Podcast Summary: The DeFi Report Podcast | Was the Fed Rate Cut a False Signal for Crypto?

Date: December 17, 2025
Podcast: Bankless presents The DeFi Report
Host: Ryan ("A")
Guest: Michael NATO (Mike) from The DeFi Report

Episode Overview

This inaugural episode introduces a new weekly format for 2026, focused on deep macro and on-chain analysis, building out what is essentially Michael NATO’s “investor journal.” The core question: Did the recent Fed rate cut and balance sheet expansion signal a risk-on environment for crypto, or is more patience needed? Ryan and Mike explore macro conditions, Fed policy moves, Bitcoin’s on-chain metrics, and portfolio strategy, with transparency into Mike’s own positioning and asset watchlist.

1. Setting the Stage: Mike's Positioning & the Fed’s Move

[03:02]–[03:50]

• Mike’s Positioning:
  • 80% cash, 20% crypto since October, right before the “10/10 event.”
  • Long-term bullish, but currently “risk-off” and focused on patience.
• Fed’s Recent Policy Actions:
  • Cut rates to 3.5–3.75%.
  • Unexpected $40B/month Treasury bill purchases (“RMP”).
  • Market reaction: Many interpreted this as "dovish" or “QE Lite.”

2. Was This Really QE? Parsing the Fed’s Actions

[04:20]–[07:27]

• Market Perception vs. Reality:
  • CNBC and Twitter were abuzz labeling this as “money printing” and “QE.”
  • Mike’s take: “This is, to me, more of a sign of just how much tightness there is in the banking sector in terms of liquidity right now.” [05:15]
• Key Insight:
  • The Fed is plugging liquidity holes by buying T-bills, not longer duration assets (like 10/30-year bonds).
  • Buying T-bills does not suppress long-term yields, which is essential for sparking risk-on moves in risk assets.
  • “We’ve had six rate cuts... and the 30 year is higher than it was at the start of that.” [06:42]
  • No shift in corporate borrowing costs or mortgage rates.

Notable Quote [06:58]:

“When you reduce duration, that is what causes investors to rebalance portfolios, move out of bonds, go into riskier assets — and we’re not seeing that right now.”
— Mike

3. How “Real” QE Would Appear: Signals to Watch

[08:48]–[11:14]

• What Constitutes the “Real” QE Signal?
  • Fed must artificially suppress the long end of the yield curve.
  • Watch for:
    • Real rates falling
    • Corporate borrowing costs dropping
    • Term premium compressing
    • Equity discount rates/mortgage rates falling

Notable Quote [11:14]:

“We believe Bitcoin and risk assets... will have their moment in the sun, but that will come after QE or whatever the Fed calls their next phase of financial repression — which is not this.”
— Mike

• Current moves are “QE Lite,” but they do signal we’re getting closer to the real thing.

4. Macro Context: Labor Market & K-Shaped Recovery

[12:30]–[14:22]

• Labor Market Looks Shaky:
  • Official unemployment 4.6%, but “real” (including part-timers, dropouts) is closer to 8%.
  • Youth unemployment: 16% for teens, 10% for ages 16–24.
• K-Shaped Recovery:
  • Wealthy continue to recover; middle & lower classes do not.
  • Retail sales are slumping; inflation remains voters' top concern, impacting presidential approval ratings.

5. Geopolitics & the Dollar: Tariffs, Devaluation, and Reserve Status

[14:22]–[20:22]

• The Big Picture:
  • Tariffs are Phase 1; ultimately, currency adjustment is the endgame.
  • “Tariffs cannot solve the problem. The only way... is through currency adjustments.” [15:30]
  • The dollar’s reserve status is at odds with US economic/political priorities (restoring manufacturing, reducing trade deficit).
  • The likely long-term solution includes “massive devaluation of the dollar”—which sets up non-sovereign assets (Bitcoin, gold) for future strength.

Notable Quote [18:33]:

“To restore the middle class and US security... you have to weaken the dollar relative to other fiat currencies... further steps will come in the future.”
— Ryan

Notable Quote [19:15]:

“If we’re devaluing the dollar... where’s the surplus going to go? That’s what we like to set up for Bitcoin and other hard assets.”
— Mike

6. Bitcoin’s On-Chain Metrics & Cycle Structure

[21:20]–[26:21]

• Market Structure Focus:
  • Close study of long-term vs. short-term holders, cost basis, and supply clusters.
  • Long-term holder supply still falling (“they’re still kind of exiting the market” [22:05]), which historically precedes cycle bottoms.
• Cost Basis Insights:
  • 41% of supply has cost basis above 78K; 28% above 92K.
  • Large cluster (5% of all Bitcoin) has cost basis in 84–85K range — likely “dip buyers.”
• On-chain signals suggest new investors may not have “diamond hands”; risk of further capitulation if prices fall below cost basis.

Notable Moment [25:35]:

“We’ve been conditioned to buy the dip, and that's been right since 2023… [but] if you’re buying at 84K and price goes into the 70s, are you tapped out? Are you potentially selling?”
— Mike

7. Technical Analysis: Moving Averages & Price Targets

[26:21]–[29:15]

• Key Support Levels:
  • 50-week moving average (“bull market support band”); already broken in October.
  • 200-week moving average (currently ~56K), likely to rise into the 60–65K range; historical bottom zone.
• Expected Market Action:
  • Possible short-term “fake-out” rally to the 50-week MA before going lower.
  • Patience is critical; Mike’s not flipping “risk on” unless deeper signals materialize.

Notable Quote [28:19]:

“I think that will be a fake out... If we did go back up [to the 50-week average], I’d be looking for can we flip that into support — that would be the thing to pay attention to.”
— Mike

8. Portfolio Strategy: Patience & The Watchlist

[29:25]–[33:49]

• How Long Will This Take?
  • Timing is tough; could converge by Q1 if the economy worsens rapidly.
• Current Portfolio:
  • 80% cash, 20% crypto — not risk-on.
  • Focus: Patient research, deep cycle awareness, and identifying fair value.
• Watchlist Assets:
  • Robinhood: On the watchlist, preference to buy at lower prices.
  • Hype, Pump Fund, Galaxy, and upcoming coverage of Bitcoin mining sector.

Notable Quote [33:17]:

“I know it sounds odd, but [bear markets] are easier to do the deep research, build conviction, less noise at this stage. This is when we want to be preparing for when opportunity comes.”
— Mike

9. How to Follow the Strategy

[31:33], [32:11], [33:49]

• Subscribe to The DeFi Report Podcast for weekly episodes.
• Written research and Mike’s transparent portfolio are available at thedefireport.io.
• Pro membership provides alerts on changes and access to Mike's full watchlist and holdings.

Major Takeaways

• The Fed’s recent moves are NOT a signal to go risk-on for crypto.
• Key indicators for a true cycle bottom (in both macro and on-chain terms) have not yet triggered.
• Patience is essential: The real risk-on moment for Bitcoin and crypto will come only after deeper QE or systemic dollar devaluation — something Mike believes is on the horizon but not here yet.
• On-chain metrics suggest further downside is possible, with new holders’ conviction to be tested as prices fall below their cost basis.
• In the interim: research, cycle awareness, and building a watchlist are priorities.

Memorable Quotes & Timestamps

• [06:58] Mike: “When you reduce duration, that is what causes investors to rebalance portfolios, move out of bonds, go into riskier assets — and we’re not seeing that right now.”
• [11:14] Mike: “We believe Bitcoin and risk assets... will have their moment in the sun, but that will come after QE or whatever the Fed calls their next phase of financial repression — which is not this.”
• [19:15] Mike: “If we’re devaluing the dollar... where’s the surplus going to go? That’s what we like to set up for Bitcoin and other hard assets.”
• [25:35] Mike: “We’ve been conditioned to buy the dip, and that's been right since 2023… [but] if you’re buying at 84K and price goes into the 70s, are you tapped out? Are you potentially selling?”
• [33:17] Mike: “I know it sounds odd, but [bear markets] are easier to do the deep research, build conviction, less noise at this stage. This is when we want to be preparing for when opportunity comes.”

Key Timestamps

• Fed Policy Discussion: [04:20]–[07:27]
• On-Chain Bitcoin Analysis: [21:20]–[26:21]
• Strategy & Watchlist: [32:38]–[33:49]

Summary in a Sentence:
The recent Fed moves are not your buy signal — stay patient, watch for real QE and deeper indicators, and use this phase for strategic research and preparation.