not in yet the bottom is the bottom is on like this date in october or

462
00:30:13,119 --> 00:30:18,339
november because that's what it like always is check can you speak to that a little bit like

463
00:30:18,339 --> 00:30:22,019
where where that i assume you know what i'm talking about from people making that prediction

464
00:30:22,019 --> 00:30:27,899
where that's coming from and then whether you agree with that or if you disagree why you disagree

465
00:30:27,899 --> 00:30:34,019
yeah there's always if i go so the first time i saw this was back in 2018 so we've sold off from

466
00:30:34,019 --> 00:30:39,619
6k down to three and a half uh three and a half is the bottom and at that time there was this

467
00:30:39,619 --> 00:30:45,899
hyperwave model which was one of these like it's 100 correct it's only been seen in the wild like

468
00:30:45,899 --> 00:30:51,179
you know six times in all of human history and bitcoin's price is exactly a hyperwave and it

469
00:30:51,179 --> 00:30:55,999
predicts a hundred sorry a thousand dollars and everyone was so anchored to it has to go to a

470
00:30:55,999 --> 00:31:01,759
thousand dollars and of course then it bottoms at three and a half and promptly rips to 14 so that

471
00:31:01,759 --> 00:31:06,879
was the first time that i saw this like a concentration of everyone and going back to my

472
00:31:06,879 --> 00:31:12,399
previous point they've been beaten and beaten and beaten and then their net worth got halved again

473
00:31:12,399 --> 00:31:18,479
and they're just going it cannot go up it has to get worse and they get so anchored to this bearish

474
00:31:18,479 --> 00:31:24,119
view that it must go lower and then they become i don't know what it is everyone just gets fixated

475
00:31:24,119 --> 00:31:25,139
on a price that's lower.

476
00:31:25,679 --> 00:31:27,319
And you probably noticed this in the recent bear.

477
00:31:27,399 --> 00:31:28,899
Every time the market went lower,

478
00:31:29,399 --> 00:31:30,999
people would lower their targets, right?

479
00:31:31,019 --> 00:31:32,379
They'd always be another level.

480
00:31:32,459 --> 00:31:34,059
There's always another leg to go,

481
00:31:34,199 --> 00:31:35,259
always another leg to go.

482
00:31:35,839 --> 00:31:37,979
Very rarely, and if you think about it,

483
00:31:38,039 --> 00:31:39,619
the reason this generally happens

484
00:31:39,619 --> 00:31:41,939
when everyone is on the same side of the boat,

485
00:31:41,979 --> 00:31:44,499
in a bull market, when everybody is long,

486
00:31:44,979 --> 00:31:49,139
max long with leverage, who is left to buy?

487
00:31:49,139 --> 00:31:50,799
There is no money left to buy.

488
00:31:50,899 --> 00:31:53,139
Everybody is in over their skis.

489
00:31:53,739 --> 00:31:57,459
So therefore, you just naturally have saturated the demand because everyone's already bought.

490
00:31:57,979 --> 00:32:00,919
In a bear market, people are selling, right?

491
00:32:01,019 --> 00:32:05,199
But they want it to go lower because whatever level they sold at, they want to buy it back

492
00:32:05,199 --> 00:32:07,479
lower or they're capitulating and just exiting.

493
00:32:07,639 --> 00:32:10,699
Eventually, there just are no sellers left.

494
00:32:10,879 --> 00:32:12,399
The pain has been so great.

495
00:32:12,779 --> 00:32:15,379
The drawdown, that's why I call the price pain and the time pain.

496
00:32:15,479 --> 00:32:19,519
The price gets people who are like, oh man, my number down, can't do.

497
00:32:19,839 --> 00:32:20,759
And then they bail out.

498
00:32:20,759 --> 00:32:22,399
And that's generally the first part.

499
00:32:22,399 --> 00:32:23,719
and most people will fall in that bucket.

500
00:32:24,299 --> 00:32:26,079
But then you've got the high conviction people

501
00:32:26,079 --> 00:32:28,299
who just like the grind of nothingness.

502
00:32:28,479 --> 00:32:31,239
They're like, oh man, my whole thesis on Bitcoin is wrong.

503
00:32:31,399 --> 00:32:32,539
Shit, I should sell everything now.

504
00:32:32,879 --> 00:32:34,779
And then you get the time pain flush out.

505
00:32:35,639 --> 00:32:36,599
Who is left to sell?

506
00:32:36,739 --> 00:32:37,859
There's no one left to sell.

507
00:32:37,959 --> 00:32:39,259
And that's honestly why I think the market,

508
00:32:39,359 --> 00:32:41,139
like we've seen bond yields through the roof,

509
00:32:41,239 --> 00:32:43,159
oil prices are high, midterms are coming up,

510
00:32:43,519 --> 00:32:44,539
the wars aren't finished.

511
00:32:44,539 --> 00:32:46,639
Choose your reason why.

512
00:32:46,759 --> 00:32:49,179
If you gave me this spread of things in the macro world,

513
00:32:49,719 --> 00:32:51,099
I would tell you that Bitcoin would be

514
00:32:51,099 --> 00:32:52,699
in a disastrous downtrend.

515
00:32:52,819 --> 00:32:54,439
And of course, it's just like chopping around

516
00:32:54,439 --> 00:32:55,419
at new local highs.

517
00:32:55,799 --> 00:32:59,239
So from my perspective, there is no one left to sell.

518
00:32:59,339 --> 00:33:01,039
We've just exhausted those people.

519
00:33:01,739 --> 00:33:04,819
2022, we bottomed at 15.6 with FTX.

520
00:33:05,139 --> 00:33:06,199
Everyone wanted 12K.

521
00:33:06,579 --> 00:33:08,819
10K to 12K was just like concentration

522
00:33:08,819 --> 00:33:10,359
of everyone said it was going to be there.

523
00:33:10,699 --> 00:33:12,099
I think, Michael, you've even like looked

524
00:33:12,099 --> 00:33:14,859
at certain price levels that like have this anchoring bias.

525
00:33:15,799 --> 00:33:18,399
Maybe it's like $1,000, $10,000.

526
00:33:18,799 --> 00:33:20,579
In this cycle, everyone wanted 40, 45.

527
00:33:21,099 --> 00:33:23,979
It's always one leg lower.

528
00:33:24,559 --> 00:33:27,539
Whereas from my perspective, I'm like, but we saw people capitulate.

529
00:33:27,779 --> 00:33:29,319
Then we saw them capitulate again.

530
00:33:29,919 --> 00:33:33,499
That's generally like who is left to sell.

531
00:33:33,819 --> 00:33:37,999
Now, of course, if we went down to 45K, no doubt you would get another wave.

532
00:33:37,999 --> 00:33:39,419
Like there's no reason this can't happen.

533
00:33:39,519 --> 00:33:43,279
But the probability of it happening, I think, had reduced because eventually you've just

534
00:33:43,279 --> 00:33:44,019
run out of sellers.

535
00:33:44,239 --> 00:33:48,539
So maybe you needed like a strategy to actually like, I don't know, regulation says, hey,

536
00:33:48,539 --> 00:33:50,499
Like, sailor, you've got to sell all the market.

537
00:33:50,619 --> 00:33:51,739
Sell all your business is bankrupt.

538
00:33:52,519 --> 00:33:54,359
Something happens where it's like, all right,

539
00:33:54,399 --> 00:33:58,639
now we've got just a structural, just a wall of supply.

540
00:33:58,999 --> 00:33:59,699
Yeah, bearish.

541
00:34:00,359 --> 00:34:02,339
But unless you can paint that picture for me,

542
00:34:02,359 --> 00:34:03,279
that was never the story.

543
00:34:03,399 --> 00:34:05,879
The story was it's got to go lower because October.

544
00:34:06,279 --> 00:34:06,659
You know what I mean?

545
00:34:06,699 --> 00:34:07,879
Like, that was the narrative.

546
00:34:08,179 --> 00:34:10,019
And I just, for me personally,

547
00:34:10,439 --> 00:34:14,379
I find that my calendar argument really kind of lacks,

548
00:34:14,859 --> 00:34:16,219
you know, it's not very rigorous, is it?

549
00:34:16,259 --> 00:34:17,339
It's just not very rigorous.

550
00:34:17,339 --> 00:34:20,339
It has to do this thing because, what, markets are a playbook?

551
00:34:20,519 --> 00:34:21,299
Of course not.

552
00:34:21,419 --> 00:34:25,859
So I just looked at the mechanics of what people did, and I was like, it kind of looks

553
00:34:25,859 --> 00:34:27,219
like we've got no sellers left.

554
00:34:27,559 --> 00:34:30,839
Cold card, soft fork, just all these negative things.

555
00:34:30,919 --> 00:34:32,379
Sailor was selling, ETFs are selling.

556
00:34:32,959 --> 00:34:33,879
Perfect example.

557
00:34:34,559 --> 00:34:37,999
The ETFs had an $8.5 billion outflow over about an eight-week period.

558
00:34:38,479 --> 00:34:41,579
When was the maximum drawdown in capital?

559
00:34:42,239 --> 00:34:43,659
The day after the bottom.

560
00:34:44,099 --> 00:34:49,539
Literally the day after the bottom was the last big outflow of the ETF capitulation, right?

561
00:34:49,579 --> 00:34:55,579
We saw people in all of these instruments, whether on-chain, derivatives, ETFs, everybody

562
00:34:55,579 --> 00:34:56,579
just did the same thing.

563
00:34:56,679 --> 00:34:59,379
They sold the bottom, right?

564
00:34:59,439 --> 00:35:00,439
And then you've got no one left.

565
00:35:00,679 --> 00:35:03,379
So what happens when you have no sellers left?

566
00:35:03,479 --> 00:35:07,099
And just for the sticklers in the audience, there's always a seller.

567
00:35:07,099 --> 00:35:11,599
At every price, there's a seller and a buyer, but you run out of the people who need to

568
00:35:11,599 --> 00:35:14,939
are forced sellers, might sell, want to sell.

569
00:35:14,939 --> 00:35:16,579
I often describe when you're in the

570
00:35:16,608 --> 00:35:18,048
the early phase of the bear.

571
00:35:18,648 --> 00:35:20,588
There's a bunch of people up here at these prices.

572
00:35:20,948 --> 00:35:23,148
They don't know they're going to capitulate, but they will, right?

573
00:35:23,168 --> 00:35:26,868
They don't know it yet, but there was a price and a time that they will go,

574
00:35:26,948 --> 00:35:27,848
I can't do this anymore.

575
00:35:28,068 --> 00:35:29,328
And they will all bail out.

576
00:35:29,408 --> 00:35:32,728
And I almost guarantee it will be on the exact same day, February,

577
00:35:32,988 --> 00:35:34,988
5th of February, and then 30th of June.

578
00:35:35,128 --> 00:35:36,968
Both of those events, everyone just goes, I'm done.

579
00:35:37,088 --> 00:35:37,368
I'm out.

580
00:35:37,508 --> 00:35:38,088
Can't do it anymore.

581
00:35:38,228 --> 00:35:38,508
It's over.

582
00:35:38,968 --> 00:35:39,448
See you later.

583
00:35:39,928 --> 00:35:41,688
Why are they anchored to a certain price that's lower?

584
00:35:42,128 --> 00:35:45,128
I think just the beatings get worse and worse and worse until morale improves.

585
00:35:46,068 --> 00:35:47,988
I have literally watched this.

586
00:35:48,148 --> 00:35:49,548
One of my favorite things to look at

587
00:35:49,548 --> 00:35:51,088
has been a heat map of price mentions.

588
00:35:51,328 --> 00:35:53,508
So again, tons of language data for Bitcoiners.

589
00:35:54,008 --> 00:35:54,788
And I have it on a heat map

590
00:35:54,788 --> 00:35:56,868
so you can see what levels have been talked about.

591
00:35:57,828 --> 00:35:59,088
100K is a crazy one.

592
00:35:59,148 --> 00:36:00,768
There's like a giant line across the thing

593
00:36:00,768 --> 00:36:02,268
where people are talking about that way up high.

594
00:36:02,328 --> 00:36:04,228
There's a million people still talk about consistently.

595
00:36:04,748 --> 00:36:06,548
But what is so consistently striking

596
00:36:06,548 --> 00:36:10,168
is that you'll watch the 58K dip.

597
00:36:10,468 --> 00:36:12,448
There becomes like a flash of a line,

598
00:36:12,448 --> 00:36:14,808
like a line just gets red hot about 40K

599
00:36:14,808 --> 00:36:18,408
because people like start they were anchored at this other level they were talking about 50k

600
00:36:18,408 --> 00:36:24,568
but they moved down 10 grand to 40k now despite being so confident about 50k just a week beforehand

601
00:36:24,568 --> 00:36:28,988
that happens consistently and happens both to the upside and the downside where people start to

602
00:36:28,988 --> 00:36:32,728
adjust and you can see the crowd change and adjust how they think about price levels and it's so

603
00:36:32,728 --> 00:36:37,388
interesting and i think like the more you look at this kind of work the more you analyze sentiment

604
00:36:37,388 --> 00:36:42,588
you realize like just kind of counter trading what the crowd is thinking doing the opposite

605
00:36:42,588 --> 00:36:45,228
thinking inversely from the crowd is almost the whole game.

606
00:36:45,568 --> 00:36:46,588
It's a huge part of it.

607
00:36:46,908 --> 00:36:50,548
It's also, I've made this analogy many times to like meditation,

608
00:36:50,968 --> 00:36:53,708
where like one of the ideas behind why people meditate at all

609
00:36:53,708 --> 00:36:55,108
is to like understand your thinking better.

610
00:36:55,668 --> 00:36:57,368
And I think like understanding this data

611
00:36:57,368 --> 00:36:59,768
and seeing where the crowd is at mentally, so to speak,

612
00:36:59,808 --> 00:37:01,168
where the crowd psychology is,

613
00:37:01,708 --> 00:37:03,188
like really lets you ground yourself.

614
00:37:03,288 --> 00:37:04,428
I'm like, okay, here's where I'm at.

615
00:37:04,848 --> 00:37:05,788
The crowd's really angry.

616
00:37:06,048 --> 00:37:07,488
I'm kind of angry too, honestly.

617
00:37:07,708 --> 00:37:09,088
Like the Bitcoin didn't do what I wanted to,

618
00:37:09,088 --> 00:37:14,968
but like realize like not don't get too poisoned by these thoughts don't get too influenced by the

619
00:37:14,968 --> 00:37:19,408
crowd stay a little bit more level stay a little more optimistic when people are pissed off and

620
00:37:19,408 --> 00:37:22,948
vice versa when things get a little bit more euphoric you that's kind of your cue to be a

621
00:37:22,948 --> 00:37:27,688
little bit more muted to stay a little bit more close to your baseline uh just that alone has been

622
00:37:27,688 --> 00:37:32,368
one of the most useful things of this uh sentiment data for me personally well it's hugely important

623
00:37:32,368 --> 00:37:38,908
being able to set like i actually found in the at the top um so around october certainly i'd

624
00:37:38,908 --> 00:37:43,648
cleared my head by november um but through october and i've spoken and written about this i should

625
00:37:43,648 --> 00:37:47,728
have been more confident that like the bear case was more resilient like i was certainly discussing

626
00:37:47,728 --> 00:37:52,068
it but i don't think i was i was confidently pointing it out and one of the reasons not that

627
00:37:52,068 --> 00:37:57,268
there's any you know aside from my my getting that part wrong um you know i've my son's brand

628
00:37:57,268 --> 00:38:00,588
new right so i've got a new thing i'm trying to work out what the hell i do with this um and

629
00:38:00,588 --> 00:38:04,348
because of that i'm short on time i'm short on sleep i'm short on everything uh so then i was

630
00:38:04,348 --> 00:38:09,988
like okay let me just go and like check twitter and that's one big mistake big mistake every time

631
00:38:09,988 --> 00:38:16,188
when i look back at my own analysis and i've made my biggest mistakes in like getting my calls wrong

632
00:38:16,188 --> 00:38:20,648
uh it was always been because and not because anyone else can't write about this stuff but i

633
00:38:20,648 --> 00:38:26,628
went looking for other people's ideas to supplement my analysis and what i should have done is trusted

634
00:38:26,628 --> 00:38:31,548
the piece that i wrote on the 16th of october and which is called on the casper i drew a

635
00:38:31,548 --> 00:38:33,628
fucking line that said, guys, I think we're going lower.

636
00:38:33,748 --> 00:38:35,468
There's a bunch of things that have cracked and broken

637
00:38:35,468 --> 00:38:36,388
and like it doesn't look good.

638
00:38:36,748 --> 00:38:38,488
I should have stuck with that piece

639
00:38:38,488 --> 00:38:42,068
because that was me using the data to observe and say,

640
00:38:42,128 --> 00:38:45,108
hey, I think we're in trouble here.

641
00:38:45,488 --> 00:38:47,008
We're not in a bear yet,

642
00:38:47,008 --> 00:38:48,928
but the more of these levels we break,

643
00:38:48,988 --> 00:38:49,728
the more that happens.

644
00:38:50,308 --> 00:38:51,788
Now, obviously, as we started falling,

645
00:38:51,908 --> 00:38:52,608
it was like, all right, guys,

646
00:38:52,668 --> 00:38:54,008
the odds are starting to increase.

647
00:38:54,108 --> 00:38:55,188
Now it's looking pretty grim,

648
00:38:55,708 --> 00:38:58,708
but I went looking for other people's insights

649
00:38:58,708 --> 00:38:59,748
and what I should have done

650
00:38:59,748 --> 00:39:01,628
has just trusted my own work.

651
00:39:02,168 --> 00:39:03,428
That was a mistake that I made

652
00:39:03,428 --> 00:39:04,128
and I won't do it again.

653
00:39:04,248 --> 00:39:05,448
So it's one of those games

654
00:39:05,448 --> 00:39:07,008
where like you have to trust

655
00:39:07,008 --> 00:39:08,688
your own thinking

656
00:39:08,688 --> 00:39:09,948
and your own process

657
00:39:09,948 --> 00:39:11,508
because if you go out there

658
00:39:11,508 --> 00:39:12,228
and by the way,

659
00:39:12,288 --> 00:39:13,068
there's obviously gurus

660
00:39:13,068 --> 00:39:13,848
and people you can look at

661
00:39:13,848 --> 00:39:14,648
in all sorts of things.

662
00:39:14,688 --> 00:39:15,328
It's not saying that you have

663
00:39:15,328 --> 00:39:16,468
to do everything yourself, right?

664
00:39:16,548 --> 00:39:17,748
Literally my whole business model

665
00:39:17,748 --> 00:39:18,888
is people don't want to do what I do

666
00:39:18,888 --> 00:39:19,608
and I do it for them.

667
00:39:20,368 --> 00:39:23,048
However, part of my edge

668
00:39:23,048 --> 00:39:23,968
is that I've spent enough time

669
00:39:23,968 --> 00:39:24,448
with my data.

670
00:39:24,548 --> 00:39:25,808
I don't need other inputs

671
00:39:25,808 --> 00:39:27,148
because I have my inputs.

672
00:39:27,248 --> 00:39:28,168
I know my system.

673
00:39:28,848 --> 00:39:31,588
It's my job to go and track other things that are, you know, macro.

674
00:39:32,008 --> 00:39:36,828
I'm a macro tourist, but I rely on other people to help distill the information for me because

675
00:39:36,828 --> 00:39:38,428
I've got my own Bitcoin thing I'm doing.

676
00:39:39,628 --> 00:39:40,908
Well, you know, it's so interesting.

677
00:39:41,008 --> 00:39:44,988
As you were saying that, I was just thinking like, you went to Twitter X and it's like

678
00:39:44,988 --> 00:39:48,668
that's something that like dilutes your own data set, right?

679
00:39:48,668 --> 00:39:51,248
Because it's adding some impurities into what you do on chain.

680
00:39:51,608 --> 00:39:54,708
But I'm just thinking about the juxtaposition of that where it's like Michael is like, he's

681
00:39:54,708 --> 00:40:00,148
like he's he's distilling that that whole corpus of of it you know that that slop of information

682
00:40:00,148 --> 00:40:06,948
from there which is just so fascinating to me and i yeah like again why this data works i think so

683
00:40:06,948 --> 00:40:12,208
well in tandem is because they each sort of explain a different part and i think michael

684
00:40:12,208 --> 00:40:16,168
what you're able to do is like because you're very much looking at like this this meta layer

685
00:40:16,168 --> 00:40:20,788
right you're you're not you're not so much getting swayed by the individual although i know you do

686
00:40:20,788 --> 00:40:26,108
like track certain, I think like key individuals that happen to be very like high, high signal.

687
00:40:26,548 --> 00:40:30,868
And I did want to ask on that. I know you mentioned some last time you even mentioned

688
00:40:30,868 --> 00:40:34,748
certain counter indicators, or I guess however you want to look at an indicator counter indicator,

689
00:40:34,748 --> 00:40:39,848
like Peter Schiff or something, are there new people you can name them or not that you've

690
00:40:39,848 --> 00:40:46,608
started to look at that are interesting supplements to your data set from an individual basis versus

691
00:40:46,608 --> 00:40:50,768
from a very high-level 50,000-foot view

692
00:40:50,768 --> 00:40:52,908
looking at the whole motion of the ocean

693
00:40:52,908 --> 00:40:54,328
versus the individual wave?

694
00:40:55,688 --> 00:40:56,788
So when I first started this work,

695
00:40:56,828 --> 00:40:58,148
one of the very first things I was sharing

696
00:40:58,148 --> 00:40:59,388
was a lot of individual data.

697
00:40:59,568 --> 00:41:00,788
I did a deep dive into Peter Schiff.

698
00:41:00,948 --> 00:41:02,968
Michael Saylor was the first one I did after myself

699
00:41:02,968 --> 00:41:05,008
because I wanted to see how I looked historically

700
00:41:05,008 --> 00:41:05,968
because I knew myself,

701
00:41:06,048 --> 00:41:07,028
and I wanted to see if this mapped

702
00:41:07,028 --> 00:41:08,788
onto other people potentially.

703
00:41:09,208 --> 00:41:10,828
I have really gotten away from that,

704
00:41:10,908 --> 00:41:11,828
not because it doesn't work,

705
00:41:11,888 --> 00:41:14,008
but because there's so much variability in individuals.

706
00:41:14,668 --> 00:41:15,728
I had a child.

707
00:41:15,728 --> 00:41:19,728
you can literally probably see in my data like i'm a little bit different in how i'm communicating

708
00:41:19,728 --> 00:41:23,648
around those time periods so you mentioned like the wisdom of crowds and like how crowds can be

709
00:41:23,648 --> 00:41:29,168
bad but like if you combine people together you eliminate a lot of that noise so there's lots of

710
00:41:29,168 --> 00:41:32,508
individuals that are all having individual life events there's crazy stuff going on there's wild

711
00:41:32,508 --> 00:41:38,668
amounts of noise but if you combine them together and they're all relating and talking about bitcoin

712
00:41:38,668 --> 00:41:43,048
you kind of like actually get the core underlying emotion of the crowd which is why i do stuff in

713
00:41:43,048 --> 00:41:46,788
that manner. The thing I do do a lot of that has been one of the most interesting things to me

714
00:41:46,788 --> 00:41:51,888
personally is cohorting people. I alluded to this with the traders where I can look at all of Bitcoin.

715
00:41:52,188 --> 00:41:55,168
That's probably the most interesting thing that's by far where I've spent the most time.

716
00:41:55,768 --> 00:41:59,608
But I can also do things like applying every single one of these methodologies to MSTR

717
00:41:59,608 --> 00:42:03,448
shareholders who are more convicted than Bitcoiners and have been for months now,

718
00:42:03,508 --> 00:42:05,928
which is like an interesting dynamic and looking at some of those relationships.

719
00:42:06,308 --> 00:42:11,348
I can do things like see like how OGs are relating to plebs, for example.

720
00:42:11,348 --> 00:42:16,728
I can look at what the most optimistic 20% of Bitcoiners are talking about comparing that to

721
00:42:16,728 --> 00:42:21,148
the least 20% most pessimistic Bitcoiners. That cohorting thing is where I've actually spent a

722
00:42:21,148 --> 00:42:25,528
lot more time in the research because it kind of gives you cues on like these people sort of lead

723
00:42:25,528 --> 00:42:30,068
on this kind of thing. Like the OGs, for example, are way more interested in the AI narrative right

724
00:42:30,068 --> 00:42:34,468
now. And the plebs don't really care nearly as much. Like those sorts of things have been really

725
00:42:34,468 --> 00:42:38,868
fascinating to me. And they're kind of like where the beginning of like narratives start to form is

726
00:42:38,868 --> 00:42:42,468
like in the differences between the two groups you can kind of tease those out through the

727
00:42:42,468 --> 00:42:47,248
cohorting i was going to say almost exactly the same thing when it comes to like individuals

728
00:42:47,248 --> 00:42:51,328
um individual this is the same in on-chain data you if you look at and that's why i say don't

729
00:42:51,328 --> 00:42:57,408
watch kids because the problem is there's like you know 2 000 whales is it an exchange is it a

730
00:42:57,408 --> 00:43:01,068
whale is it actually a whale have they broken up their coins into many utxos do you know what

731
00:43:01,068 --> 00:43:06,728
you're talking about probably not there's so much noise around is it a deposit to an exchange which

732
00:43:06,728 --> 00:43:09,308
is a sale or is it some dude buying?

733
00:43:09,588 --> 00:43:11,548
Because they're at two opposite ends of the spectrum.

734
00:43:12,208 --> 00:43:14,768
So on the individual basis, noise.

735
00:43:15,508 --> 00:43:20,388
On an individual, there is going to be some dude who decides it's time for me to do UTXO

736
00:43:20,388 --> 00:43:22,288
consolidation on this particular day.

737
00:43:22,428 --> 00:43:24,988
And for us, it's going to look like, oh, realize profit, realize loss.

738
00:43:25,808 --> 00:43:29,268
Unless you're one of those whales, in which case we generally can identify like a big

739
00:43:29,268 --> 00:43:33,648
exchange movement or something like that, it just fades into the background noise.

740
00:43:33,648 --> 00:43:40,048
But what tends to happen is in the bull, those OGs start to bring their coins back to life.

741
00:43:40,128 --> 00:43:46,048
You see old coins locking in large profits, and they all do it in fairly concentrated periods of time.

742
00:43:46,168 --> 00:43:50,828
So that is a extension away from the noisy median.

743
00:43:50,988 --> 00:43:52,548
This is what statistics are so beautiful for.

744
00:43:52,988 --> 00:43:53,208
Right.

745
00:43:53,288 --> 00:43:54,768
There's always background noise.

746
00:43:54,888 --> 00:43:56,988
So just accepting that there's always background noise.

747
00:43:57,528 --> 00:43:59,548
That's your like base level.

748
00:43:59,548 --> 00:44:13,151
show me when the signal bounces above the median or extends significantly away from the mean whatever it is Try to and this is what a lot of people miss It like but yes there noise in all of this data And the more individual you get the more it is

749
00:44:13,391 --> 00:44:17,971
But once you zoom out and look at a big system, a big complex system at a statistical standpoint

750
00:44:17,971 --> 00:44:22,491
in aggregate, your signal really starts to come out because people do the same thing

751
00:44:22,491 --> 00:44:23,191
at the same time.

752
00:44:23,251 --> 00:44:25,631
It's that herd mentality and cohorts.

753
00:44:26,051 --> 00:44:28,111
I mean, in the on-chain world, it's so powerful.

754
00:44:28,591 --> 00:44:30,111
Just understanding short-term, long-term.

755
00:44:30,611 --> 00:44:32,271
People love to argue over like,

756
00:44:32,331 --> 00:44:33,731
oh, short-term holders, long-term holders.

757
00:44:34,211 --> 00:44:35,671
Surely it's got to be like a year

758
00:44:35,671 --> 00:44:36,831
because otherwise it's not long-term.

759
00:44:36,911 --> 00:44:37,991
Or a long-term holder is only someone

760
00:44:37,991 --> 00:44:39,171
who's held for like five decades.

761
00:44:39,531 --> 00:44:40,811
And like they've got their own opinion

762
00:44:40,811 --> 00:44:41,931
about what the thing is.

763
00:44:41,971 --> 00:44:43,211
But then if you look at the statistics,

764
00:44:43,771 --> 00:44:45,131
there's a beautiful power law.

765
00:44:45,171 --> 00:44:46,891
And I replicated this on my node the other day.

766
00:44:47,351 --> 00:44:48,891
There's a beautiful power law

767
00:44:48,891 --> 00:44:51,331
between how long a coin's been held

768
00:44:51,331 --> 00:44:53,651
and the probability of it being spent.

769
00:44:53,971 --> 00:44:57,331
So in other words, once a coin is twice as old,

770
00:44:57,331 --> 00:44:59,831
it is 10 times less likely to get spent, right?

771
00:44:59,891 --> 00:45:01,331
So every time it gets older,

772
00:45:01,471 --> 00:45:03,391
it gets much less likely to be spent.

773
00:45:03,971 --> 00:45:07,551
Now there is a power law for that first five, six months.

774
00:45:07,671 --> 00:45:08,431
It's very clear.

775
00:45:08,851 --> 00:45:10,211
Then you get a bit of deviation

776
00:45:10,211 --> 00:45:12,391
in around the one to four year period.

777
00:45:12,551 --> 00:45:14,731
This is like the transition into long-term holder.

778
00:45:15,231 --> 00:45:18,071
And then there's another one over at the four year plus.

779
00:45:18,151 --> 00:45:19,371
So call them like long-term holder,

780
00:45:19,531 --> 00:45:20,431
ultra long-term holder.

781
00:45:20,931 --> 00:45:22,171
But the most important thing is that

782
00:45:22,171 --> 00:45:23,671
that five month threshold,

783
00:45:24,031 --> 00:45:25,851
whether you want to argue about taxes

784
00:45:25,851 --> 00:45:29,411
or one-year capital gains or any other mechanic you want,

785
00:45:29,951 --> 00:45:32,111
something happens around the five to six months

786
00:45:32,111 --> 00:45:34,651
where it is just distinctly different, right?

787
00:45:34,691 --> 00:45:37,631
So there is that first early part of the curve.

788
00:45:37,791 --> 00:45:39,611
And the way I'm describing it,

789
00:45:40,031 --> 00:45:41,551
once a coin gets to five months,

790
00:45:41,671 --> 00:45:43,231
the odds are it's going to become a one-year

791
00:45:43,231 --> 00:45:45,031
and a five-year and a 10-year coin, right?

792
00:45:45,051 --> 00:45:46,331
Once it gets to that threshold,

793
00:45:46,451 --> 00:45:49,931
it's more likely to behave like a long-term holder.

794
00:45:50,291 --> 00:45:51,351
That's the whole dynamic.

795
00:45:51,351 --> 00:45:54,811
So looking at these cohorts is just super, super powerful.

796
00:45:54,811 --> 00:45:57,331
for the short-term holders in particular,

797
00:45:58,071 --> 00:45:59,391
we generally see long-term holders

798
00:45:59,391 --> 00:46:00,491
sell tops and buy bottoms.

799
00:46:00,711 --> 00:46:01,811
They also capitulate bottoms.

800
00:46:01,911 --> 00:46:02,571
People who buy,

801
00:46:03,011 --> 00:46:04,131
they survive the whole bear

802
00:46:04,131 --> 00:46:05,411
and then they sell it all on the last day.

803
00:46:05,471 --> 00:46:06,951
They tend to get to long-term holder status.

804
00:46:07,591 --> 00:46:10,211
So long-term holders are very active at the extremes,

805
00:46:10,531 --> 00:46:12,471
but short-term holders define everything

806
00:46:12,471 --> 00:46:13,671
that goes on in between.

807
00:46:13,831 --> 00:46:15,251
And it's just like ball of hot money

808
00:46:15,251 --> 00:46:16,791
at the start of a bull.

809
00:46:16,951 --> 00:46:18,671
It's actually bear market survivors,

810
00:46:18,911 --> 00:46:19,331
smart money.

811
00:46:19,331 --> 00:46:20,831
Right now we're in that like short-term holders

812
00:46:20,831 --> 00:46:21,711
are actually smart money.

813
00:46:22,051 --> 00:46:23,131
In six months time,

814
00:46:23,211 --> 00:46:24,351
they're going to be speculators, right?

815
00:46:24,351 --> 00:46:26,431
and starts to switch between who these people are.

816
00:46:28,611 --> 00:46:32,751
I'm curious, Michael, if that, like, the corollary there for you,

817
00:46:33,151 --> 00:46:36,331
is that like the trader cohort that you're looking at?

818
00:46:36,331 --> 00:46:38,291
I don't know if that's actually a different cohort

819
00:46:38,291 --> 00:46:41,451
than, like, what Check would consider as short-term holders.

820
00:46:41,591 --> 00:46:43,251
I mean, I'm sure, but, like, from your perspective,

821
00:46:43,391 --> 00:46:46,471
do you try and, like, map some of the things?

822
00:46:46,591 --> 00:46:48,571
I know you guys have obviously, like, worked together before in this stuff,

823
00:46:49,091 --> 00:46:51,631
but do you try to map some of your cohorts

824
00:46:51,631 --> 00:46:56,191
to the specific sort of on-chain groups that Cech has identified?

825
00:46:58,071 --> 00:47:01,151
It's endlessly interesting to me how many commonalities there are.

826
00:47:01,271 --> 00:47:04,631
Something else I meant to mention earlier is that it is so interesting

827
00:47:04,631 --> 00:47:07,091
that both of us are not analyzing price action.

828
00:47:07,631 --> 00:47:11,891
We're both analyzing sentiment and human psychology around it.

829
00:47:11,951 --> 00:47:14,911
Not a single thing I look at, not a single metric I show about excitement

830
00:47:14,911 --> 00:47:16,371
and conviction takes price in it all.

831
00:47:16,671 --> 00:47:18,031
There's no financial data whatsoever.

832
00:47:18,611 --> 00:47:20,151
It's tightly related to price.

833
00:47:20,151 --> 00:47:23,151
You can see it directly track the Bitcoin price with the heat map.

834
00:47:23,271 --> 00:47:27,251
You see it exactly trend with the Bitcoin price, but I don't track any financial information,

835
00:47:27,371 --> 00:47:29,531
which is like something that's so interesting to me.

836
00:47:29,591 --> 00:47:34,211
And like one of the reasons I like the on-chain stuff so much and was so inspired by that.

837
00:47:34,951 --> 00:47:39,371
To continue on with that, though, like I really wanted to emulate these same ideas.

838
00:47:39,471 --> 00:47:41,511
That's why I looked at the OGs and versus pubs.

839
00:47:41,511 --> 00:47:43,231
That was what we talked about previously.

840
00:47:43,491 --> 00:47:47,571
The OGs I still track closely and continue to.

841
00:47:47,571 --> 00:47:52,931
But what I was thinking about when James was talking about the short-term holders and people arguing about the five months thing,

842
00:47:53,051 --> 00:48:00,271
I decided that I was going to label OGs as people that were around before the 2017 bowl, before the euphoria, so 10 years.

843
00:48:00,831 --> 00:48:02,891
I had a bunch of people yell at me, like, that's not an OG.

844
00:48:03,051 --> 00:48:03,751
They should have been this thing.

845
00:48:03,771 --> 00:48:04,651
You should have measured this thing.

846
00:48:04,931 --> 00:48:11,971
I did not do the depth of statistical analysis that James has, but there's very clear different groups that entered after that,

847
00:48:12,251 --> 00:48:14,251
and they kind of talk about different things, those sorts of things.

848
00:48:14,251 --> 00:48:16,991
So it's just so funny how that also is a commonality there.

849
00:48:17,571 --> 00:48:23,111
I think that's right, by the way, because 2017, the top of that bull, that's when I first bought.

850
00:48:23,451 --> 00:48:24,891
That's when it became a household name.

851
00:48:24,891 --> 00:48:32,691
So from that point on, people who were around before that, and especially, honestly, the only definition I have for OG,

852
00:48:33,271 --> 00:48:42,971
if you survive the 2015 bear market, you get a label and a trophy, because that right there was a bear market that I don't know how you held through that.

853
00:48:43,051 --> 00:48:44,891
That is an animal of a whole different proportion.

854
00:48:44,891 --> 00:48:51,671
you know down 90 stayed there for a year horrible horrible stuff so uh yeah i think the 2017 is a

855
00:48:51,671 --> 00:49:00,951
very very decent cut off michael do you look at uh do you look at bitcoin fud as its own sort of

856
00:49:00,951 --> 00:49:06,371
sentiment category like is it like main either mainstream or from you know these particular

857
00:49:06,371 --> 00:49:12,771
cohorts of familiar faces of bitcoin haters and doubters and fudders is that something you look

858
00:49:12,771 --> 00:49:18,451
at as its own sort of category or how, how much do you bring in sort of larger, let's say legacy

859
00:49:18,451 --> 00:49:24,811
media sentiment and FUD into the analysis that you do, or do you try to keep it contained to

860
00:49:24,811 --> 00:49:29,891
more purely individual, but then, you know, uh, obviously grouped individual sentiment,

861
00:49:29,891 --> 00:49:34,531
like on social platforms. There's a lot that I did behind the scenes that I haven't totally

862
00:49:34,531 --> 00:49:38,671
surfaced because I explored a path, wanted to go down this branch, see if there's anything

863
00:49:38,671 --> 00:49:43,651
interesting there. I have an entire cohort that I built out of the broader market. So people that

864
00:49:43,651 --> 00:49:48,591
are like stock accounts, just talking about like the S&P and those sorts of things. I also have

865
00:49:48,591 --> 00:49:53,371
entire cohorts I built for the AI trade, people that are actually building on AI versus people

866
00:49:53,371 --> 00:49:58,031
that are like traders in it, like the Mike Elfords of the world, people in like Iron and the other

867
00:49:58,031 --> 00:50:02,291
data centers. And I like to contrast these to Bitcoin because I can use the same cohort analysis

868
00:50:02,291 --> 00:50:06,531
to see like, do people in the AI trade, is their sentiment differing than Bitcoin? How does that

869
00:50:06,531 --> 00:50:11,931
interrelate. So I did a lot of these things. But I did, like I initially mentioned, like,

870
00:50:11,971 --> 00:50:16,111
look at the Peter Schiff's. And mostly it was just novelty. The more I looked at it,

871
00:50:16,131 --> 00:50:20,611
the more like just finding people that are pure anti-signals is pretty fun for the hosts and the

872
00:50:20,611 --> 00:50:24,991
lols. But it's less signal than people that are actually emotionally attached to Bitcoin.

873
00:50:25,711 --> 00:50:31,271
So the entire thing of my work is like rooted in an individual, looking at their baseline

874
00:50:31,271 --> 00:50:33,091
and how they talk over time.

875
00:50:33,291 --> 00:50:35,691
So if they don't care about Bitcoin at all,

876
00:50:35,811 --> 00:50:37,991
and then they tweet something mean about Bitcoin,

877
00:50:38,071 --> 00:50:39,311
it's like just not that high signal.

878
00:50:39,411 --> 00:50:40,191
You can see in the group,

879
00:50:40,251 --> 00:50:41,251
like when their interest will be.

880
00:50:41,611 --> 00:50:43,571
I'm sure it'll track with like after dips,

881
00:50:43,931 --> 00:50:45,391
like at least some Peter Schiff

882
00:50:45,391 --> 00:50:46,651
definitely talked about stuff a lot.

883
00:50:47,291 --> 00:50:49,671
But for these broader indexes,

884
00:50:49,711 --> 00:50:50,371
and like we were talking about,

885
00:50:50,431 --> 00:50:51,831
like forward predicting stuff,

886
00:50:52,011 --> 00:50:53,431
it's way more interesting

887
00:50:53,431 --> 00:50:54,631
and way more high signal

888
00:50:54,631 --> 00:50:56,351
to actually look at the people that we know

889
00:50:56,351 --> 00:50:58,771
are in the market buying Bitcoin consistently,

890
00:50:59,211 --> 00:51:00,651
the traders talking about Bitcoin,

891
00:51:00,651 --> 00:51:03,831
because their entire online presence is around Bitcoin

892
00:51:03,831 --> 00:51:05,931
and their conversations around Bitcoin.

893
00:51:06,071 --> 00:51:09,871
So it's all sort of like much more consistent

894
00:51:09,871 --> 00:51:11,811
and yeah, just higher signal generally.

895
00:51:12,951 --> 00:51:13,231
Makes sense.

896
00:51:14,751 --> 00:51:17,391
Again, I know I've said this like 10 times, right?

897
00:51:17,451 --> 00:51:19,631
It's all just so fascinating seeing these pieces come together.

898
00:51:19,771 --> 00:51:21,411
And I talked to guys like you

899
00:51:21,411 --> 00:51:23,111
and especially talking to you guys like together,

900
00:51:24,151 --> 00:51:28,931
it seems that like it just further reinforces my bullishness

901
00:51:28,931 --> 00:51:34,831
about where we're at right now. I am curious though, if you guys think kind of on a like,

902
00:51:35,171 --> 00:51:39,091
and this is, I don't know if you have the data to relate to this or just, this is just more of like

903
00:51:39,091 --> 00:51:45,691
a gut check for you guys. But as we look sort of more towards the distant future, I'm very curious

904
00:51:45,691 --> 00:51:50,971
about your thoughts on the diminishing returns idea, right? That people are going to continue

905
00:51:50,971 --> 00:51:55,451
kind of being more disappointed and disappointed about the potential returns they could get from,

906
00:51:55,451 --> 00:52:00,211
let's say and i think people tend to measure bitcoin returns from like top to top which i've

907
00:52:00,211 --> 00:52:04,871
never found to be particularly interesting i think bottom of bear to top of bull is a more

908
00:52:04,871 --> 00:52:09,691
interest that's more interesting i think that's more signal but i'm curious where you guys stand

909
00:52:09,691 --> 00:52:12,911
on that and yeah maybe check you can lead this off because i know you've got you've got some

910
00:52:12,911 --> 00:52:17,711
thoughts on this no i'm very much in the bottom to bottom because if you think about bottom to

911
00:52:17,711 --> 00:52:22,191
bottom bottom to bottom that's the in my opinion the correct way to think about it and the reason

912
00:52:22,191 --> 00:52:28,931
is that in a bull, you have a ton of unsustainable euphoric nonsense. So at the bottom of a bear,

913
00:52:29,051 --> 00:52:34,811
you have what is the flaw? What is the final clearing price where there are no sellers left?

914
00:52:35,171 --> 00:52:41,331
That is your real growth rate. And the other thing, again, I totally agree that people who

915
00:52:41,331 --> 00:52:48,551
bought at 58K in 2021 and then complain about their returns at 58K in 2026, I have a strong

916
00:52:48,551 --> 00:53:00,395
suggestion for you have you tried buying the bottom Because that would genuinely really improve your overall performance because if you buying the bottom and then comparing it to the next bottom which would also be 58k but

917
00:53:00,395 --> 00:53:06,155
the previous bottom was 15 suddenly the numbers make sense it's like an inflation rate right if

918
00:53:06,155 --> 00:53:11,834
you whatever your inflation rate is different to mine depends on what i buy if your decisions to

919
00:53:11,834 --> 00:53:16,874
buy high and then complain about it when it's low that's your decision but that's not the decision

920
00:53:16,874 --> 00:53:19,395
that is probably going to get you ahead in the overall game of things.

921
00:53:19,575 --> 00:53:23,035
So I think low to low is the correct way to think about it

922
00:53:23,035 --> 00:53:25,874
because you are talking about the least overheated,

923
00:53:26,055 --> 00:53:31,175
least ridiculous, most sustainable concrete floor to concrete floor.

924
00:53:32,135 --> 00:53:34,995
You can compare the height of the steeple,

925
00:53:35,075 --> 00:53:36,195
but if it's built with toothpicks

926
00:53:36,195 --> 00:53:37,895
and the next breeze is going to come and knock it over,

927
00:53:37,995 --> 00:53:39,855
well, did it really make sense to compare and be like,

928
00:53:39,895 --> 00:53:41,275
look, we're the tallest building in the world,

929
00:53:41,315 --> 00:53:42,255
and then down it comes?

930
00:53:42,714 --> 00:53:43,374
No, of course not.

931
00:53:43,435 --> 00:53:46,294
It makes sense to be like, well, how many buildings are still there?

932
00:53:46,294 --> 00:53:47,914
over the long period of time.

933
00:53:47,935 --> 00:53:49,294
That's your correct anchoring point.

934
00:53:49,595 --> 00:53:52,175
So yeah, I'm a big fan of,

935
00:53:52,294 --> 00:53:54,035
I mean, honestly, when you look at like the CAGA,

936
00:53:54,495 --> 00:53:56,095
the growth rate of the floors,

937
00:53:56,675 --> 00:53:59,454
it's 30, 35% on the 200 week moving average.

938
00:53:59,834 --> 00:54:01,735
So, you know, this is like the base level

939
00:54:01,735 --> 00:54:04,475
that we've hit in previous bear cycles growing at 35%.

940
00:54:04,475 --> 00:54:06,695
Yes, if you're measuring top to top,

941
00:54:06,855 --> 00:54:08,055
unsustainable to unsustainable.

942
00:54:08,095 --> 00:54:10,075
And by the way, what was unsustainable in 2021

943
00:54:10,075 --> 00:54:14,374
is now bedrock bottom in 2026, right?

944
00:54:14,435 --> 00:54:15,815
Two completely different things.

945
00:54:15,815 --> 00:54:19,615
So it really is a bit of an apples and oranges type equation there.

946
00:54:20,755 --> 00:54:22,435
Yeah, CAGR depends on when you buy.

947
00:54:23,454 --> 00:54:25,555
You're doing the four-year CAGR.

948
00:54:25,675 --> 00:54:29,095
I use this as an example because I did a piece called Correcting CAGR,

949
00:54:29,995 --> 00:54:31,475
which is compounding your growth rate.

950
00:54:32,155 --> 00:54:34,575
And I was basically showing this is when we were in the peak apathy phase

951
00:54:34,575 --> 00:54:35,615
and we're chopping sideways.

952
00:54:35,914 --> 00:54:37,115
We're in 65K forever.

953
00:54:38,075 --> 00:54:40,635
And yet the four-year CAGR was going up.

954
00:54:41,015 --> 00:54:41,575
Hang on a second.

955
00:54:41,655 --> 00:54:43,334
How the hell can we be in a bear market?

956
00:54:43,334 --> 00:54:45,595
Price is going sideways, but the four-year CAGR is going up.

957
00:54:45,815 --> 00:54:51,855
Because it literally, the way CAGR is calculated, you literally measure what happened four years ago between here and there.

958
00:54:52,294 --> 00:54:57,235
And what was happening four years ago, we were falling off as three arrows blew up and Luna blew up.

959
00:54:57,275 --> 00:55:03,155
So we're coming down the mountain on the backside, even though the end point is trading sideways.

960
00:55:03,155 --> 00:55:04,374
So your CAGR goes up.

961
00:55:04,855 --> 00:55:06,714
And it just goes to show that it makes absolutely no sense.

962
00:55:06,815 --> 00:55:09,615
Now, on the diminishing returns thing, first and foremost, we don't know.

963
00:55:09,615 --> 00:55:18,095
But if you run the experiment of diminishing returns forever, eventually Bitcoin goes up $1 and it's like, well, that's it.

964
00:55:18,335 --> 00:55:19,355
Thanks for the bull market, fellows.

965
00:55:19,435 --> 00:55:19,755
It's over.

966
00:55:19,835 --> 00:55:22,015
Because eventually it just compresses until there is nothing left to be.

967
00:55:22,695 --> 00:55:24,255
And at some point it must break.

968
00:55:24,794 --> 00:55:27,035
So that's obviously a very extreme case.

969
00:55:27,175 --> 00:55:31,935
But we bottomed 50%, 55% below the previous high.

970
00:55:33,015 --> 00:55:36,835
Worlds apart from what we did before, 75% is a whole other 50% lower.

971
00:55:37,535 --> 00:55:39,595
Once we break the next all-time high, and we will.

972
00:55:39,615 --> 00:55:44,335
once you break the next all-time high we're above 100k the headlines gonna be going crazy and what

973
00:55:44,335 --> 00:55:50,294
do you blame it on trump stimulus household name no eventually it's like hey people just really

974
00:55:50,294 --> 00:55:54,914
want the orange coin and then it just becomes a normal part of a portfolio i think it goes

975
00:55:54,914 --> 00:56:02,294
gangbusters i think yeah i think diminishing returns is a uh sorry a fleeting thing i just

976
00:56:02,294 --> 00:56:06,555
ran a analysis on dca i wanted to bring it up because like what you just said about like the

977
00:56:06,555 --> 00:56:09,115
buying the bottom, buying the whole bottom that you talk about so frequently.

978
00:56:09,115 --> 00:56:13,675
It's like I cross-referenced DCA to what the average person does,

979
00:56:13,755 --> 00:56:16,755
which is buy during the excitement or buy during the conviction.

980
00:56:17,575 --> 00:56:21,435
It's like if you just held on to your cash reserve and bought when the crowd did,

981
00:56:21,815 --> 00:56:26,194
you underperformed Bitcoin like 15%, 20%, depending on which different emotion it was.

982
00:56:26,855 --> 00:56:28,935
And it was like that's what most people are doing.

983
00:56:29,055 --> 00:56:32,334
And they're looking at that for their DCA or as compared to DCA.

984
00:56:32,435 --> 00:56:34,954
But it was just like I ran a whole bunch of different models,

985
00:56:34,954 --> 00:56:38,635
a whole bunch of different buying strategies based on sentiment that I have. And like just

986
00:56:38,635 --> 00:56:44,595
continually the big takeaway is like systematic buying is so useful. And DCA in general is just

987
00:56:44,595 --> 00:56:49,294
this brilliant strategy that's so hard to overperform because like, because of these things,

988
00:56:49,315 --> 00:56:52,794
because your emotions are telling you to buy precisely when it's the worst time typically.

989
00:56:53,214 --> 00:56:55,914
It was so interesting. And the other thing I want to make sure I mentioned was

990
00:56:55,914 --> 00:57:01,954
this like narrative thing with diminishing returns. I consider this to be really akin to

991
00:57:01,954 --> 00:57:07,895
the four-year cycle thing too where like i studied story a lot i'm really into writing really into

992
00:57:07,895 --> 00:57:13,095
like the crowd psychology through all this work and there's a dynamic here where like once a group

993
00:57:13,095 --> 00:57:17,575
latches onto a story and it becomes the thing that the crowd thinks about this thing it's kind of like

994
00:57:17,575 --> 00:57:21,495
it inevitably must break like there's the four-year cycle over a long enough time horizon

995
00:57:21,495 --> 00:57:26,595
will break when that happens there's likely to be some volatility because people's entire conceptual

996
00:57:26,595 --> 00:57:32,595
framework here fractures in short order and price moves aggressively. The same I feel as though is

997
00:57:32,595 --> 00:57:37,434
likely to happen with diminishing returns, where if we keep going down and we perhaps will have

998
00:57:37,434 --> 00:57:41,255
diminishing returns for a little while here, and that'll continue to be a narrative, eventually it

999
00:57:41,255 --> 00:57:45,495
will not be a narrative anymore. And when that happens, there's a large shift in the way people

1000
00:57:45,495 --> 00:57:49,535
think about Bitcoin. I suspect that to be quite bullish likely when that does happen, but who

1001
00:57:49,535 --> 00:57:56,555
knows when it will. We like stories, don't we? I like your story. You should go read Blood of the

1002
00:57:56,555 --> 00:58:00,995
bourgeoisie. It doesn't matter if you can't spell it. None of us can on the first try,

1003
00:58:01,135 --> 00:58:08,515
unless you're some sort of savant or French. But go check that out. But we love stories, right?

1004
00:58:08,855 --> 00:58:12,175
We love telling ourselves stories. We love telling ourselves stories to make ourselves comfortable.

1005
00:58:12,895 --> 00:58:19,195
And I think especially in markets, and check this is something you've talked about for a long time.

1006
00:58:19,315 --> 00:58:25,075
It's like people have these stories, they really want to stick to them. They really get locked in

1007
00:58:25,075 --> 00:58:32,395
to those stories at times when that story may have been valid for a while, but the problem is

1008
00:58:32,395 --> 00:58:35,755
you get locked into that story. You get locked into that narrative you've sold yourself.

1009
00:58:36,535 --> 00:58:41,694
And whether that's on the upside, whether you're the overconfident bull or the overconfident

1010
00:58:41,694 --> 00:58:48,995
bear, there's a point where you start being wrong. Your story's not right anymore. You have to update

1011
00:58:48,995 --> 00:58:55,794
your models. You have to check your priors. And it seems that, I mean, we've, we've been in one of

1012
00:58:55,794 --> 00:59:01,495
these periods now for, for a while where people have not even Bitcoiners. And I am curious. I mean,

1013
00:59:01,495 --> 00:59:06,595
it's been, it hasn't been the easiest summer for it. It wasn't the easiest summer for Bitcoiners.

1014
00:59:06,695 --> 00:59:11,195
I mean, or early fall either. I mean, check, I know for you, it's flipped, but you know,

1015
00:59:11,435 --> 00:59:16,615
for us here that, that, that aren't, uh, that aren't upside down, I mean, we had massive, uh,

1016
00:59:16,615 --> 00:59:23,555
probably i mean probably the most destructive custody incident ever in terms of hitting the

1017
00:59:23,555 --> 00:59:28,175
people who are who tried to do everything right in terms of the cold card thing right that wasn't

1018
00:59:28,175 --> 00:59:34,055
that wasn't a derivatives exchange blowing up that was like good old-fashioned bread and butter

1019
00:59:34,055 --> 00:59:42,655
self-custody that's rough but the price didn't it wasn't like we cratered you know it was amazing

1020
00:59:42,655 --> 00:59:45,755
I was expecting it to be so much lower on that event.

1021
00:59:45,895 --> 00:59:50,655
And my first pass was like, obviously, cold car can't be very big.

1022
00:59:51,434 --> 00:59:54,794
And I knew it wasn't big, but it was obviously much smaller than even I'd anticipated.

1023
00:59:56,775 --> 00:59:59,475
But also, you're just like, there's no sellers left.

1024
01:00:00,834 --> 01:00:02,075
How much worse can it get?

1025
01:00:02,135 --> 01:00:02,855
There's no sellers left.

1026
01:00:02,934 --> 01:00:06,575
And that event, the only other time I felt like that was when FTX blew up.

1027
01:00:07,155 --> 01:00:08,174
There's like gut-wrenching.

1028
01:00:08,334 --> 01:00:10,655
This is actually really, like, people are really hurt here.

1029
01:00:10,834 --> 01:00:12,194
It's a really bad thing.

1030
01:00:12,655 --> 01:00:13,454
That's the only other.

1031
01:00:13,595 --> 01:00:17,635
And to be honest, I think cold card for me was worse because it was really close to home.

1032
01:00:18,735 --> 01:00:24,275
Two of my mates who I got into Bitcoin had cold cards and what saved them was a passphrase.

1033
01:00:24,635 --> 01:00:30,454
My co-founder Alec, literally the Mark III with the exact firmware where the bug was introduced.

1034
01:00:30,794 --> 01:00:34,334
Literally, his seed was on the top and passphrase.

1035
01:00:34,515 --> 01:00:35,775
The only thing that saved him.

1036
01:00:35,975 --> 01:00:37,975
And that kind of thing hit real close to home.

1037
01:00:38,055 --> 01:00:39,414
I was like, holy shit.

1038
01:00:39,815 --> 01:00:40,355
Not cool.

1039
01:00:40,355 --> 01:00:45,255
um but yeah there's just there was no sellers and i was like after the dust settled you're like

1040
01:00:45,255 --> 01:00:50,895
not to belittle that event but like guys i think i think well it might be in after that

1041
01:00:50,895 --> 01:00:57,655
the other thing is here too and michael i do want to get your your read on how sentiment has evolved

1042
01:00:57,655 --> 01:01:04,155
this summer because that wasn't the only we had a we had a contentious uh you know soft fork where

1043
01:01:04,155 --> 01:01:09,135
there's there's been a lot of stuff that's happened my sense and i have not been in bitcoin i'm not an

1044
01:01:09,135 --> 01:01:11,214
OG by anyone's definition, right?

1045
01:01:11,275 --> 01:01:15,735
Whether, wherever you put the OG timeline, you know, it was 2020 for me, but, but I've

1046
01:01:15,735 --> 01:01:18,675
now, you know, this has been going on six years now in Bitcoin.

1047
01:01:18,675 --> 01:01:20,835
And so I've seen a little bit of the ups and downs, right?

1048
01:01:21,914 --> 01:01:27,815
And what I remember distinctly from, and maybe this was just part of it was the volatility

1049
01:01:27,815 --> 01:01:31,874
of the early COVID period in terms of liquidity that was getting injected in the market.

1050
01:01:32,414 --> 01:01:36,975
People were looking for anywhere to park capital, you know, you buy any, you know, Davey day

1051
01:01:36,975 --> 01:01:49,918
every stock you buy goes up doesn matter you know SPY calls or whatever calls you would make all the time So it was just a wild time But there was a feeling for me then that it was like both positive news and negative news

1052
01:01:49,918 --> 01:01:53,538
seem to have an outsized impact on the price.

1053
01:01:53,538 --> 01:02:00,298
It feels like where we've been for some time now has been even really bad news.

1054
01:02:01,038 --> 01:02:06,878
Really, I mean, self-custody failure at a, you know, a major Bitcoin hardware provider,

1055
01:02:07,038 --> 01:02:07,178
right?

1056
01:02:07,178 --> 01:02:12,358
contentious soft for like things like that. It's just kind of like, eh, but, but same thing to the,

1057
01:02:12,358 --> 01:02:18,478
the positive side too. It's like, Oh, what's a strategy bought, you know, a couple of a few

1058
01:02:18,478 --> 01:02:23,738
billion or, or strategy sold a little bit. It's like, eh, okay. It seems like Bitcoin is,

1059
01:02:24,098 --> 01:02:29,378
is this just a maturity thing where it's like Bitcoin's just shrugging it off? Or is this is,

1060
01:02:29,378 --> 01:02:33,718
you know, it's not necessarily a, I would guess, you know, a liquidity thing because Bitcoin's

1061
01:02:33,718 --> 01:02:39,098
market caps not that much bigger than it was, let's say, at the top of 2021, for example.

1062
01:02:40,038 --> 01:02:43,658
So what is this? And Michael, I don't know if you have something from the sentiment perspective

1063
01:02:43,658 --> 01:02:50,858
that kind of explains this. Are people just not as moved by the news anymore? Whichever side that

1064
01:02:50,858 --> 01:02:54,098
news may land on, is there something else at play here? What's your read on this?

1065
01:02:55,498 --> 01:02:59,838
So slightly different question I'm going to answer, which is about how different the bear

1066
01:02:59,838 --> 01:03:04,058
market is now comparatively to historically because i suspect james might have some more

1067
01:03:04,058 --> 01:03:07,538
articulate thoughts on the direct question but like something that i was so unique in the sentiment

1068
01:03:07,538 --> 01:03:13,258
data that i've explored deeply but i feel like people don't really understand as much is just

1069
01:03:13,258 --> 01:03:18,938
how unique this bear market has been from sentiment perspective if you went through 2022 bear market

1070
01:03:18,938 --> 01:03:24,998
it was there was price like price was bad things were bad right but like there was so much

1071
01:03:24,998 --> 01:03:29,918
camaraderie. Walker, I know you felt this, like, it's the way that it was like, there was negative

1072
01:03:29,918 --> 01:03:34,238
news, negative things happening. But like this ethos of what Bitcoin was was still so sturdy.

1073
01:03:34,898 --> 01:03:38,298
I've studied this from a bunch of different angles. I've actually looked at OGs data because

1074
01:03:38,298 --> 01:03:42,518
I wanted to specifically see since they've been around much longer, how they react in this bear

1075
01:03:42,518 --> 01:03:49,738
market compared to previous ones. And OGs had a lot of engagement through 2022, 2023, like huge

1076
01:03:49,738 --> 01:03:53,838
engagement, even in the bottom of the bear, there was a lot going on. That's not happening right now.

1077
01:03:53,838 --> 01:03:57,278
people are checked out across the board. Like the sailors of the world still get a lot of engagement,

1078
01:03:57,278 --> 01:04:01,178
but in general, like some people that have been around longer on the same posts have lower amounts

1079
01:04:01,178 --> 01:04:05,738
of likes and these kinds of things. In addition to that, there's another dynamic happening that's

1080
01:04:05,738 --> 01:04:09,958
really unique where I wrote a piece a while ago called The Fracturing Ideologies of Bitcoin,

1081
01:04:10,838 --> 01:04:13,938
kind of looking at the different cohorts of Bitcoiners there are, like I've described here.

1082
01:04:14,018 --> 01:04:17,778
One of the ones I haven't even mentioned yet is that there's like Bitcoin capitalists now who are

1083
01:04:17,778 --> 01:04:23,658
the treasury folks, like people that are way more into the, like building the tech on Bitcoin,

1084
01:04:23,658 --> 01:04:28,618
like the wallets, the actual like technology, that kind of thing. And there's people that are

1085
01:04:28,618 --> 01:04:34,918
just like, I run a node. That's it. If you use a Bitcoin any other way, you're like evil. Like,

1086
01:04:35,378 --> 01:04:39,798
I don't mean to like talk too poorly on them, but like there's clearly different groups, right?

1087
01:04:40,338 --> 01:04:43,858
These groups are acting way differently. And during the bear market, there was essentially

1088
01:04:43,858 --> 01:04:46,858
a fracturing between them where they got latched onto totally different narratives.

1089
01:04:47,078 --> 01:04:50,998
Like the Bit110 folks were in their own different world for that. They were blind to the things that

1090
01:04:50,998 --> 01:04:55,238
the treasury folks were talking about completely. And so Bitcoin's really shifted. It's more

1091
01:04:55,238 --> 01:05:00,438
institutionalized now in a lot of ways. So if you like don't, your algorithm keeps you so siloed,

1092
01:05:00,458 --> 01:05:05,198
right? So if you think the BIP 110 is the whole thing, or if you think the treasuries is the whole

1093
01:05:05,198 --> 01:05:07,938
thing, and you don't realize that people are transacting with Bitcoin in the jungle still,

1094
01:05:08,018 --> 01:05:12,178
like you just don't have a good pulse on the whole thing. And this is just a broader topic,

1095
01:05:12,178 --> 01:05:15,378
honestly, even outside of Bitcoin, because our algorithms keep us in this like little isolated

1096
01:05:15,378 --> 01:05:20,818
worlds. But that's been a really core thing that I think was this analysis helped me see

1097
01:05:20,818 --> 01:05:25,498
during this bear market is just like how much more fractured we became sentiment was bad people

1098
01:05:25,498 --> 01:05:29,498
were apathetic there's anger everywhere and there's more infighting and people like branched

1099
01:05:29,498 --> 01:05:34,538
off harder into their own little worlds through this entire time period i think i can add to this

1100
01:05:34,538 --> 01:05:38,318
i'm not even from the data side but just something that i've always had running in the back of my

1101
01:05:38,318 --> 01:05:45,678
mind um based on my statistics walker i'm sure your statistics the average bitcoiner kind of

1102
01:05:45,678 --> 01:05:50,418
looks exactly like the three of us that's like just typical in terms of age in terms of everything

1103
01:05:50,418 --> 01:05:53,438
It just, we literally are the average.

1104
01:05:53,598 --> 01:05:57,818
Now, what has happened in the last, like, let's go back to 2017.

1105
01:05:58,378 --> 01:05:58,978
What was I doing?

1106
01:05:59,098 --> 01:06:03,178
I was probably drinking too much, partying, having a good time, didn't have a family.

1107
01:06:03,418 --> 01:06:04,918
Like, I had a bunch of disposable income.

1108
01:06:06,318 --> 01:06:07,378
What am I doing now?

1109
01:06:07,458 --> 01:06:08,718
I've got a son.

1110
01:06:08,898 --> 01:06:10,238
You know, I got to look at him, buy a house.

1111
01:06:10,418 --> 01:06:12,518
Like, life has changed, right?

1112
01:06:12,538 --> 01:06:13,958
A lot happens in 10 years.

1113
01:06:14,318 --> 01:06:15,938
So, a lot can change.

1114
01:06:15,978 --> 01:06:18,458
And I think that there's this, like, maturation that's occurred.

1115
01:06:18,458 --> 01:06:22,278
I spend considerably less time on Twitter these days because first of all, I find the

1116
01:06:22,278 --> 01:06:23,298
algorithms just cooked.

1117
01:06:24,038 --> 01:06:25,158
And I just, you know, that's a whole thing.

1118
01:06:25,238 --> 01:06:30,418
But I find that like I've actually decided to dedicate my time to just doing the newsletter

1119
01:06:30,418 --> 01:06:31,398
really, really well, right?

1120
01:06:31,478 --> 01:06:36,778
Building my charts, doing my analysis, focusing on my business, my product, my insights, right?

1121
01:06:36,838 --> 01:06:40,858
So spending far less, I should be tweeting a lot more because it'd be great for just

1122
01:06:40,858 --> 01:06:45,318
like people finding me, but I just am focusing more on what, you know, this part of not having

1123
01:06:45,318 --> 01:06:45,818
enough time.

1124
01:06:45,818 --> 01:06:48,718
I've got to prioritize what actually drives the needle.

1125
01:06:49,178 --> 01:06:53,078
Now, through this bear market, I was very surprised with the absolute bottom.

1126
01:06:54,018 --> 01:06:57,778
My team and I made the decision that it was the right time to do a survey.

1127
01:06:58,158 --> 01:07:07,878
I want to do a survey, and we do one every quarter, just to find out who are the people who are still reading and watching our newsletter at the absolute ass end of a bear.

1128
01:07:07,958 --> 01:07:10,058
Because they are the people that we want more of you.

1129
01:07:10,178 --> 01:07:13,978
Because you are the kind of people who are going to help us survive long term.

1130
01:07:14,098 --> 01:07:15,198
You are our core audience.

1131
01:07:15,478 --> 01:07:16,538
Help me understand those people.

1132
01:07:16,978 --> 01:07:20,478
And we asked a question that honestly, I did not expect the answer to.

1133
01:07:20,498 --> 01:07:21,978
I'm not going to get the percentages exactly right.

1134
01:07:22,698 --> 01:07:29,878
It was, how has your interest changed in Bitcoin over the course of the last six months or through this bear market?

1135
01:07:29,938 --> 01:07:30,778
I forget the exact wording.

1136
01:07:31,138 --> 01:07:35,058
I was expecting, truthfully, to be like, people are checked out.

1137
01:07:35,498 --> 01:07:40,498
It was like 60%, 70% of people said, I am more interested than I have ever been.

1138
01:07:40,918 --> 01:07:44,718
And I was like, whoa, that was not what I expected at all.

1139
01:07:44,718 --> 01:07:50,038
so my instinct if i kind of put those two narrative arcs together i think that a lot of bitcoin is in

1140
01:07:50,038 --> 01:07:54,858
like my core business model was i know there's a bunch of us who are just really really really

1141
01:07:54,858 --> 01:08:00,158
fucking long this asset it's like our life savings so doesn't it make sense to like understand what

1142
01:08:00,158 --> 01:08:03,378
it's doing just so you can manage your own emotions and all that kind of stuff that's like the whole

1143
01:08:03,378 --> 01:08:09,198
idea and i was like it turns out there's a lot of people who are in the exact same boat as me

1144
01:08:09,198 --> 01:08:14,698
living a very similar life to me in the same stage of life to me and they also don't have time to

1145
01:08:14,698 --> 01:08:21,078
be on twitter and do all these things but they also need to be aware and they value signal and

1146
01:08:21,078 --> 01:08:27,538
quality a lot more than they value like noise and like the excitement stuff we're not out drinking

1147
01:08:27,538 --> 01:08:32,218
and partying anymore we've got more important shit to do in our life and therefore you must

1148
01:08:32,218 --> 01:08:36,918
prioritize and like for me like as a business it's just like i gotta make sure that this thing

1149
01:08:36,918 --> 01:08:41,718
is one of those things people don't ever want to cancel make it valuable so that's how i like

1150
01:08:41,718 --> 01:08:47,958
process this idea i think there's a lot of us in the exact same boat we are maturing alongside

1151
01:08:47,958 --> 01:08:52,258
bitcoin bitcoin's gonna get more boring because it's going to become just like you know it's a

1152
01:08:52,258 --> 01:08:56,418
really bullish thing any model portfolio that says like four percent allocation because like

1153
01:08:56,418 --> 01:09:02,198
the size of that capital is just ginormous it's massive but that's like as bitcoin breaks through

1154
01:09:02,198 --> 01:09:05,918
its next all-time high that's why i think diminishing returns can like you know go jump

1155
01:09:05,918 --> 01:09:10,098
because i think at some point in time the wall of money that comes in and as bitcoin gets bigger

1156
01:09:10,098 --> 01:09:15,078
you can actually store more capital in it the liquidity profile goes up think about all the

1157
01:09:15,078 --> 01:09:19,938
good and bad news i mean i wrote a piece um tongue in cheek uh i can't forget when it was might have

1158
01:09:19,938 --> 01:09:25,238
been like november or late october called bullish selling and i was like like i was hammering the

1159
01:09:25,238 --> 01:09:32,598
drum being like guys the amount of og like revive supply old coins just hitting the cell i know

1160
01:09:32,598 --> 01:09:37,338
we're not at the all-time high anymore but my god this thing can take a punch and like the bitcoin

1161
01:09:37,338 --> 01:09:42,778
market just absorbed it now of course we then went into a bear market but at the time it was just

1162
01:09:42,778 --> 01:09:48,838
taking it like a champion and i was like this is i was actually gobsmacked for several months

1163
01:09:48,838 --> 01:09:54,558
consistently like how is it handling this kind of sell side it just can't be bitcoin's going to get

1164
01:09:54,558 --> 01:09:59,458
so big that people really can store serious capital in it they're not worried so much about

1165
01:09:59,458 --> 01:10:04,998
75 drawdowns anymore i just think there's like maturation phase of the people the markets the

1166
01:10:04,998 --> 01:10:10,698
capital, the types of buyers. It's just like a growth phase. It's hard to envision the whole

1167
01:10:10,698 --> 01:10:15,738
matrix of things that are going on. But I think that's, you know, it is a maturation signal. I

1168
01:10:15,738 --> 01:10:20,158
think it's really, really constructive, honestly. As you were saying that, I was just thinking,

1169
01:10:20,318 --> 01:10:26,298
man, all of, you know, the Bitcoiners like us who have perhaps been tweeting less than we used to,

1170
01:10:26,778 --> 01:10:33,178
I certainly tweeted more before I had, before I had kids, probably tweeted worse as,

1171
01:10:33,192 --> 01:10:35,672
But Michael, I'm just wondering, does that screw up your data set at all?

1172
01:10:35,772 --> 01:10:37,312
How is that messing with your data?

1173
01:10:37,652 --> 01:10:41,612
Now you've got to deal with all these Bitcoiners making Bitcoin baby NGU.

1174
01:10:41,852 --> 01:10:43,392
Is that screwing with your data?

1175
01:10:44,772 --> 01:10:48,112
One of my most interesting observations, which is not at all related to the sentiment data,

1176
01:10:48,172 --> 01:10:52,852
but just as casually talking to Bitcoiners, is the amount of babies that happened, including mine,

1177
01:10:53,152 --> 01:10:54,912
roughly nine months after 100K.

1178
01:10:55,792 --> 01:10:59,152
There's a lot of them that were had within a few-month range.

1179
01:11:00,032 --> 01:11:02,292
I think both of you two are not far off that range either.

1180
01:11:02,292 --> 01:11:11,632
So it's like, and I know a lot of other people that had babies in the last like six months of the year. And it's hilarious in hindsight that so much of that happened when Bitcoin was like over a hundred K.

1181
01:11:12,372 --> 01:11:18,512
That is interesting. That is an interesting data point. We need to, we need to, we need to, yeah, we need a little survey data there.

1182
01:11:18,512 --> 01:11:26,012
but I mean it also like it makes sense and you look around like the I think I can speak for all

1183
01:11:26,012 --> 01:11:29,072
of us when I said if you look around the Bitcoiners that you know you know people you know personally

1184
01:11:29,072 --> 01:11:33,912
in the Bitcoin space whether you know personally via you know your internet friends or personally

1185
01:11:33,912 --> 01:11:37,552
via like these people you know you've gone to conferences with that kind of thing hang out with

1186
01:11:37,552 --> 01:11:46,832
it's like there there's not you don't see the the dip in sentiment or in especially for you know the

1187
01:11:46,832 --> 01:11:53,332
younger cohort of folks our age, you don't see a dip in the babies. You don't see a dip in the

1188
01:11:53,332 --> 01:11:59,592
vibes or the babies. You see people still being pretty gosh darn bullish on Bitcoin, being excited

1189
01:11:59,592 --> 01:12:07,292
because that's the very obvious, extremely obvious change that happens, I think, in all of us as

1190
01:12:07,292 --> 01:12:16,812
Bitcoiners after we've gotten pounded by a bear a little bit. We've just gotten just mauled.

1191
01:12:16,832 --> 01:12:22,672
right uh and like 2022 was was rough right i mean i was buying all the way up to the top to your

1192
01:12:22,672 --> 01:12:25,752
point checkmate it was like you know i was buying all the way up to the top but i was buying all the

1193
01:12:25,752 --> 01:12:30,672
way more down to the bottom and then buying along that trough and when we were bouncing around at 19k

1194
01:12:30,672 --> 01:12:39,792
forever i was like okay like let's let's fucking go you know but you get to this point where you

1195
01:12:39,792 --> 01:12:44,632
you you want you actually like you're not a bear you're a huge bull but you would love to see

1196
01:12:44,632 --> 01:12:49,352
Bitcoin stay lower a little bit longer. You would love it because you know where it's going.

1197
01:12:50,012 --> 01:12:55,412
You know where it's going. And so it's like, okay, I'm going to be buying either way. If I can get

1198
01:12:55,412 --> 01:13:05,172
more sats for my dollar, for my pound, for my Euro, for my kangaroo coins, also dollar that you

1199
01:13:05,172 --> 01:13:10,632
have down there, like, yes, please, I'll take it. And it's such a different, and you notice this

1200
01:13:10,632 --> 01:13:17,032
when you've made the mistake of trying to orange pill friends proactively versus waiting for them

1201
01:13:17,032 --> 01:13:22,352
to come to you, which I know also all Bitcoiners have done. You get to that initial point where

1202
01:13:22,352 --> 01:13:25,912
you're like, I'm going to orange pill fucking everyone because I need to save them. They need

1203
01:13:25,912 --> 01:13:30,252
to know it. This doesn't work out the way quite I think it will. A lot of them end up selling.

1204
01:13:30,592 --> 01:13:35,752
Some of them hold and some of them are like later are like, yeah, that was good call. Good call,

1205
01:13:35,752 --> 01:13:40,712
man. But like, there's so much more sensitive on that. They see it going down and it's immediate.

1206
01:13:40,812 --> 01:13:43,992
That's the first thing it is. It's, you know, crashed again. I should probably sell, right?

1207
01:13:44,052 --> 01:13:48,872
I mean, it's, I'm down, I'm down 30%. I should probably sell. You hold it for a little bit

1208
01:13:48,872 --> 01:13:50,932
longer to your point check earlier. They made it at the beginning of the,

1209
01:13:50,932 --> 01:13:56,292
the beginning of the pod, those coins stay not sold for a little while.

1210
01:13:57,872 --> 01:14:01,392
It makes sense that you actually have the data to back this up, but like, this is something just

1211
01:14:01,392 --> 01:14:07,392
observationally, anecdotally, if people hold onto them long enough, they end up just saying, well,

1212
01:14:08,332 --> 01:14:13,312
I mean, I may as well just keep, keep holding them or, or Hey, wow, I'm in profit now. Uh,

1213
01:14:13,312 --> 01:14:16,112
you know, that was a little temporary dip. I'm in profit now. This, this looks pretty good.

1214
01:14:16,112 --> 01:14:20,092
This feels pretty good. And I don't know. There's not even a question there. It's just,

1215
01:14:20,252 --> 01:14:26,772
it's, it's amazing to observe these changes and feel that this is a mature market, but I still

1216
01:14:26,772 --> 01:14:31,752
have the feeling that this is also like, it still feels so early. Like I know, like I'm not an,

1217
01:14:31,792 --> 01:14:35,532
I'm not an OG, you know, a checkmate, you're right in the cusp there, depending on Michael's

1218
01:14:35,532 --> 01:14:40,972
definition, which he's going to get railroaded for again, probably, but it still feels so early.

1219
01:14:41,072 --> 01:14:45,852
It still feels like this young market. And you look at it from market cap perspective versus gold.

1220
01:14:46,332 --> 01:14:52,412
It sure as heck is. And you look at the moves that gold was able to make a silver market. Well,

1221
01:14:52,492 --> 01:15:03,400
you know that was that was an interesting one Check I think you played that one pretty well but most people did not They were looking at that top and thinking it had more room to go I don know

1222
01:15:03,920 --> 01:15:10,680
I struggle not to be exceptionally bullish right now, given the global instability that

1223
01:15:10,680 --> 01:15:18,040
we see, given the fact that we're at the midpoint of this generational turning cycle.

1224
01:15:18,040 --> 01:15:26,320
given all these factors i look at this and i say how are we still so apathetic you know not we but

1225
01:15:26,320 --> 01:15:33,820
how is like the the whole so apathetic what do you guys think it takes for more people to give

1226
01:15:33,820 --> 01:15:38,360
a shit is it is it pursuit of pleasure is it avoidance of pain you know is it number go up or

1227
01:15:38,360 --> 01:15:44,660
is it states boot on my neck like well you get both but the problem is once you get states boot

1228
01:15:44,660 --> 01:15:49,500
on your neck that things start to go you know it's kind of too late yeah um yeah look it's it's

1229
01:15:49,500 --> 01:15:53,420
one of those things where i just think that the next the next all-time high is going to be very

1230
01:15:53,420 --> 01:15:58,980
interesting because you can't blame it on anything other than demand and you know once this thing

1231
01:15:58,980 --> 01:16:05,800
recovers from yet another bear market you just can't say that it's gonna die you know like the

1232
01:16:05,800 --> 01:16:11,980
critics are just out of ammunition and i think it then becomes a normal asset you know like internet

1233
01:16:11,980 --> 01:16:17,360
stocks were a weird asset back when the internet was the first thing you're like how do i value

1234
01:16:17,360 --> 01:16:20,960
these things at all they don't make any money but like i think they're gonna you know speculation

1235
01:16:20,960 --> 01:16:27,460
but over time it just becomes hey it's actually a normal part of the economics right so i think

1236
01:16:27,460 --> 01:16:32,160
at some point in time people just have it as part of their allocation i think this is how it

1237
01:16:32,160 --> 01:16:37,800
generally begins right and you know part of the tension is bitcoin is like the self-sovereign

1238
01:16:37,800 --> 01:16:43,540
monetary asset versus the just it's just an investment right the fact of the matter is the

1239
01:16:43,540 --> 01:16:48,760
vast vast vast majority of people probably for the next couple of decades i would i would wager

1240
01:16:48,760 --> 01:16:56,780
are only ever going to view it as an investment however my son is probably not going to view it

1241
01:16:56,780 --> 01:17:01,1000
as an investment he's probably going to view it more as money eventually right bitcoin will progress

1242
01:17:01,1000 --> 01:17:07,460
like science one funeral at a time eventually will not be run by octogenarians right i just

1243
01:17:07,460 --> 01:17:12,040
want to loot the treasury eventually there are going to be people who are younger and have been

1244
01:17:12,040 --> 01:17:17,260
exposed to this as a normal thing like you know kids are going to grow up where bitcoin is just a

1245
01:17:17,260 --> 01:17:21,920
part of the normal system especially bitcoin as kids right so i think the most bullish thing you

1246
01:17:21,920 --> 01:17:26,560
can possibly do is have bitcoin kids because they're just going to be aware of how this plays

1247
01:17:26,560 --> 01:17:31,340
out all right and you know the same way that you know i've spoken to some of my friends who you know

1248
01:17:31,340 --> 01:17:36,960
have a history in like uh germany where they went through the the inflation and like they instilled

1249
01:17:36,960 --> 01:17:43,380
this idea of like why gold important must own must own gold because inflation just kills everything

1250
01:17:43,380 --> 01:17:50,080
right so over time it just it's going to progress one funeral at a time and humans always want to

1251
01:17:50,080 --> 01:17:56,560
bring i we suffer from this all the time there's a ton of really really big ideas in bitcoin you

1252
01:17:56,560 --> 01:18:00,1000
know one of the biggest is guys the fucking financial system is a ponzi scheme that's a

1253
01:18:00,1000 --> 01:18:05,340
really big one and it's actually really really hard to like hey um i want to tell you about

1254
01:18:05,340 --> 01:18:09,380
Bitcoin. So have you heard that the whole world's a scam, right? It's a really hard to tough opener,

1255
01:18:09,580 --> 01:18:14,860
right? We've all been there to tough opener. So that is a challenge. But over time, right,

1256
01:18:14,860 --> 01:18:19,560
these things will ultimately prove that they are, it is a Ponzi scheme. And eventually it does have

1257
01:18:19,560 --> 01:18:25,180
to break and there will be collateral damage and all these sorts of things. As the cycle plays out,

1258
01:18:25,260 --> 01:18:31,580
it becomes more and more obvious, right? But for us who are very aware of it, we extrapolate all

1259
01:18:31,580 --> 01:18:36,820
the big ideas and like we know what we know the direction but you bring it into the next daily

1260
01:18:36,820 --> 01:18:42,100
candle you're like why isn't it happening right now and on the flip side we often take like the

1261
01:18:42,100 --> 01:18:46,920
next red daily candle and extrapolate and be like ah the bull market's over it's another bear or

1262
01:18:46,920 --> 01:18:52,180
these green candles will never end so humans often take small information and extrapolate it to be

1263
01:18:52,180 --> 01:18:57,540
big and they take big information they get confused why it's not happening all at the same time time

1264
01:18:57,540 --> 01:19:03,520
is such a big factor and you know it's a gradually then suddenly type thing it takes glacial pace

1265
01:19:03,520 --> 01:19:08,360
and then it all just cracks in one go right it all happens in one go then you go ah makes a ton

1266
01:19:08,360 --> 01:19:14,460
of sense for example you could see the whole world reshuffling around gold and treasuries and china

1267
01:19:14,460 --> 01:19:29,648
and russia and then the bitcoin sorry the gold price is just doing this through all of 22 23 24 and then bang 20 trillion just 20 trillion added to its market cap so can bitcoin have diminishing returns i mean you want to add 20 trillion to the market cap and see what happens

1268
01:19:29,648 --> 01:19:32,847
um that's a monster of a move right give me 10 of that and we're going to be happy

1269
01:19:32,847 --> 01:19:39,628
so uh i think that that's like we we can see it happening but then it actually goes and it's so

1270
01:19:39,628 --> 01:19:45,727
easy to get caught up in the day-to-day shop and then michael anything else from your side i know

1271
01:19:45,727 --> 01:19:47,167
We're bumping up on time here.

1272
01:19:48,087 --> 01:19:51,828
Yeah, anything you want to maybe close out with or follow up on check with?

1273
01:19:52,948 --> 01:19:55,547
Something that was coming to my mind here and something I've been thinking about a lot lately

1274
01:19:55,547 --> 01:19:58,068
because it's been one of the common questions I've been asked is like,

1275
01:19:58,068 --> 01:20:00,467
what's the narrative that's going to bring this about, right?

1276
01:20:00,547 --> 01:20:01,708
Like this next big move.

1277
01:20:01,887 --> 01:20:06,227
Like one of the defining characteristics of the summer is that a lot of the narratives

1278
01:20:06,227 --> 01:20:10,387
that people latched on to and stories they put on Bitcoin kind of crumbled in some way.

1279
01:20:10,467 --> 01:20:15,047
Like the cold card thing really made people rethink some of the self-custody aspects, right?

1280
01:20:15,047 --> 01:20:19,907
the 110 thing caused a lot of people to like view like what what they thought bitcoin was going to

1281
01:20:19,907 --> 01:20:25,068
be changed um especially more institutionalization happens more bitcoiners are just like straight up

1282
01:20:25,068 --> 01:20:30,007
like only talking about like treasury companies like this has been a really tumultuous time and

1283
01:20:30,007 --> 01:20:36,068
it's really challenged people's story for bitcoin um i suspect that's going to keep happening and

1284
01:20:36,068 --> 01:20:40,628
like the narrative thing like there has not been a clear narrative for this bull right like there's

1285
01:20:40,628 --> 01:20:45,787
there's always the background things of money printing Ponzi scheme, right?

1286
01:20:45,868 --> 01:20:47,087
That James was just talking about,

1287
01:20:47,167 --> 01:20:51,047
but people really want a more clear narrative of like why Bitcoin is going to

1288
01:20:51,047 --> 01:20:52,007
pump two months from now.

1289
01:20:52,148 --> 01:20:54,488
And I think they're trying to latch onto different things.

1290
01:20:55,007 --> 01:20:56,828
AI has been a really big one.

1291
01:20:56,828 --> 01:20:58,748
Like there's all this enthusiasm in AI,

1292
01:20:58,967 --> 01:21:01,787
AI stocks ripping until very recently.

1293
01:21:02,948 --> 01:21:06,248
And they were like trying to jam the AI thesis into the Bitcoin thesis,

1294
01:21:06,448 --> 01:21:08,727
which I am amenable to, to some degree over the longer term.

1295
01:21:08,727 --> 01:21:16,467
But like there's just like these are the exact kind of things that I personally would expect to see during disbelief when there's like not really a clear narrative.

1296
01:21:16,607 --> 01:21:20,787
Like we are having lots of positive price movements, but people just still don't feel like it's real.

1297
01:21:21,387 --> 01:21:23,547
There should be some massive news story that's bringing us up.

1298
01:21:23,568 --> 01:21:24,727
And that's not what we're seeing right now.

1299
01:21:25,587 --> 01:21:29,368
To me, again, optimistic contrarian is like the primary way this data is useful.

1300
01:21:29,648 --> 01:21:31,948
Like that's exactly what you'd expect to see during these phases.

1301
01:21:31,948 --> 01:21:33,948
And I think like Bitcoin will find a new narrative.

1302
01:21:34,387 --> 01:21:36,148
I think Bitcoin's narrative shifts over time.

1303
01:21:36,148 --> 01:21:38,527
The story people tell around Bitcoin has changed dramatically.

1304
01:21:38,727 --> 01:21:42,868
where it was once like it still is free to money,

1305
01:21:43,087 --> 01:21:44,868
but then like digital gold kind of becomes more of a thing

1306
01:21:44,868 --> 01:21:46,147
and it sort of shifts over time.

1307
01:21:46,467 --> 01:21:49,628
I just, I can't imagine not being bullish on Bitcoin

1308
01:21:49,628 --> 01:21:52,647
during a time when like there's a massive shakeup

1309
01:21:52,647 --> 01:21:55,208
of society with AI that's like fundamentally changing

1310
01:21:55,208 --> 01:21:56,248
the way a lot of businesses work,

1311
01:21:56,328 --> 01:21:57,488
a lot of businesses are valued,

1312
01:21:57,868 --> 01:21:59,587
is massively deflationary potentially.

1313
01:22:00,307 --> 01:22:02,748
Like to me, owning like this perfectly scarce asset

1314
01:22:02,748 --> 01:22:06,147
that's disconnected from a lot of this tumultuous system

1315
01:22:06,147 --> 01:22:07,488
that's getting kind of restructured

1316
01:22:07,488 --> 01:22:09,688
just seems like such a no-brainer.

1317
01:22:10,208 --> 01:22:12,007
And I think we're just so early to this

1318
01:22:12,007 --> 01:22:15,448
that when the narrative has changed so much for us personally,

1319
01:22:15,568 --> 01:22:17,787
the people that we're representative of here,

1320
01:22:17,887 --> 01:22:18,568
like our demographic,

1321
01:22:19,328 --> 01:22:21,387
that it feels like that's far away

1322
01:22:21,387 --> 01:22:22,387
and that's kind of frustrating.

1323
01:22:22,507 --> 01:22:25,967
But I really do think that we are in the right asset.

1324
01:22:26,087 --> 01:22:27,948
I've just never had higher conviction around it.

1325
01:22:28,448 --> 01:22:30,007
But whether or not that happens in two weeks from now,

1326
01:22:30,027 --> 01:22:30,407
I don't know.

1327
01:22:30,607 --> 01:22:32,767
But over the long term, I'm just so insanely bullish.

1328
01:22:32,847 --> 01:22:34,547
It seems very clear this scarcity thing

1329
01:22:34,547 --> 01:22:37,188
is one of the most important innovations to humanity.

1330
01:22:37,488 --> 01:22:41,568
And I can continue to be as orange-pilled and optimistic about it as ever.

1331
01:22:42,948 --> 01:22:45,167
Yeah, I mean, humans gravitate towards scarcity, right?

1332
01:22:45,307 --> 01:22:48,208
And I still think of a really fundamental level.

1333
01:22:49,087 --> 01:22:52,967
Gold is one of these assets where, and again, gold is just the first meal on the table.

1334
01:22:53,868 --> 01:22:56,988
But gold, the more the price goes up, the more gold deposits.

1335
01:22:57,087 --> 01:23:02,967
This is why the inflation rate of gold is consistently 2% because we get much better at mining it, but the supply is bigger.

1336
01:23:03,208 --> 01:23:04,887
We get much better at mining it, but the supply is bigger.

1337
01:23:04,988 --> 01:23:06,708
The price goes up, suddenly we can mine more of it.

1338
01:23:06,708 --> 01:23:07,307
It takes time.

1339
01:23:07,727 --> 01:23:10,708
It's still far more sound than the vast majority of things.

1340
01:23:11,087 --> 01:23:13,407
And it's got thousands of years of cultural acceptance.

1341
01:23:14,628 --> 01:23:16,847
Bitcoin will also have cultural acceptance, right?

1342
01:23:16,988 --> 01:23:20,688
Long term, it will also have that all of these things are just not unique.

1343
01:23:21,568 --> 01:23:23,648
I've been thinking more recently about this.

1344
01:23:23,868 --> 01:23:25,907
Again, both of these things are far in the future,

1345
01:23:25,967 --> 01:23:28,507
but Bitcoin's got this quantum threat that everyone's worried about.

1346
01:23:29,148 --> 01:23:32,007
I actually, not that I like that this is the setup,

1347
01:23:32,007 --> 01:23:38,328
but I do think that the AI risk vector of like AI starting to crack things like cryptography,

1348
01:23:38,328 --> 01:23:44,167
they're not there yet, but the risk of like classical breaks to cryptographic security,

1349
01:23:44,167 --> 01:23:55,635
it makes a ton of sense for us to have hey what if we had more than one scheme just for anything Could be quantum could be this could be that could be AI could be classical What if we actually just had multiple schemes

1350
01:23:55,755 --> 01:24:00,135
So once Bitcoin solved something of that nature, because at the end of the day, like when people

1351
01:24:00,135 --> 01:24:02,815
ask me, what's like the thing that sends Bitcoin to zero?

1352
01:24:02,935 --> 01:24:04,495
In my opinion, it's like a technical break.

1353
01:24:04,835 --> 01:24:06,175
It's like a cryptographic break.

1354
01:24:06,175 --> 01:24:08,275
It's a technical fault in the system.

1355
01:24:09,055 --> 01:24:10,935
Everything else, the human incentives just work.

1356
01:24:10,935 --> 01:24:17,595
at some point in time we will start hauling materials in from asteroids this will happen

1357
01:24:17,595 --> 01:24:23,955
at some point right you kind of can't do a fix for that that's just human progress now i'm not

1358
01:24:23,955 --> 01:24:29,535
expecting that to be anytime soon but over the long arc of human time am i going to bet against

1359
01:24:29,535 --> 01:24:34,455
human ingenuity probably not all right there's a reason all these billionaires are sending rockets

1360
01:24:34,455 --> 01:24:38,215
into space right they're thinking about this they've done the math they understand these things

1361
01:24:38,935 --> 01:24:42,275
So from that perspective, now, again, all these are very far in the future, but what

1362
01:24:42,275 --> 01:24:44,075
assets exist out there?

1363
01:24:44,595 --> 01:24:48,995
And I think one of the most bullish things about Bitcoin is its use as collateral, right?

1364
01:24:49,095 --> 01:24:52,695
The perfect collateral that trades 24-7 that you can liquidate anywhere in the world, and

1365
01:24:52,695 --> 01:24:53,855
there's always a buyer for it.

1366
01:24:54,395 --> 01:24:56,215
Perfect collateral for a system.

1367
01:24:57,095 --> 01:25:02,035
And at some point, everything else, stocks can be printed by the owners.

1368
01:25:02,575 --> 01:25:05,015
Bonds can be printed by the government and the company.

1369
01:25:05,455 --> 01:25:08,275
Gold can just be mined from Lord knows where.

1370
01:25:08,735 --> 01:25:11,075
The higher the price goes, the more we're going to dig out of the ground.

1371
01:25:11,255 --> 01:25:14,575
It's one of these things where there is an infinite supply of everything.

1372
01:25:16,355 --> 01:25:20,235
And assuming we don't change the rules of Bitcoin, that is the one exception to that rule.

1373
01:25:21,435 --> 01:25:22,795
And there's a bunch of folks.

1374
01:25:23,035 --> 01:25:24,155
I had a question recently.

1375
01:25:24,775 --> 01:25:29,655
And they said, I'm curious, in the age of AI, how do we know that AI is not going to invent a better Bitcoin?

1376
01:25:29,975 --> 01:25:32,195
This is a question that goes back as far as you want.

1377
01:25:32,195 --> 01:25:38,475
and from my perspective you can invent a better bitcoin there's tons of them there's a whole coin

1378
01:25:38,475 --> 01:25:44,475
market cap list of better bitcoins the problem is they don't have the history the history and

1379
01:25:44,475 --> 01:25:50,875
like to me what makes bitcoin bitcoin yes there's mining yes there's 21 million this is and all these

1380
01:25:50,875 --> 01:25:54,115
things are very important the difficulty adjustment but you know what actually makes bitcoin bitcoin

1381
01:25:54,115 --> 01:26:01,855
that utxo set right that utxo set the history of who owned what and when the trials and

1382
01:26:01,855 --> 01:26:06,795
tribulations that people went through to create their UTXOs, the ability to hold them for as long

1383
01:26:06,795 --> 01:26:11,315
as they did, the ups and the downs, that human journey, that's the golden record. That's the

1384
01:26:11,315 --> 01:26:16,795
thing you stick on the bloody Sputnik and send into space. That is the story of Bitcoin that

1385
01:26:16,795 --> 01:26:21,895
makes it unique. Now, you can fork Bitcoin, but as we just saw, real damn hard to do, right? Good

1386
01:26:21,895 --> 01:26:26,615
luck getting people to jump ship onto your, you know, you can make the ticker as similar as you

1387
01:26:26,615 --> 01:26:31,235
want. It's just not going to happen. So there's this network effect of people who go, but that's

1388
01:26:31,235 --> 01:26:38,035
my UTXO set. Not interested. So to me, that's what makes Bitcoin really, really special and unique.

1389
01:26:38,035 --> 01:26:43,935
It is unique in the world in terms of scarcity, but it's the UTXO set that makes sure that we

1390
01:26:43,935 --> 01:26:48,295
preserve that long-term. And you really can't say that about anything else. So these are all

1391
01:26:48,295 --> 01:26:52,555
long-term projections, but at the end of the day, will Bitcoin be higher demanded in the future

1392
01:26:52,555 --> 01:26:58,715
than it is now? I think very, very likely, yes. I think that's a perfect note to end on, guys.

1393
01:26:58,715 --> 01:27:06,175
fantastic appreciate you both uh michael where can people go to find your work your heat maps

1394
01:27:06,175 --> 01:27:11,995
uh your book as well send them wherever you want yeah best way is honestly on sub stack i have a

1395
01:27:11,995 --> 01:27:15,255
newsletter called bitcoin sentiment weekly where i'm sharing this stuff all the time do a bunch of

1396
01:27:15,255 --> 01:27:20,415
analysis on there um i have a dashboard too for my sub stack subscribers where you can like analyze

1397
01:27:20,415 --> 01:27:25,195
some of this data that i'm continually just like in the weeds on cohorting finding new people to

1398
01:27:25,195 --> 01:27:29,515
ingest and put it in my massive system that does all this analysis for me. So appreciate the time,

1399
01:27:29,615 --> 01:27:35,775
guys. Yeah. And check. Yeah. You'll find us over at checkonchain.com newsletter and charting

1400
01:27:35,775 --> 01:27:42,835
website. Love it. Well, guys, this was fascinating as always. I hope people got some good info out of

1401
01:27:42,835 --> 01:27:47,595
it. I have a feeling you did. And if you didn't, I think that's on you. Just like, you know,

1402
01:27:47,935 --> 01:27:53,915
buying the 58K top and buying it again and all that, which I very much did. And that's on me.

1403
01:27:53,915 --> 01:27:55,775
but appreciate you guys.

1404
01:27:55,895 --> 01:27:57,855
Thanks to everybody who listened to this as well.

1405
01:27:58,075 --> 01:27:58,815
And yeah,

1406
01:27:58,875 --> 01:27:59,115
go,

1407
01:27:59,235 --> 01:28:00,335
go make some more Bitcoin babies,

1408
01:28:00,415 --> 01:28:00,675
everyone.

1409
01:28:00,855 --> 01:28:01,175
It's a,

1410
01:28:01,215 --> 01:28:01,995
it's a beautiful thing.

1411
01:28:02,435 --> 01:28:02,895
Cheers guys.

1412
01:28:02,995 --> 01:28:03,575
Number go up.

1413
01:28:05,055 --> 01:28:05,495
Always.

1414
01:28:07,895 --> 01:28:08,835
All right.