Bankless Podcast Summary
Episode Title: Where Do We Go From Here? | Michael Nadeau
Date: February 3, 2026
Host: Ryan (Bankless)
Guest: Michael Nadeau (The DeFi Report)
Overview
This episode dives deep into the current state of the crypto markets amid a broader downturn while traditional markets surge, with a focus on where we go from here. Key themes include the end of the recent bull cycle, bear market psychology, the impact of the newly appointed Fed chair Kevin Warsh, macro liquidity trends, and tactical approaches to surviving (and eventually thriving) in this phase. Michael Nadeau shares his frameworks for market cycles, price targets for major cryptocurrencies, and how investors can identify opportunities amid the prevailing pessimism.
Key Discussion Points & Insights
1. The Current Crypto Bear Market
- Where Are We in the Cycle?
- “Is this the blood in the streets we’ve been waiting for?” (Ryan, 00:44)
- Michael believes we've entered the 'wealth destruction' phase following signs that the bull market momentum is gone.
- Historically, crypto bear markets last about a year from the top, suggesting more pain ahead.
- Market Structure:
- Notable drop in Bitcoin from 90k to 78k, and Ether down 23% in a month (03:15).
- Still not at a macro low; “the market is starting to accept a typical crypto bear market.” (Michael, 00:49)
- The capitulation and acceptance is necessary before a real bottom is formed.
2. How Michael Called the Cycle Top
- Cycle Fundamentals (‘Cyclomentals’):
- Michael pivoted to cash before the October 10 event of 2025, citing excessive leverage and lopsided market structure. (05:37)
- Price-agnostic buyers (corporates adding BTC/ETH to balance sheets) enabled leverage, which concerned him.
- “Long-term holders are de-grossing at the same time as weak hands and leverage are near the top.” (Michael, 07:24)
3. The Fed Chair Shakeup: Who is Kevin Warsh?
- Profile & Impact:
- Warsh, the new Trump-appointed Fed Chair (coming April 2026), is seen as a free-markets advocate, previously against QE.
- Market expectations were for dovish Trump-alignment, but Warsh is talking about reducing the Fed balance sheet (i.e., tightening).
- “He’s talking like a politician talks to Main Street... but also talking about taking the Fed more hands-off.” (Michael, 20:15)
- Market Reaction:
- Gold, silver, and to a lesser extent, equities sold off on the announcement (10:35, 10:47).
- Raises questions about whether risk-on assets (including crypto) could see less support if the playbook shifts away from QE.
4. Macro Liquidity Picture
- Global vs U.S. Liquidity:
- U.S. liquidity is tightening; China and Japan are sources of global liquidity, which explains precious metals’ outperformance over BTC (18:05–19:00).
- Fiscal Policy:
- U.S. deficits aren’t growing as fast as during the Biden years, but are still substantial.
- Populist policies (affordability, credit/mortgage rates), but conflicting goals (“Trump wants lower rates and higher home prices... you can't really have it both ways.” – Michael, 20:15).
- Regime Uncertainty:
- Unclear if the new policies will resemble true tightening or revert to previous bailouts and QE during recessionary pressure.
5. Picturing the Bear Market End: Historical Cycle Metrics
- Historical Anchors:
- Previous bear lows lasted 3-6 months trading below realized value (MBRV < 1).
- “We’re at 1.4 today… still room to drop.” (Michael, 00:49)
- 200-week moving average and realized value: fair value seen around 65k, possibly lower.
- Key Metrics to Watch:
- Market Value to Realized Value (MVRV)
- Supply held by long-term holders
- Mining hash rate and miner capitulation
- Relative performance vs. NASDAQ and gold
6. Sentiment and Psychology
- As the pain builds, sentiment shifts to “crypto is dead,” “should have held NASDAQ or gold.” (Ryan, 38:15)
- “Right at the peak is when people are most confident... then the narrative can flip” (Michael, 40:27).
- “The bear market pile-on” (Michael, 41:30). Famous investors (Saylor, Tom Lee) now under water, fueling the FUD cycle.
- Michael views crypto’s hyper-reflexivity and meme-driven nature as creating investor opportunities—not merely risks.
7. Michael’s Tactical Approach and Portfolio Framework
-
Current Stance: 80% in cash, waiting for signs of bottom.
-
Deployment Structure:
- 65% Bitcoin (anchor)
- 20% high-conviction core assets (ETH, SOL, others)
- 10% long-term, higher risk/reward plays
- 5% “hot sauce” (small caps/memes, only later in cycle)
-
Re-deployment Plan: Scale in, not all at once, and always start with Bitcoin.
“I like to say the onus is on Bitcoin to show me.” (Michael, 50:12)
-
Criteria for Bottom:
- Capitulation event; forced selling and exhaustion
- Major cycle indicators (MVRV, hash rate, 200w MA) align near/below fair value
- Market apathy—“it just gets quiet” and almost no FUD (Michael, 50:12)
8. Price Targets and Watchlist
- Bitcoin: Fat pitch buy zone at 65k (“fair value”)
- Ethereum: Watch zone at $2,200—already hit high end of target (47:15)
- Solana: $75–90 as target range (47:15)
- Watchlist: 30 assets tracked for opportunities by DeFi Report—all focus on outperforming BTC over the cycle
9. Looking Forward — Opportunity in Bear Markets
- Long-term Perspective:
“My thesis is that we’ll see Bitcoin over a million dollars... I certainly think we’re going to see all-time highs for crypto and the assets that are here to stay.” (Michael, 56:15)
- The bear market is the opportunity; when the doubters are loudest and apathy reigns, it’s time to prepare.
- Regulatory and institutional signs point to continued infrastructure development, even amid price pain.
Timestamps for Notable Segments
- Market breakdown and cycle status: 00:44 – 02:58
- Michael on cycle top & DEFI report pivot: 05:37 – 08:43
- Fed Chair Kevin Warsh—Who is he and why does it matter?: 09:35 – 14:00
- Macro liquidity and fiscal shifts: 17:30 – 20:16
- Cycle awareness & bear market metrics: 25:05 – 31:42
- Sentiment & psychology, “crypto is dead”: 38:15 – 41:30
- Portfolio construction & deployment rules: 42:23 – 44:04
- Michael’s buy signal playbook, capitulation: 50:12 – 52:48
- Price targets across BTC/ETH/SOL: 47:15 – 49:25
- Optimism and long-term thesis: 56:15 – 58:09
Notable Quotes
-
On Waiting Out the Bear:
“For me right now, the onus is on bitcoin to show me... I’m waiting for bitcoin to show me that it’s time.”
— Michael, 50:12 -
On Bull vs. Bear Psychology:
“Right at the peak is when people are most confident. As soon as some serious risk gets introduced, the narrative can flip... I view these as opportunities because crypto is so reflexive.”
— Michael, 40:27 / 41:30 -
On Macro Shifts:
“He [Warsh] is talking about reducing the Fed balance sheet by trillions of dollars ... and signaling that to the market. And he thinks the market can actually digest that... but it's not necessarily good for crypto.”
— Michael, 12:00 -
On Where Bitcoin Might Go:
“We believe the fair value is roughly around 65K for Bitcoin. That doesn’t mean it can’t go below that ... last cycle, we did go below that.”
— Michael, 31:42 -
On the Next Upcycle:
“My thesis is that we’ll see Bitcoin over a million dollars... the entire financial system is going on to crypto rails.”
— Michael, 56:15
Key Takeaways
- We’re in the heart of a typical, grinding crypto bear market (“wealth destruction” phase) that often takes 12 months or more from peak to trough, with more pain and possibly a final capitulation ahead.
- Macro tailwinds are weak: A new, potentially hawkish Fed Chair may preside over tightening or, at best, a shift to more free-market (less QE-driven) policy.
- US liquidity is rolling over while Chinese liquidity buoys gold, not crypto—hence the underperformance.
- Price targets: Bitcoin at $65k (watch for capitulation); ETH tested $2,200 range; SOL $75–90. Michael is waiting for market signals, not catching falling knives.
- Sentiment will likely get even more dire before the bottom, but past cycles show bear markets as prime opportunity for patient, convicted investors.
- The long-term thesis remains bullish—crypto rails continue to be laid, and those prepping now may reap the rewards in the next cycle.
Closing
Michael Nadeau and Bankless urge patience, data-driven analysis, and preparation for opportunity as the bear market unfolds. Now is the time to build watchlists, hone strategy, and prepare emotionally and tactically for the next major cycle.
For weekly cycle and asset updates, follow The Defi Report Podcast and Substack.