David (10:17)

Okay, there's two questions that that leads to for me. So in this scenario Where ETH does reach all time highs at some point in 2026. Would that be unprecedented to have Eth sort of almost feels like Eth leading in that world. Whereas we've all been trained to see Bitcoin as like, oh, bitcoin has to kind of all time high first and then eth.

Ben Cowen (10:39)

Yeah, I mean, I think in, I mean, in 2018, Ethereum put in an all time high even while Bitcoin didn't. You know, bitcoin topped in December and then Ethereum topped in January.

David (10:51)

But that was at the end of like a euphoria phase, which is not something we felt this time around.

Ben Cowen (10:56)

Exactly. Which is why I feel like it's more like we're more like in this phase here, like after this like 2019 style rally.

David (11:04)

Okay.

Ben Cowen (11:05)

And then we're just kind of like in apathy. But I just, I don't know if, like, if there could be kind like if, if you can see my chart, I'm like, all right, could there be a scenario where it just kind of like wicks down, wicks up and then crashes? Like, I, I could see something like that happening. That would be in line with the bar, the butterfly harmonic idea that we talked about on your channel like a year ago. Right. I mean, back when Ethereum went home, as we caught it, we said, all right, now that it went home, it'll likely rally to new all time highs. But on the first sweep of the high, it should get rejected. And where I'm, I'm a little hesitant is I don't know if Ethereum can go back up going into the midterm year. If Bitcoin truly is in a bear market. Right. And if, if we're in a bear market, which is what it feels like, it would be kind of hard for Ethereum to go up there. And if it does go up there, while Bitcoin's in a bear market, it likely means it's just sort of like a bull trap, Right.

David (12:06)

It's just fleeting.

Ben Cowen (12:08)

We go to 5K and then we crash right back down to 2K. Kind of like what just happened, you know, to be honest. But I mean, you know, could there be a scenario where it just falls back into the regression man, and then eventually goes back up? That's also possible. I almost, at this point, I almost would prefer that. But I am like, I am, I would say the only altcoin. I mean, I don't really consider Ethereum an altcoin, to be completely honest, but the only altcoin that I'm Even considering this for is. Is Ethereum, I think a lot of the other altcoins are, are kind of cooked at this point for this cycle.

David (12:45)

Wow.

Ben Cowen (12:46)

I just, I just don't see, I just don't see. If they haven't put in an all time high yet, they're probably not going to the. I could see a scenario where Ethereum does it, but I'm also not married to the idea I got you.

David (12:59)

So like low probability, but a possibility that ETH could hit an all time high in 2026. If so, it would be more of a fleeting all time high so long as Bitcoin is in a bear. Second question that falls out from this is, so when you do things, Ben, like you compare Tesla, the Tesla chart to something like the Ether chart, like how do you, like how does that make sense? Like, I mean those are two completely different assets, obviously. Maybe the charts are similar. They could be similar, but on what basis is there a comparison? Is it sort of like as I'm trying to get to the, to the root of why this would even make sense, that one chart for a completely different asset in a completely different industry, completely different market structure is similar to another asset? Is it market psychology?

Ben Cowen (13:52)

Yeah, I guess. I mean you could argue that human emotions don't really change from. I mean there's also a lot of speculation in Tesla as well, right? I mean if you, if you were to take Tesla as just a car company, you could argue that it's completely way overvalued, right? In terms of like the price to earnings and everything like that. But if you take Tesla as more than just a car company, if it's more about speculation about how, you know, we're going to be using AI and robotics and a lot of other things and robo taxis and everything else, there's a lot more speculation there and then it kind of helps it maintain these higher valuations. So I think there's just a lot of speculation. The only reason I even knew about it was because I bought Ethereum in April and I remember having done the same thing with Tesla in April of 2024, right? Like I bought Tesla in April 2024 when it capitulated on a macro higher low. And then we, I talked about Ethereum going home for a long time and I was like, gosh, it's bottoming exactly a year after Tesla bottomed. And so it kind of seemed like from a seasonality standpoint we could get this rally out of April. And we did. I. I mean, yes, like will the, will it break down at some point. Yeah, absolutely, because you could argue that it kind of already has because it took Tesla until December to, to sweep the high, whereas Ethereum, it only took it until August. So instead of April to August, instead of April to December, Ethereum did it a lot quicker. So that's why I'm saying like, you know, if, if Ethereum is to follow Tesla and go to a new all time high, like maybe it happens very quickly and it doesn't take as long as it doesn't take a full year. I would view that as a much more bearish outcome though. Right. Like I, I would see it as, as kind of like an exit rally for, for all these guys who've developed these like treasury companies around Ethereum and whatnot. Like I feel like they might use that as just an opportunity to just dump on all the retail investors that are going in and fomoing in. I think it would be healthier at this point to just kind of like consolidate around these levels at least through the summer of 2026. Kind of like Ethereum did last cycle where it formed a low in June, kind of in the, in the first half of, of the midterm year, maybe it forms a low in 2026. The other thing too remember is by the time Tesla rallied to a new all time high, it was actually after it swept the low and it went down, it went to 490 and then it went back down to 210. So for Ethereum it would go from 4, 900. That potentially puts it at like sweeping this low from June. Right. Like 2100 right back to the fair value logarithmic regression trend line. So there does exist the scenario where like the pattern does something like this where like it sells off and then consolidates and then rallies back up to all time highs.

David (16:55)

It's funny how the numbers are so similar to just ethos.

Ben Cowen (16:58)

I mean it really is, it really is just a 10x. It's crazy. It really is just a 10x. And I do, I mean look, I do think Ethereum will eventually go back to a new all time high. I would just say like it would probably be a lot more bullish if it happened, you know, not in the next two months. Like if it happens in the next two months. How do we get around the idea of the four year cycle being different? Maybe it just gets that rally into January and then, and then that's all she wrote for, for a while. So we'll see. I mean I still hold some, I mean I still hold Some Ethereum that I bought back in April. So I mean obviously I am incentivized to see it, to see it go, to see it go higher. But I just want to be, try to be objective about it and be like, look guys, if Ethereum had already gone to like 5 to 6k, I would be very bearish on it right now. Like very. But it didn't do that. And so it kind of lead like I feel like there will be another move up. I just don't know if it's going to happen in January or if it's going to happen in like June or like exactly what month it's going to happen.

David (17:59)

Okay, so, but it's definitely not an overbought territory. This is maybe an accumulation type of territory. If you're a long term believer in eth, we have a lot of long term believers in eth. Like let's that tune into Bankless. As you know, Ben, if you zoom out on the cycle, just let's stick with eth the asset. Should eth holders and eth bulls be disappointed about Ethereum's performance this cycle? Are there reasons for them to be hopeful?

Ben Cowen (18:27)

Well, I mean I think this has been kind of a bitcoin maxi cycle in a lot of ways. And I think the reason for that, as kind of you said earlier, there just wasn't a lot of retail interest this cycle. Like this cycle, this is bitcoin color coded by social interest. This does not look like 2021 or 2017 where Bitcoin topped on euphoria. It looks a lot more like 2019 where Bitcoin topped on apathy. And when it topped on apathy Back in 2019, Bitcoin topped two months before quantitative tightening ended. And this cycle Bitcoin topped in October, two months before quantitative tightening ended in December. So Ethereum can control what goes on on Ethereum, right? But it cannot control the macro economy. Right? It cannot control what's going on there. And unfortunately for risky assets, I mean Ethereum is a much riskier asset than like buying the, the stock market, right? Like buying the like an index fund. Ethereum is obviously riskier. It just, it, it doesn't hold up as well when you have this like macro economic uncertainty, right? Like when you have the unemployment rate going up as much as it has been, you know, throughout all of Ethereum's history. The unemployment rate has basically just been trending down, you know, except for the pandemic. And then recently it's been trending up. So I think the reason why people are Disappointed is because they were expecting, you know, an alt season like in prior cycles. But we didn't really get that. And the reason we didn't get that was because, you know, we never truly went to this like euphoria mode. We, we, yes, Bitcoin went up, but it went up akin to what it did in 2019 where it topped on apathy. So I do think there will come a time again where we go, we, you know, we have much looser monetary policy and something like Ethereum does much better but I just don't see it happening in a durable fashion and you know, in the first, like, yeah, I wouldn't see it happening in a durable fashion in the first half of 2026. And like, and that could even include, even if it, if it wicks to a new all time high, that doesn't mean anything, right? I mean you're, you know, I'm not here and you're not here just to see Ethereum go to one slightly higher high and then go to a new low. Like, you know, I mean if you're in the market, you've been in the market since 2021 or since 2017, you know, you clearly want Ethereum and you own Ethereum, you clearly want it to go much, you want to go to 10k or much higher. You don't just want it to top out at 5k and then, and then that be it. So I think the bull, the long term bull case for Ethereum is that, you know, this cycle hasn't been what people thought because the macro economy hasn't really allowed for it. It hasn't allowed the more speculative assets to do as well because people are more so worried about inflation and the labor market. At some point in time we're going to get back to a period where the unemployment rate starts going down just like it did, you know, from 2009 until, you know, 2020. And by the way, I mean think about how well Bitcoin did during that time while the unemployment rate was going down. We'll get to that point eventually. Again, we're just not there yet.

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David (24:32)

Can you explain this, Ben? Why did we not get the euphoria phase of this cycle? So you said the bitcoin cycle is basically over, which largely probably means the crypto cycle is over. I think a lot of investors were holding out for that euphoria phase you usually see at the end of the cycle. You saw it in 2017, we saw it in 2021. The social chart that you were showing clearly shows that. And so investors have been waiting for that and they never felt it this time around. Why not?

Ben Cowen (25:03)

I. I mean, I really think it was just. It's due to monetary policy that then affects the macro economy. Right. I mean, I think we've had. We. There was a lot of mistakes made with monetary policy back in 2021. I mean, they should have been raising interest rates back then, and they didn't. And so then, like, we ended up seeing like the crappiest of altcoins rally for like 612 months. And now we're paying the price. Right? Like, we're, we're just continuing to pay the price for all that. Um, and, and so, yeah, I think the reason is, is, you know, in that 2019 move, right. You can see how bitcoin topped here about two months before quantitative tightening ended. You could argue the same thing's happening now. Right.

David (25:40)

This is, this purple line is a QE line.

Ben Cowen (25:42)

It's the balance sheet of Federal Reserve. Yeah.

David (25:44)

Okay.

Ben Cowen (25:45)

And so, you know, there was no rotation into altcoins after that. Right. The rotation into alts didn't happen until like a year and a half later. Right. And what, what, what ultimately require. What ultimately led to the rotation into altcoins was the stock market selling off. And that, that's the issue that we have in crypto is that like when, when crypto drops, the Fed does not care. Right. Like the Fed's not going to come rescue altcoins or Bitcoin for that matter. When the stock market drops, then they come to the rescue. Let me show you a chart that's really interesting. Look at Bitcoin's chart against the S&P 500. What you'll notice is that in 2019, Bitcoin started bleeding against the S and P. But while bitcoin was bleeding against it, The S&P 500 continued to go up. Right? Look at the S and P in 2019 and early 2020. Like, it kept going up despite the fact that bitcoin was bleeding to the stock market. The same thing's happening now, right? Like bitcoin is bleeding to the stock market, but stocks keep going up. And so last cycle, there wasn't a rotation out of bitcoin until after bitcoin had a truly parabolic rally where retail came back. But that rally wasn't able to occur until after the Fed aggressively cut rates and until after there was all this money printing. But the problem is that the Fed did not aggressively cut rates and really print money in excess until there was a reason to do so. And one of those reasons, of course, was the stock market dropping. And the stock market dropping was arguably because of the pandemic. So we find ourselves in a very precarious position where, like, the main way for crypto to really go back up is for loose monetary policy. But we're not going to get the type of monetary policy we want until the stock market starts to show weakness. Right? And so that's kind of the dilemma that we face right now is like, in order for an alt season to eventually happen, whether it be one year or two years away, it's almost like you have to have the stock market have a, have a big sell off to then lead to lower rates. And regardless, I don't think Powell wants to be remembered for aggressively cutting rates before he leaves office. So I don't think it's going to happen before May of 2026. I think there's going to be these macro headwinds that crypto faces through the summer of 2026. And by the way, if you compare bitcoin's current bear market not with 2022, 2018 or 2014, where we topped on euphoria, if you Compare it to 2019, where we topped on apathy, it kind of looks very familiar, where it's just kind of slightly lower lows, slightly lower highs, and maybe we can start to form a base by the summer of 2026.

David (28:43)

Okay, so if all of that has to happen first, this does imply it could take some time for this to all play out. However, when you were showing kind of the purple line, which is the Fed balance sheet, and talking about looser monetary policy, Ben, aren't we on the cusp of starting to see signs of looser monetary policy? We got Another rate cut, Just what is it? A week or two ago. And then also what is this $40 trillion in T bill spend billion, I should say, been adding, added to the Fed balance sheet. Like there's murmurings that this purple line maybe, and certainly rates at least are beginning to reverse in the loose policy direction. And certainly whoever Trump appoints as the next Fed chair, he's come out and said, I want somebody who's going to cut rates. So isn't this loose monetary policy basically implied right now and then moving into 2026?

Ben Cowen (29:42)

Yeah, to some degree. But I think there's one reality that we have to face and that is after quantitative tightening ended in 2019 and QE began, you can see the purple line started going up, but bitcoin was still falling, you know. And that's before the pandemic, right? That's before the pandemic. You can also see that the Fed was cutting rates, but Bitcoin was still falling just like it's doing now. Right? Like Bitcoin's been falling while the Fed has been cutting rates. So I, I, I think the hard part with, with this is that like you're right, qe, like, you know, QT has ended and they're starting to turn things back on and they're, they're lowering rates, but they're not doing it as aggressive as they need to be to really justify like a truly parabolic move. So let me show you an example of what I mean and where Ethereum has, has done best. If you look at the Fed funds rate and you subtract out the two year yield, so we're treating the two year yield here basically as the neutral rate. So if the Fed funds rate is above the neutral rate, then it means the economy is in restrictive territory. And if the Fed funds rate is below the neutral rate, it means that we're in more economically looser monetary policy territory. So when you think about like where Ethereum has done best, it did very poorly when monetary policy was up here where the Fed funds rate was well above the neutral rate. And that's where we've been for the entire cycle. Right. Where Ethereum has done best is where it's closer to Z, like when the Fed funds rate is closer to the two year yield or well below it, like over here in like you know, 2016, 2017 and then in this area in 2020 and 2021, like that is where it is done the best in those periods. When it's up here, it doesn't do well. And so I I think that's kind of like what a lot of people have missed this cycle is like, look, when you're in the, you can, you can cut rates, but you know, as long as the two, as long as the fed funds rate is still above the two year yield, you could argue that we're still in restrictive territory. And right now the fed funds rate is 3.75% and the two year yield is 3.5%. So we need one more rate cut just to get to the point where you could argue we're at neutral. Right, One more rate cut.

David (32:12)

Okay, so let me give you another reason, a possible reason why we didn't hit euphoria this cycle. And this is less to do with loose monetary policy or tight monetary policy, and more to do with investor attention. So here's a claim. Investor attention was just on AI this cycle. Crypto was not the hot new tech this cycle. And you could see it in the social charts like investors, where's all of that frenetic energy? It's not in our crypto charts. It's in OpenAI and Google and Nvidia and you know, the Mag 7. And so some are wondering if that will ever come back to crypto. But to what extent do you think that's an explainer of why we never hit the euphoria? Just the euphoria was out there. It just wasn't in crypto, it was in AI.

Ben Cowen (33:06)

Yeah, I mean, I think there's some validity to it. I, I think too, if you think about it, if you're a developer in crypto and I, I've said this before, right? If you're a developer in crypto, what do you, what are you going to focus on? Are you gonna, are you gonna try to build the next altcoin? And, and, and, and like let's imagine you have like the best view of crypto and you truly wanna build something valuable, right? That's not just another rug pull, right? Let's say you have like a good heart and you really just want to build something. The problem is that this cycle, no one has cared about those people. Like all people have cared about are like meme coins and like think about all the meme coin launches. So how demoralizing would it be as a developer to, to spend years pouring your skills into developing something only for some random meme coin to outperform your lifetime returns on a Tuesday afternoon? Which is essentially what happened this cycle, you know, So I think a lot of developers left crypto and went over to AI where they Felt like their skills would be more appreciated and where they could monetize it more and not just get caught. A scammer, right, which is ultimately what happens in the crypto space. So what I think has happened is, you know, there's been this, like, very much like this mal investment of capital, this cycle where people just keep throwing their money into, like, random crap that has zero value, like, absolutely zero value. And they know it has zero value. They're literally called meme coins. And the creators will say, like, there's no value, and then people will still go and buy it, you know, and it. And it makes absolutely no sense. So I, I think, like, you don't need the SEC to regulate crypto in my view, because I think the market will reg. Will regulate itself over a long enough period of time. Like, there's people that spent the last three years buying the crappiest of altcoins that hopefully will not make those same mistakes in the future, because they're going to be like, all right, I just spent years buying all this crap, and I would have been better off if I had just stuck with the blue chips of every asset class. Right? So I think over a long enough period of time, the markets kind of like, regulate themselves. And I think a lot of the people that have been in crypto for the last few years kind of know how it works. Now, in order for a lot of the meme coin stuff to take off again, you would need a huge influx of retail, like, of new retail investors into the space. Because I feel like everyone at this point in crypto has learned their lesson and they don't want to touch it. A lot of them don't want to touch it ever again. And the people that do are just, you know, I mean, they just treat it as a casino anyways. Like, it's no different than just going to Las Vegas and betting it all on black or, you know, or something like that. So I think that is. Is a big component. I mean, I think AI has stolen some of the thunder. But, I mean, had you shown me a chart of just bitcoin and monetary policy and all bitcoin pairs, I feel like I could have explained everything even without knowing that AI was even. Even a thing. But I do think if you're a developer, do you go. Do you go launch an altcoin and try to build something like that, or do you go try to develop the next. I don't know, Chad, GPT wrapper to some, you know, to form or to some, you know, to accommodate some like niche industry that you can package in like an interesting way. And I think a lot of people took the latter approach well.

David (36:30)

And this goes to another question I think that's out there and lingering in folks minds. I never, I don't want to say I've never seen crypto sentiment so bad, but maybe that's partially true. I think there's this question Ben, as to whether investors are ever going to actually come back to crypto. So maybe they've been burnt too much. Investors and, or builders, are they ever going to come back? And so there's some question I think in people's mind maybe this happens every bear season or maybe this is unique and new which is maybe that was it, maybe that was the last cycle. Maybe there are no more cycles moving forward, maybe there's a slow grind up. But this plays out over many years and even decades because investors aren't coming back, builders aren't coming back. It's it, it's over. And so the social that we saw, that chart that you were showing never hits kind of the, the red again because investors have been too burnt by this asset class. What do you think about that? Because if that's the case, this breaks the cycles. We don't get another four year cycle. Or also it could mean that we've just entered a new era and a new phase. So the previous phase we had these four year cycles and they were boom, bust, you know, euphoria and then like trenches of despair, net new moving forward, the second era, we're going to have to earn it. It's going to have to come through traditional finance, real world adoption, the good old fashioned way, the hard way. And so if that's the case, that's different from a structural perspective.

Ben Cowen (38:07)

So you're saying, which I completely agree with, that dubious speculation only gets us so far.

David (38:12)

That's right, exactly.

Ben Cowen (38:14)

Yeah, exactly. Yeah, I mean I agree. I, I, I think, you know, I think a lot of people are kind of tired of the crypto asset class constantly promising things and, and then it not really ever happening. What I, what I think ultimately needs to happen for us to get back on track. I feel like we need to rebuke all the crap in the space and we just need to focus on like a few things because the reality is there's not really a future where everyone's launching their own meme, coin and Altcoin and that's a sustainable thing, you know. You know, could there be a future where you have a few different chains and, and people working on developing More like interoperability between the chains. Like that's a future I could see, but I just, I don't think, you know, there, there, this is not completely unprecedented, even though it sounds like it probably is. In China, like thousands of years ago, there is a, a speculation phase where a lot of people just created their own coins and they all, you know, they, they all had like different values and there was like thousands and thousands of them. And then eventually it all just collapsed. Right? And, and because society cannot function on a hundred thousand different currencies, you know, it just can't because there's just not enough confidence that the, that they actually hold value. You know, there can be confidence in a few, right, but, but not a hundred thousand different ones. Look, I, I think long term, you know, retail will come back. You know, they might not come back in 2026, maybe not in 2027. I don't, I don't know exactly when it's going to happen, but long term, I, I, I want to be optimistic and, and assume that they will eventually come back. I mean, I've been, I've been accused this cycle of being too pessimistic about altcoins a lot, but I had my reasons, right? Like I had my reasons for it. It was mostly based on monetary policy. And you know, I don't know if that was the actual reason why altcoins struggled this cycle. It seems like it, that was the reason to me. But just because they coincided doesn't mean that was the actual reason. Like, maybe it was the AI reason, right? Maybe it was the ETFs that, you know, who, who knows what the reason was. Regardless, I mean, I do think attention will come back to crypto. It just might take longer, you know, than, than people are thinking. I mean, I, I could see it happening next cycle potentially. Maybe it doesn't, you know, maybe it, it takes 10 years, you know. You know the, the funny thing is we were talking about, or we've talked before about like the lost decade in stocks, how like sometimes stocks will just go sideways for like 10 years and you really don't have any gains to show for it. That's, you know, like look at 1999 to like 2008, right? Really, if you had, if you bought in 2000, you had to wait until 2013 for durable new highs after that. So like, is it possible that we're just like, that we've been in that for like the last four to five years for certain assets where like we're in a longer dead, dead zone. I mean obviously bitcoin hasn't been in that. Bitcoin has gone to new all time highs. But Ethereum, if we're being honest, right, like it, it hasn't really gone to a new all time high, not a durable one you could argue in over four years, right? Like four, four and a half years at this point. If you don't, if you exclude the November 2021 top. And so one of the things I thought about a long time ago and it always made me a little like curious as to like what it would mean and I feel like I'm getting the answer now is like I was looking at this chart and I remember in 2022, like looking at it and, and, and kind of extrapolating the regression line and, and thinking to myself, gosh, like it's going to take until 2026 for the quote unquote fair value of ethereum to be $2,000, right? That was the crazy thing to me back then. I'm like, gosh, like. Cause back then Ethereum was already at 3,000 in, in March of 2022. I was like, I was looking at this, I'm like it's going to take until 2026 just for the fair value reach 2k. So it could just simply be that we're in a zone like this where we kind of come back down, maybe we rally back up and then eventually as all this stuff finally catches up, then we can build off of it and then retail comes back. Maybe we just brought in too many people too quickly and there just wasn't anyone else to bring in. Um, and then so we then spend like all these years just kind of like twiddling our thumbs waiting for something that everyone thought was going to happen three to four years earlier. So I, I will say I do think retail will come back. I just think they haven't been able to come back this cycle because of high inflation, because of a rising unemployment rate and also because of within crypto. I feel like there's been this very much mal investment of capital and also with basically every single altcoin, like they don't, a lot of them don't really have good revenue models. You know, there's been plenty of companies that have done well like Apple and Google and Nvidia and Microsoft, but they're actually making money, right? It's not just a circular economy like a lot of altcoins. Like there's a lot of altcoins that will print more altcoins and then give those altcoins as rewards to their users. But then those rewards are just diluting the tokens that the users already had because they're just printing more tokens. Right? So what we need is we need the projects to actually generate revenue, like more revenue so that people, so that, so that like in more institutional investors can look at it and understand it and be like, all right, this is the bull case. Like they're making money and we can see how they're making money. What, what instead has been, has been this constant promise of oh, we're going to have this utility in the future. But then the future just keeps getting kicked down the road. Like the, the can just keeps getting kicked down the road. So I agree with you. I think we need, you know, more utility in the crypto space. I do think social interest will return. It's just, it's just taking longer. And I mean, I think the reason, I think that is because I just want to be, I mean I want to be long term bullish on, on Bitcoin and you know, because I mean, if not, what are we doing here? Right? Like, I mean, long term, I'm bullish on it. I just think that this is the first cycle where the unemployment rate has really gone up and it's, and it's affected a lot of, a lot of the different cryptocurrencies.

Podcast Host (44:45)

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David (46:54)

Check it out@cca.uniswap.org Another paradox for you Ben, about where we are in the cycle and just of the historic journey of crypto is I feel like we got everything we wanted this cycle except prices. And here's what I mean by that. BlackRock, Larry Fink, they're talking about tokenization. We have full approval of ETFs. We have the genius stablecoin bill. The Secretary of Treasury of the United States of America is saying he anticipates a world where we see 3 to 5 trillion in dollars on stablecoins. We have the clarity bill in front of Congress, we have all of tradfi and even project crypto from the sec. We have the total opposite of Gary Gensler at the chair of the SEC talking about tokenization being a priority in 2026. Like these are all tailwinds in our favor and yet prices are like this and we're in sentiment despair. I mean make that make sense.

Ben Cowen (47:59)

It's probably just like, I guess it's one of those things where if, if this doesn't convince you that markets are forward looking then like nothing ever will. Right? Like all that stuff that you mentioned is a good thing and long term it's bullish but like it's Possible that it was all like that. A lot of it was priced in when Trump took office, you know, because that ended up being a top for a while, right? Bitcoin topped at around 109k and it only went above it slightly to 126. So I, I think it's just evidence that the market is somewhat forward looking and, and you know, by the time you wait, there's a common saying, I can't remember what it is. It's like, if you wait for the robins, spring will be over, right? So if you wait to see the robins, if you wait for things to look good, to buy, the bull market's over, you know, that's why, like when the bear market's going on, if you wait for things to look, if you wait for things to look good, you end up missing the bottom, you know, so that's a common. I think it's a great quote, is to kind of live by when it comes to investing. If you wait for the robins, spring will be over. So if you waited until the genius act, if you waited until, you know, Trump to take office, if you waited until all this stuff to go out and buy bitcoin, you waited until you saw the robins and spring was already over by that point.

David (49:19)

You know, this also makes me wonder what the AI market is pricing in from a forward looking basis. Right. And how big that could expand. I mean, are you tracking that at all? Like, it seems like you could apply your same knowledge of markets and bubbles and euphoria and cycles to something like AI. I was reading a Howard Marks memo. He's had a series of memos lately and the question right now is, are we in a bubble? And he never quite answers that question, but he's like, yeah, it looks like we're close to. I saw a Ray Dalio clip earlier this week saying we're 80% of the way in a bubble in terms of AI stock. Do you have a take on that or are you reserved just to crypto?

Ben Cowen (49:58)

Oh, absolutely not. I do have a take on it. I would say there's two ways to measure it. And one ways. Well, there's three. Well, I'll show you two. One is the S&P divided by M2, and the other one's the S and P divided by gold. Okay. So if you look at it against M2, which I don't even know, this is not even my favorite way to look at it. If you look at it against this, it suggests we have about one more year. Okay. And what I mean by that is if you look at what happened in 1996 to then what happened into the dot com era, you see this kind of this bar pattern and then you overlay it. So you take 1996 and you just put it on 2022. It's, it's almost a carbon copy, right? Like you even got your 20% drop around the same time. And you could argue that we're like kind of entering into maybe like an early correction into early 2026 as well. So if you look at it like that, then the, the tariff capitulation that we had was just the same type of capitulation we had in 1998. And you'll see that the drop that we do, a 20% drop in 1998 occurred at the exact same level it occurred at in 2025. We got 20% drops. And then after that we then into this we went into more of like a longer term distribution phase that held for like a year and then eventually everything came collapsing down. Right. So when you look at it through the lens of M2, you could argue that it absolutely is a bubble. But there's a counterpoint, I mean as well is that like, just because it topped there in 2000 doesn't mean it can't go higher this time. Because also, you know, like, there's some justification for like maybe long term this whole thing is increasing and not just an oscillator. If you look at the NASDAQ against M2, it already has gone to all time highs, right? So you, you can see that like don't, like, I don't think we should put a cap on what the S and P can do just because of where it topped out against the, against M2 all those years ago. But my favorite chart for looking at this to kind of figure out like, is this as Bubblish as 2000 is to look at the S&P 500 divided by gold. And when you look at it divided by gold, it actually does not look like 2000 at all. It looks like the 1970s. So if you look at it here, what you'll notice is that these valuations right here against the S and P, you can also see the S and P was at these valuations against gold back in the 1970s as well. And that's exactly the same level we're testing these days. Right? So this is what the dot com era looked like, right, where, where the S and P was much higher against gold than it is right now. In fact, from the current levels, the S&P 500 would have to, would have to rally 258% against gold to get as highly valued as it was at the peak of the, at the peak of the dot com era.

David (52:58)

That would mean we're still very early then. Possibly.

Ben Cowen (53:01)

Well, if only if it ends up becoming a bubble like the dot com era. I mean, there's also a chance it's like the 1970s where, you know, we keep bouncing off this level and we do get some corrections and maybe the stock market drops 30, 40, 50% at some point, but it's not the same type of bear market like you got from like the dot com crash or something. My guess is that it's not either of these things because it's not going to be 2000 and it's not going to be 1973 because it's not 2000 and it's not 1973, it's 2025. And, and something slightly different is probably going to happen. Right. Like, so it's not going to be a carbon copy. I think something slightly different will happen and so we have to stay on our toes. But I will say, like, if you look at it just against M2, it does seem like valuations are getting stretched. But also at the same time there's a lot of companies today that are actually making money with AI. Whereas I feel like in the dot com era there wasn't a lot of revenue being generated.

David (54:01)

It was dubious speculation, was it not?

Ben Cowen (54:03)

Right. I mean, I feel like it's easy to sort of assume we're in a bubble. And I feel like my base case is that eventually, like we're going to have a massive drop out of the bubble. But what if it doesn't happen until say 2028, right. Or 2029? Like, who knows when that's going to happen? It could be, it could still be, you know, a couple of years away for all we know. And it's hard to, it's hard to time these things. It's hard to know exactly how things are going to play out. You know, I would even argue that, and this is not the first time, you know, of anyone expressing this opinion, but I would almost argue, like, what's the scarier proposition? That we are in a bubble or that we're not in a bubble? You know, like if we're not in a bubble, then a lot of the people that are waiting for much lower valuations are just going to be waiting forever. And if we are in a bubble, then obviously the negative thing about that is that then we, it Kind of kills the market for, you know, five to 10 years. And obviously no one wants that. So it's tough. It's tough. I will say there's certain aspects of things that do that, that do appear somewhat bubble like, but I don't think valuations are as stretched as they were in 2000. I think they're more. So it's more like 19. It's more like the 1970s, if I had to guess, or the 1940s in terms of inflation and that kind of stuff. More so than what we saw during the dot com era. And if you look at the dot com era, like look at, look at the S and P divided by gold, like it rallied from this low from 1980 until when it topped two decades later, the S&P 500 rallied over 4, 300%. Right. Like ever since Bitcoin has been around in 2009, the S&P only went up 260%. You know, right. Against gold, you're, you're talking about an order of magnitude difference in terms of, you know, in terms of that. And, and who knows, maybe, maybe like we're kind of in this area where it's just kind of rolling over into a low and then it then builds up into a more massive bubble. I don't know. Listen, I will say with stocks, no one can predict what's going to happen. And that's why usually lump sum is better than anything else, because everyone thinks they can time the market and then basically no one ends up being successful at it.

David (56:23)

Ben, since you brought up gold, there's another question in my mind that has perplexed me for this cycle. And I'm wondering if you know the answer to it or have any ideas, which is why has gold price risen so much and left bitcoin in the dust? Bitcoin was supposed to be digital gold. It's a non sovereign store of value. Why is it that gold is rallying on that narrative and bitcoin is not? And is there maybe a bull case here that eventually bitcoin will catch up?

Ben Cowen (56:56)

I mean, eventually, everything that's worth anything, I feel like eventually goes up into the right, you know, because, because the denominator of what we value it in is going asymptotically to zero. Right? Like the US dollar purchasing power is going to zero. So if there's assets that are valuable, then theoretically they should increase in value over a long period of time. With gold, look, I, I will say bitcoin has never traded like gold, right. And a lot of people think it's digital gold, but it's never traded like gold. If it had traded like gold, no one would care about bitcoin right now because it would have meant it hadn't done anything for the last 15 years. You know, we don't want it to trade like gold, right, because we're, we're, we're more often in risk on times than risk off. So it makes more sense to want it to trade like a risk on asset, not like a risk off asset. It's just that when you go, you know, when you go into risk off times, certain things like gold can rally for really long periods of time. A lot of times the gold bull markets can last like 10 years. You know, like this was a 10 year bull market from 2000 until like 2011 and this was a 10 year bull market From 1970 until 1980. So gold's rallying probably just because of all the macro uncertainty, all the mistakes that you could perceive that the Federal Reserve is doing. The fact that there's no fiscal responsibility at all, right? Like everyone just wants to inflate our problems away, print more money. It's going to likely cause the bond vigilantes to, to revolt at some point and send the long and the yield curve higher. I think that, look, when you're in times of uncertainty, people want to buy real physical assets and not, they're not as attracted to more dubious paper assets or just more speculative things because there things are uncertain, you know, and the reality is, is gold's been around forever. You know, the market for gold has been around far longer than any other thing that we've created. Right. I mean it's ex. They just the market for it existed for a long time over a long enough period of time. We can look at the gold chart and see that it just goes up into the right, you know, and, and I think we're just, you know, we're in one of those times. We're in a period of high inflation. And you know, in, in the 70s we had high inflation coming and going like in these waves. And look at what gold did, right? It just went parabolic. So when you're in times of macro uncertainty, people tend to favor hard assets. And I think that's the reason why gold has done so well.

David (59:22)

But your narrative, that's the exact same case as bitcoin. That's what, that's what people say about bitcoin. The exact same thing you said about gold is the case people, investors make for bitcoin. I mean, have you ever looked at sort of a bitcoin goal.

Ben Cowen (59:34)

But people make that case. But it doesn't mean it's true. Right. Bitcoin is a risk asset. Right. It's not a risk off asset. It is always traded like a risk on asset. It's always traded like a levered version of the Nasdaq. Right. If you look at. Let me see if I have it. If you look at the correlation, I mean, over certain timeframes, everything just seems correlated. Right. In bull markets. But if you were to look at the correlation over the last 365 days between Bitcoin and. Or let's just look at the total crypto market cap. So the total crypto market cap against gold, the Correlation is only 0.23. Right. Like, there's not. It's a very low correlation against nickel and copper. I mean, nickel, it's negatively correlated for a lot of these metals. It's just very. It's a very low number in terms of the positive correlation. It's not really that meaningful unless it's closer to like 07 or 0.607, 0.8, 0.2. It just means there's not really a great correlation there. So I think that like, you know, and if you look at like total market caps correlation with the S and p, it's at 0.61. Right. So that's a little bit more meaningful. I just, I don't think that you can look at bitcoin and say that it trades like gold because it, it never really has. In fact, in 2019, Bitcoin topped when gold broke out. Right. So, like, when gold does very, very well, crypto does not do well. Right. And that's kind of how it's always been. It's just been that, like, there's been this narrative of like, oh, it's digital gold. So that implies that if gold does well, bitcoin will do well. But bitcoin is traded a lot closer to the NASDAQ than it has gold. And I mean, I don't, again, like, I don't make that rule. That's just, that's just the reality that we're in.

David (61:35)

Would you say then, like, bitcoin is almost its own kind of third thing. It's. It definitely doesn't trade like gold. It trades more like stocks, but it doesn't trade exactly like stocks. It's its own separate.

Ben Cowen (61:47)

It trades further. It trades further up the risk curve than stock.

David (61:51)

Right, okay.

Ben Cowen (61:52)

But that's why in a bull market like this bull market, Bitcoin went up 700% or more, the stock market only doubled, right? So like it, it's just further up the risk curve. And altcoins are even further up the risk curve than bitcoin. But just because they're further up the risk curve doesn't mean they're always going to rally. Right? So, you know, I think that it's further up the risk curve, therefore it tops out earlier, right. Like it shows weakness earlier when the macro economy starts to falter. But when the macro economy starts to look good again, Bitcoin will likely bottom sooner, if that makes sense.

David (62:32)

It does. Ben, this has been a pleasure. I mean, last kind of question really to wrap this up is if what you're saying could be the case does come to be. It's going to require a lot more patience from crypto investors who previously maybe are not used to having patience. And a certain number of investors in this asset class might be scratching their heads and say, why should we stick with crypto? Do you have an answer to that?

Ben Cowen (63:00)

Why?

David (63:00)

Why should investors stick with crypto? And what should they be thinking about this point in the cycle? What should they be doing their time and their resources?

Ben Cowen (63:10)

I think it makes sense not to marry an asset class. Like I have large, like I have positions in gold and silver and palladium and uranium and, and stocks and you know, index funds and, and other things. Like, I, I think it makes sense not to limit yourself to any individual asset class. But I will say usually the time to buy crypto is like halfway, starting halfway through the midterm year, through the end of the midterm year. So like if you're, if you're an investor and you're like, all right, well how do I get an allocation? When do I want to buy crypto? Usually the midterm year is the worst year or is starting in Q4, the post having year going into the midterm year, that's the worst time. That then leads to questions like these, right? So then it usually leads to negative price action and there's negative price action associated with it. The market usually ends up bottoming out. I think the reason to have crypto in your portfolio long term is that when we are in a bull market crypt, like especially something like bitcoin can drastically outperform the stock market just like it did this cycle. But when, when it, when, if bitcoin can go up several hundred percent more than stocks, it can also drop a lot more in, in a bear market. Right? So that's kind of where we are right now. We're just I think we're in a bear market, but it doesn't mean that the bull market will never come back. And when it does come back again, which hopefully it does, I think bitcoin will, you know, outperform once again. But I admittedly, I think that we're a little bit of ways off from that.

David (64:43)

So how are you playing this? How should people play this? So sometime in 2026 could be a good point to enter with some more to continue accumulating. Right, that's, that's a time based dimension. Is there a price based dimension to this? Like at what point does ether get cheap enough for you to enter? What, what about bitcoin?

Ben Cowen (65:00)

I think when Ethereum's in the regression band, usually like that's a good time to accumulate it. That's when I bought it back in April. Yeah, I mean with bitcoin in the midterm year, normally it goes to the 200 week moving average. That tends to be a good time to accumulate bitcoin.

David (65:15)

So is that around like 50 or 60k?

Ben Cowen (65:17)

Right now it's approaching 60, but I mean it'll be sometime, it might be mid-60s or something. 70k maybe by the time bitcoin reaches it. Like I don't know exactly when, but these are all just, you know, there's times to get exposure. You know, usually sometime mid to late midterm year is a good time. So we'll see and we'll see if it plays out like it normally does.

David (65:42)

Ben, this has been great. How can folks follow your work? Stay in touch.

Ben Cowen (65:45)

Yeah, I'm in my YouTube channel, Benjamin Cowan Twitter at Into cryptoverse and then I have my website into the cryptoverse.com we actually also launched Benjamin Cowan.com as well, but it's kind of under construction still. So maybe just go to into the cryptoverse. But really I think the best place to go to is just my, my YouTube channel.

David (66:02)

Amazing. And many of the charts we saw was actually on the into the CryptoVerse platform. So a ton of resources there for you. Bankless nation. Gotta let you know, of course none of this has been financial advice. Crypto is risky. You could lose what you put in. But we are headed west. This is the frontier. It's not for everyone. But we're glad you're with us on the bankless journey. Thanks a lot.

Podcast Host (66:23)

Sam.