B (4:29)

That is right, yeah. That is absolutely right. I mean, it's actually kind of interesting that, you know, when I, when I got into investing, when I learned about investing, it was through the lens of Warren Buffett, Charlie, Charlie Munger. And I do have sort of a, a, a focus on fundamentals and deeply understanding also the, the macro cycles and sort of what drives the price of Bitcoin. I think the philosophy is really deeply understanding what drives the price of Bitcoin, what is fair value for Bitcoin, what do we want, what that is the price that we want to pay for Bitcoin. And we're pretty disciplined in terms of like our entry points of when we actually allocate capital. And so the strategy is to sort of be risk on when the market is more risk off and sort of deploy capital at those points and then hold for long periods of time. And we also will trade into other assets during risk off regimes within the larger cycle. But the goal is to exit the cycle with, with more cash than you started with so that you can, you know, deploy that and be greedy when others are fearful, which is a Warren Buffett quote, you know, in the bear markets. And so that's really the whole strategy.

A (5:40)

Okay. And so I think it's really important to understand Mike's decision making by understanding Mike as a, as an investor and a bayless listener. You might play this differently. So you might be a trader, you might be doing things that Mike's not doing. You might be deeper on the risk curve into alts. You might be someone like me. I would consider myself a long term investor that doesn't really play these cycles too well or too much. So I tend to kind of buy and hold more across cycles. And the reason is because I'm terrified that I'm going to miss, you know, one of those days where you want to be in the market and you get kind of a melt up. So I've decided personally to just simplify my life and not to play these cycles too much. So I'm always biased towards like, hey, it's going to be bullish at some point. So you may as well always be buying dollar cost averaging in every single month. So that's my take on it and that's why I'm not very good with these cycles and why I like to pay attention to people like you. So let's go through where we left the, the podcast about a month ago. When I talked to you at the end of September and this is a post you wrote the end of September. You've been, you've been calling it late cycle by the end of September. I think you, you thought we would get a top sometime in Q4 of 2025. You actually marked the expansion phase here. Here's how your, your entry on the Defi report kind of begins. The current expansion phase is now on day 1044 as measured from the price trough for, for Bitcoin in November 2022. The 21 expansion lasted 163 days and the 17 cycle lasted 165 days. Measured this way, we're distinctly late cycle. Now at the time of recording, we're actually 1065 days in. So the symmetry is kind of interesting. We're at about the same time the previous cycles ended. And so you think this means we're late cycle now. You said there's no law that requires Bitcoin to continue on, on four year cycle paths. But when you look hard at the data, it's difficult to fade the idea of a Q1 top. Now at the time I think you were primarily still deployed in crypto, so you're like 20% cash and the rest deployed in crypto. What were you thinking at the beginning of October?

B (8:01)

Yeah, so thinking at the beginning of October was that you know, sort of anchoring to this idea that yes, we are late cycle and the base case is that you're going to have a Q4 top. So October tends to be a pretty bullish month. September tends to be a little bit more bearish. And so coming out of September, heading into October, we did have like a pretty good move like very first few days of October and like everyone kind of got it, got excited, like it.

A (8:29)

Looked like October for sure.

B (8:30)

October's here, October is here. And you know, I think the view at that at this time, you're right. We're about, you know, 20, 25% cash at this point. And so we're sort of leaning, you know, towards exiting the market. That's sort of where the bias is starting to push. But at the same time we've been acknowledging that the economy still looks strong even though there are, there are some sort of, you know, we've seen some, some weakness in the labor market, but the economies are strong, GDP looks good, earnings look good, valuations are high, Fed.

A (9:00)

Rates were going down. Right.

B (9:02)

And we have the Fed cutting rates. So you have an interesting sort of setup here. There are other risks with, with tariffs and geopolitics and other things going on out there, but there's, we're sort of like balancing this tension between, hey, crypto typically does really well in Q4, especially after, you know, post having years. We've had a pretty good run. We are definitely late cycle here, but there is also this right tail risk of a melt up. And so you want to be in the market. Crypto markets can reprice rapidly in a two to three month span. And so your strategy of sort of saying, hey, I don't want to miss That I want to be in the market is fair. There's absolutely risk to just exiting the market too early. And so we've been balancing, I think this tension and monitoring this and it's sort of boiled up a little bit within the last few weeks or so.

A (9:51)

So this was another report on the Defi report in early October when you were in kind of this frame of mind and you were talking about where eth might top. Right. Of course there's a lot of folks that are incredibly bullish on ether and have price predictions far higher than what your base case is. You know, people like Tom Lee, you go talk to him and you know, we get something in the 20,000 range, maybe depending on, depending on the day. But you close this post by going through some on chain metrics for ether, the asset. And he said it was possible that ETH trades 255, 250% above its 200 weekly moving average. That would put ETH at around 8 and a half K. So $8,500. Or if you look at the realized price, there's another way you can get eth to about $8,001 $8,700. Or if you compare it to bitcoin market cap and you think Bitcoin hits 150, ETH gets to 8600. Anyway, it's basically your base case was eth could be $8,500, which is of course like more than double what it is right now. At the time of recording, I think we're recording, ETH is hovering around $4,000. You said even the bull case would send eth to 10k. So at the beginning of October you still thought this was, this melt up type scenario was very much on the table. In fact, it was actually your. The base case, right?

B (11:21)

Yep, yep, yep. Yeah, this was, this was essentially the base case. And this is all predicated on bitcoin's performance. Right? This is, you know, I think, you know, over time we should start to see these assets start to trade independently of each other. But I'd say right now everything is still sort of being priced relative to what bitcoin is doing. And so if you have a view on eth, if you have a view on other altcoins in the market, in my view, you first have to have a thesis and a view for what bitcoin is going to be doing. And so that was sort of the base case. Hey, we're probably going to see a typical Q4. There's no reason to be super worried about macro risks out there. And a 30% or so move from Bitcoin gets you to 150k and then you can kind of back into where you would think that that ETH would land. And so, yeah, this was sort of the base case towards the end of September. At the same time, sort of acknowledging, building, building risks and we can get into sort of what sort of prompted me to kind of start to go more risk off.

A (12:30)

Well, let's do that because this was where we sort of left things. Right. And then I got a, an alert email from the defi report from you and it was titled shifting to risk off. Okay. I got this on I believe sometime Friday. So Friday morning before the market started to sell. And I think you had started to make moves that Thursday night in your own defi report in portfolio. So before the flash crash, which is why this is really interesting, why I wanted to give that history because we can set up kind of the contrast point. So this is basically you said, I'm sharing a quick update. We've updated our portfolio last night due to rising market risks. And you switched to risk off mode. Right. So just to quantify this, Moving from a 20 to 25% cash position, everything else kind of deployed to a closer to 50 to 60% cash position on the back of this. This is what I was seeing. And you gave some reasons for that. You said bitcoin low trading volumes ETF flows have slowed for bitcoin. Neath what was kind of remarkable. I don't know if you had just fantastic luck in, in, in timing, Mike, or if like you're just that damn good. All right. But like you called the flash crash before the flash crash. And I kind of want to know what you saw in order to take a convicted bet at that point in time.

B (13:50)

Yeah, so. So I don't feel, to me, I don't feel like I called the flash crash. It was more just, hey, you know, and I try to trust my insights. We study, you know, tons of data and the process here is really pulling in lots of data. We follow other researchers in the space as well, and we pull different, different opinions into, into our own. But I think, you know, I try to trust the, the gut and the instinct of what, what it's telling me. And a lot of this just had to do with. We had a pretty big liquidation event that preceded the one that we had two Fridays ago. And it was, it was the largest one since like last cycle. And then we had this massive one like two weeks later. And I've been sort of monitoring just the amount of leverage, you know, in the system and then pairing that up with what I'm seeing with, with the other fundamentals and on chain data. And if you have a lot of leverage building up and you're not seeing sort of strength behind that, that is when you sort of get these potential.

A (14:55)

These potential strength is that like trust, trading volume strength.

B (14:59)

So yeah, so trading volumes, spot ET looking at ETF volumes, looking at we, we, we look a lot at like the Solana ecosystem in particular, like what's happening with launch pads, like how many new tokens are coming out. What's happening with trading bot platforms that are like sort of in the trenches so that we have a good sense of like where the animal spirits are. Is there like still a lot of interest in crypto at like the, the like pure degen layer to get a sense of like just you know, the risk appetite in the market. And so I think combining some of this analysis with what we're seeing just in terms of, you know, spot buying, ETF buying other, you know, active users and things like these types of metrics, this is what started to make me nervous that okay, you have like a situation here where the market's tilted heavily towards risk with all the leverage, but I'm seeing weakness, you know, underneath that and that's when the house of cards can, can get a little bit wobbly. So I was not predicting a flash crash or anything like that. It was more just, hey, like you know, my conviction is starting to lean towards things are getting riskier. Right, right. That, that was really what it was. And when you're this late in the cycle, if you, if you end up holding too long at some point you are going to, we are going to move past whatever that all time high is. We don't know if that, that has happened already for, for these assets, but we, it's always going to be in hindsight when we find out. And so you have to, you have to move. If you, if you feel you have conviction on something, you do have to move. We realize that like you know, we might, we still might be wrong here, like the markets, we still could see another move. I would say that the market structure for, for Bitcoin, the, the bull market structure has not been fully broken I would say and we can talk about what that, that looks like, but it's more that hey, the probability is pointing towards sort of weakness here and I'm having trouble kind of like coming up with a view of what the next catalyst is going to be for for the markets. And so if I can't find a catalyst I'm seeing weakness and I'm seeing this sort of lopsided market structure of leverage and sort of weaker fundamentals underneath it. That's kind of what prompted the sort of moving more towards risk off.

A (17:20)

As an investor I always admire fellow investors making kind of contrarian plays but also conviction type plays. And I always find much harder for me personally to have conviction on sells than it is buys. I do for whatever reason my orientation I can do buys all day. Right. It's like I get very excited about something, I study it like you know, learn what's going on and he conviction on, on the buy, harder on the sell. And so the fact that you were able to do this was a signal to me and part of the reason we're having this conversation and doing it a little bit earlier of course what happened that same day was what Bitcoin sold off from the 120 range all the way down to 110. It's since gone lower so we saw 104. So as of right now that was definitely the right play. We have recovered a little bit. So we're at back at 111k for Ethereum is basically the same story except a bit more volatility here. So on the the Friday flash crash sell off we went as low as $3,600. Unbelievable. It's quite a wick down. We've since somewhat recovered to around 4,000. You are now I believe in a 70% cash position. So post this. These Friday events you've decided hey, like it's kind of I'm still risk off for the remainder of this cycle. Now I want to ask you a little bit later, you know what would convince your, you, you to change your mind on this. But first give me some of the rationale for where we are now. Where you are now let's talk about some of the data that you're seeing on chain that's driven you to the conclusion to be more risk off than you are risk on at this point.

B (19:04)

Yeah. So the chart that you have up here currently is the ETH futures estimated leverage ratio and we can see that it got up, you know this is before the, the crash there. That blue line got close to to one and that's you know, far and away, you know an all time high. We got up to about close to, to 0.8 or so. This was, this was early, a little bit earlier in the cycle and we've almost doubled from where we got to like in, in Q4 of last year.

A (19:34)

When this is the amount of leverage like traders are taking on eth, is this like measuring the perp stuff?

B (19:40)

Yeah. So this is. Well, this is. Think of this as the total amount of like leveraged ETH that's in the market. So when you see that, that hitting up towards one, it means for every ETH that's sitting on an exchange, there's another eth that of leverage in the market. So you've basically got twice as much sort of long exposure in the market than there is of actual ETH collateral sitting on those exchanges. And this is how you know, you get the crazy liquidations when, when price turns. And then we had a lot of auto liquidations and we had some technical things on binance that, that caused some big unwinds.

A (20:18)

Now if I look at this, this ratio, Mike, in the blue here, it's like far higher than it was in the previous bull cycle. Does that indicate that the structure, the market structure really changed this cycle and a lot of the run up has been driven by kind of margin?

B (20:33)

I think so. And this is part of sort of the analysis that, that I was going through looking at all the buying activity that was behind us in terms of the Dats. And I think what, what 10 what happened there is when you have a price agnostic buyer in the market, like these massive debts and all of the buying that bit mine has done and sbet and bit digital and some of these others, it gives traders and others that want to put on leveraged a lot of confidence to do so because they know they've got a large buyer in the market. So I think we saw this really pick up after the summer, like after July or so when we saw these stats really kind of get out into the market. And so if some, if the market starts to get too complacent and too comfortable with putting on leverage, this is sort of how you get out of your over your skis. I think it's played a big role. And then looking forward it's like, okay, most of that is that story is behind us. Not all of it, but most of it's probably behind us. You know what's going to be the catalyst to take us to from 1800 to 4k and then 4k to 8k, how are we going to get there? That's part of the analysis.

A (21:44)

Let's talk about this slide which is the stages of the cycle and this is moving back maybe in the direction of bitcoin here. So you've got the early bull Market, you've got wealth creation, you've got wealth distribution. And wherever we are now, what stage are we in the cycle and how do you see this?

B (22:01)

So yeah, I think this is helpful just kind of how I think about cycles. And so early bull, you know, the people that were in the market were the people that were, you know, buying when everybody else was, was fearful. Right. This is kind of the, the Buffet strategy. This was after ftx. You know, people were calling for bitcoin to go to 1012 K at this time. If you were getting into the market then you were, you were catching some of that bottom. And what tends to happen is like for about a year bitcoin will like double in price. So that early bull period From January of 23 to, to about October of 23, Bitcoin doubled in price. But I don't think anybody would have told you you were in a bull market at that point because you're still significantly. It doesn't feel that way because you're still significantly below prior all time highs. But you know, you are in a bull market certainly for people that, that got in at the right prices. And then so coming out of the early bull phase, you entered we enter wealth creation. This is kind of typical, the typical phase two of a cycle. This is October of 23 up to about January of 25. We had the Bitcoin ETF launch, you know, happened during this period. We had Trump come into office and everything that happened, you know, around that period. And so this is kind of the wealth creation period. This is where bitcoin goes from, you know, 40k or so up to about 110k. So a massive wealth creation period. And if you kind of go back, we've done a lot of work on like trying to understand when did the most new users come into crypto in this cycle. This was the period that most of the ETF buying happened. This is when most of the meme coin speculative activity was happening. This is when, you know, long term holders of bitcoin were selling most of their bitcoin. So it was mostly happening in this sort of wealth creation phase, particularly around Q4 of last year into Q1 of this year. And that looks similar to what we saw in the past cycle. There were two tops in the past cycle. The first one was in April and the second one was in November. And the first, what year was that? This was of 21, 2021. So the first top was April of 21. It was like right after Coinbase went public. That looks to be like the, the true top. In my opinion, we did have a correction and then we sort of had a little bit of a leverage push that got us back up to like 66k or so and then that was the top. And so it feels a little bit similar where that initial big move that is probably like the true top. That's when most of the new short term holder activity picked up. And we've seen since that time since, since we, you know, we had the tariff tantrum in April of this year and now we've rebounded. And the question is, is there enough here? Given that a lot of like sort of early bitcoin investors have been, you know, de risking into, you know, 100K Bitcoin, you know, who's the, who's the marginal buyer that's going to take us from where we're at now, you know, up to you know, 150k or so. And that's, that's the question because that's.

A (25:13)

Where we've been in for the last year is the la, the, the wealth distribution phase, which is basically some of these holders, long term holders that are selling into this market above 100k.

B (25:24)

That's right, yeah. And so that takes us to, you know, where we, where we've been for 10 months, which is a pretty long wealth distribution phase here. And I think this is part of the reason that the cycle's been somewhat muted is that there are sort of a lot of early bitcoin holders that have finally decided that, that a hundred K is a pretty good number to, to take some risk off. And you know, in some ways we've had a different bull market. I think we, because of this and because, you know, when you think about all of the new buying activity that's happened here, these are all new holders now and this is going to be setting the base, you know, for the next bear market. We could have a different, you know, bear market as well and probably set a higher base in the bear because of the length of this sort of wealth distribution phase. What tends to come after this is wealth destruction. We don't know if that, if we are entering that period just yet. But that tends to be when things, things break down. Tends to happen after bitcoin has a failed weekly close at its 50 day moving average, which is about 102k right now. So we're still sitting above that.

A (26:32)

Make your case with some more numbers here. So here is realized profits last cycle versus this cycle. What's that showing you?

B (26:39)

Yeah, so again, just kind of anchoring to this idea that we're late cycle. So this is realized profits taken. We take this from Glass Node and just looking at, you know, what was the last cycle, we expect it to be higher this cycle just because of the total, you know, the price of bitcoin and acknowledging that a lot of people are, you know, were early holders of bitcoin. But we've, we've almost, you know, doubled the, the realized profits. So this just helps me anchor to like, okay, if, if we are going to have this extended cycle that everyone's talking about, like you still have to factor in like who this, who's going to be the buyer, who are the buyers and who are the sellers. We've already seen quite a bit of selling from the sort of people that you would expect to be the buyers in a bear market. And so it's hard to sort of take off to like to go into another phase when we're already this late in the cycle.

A (27:30)

So what this is showing is last cycle, the long term holders of bitcoin, let's call it realized $500 billion in profit basically. So they kind of cashed out their chips 500 billion this cycle, they've already cashed out $900 billion. And you're just making the point like that's a lot, that's a lot, that's a lot.

B (27:53)

And if you're going to, you know, when you're thinking about, I think a lot of the people that are sort of projecting, okay, the setup looks great for cycle extension, I could agree with a lot of that actually, and I think that you can make a pretty sound argument there. But then when you come back to this type of data, it's harder to make that case of like, okay, who is actually the buyer? Who's the buyer? What is the catalyst? And that's why we look at this data as well.

A (28:16)

Now ETH is not telling us quite the same story when it comes to realized profit. Maybe that says more about ETH's more muted cycle than bitcoin. So same realized profit numbers. Last cycle eth holders realized 220 billion. This cycle it's been 206 billion so far. So that's actually under the previous cycle. How do you factor that in? Because I think there's a lot of ETH Maxis out there who are just like hearing some of this and be like, we haven't even had our bull market, Mike.

B (28:46)

Right?

A (28:46)

What, what are you talking about? What, what, what does this mean for your analysis?

B (28:51)

It, it's, it's, it's Interesting to look at it from this perspective because you can kind of make the case, okay, bitcoin, Bitcoin's done its thing, and it's maybe a little bit less than people were hoping for, but you can kind of make. You could, you could sort of make the case that bitcoin's done its thing. ETH has not. Like, when you look at this, you know, it just hasn't. It hasn't repriced relative to bitcoin. And that's really what this is telling me right now is okay, if, if we can kind of concede that, yes, it's a little bit of a muted cycle for bitcoin, but still 5,6x from the lows, pretty good returns. If eth had just done what it typically does relative to bitcoin, this would look. This would look different. Right. The ETH BTC ratio still hasn't been able to get up to the levels that we've seen in the past during, during bull markets. And so I think this is what the market is. And a lot of people don't own bitcoin. Right. So then this really feeds into sentiment and, and people just can't wrap their heads around the fact that the, the cycle could be over and, and end in this type of state. And that's something, you know, if that, if it does play out this way to me, we have to sort of sit back in the bear market and say, wait a minute, what is this? What does this mean? Because I think what, what we've started to see here a little bit is like, in some ways, the bitcoin maxi crowd has been accurate about some, some of their sort of thesis that bitcoin would sort of swallow most of crypto. We are basically seeing that if you look at most charts of even some of the top altcoins paired against bitcoin, they tend to bleed out a bit against bitcoin. Ben Cohen does a lot of great work on this subject. Um, but yeah, I think that's really it. These other assets just haven't, you know, repriced relative to bitcoin the way that I think a lot of people were expecting, myself included.

A (30:44)

Well, maybe you could argue that ETH has just had kind of a weak cycle. Of course, there's also the argument we'll get to that, hey, the cycle's not over, Mike. But we'll get to that later.

B (30:52)

But that's right. Yep.

C (30:53)

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A (33:53)

Let'S zoom out to the top seven crypto assets and get even more coverage here. So you've got a chart that shows the capital base in trillions of 1.73 trillion and then a valuation of over 3 trillion. So I'm actually not sure what this chart means. What is this telling us?

B (34:13)

Yeah, so some more data that we source from Glass Notes. So we're calling the capital base, essentially, this is the realized price or the, or the realized cap of the top seven crypto assets out there. And what we're looking at here is the sort of cost basis of these assets. So the total amount of capital that investors have placed in the top seven assets is $1.73 trillion. The market valuation, the current market cap of those assets is 3.1. So this has come down significant. It was, it was over two or so before some of these, these liquidations. But this, you know, this is something we track because when you think about crypto valuations, you have the. The way I think of it is you have the capital base, and that's like the actual money that investors have put into these things. Like, this is something. We don't have this metric in stocks. Right. There's no way to track this. This is one of the cool things about on chain data is you can kind of understand like the kind of.

A (35:14)

The cost basis. Yeah. Of all the market.

B (35:16)

Very cool. And so it's a proxy. It's a rough estimate, but it's proven to be a really strong signal. And so you have the. That's your capital base, the amount of money investors have put in. And then you have a premium, which is essentially the valuation plus the leverage premium. So if you're in an environment where there's tons of leverage being put on and there's twice as many sort of leveraged ETH in the market, as there are actual ETH held by investors, then that's how you get that valuation premium pushing up. And so that is fine. And we were happy to see that. And that tends to be what drives bull markets. But we want to see strength sort of supporting the leverage. And that's where we started to become a little bit more bearish based on just the indicators and the fundamentals that we were, we were seeing in the market. But my view is that in bear markets and we've, we tracked data on this, the right side of that chart is going to collapse to the capital base in the bear market. And that's when the leverage and sort of the valuation premium gets wiped out. That tends to be the best time to buy crypto assets.

A (36:27)

Okay, so the full story here, if I could summarize a little bit. You're seeing the end stages of a bull cycle. You're starting to see momentum slow down. You're starting to see us kind of, I'll say run it running on fumes because we're running not on net new buyers so much as we're running on leverage in the system debt and kind of like hope for an alt season. And you're seeing weakness in trading volume, you're not seeing a source for net new buyers. And so you're just like, okay, October hasn't really happened. And so I'm at now judging by your cash position, 70% probability that the cycle is over, at least for your portfolio. And maybe you're more risk adverse than others out there, you know, like managing funds. But for your portfolio, you're kind of calling it, you're going to still leave some deployment in the market, but from what it looks like, you've also consolidated to your highest conviction bets here. So you're not doing long tail stuff with that 30%. Is that about right?

B (37:36)

That's exactly right. So when we started to go risk off, the first things that we were getting rid of were assets that we don't want to hold, you know, dirt through a bare market. So we have, you know, a small allocation the portfolio, some meme coins, things like that, things that, things that we've done well on earlier in this cycle that we just said, all right, let's just, let's cut, cut these few other, you know, risk on positions as well. And then we trimmed our sort of core, core asset holdings. And you know, that allows me to kind of say, okay, you know, I'm sort of 70, 30, 30% chance that, that I'm wrong. We, we do have this sort of melt up, you know, melt up, set up here and we'll still capture some of that upside. Otherwise I'm happy to, you know, book some profits and sort of get myself in a, in a good position for the bear market. I think we do most of our best work in the bear market. I enjoy actually the bear markets more than bull markets, which is surprising to hear. But it's just the tide goes out, it's easier to do the analysis, it's easier to see what's truly real. And so we want to be in a good position for that. And so to me it's riskier for me to sort of sacrifice being in a really good position for that. And this way I can sort of still capture some upside down while allowing myself to sleep well at night and kind of preparing for the next, the next phase here.

A (38:57)

I get it. I get the rationale. That's exactly what I wanted to get in your head, to just sort of understand that. And I don't, I don't like the conclusion, I'll say that. But I do understand the rationale. There's someone who also agrees with you that, you know, I followed for a while. Chris Brunisky. He said this after he said this on October 17th. So late last week, increasingly convinced that last Friday's massacre, he was talking about the, the Friday flash crash of course broke crypto for a while. Hard to quickly develop a sustained bid after such a meltdown. This cycle has been disappointing for most which can paralyze action as people hope for bluer skies or former all time highs. He said if you look at bitcoin and eth, we're in the elevated range right now. He also says this bull was different, the next bear will be different too. This is not like following Chris for a while. This is not so much Chris saying, yeah, the bull market's over. I don't know that Chris will ever say that, but it is him probabilistically leaning more in your direction, which is like it's late cycle. Book some profits right now and prepare for the very real possibility that we have hit a top. Even though that's not for sure. He's kind of saying the same thing that you're saying.

B (40:11)

Yeah, no, I have a lot of respect for Chris as well and you know, I think he's one of the good ones out there who will sort of share a little bit more of even when he's sort of long term, always long term, bullish, but will be sort of strategically Bearish. And I think that's similar how I view these markets. Like we're building a business in this space. We're extremely bullish long term on, on crypto as an, as an asset class and what it's going to do to just change finance and many other things. And we can sort of hold that view and also say that okay, there are cycles. This is just how a lot of this is just how human behavior and markets work. And we tend to get these cycles and we want to sort of be smart around some of that. So yeah, a lot of respect for Chris. I mean, we'll see. Nobody knows, you know, Chris, super smart guy, he's managing money. At the end of the day, we're all trying to sort of like play to whatever we think the probabilities are and position for, you know, basically be positioned for whatever outcome, outcome comes and be in a, in a, in a position of strength rather than weakness and sort of making. I never want to be in a position where something happens that I wasn't prepared for and I had too much, too much risk in the market and that starts to impact your psychology and it makes it harder to make good decisions. So that's something that I sort of plan for as well because I don't want to put myself in a position where you're, you're sort of struggling with, you're, you're on tilt and you're struggling to kind of like center yourself. I always want to kind of like be ahead of that.

A (41:43)

So yeah, I'll also add I'm saying these things publicly in some. A place like crypto, Twitter is not very popular. So at least for a lot of people who want to stay bullish. Of course. Right. And they have bags maybe counting on this. Let's get into the counterpoint because I want to get you to respond to this because I know something that you've looked at before is one of the points that Raoul Paul makes around global liquidity. And maybe I can just articulate this, but as I understand it, Raoul Paul, another crypto kind of macro trader, macro voice that I tend to follow. At least I appreciate his opinion. He basically thinks that this is going to be an elongated cycle. Okay, so not a top in Q4. His base case is that we have six to nine more months into the cycle that we get something extended that it goes into 2026. He said if this was a flash crash on Friday. All said and done, regardless of what sparked it, Flash crashes usually recover in V shapes back to their prior price in this case we entirely wiped out the accumulated leverage. So higher. He's basically saying, hey, the flash crash was actually good. We wiped out the leverage. It was just a flash crash, just a flesh wound. It's somewhat like flash crashes in late summer, September of 2021, where we actually did hit all time highs after that. If you more of his analysis, he kind of looks at basically current prices of stocks and other risk on assets, of course, which is, I mean I think we'd all agree Bitcoin and ether and the long tail of crypto is very much in kind of the risk on category, at least right now it's not as correlated to gold as we might like. And you've pointed this out. But Raoul Paul's base case is like we're not done. It's not even a bubble in tech stocks yet because the global liquidity cycle actually hasn't completed yet. So he's got a chart. Maybe you could explain this a little bit more, Mike. I'm not always entirely sure what I'm looking at, but he's got A chart of ISM and a 5 1/2 year like sin curve. So he's basically saying, let's see. He's basically saying this is why the cycle is lackluster thus far because 2025 was not the year of the big debt rollover. Thank you Covid for allowing average maturity to be lengthened by a year as rates hit zero. So a lot of the stuff Raoul Paul rounds his work in is basically the global liquidity cycles which tend to be on four year cycles. He's saying in this case it's not a law written the universe that says a four year cycle. This could be maybe a four and a half year cycle or a five year cycle. In fact, if you kind of look at ism and some of the global liquidity metrics out there, you can kind of make the case that we're just on a, a delay, a lag delay of bitcoin price, crypto price, even tech stock price catching up with global liquidity. And that's going to take some time to play out, probably won't fully play out. We won't hit max global liquidity into sometime the first quarter, the second quarter of 2026, thus an extended cycle. I know that you look a lot at global liquidity because we've talked about it on Bankless before. What about global liquidity? Right? Like aren't the money printers still printing money?

B (45:05)

Yeah, so a few things I would say on this and yeah, a lot of respect for, for Raoul Pal and his team. The way I sort of think about, think about this is he could be right, right, he could be right that the sort of refinancing schedule got pushed out a little bit and therefore the liquidity cycle should stretch a little bit longer here and that could take us into, you know, first half of next year. The, the thing that I keep coming back to is the fact that global liquidity continued to expand. I don't have the chart for this call, but global liquidity continued to expand well past the cycle peak last cycle. So we should definitely acknowledge that, that it's not like a perfect predictor just because it, just because it's still going up. That's one, that's one piece. The, the second piece is even if global liquidity continues to, to sort of do its thing, I still think you have to factor in the crypto market structure and the fundamentals and sort of what we look at with, with wallet cohorts and profit taking COIN days destroyed, all of these things because I still think that that is, you can't, you can't just ignore that and just say oh, there's going to be new buyers because global liquidity is going up. You still have to have a thesis for who's that new buyer? What is the market structure, what has actually played out?

A (46:30)

How do you have a crypto asset specific thesis? You can't just say global liquidity go up, therefore crypto asset prices go up.

B (46:37)

Yes. I don't think you can just blindly say that even though it's, it can work that way at different points in the cycle. And then, so, and then the final thing is I'm seeing sort of a tension with liquidity. And you've got the chart up here. You know, I'm not an expert on, on sort of monetary plumbing. We, we, we get a lot of our insights through people like Michael Howell from, with his global liquidity indexes that we're looking at here. What this is showing is that the SOFR rate is sort of exceeding the fed funds rate. And when this tends to happen, there's a red dotted danger line there. When this tends to happen, it means that the rate that banks are lending to each other in the overnight hours is going up. And so you have essentially some liquidity drying up out there within the banking sector. And I think there's a few reasons for this. We've written a little bit about the TGA rebuild, the drawdown of reserves. We have another chart just to show where we think ample reserves, you know, should be and where we're at today. And so this is sort of something, I think that's sort of growing under the hood. I don't know if Ral has addressed this at all just yet or if, if, if he agrees with this of what's happening out there, but it kind of looks we had like a reverse repo scare in, in 2019. This was right before COVID This has happened in the past. It tends to create a more volatile environment in assets which we are starting to see. So credit spreads are starting to pick up. That's giving you an indication of how, how difficult or how easy it is for riskier companies to be able to access credit in the market versus sort of like the treasury rate. And so we're seeing credit spreads pick up. The VIX was up quite a bit, got up to 29 or so last week. It came down a little bit on Friday. So when you see this happening in the, in terms of liquidity in the banking sector, you tend to see that get expressed through volatility in the markets. And if we're showing weakness in terms of fundamentals and we know there's a lot of leverage still in the system, this just sort of adds to my view that like the risk is tilting more towards the left tail risk as opposed to the belt up risk. And so I think that's kind of where I land on this.

A (49:04)

You mentioned Michael Howellsteg, who's somebody who I know tracks global liquidity quite a bit. What's his take right now? I think he thinks it's late cycle even with respect to global liquidity. Is that correct?

B (49:18)

Yeah. So his view is that we are late cycle. The Fed is sort of not adding a ton of liquid. We know that the Fed is going to be cutting, is going to cut rates. I think it's like last time I looked it was 97% chance of an October cut and also a 97% of a December cut.

A (49:37)

Isn't that more liquidity? That's more.

B (49:40)

That should add liquidity to the system. It's not, you know, the Fed doesn't necessarily directly, you know, inject liquidity by cutting rates. The banks can, can, can issue loans and that gets liquidity out in the market. If they start buying assets and doing QE or if the treasury starts to do some interesting things where they just start buying like T bills. Right. To just sort of add liquidity to the system or they do buybacks, there's stuff that can happen that can sort of put the bank this sort of liquidity crunch. At ease. And so this is a, this is also. We cited this when we shared our note with TDR Pro members. You know, there's other risks out there. And just like, can the policymakers just come up with ways to sort of, you know, continue to juice the markets? And that is, that is, that would.

A (50:29)

Be a risk for the. Being in cash for the meltdown.

B (50:32)

Yes, that's a risk for the melt up. You know, if you're in, if you're in cash and, and Trump is just.

A (50:37)

Like money cannon time. Let's get on at Powell. Then things could, like, global liquidity could increase and that could cause a reaction in risk on assets.

B (50:47)

There's talk about, you know, if you got the Fed cutting rates. I mean, he's floated out this idea that, you know, he could issue, take some of the tariff revenues and issue stimulus checks with those. Like, if I start to see, if I start to see this happening, like, this changes the calculus. This changes the calculus? Yes, this changes calculus. We're going back to Covid and next thing you know, Elon's tweeting about memes and everything. Actually, I think he saw, I saw. He tweeted out about a meme, a meme coin this morning. So. Okay, so we'll see. But yeah, this is, this played into it and I do track this liquidity, you know, and this kind of was just another, another variable that I threw into the mix. And I just said, okay, this is continuing to build towards the kind of.

A (51:26)

Risk offside and, and we'll earmark that for later because I, I want to get your thoughts on what would really change your mind. But it sounds like global liquidity is still very important to you. You just think we're closer to the end cycle of global liquidity pending something happening, some sort of catalyst, a Trump driven, a political driven catalyst. Right?

B (51:46)

Yeah. And like, you know, this could swing out. So I mean, you tend to have to have sort of a end to the cycle and then a restart. And so I expect, you know, we have Powell coming. You know, he's going to leave office next May. I expect there's going to be potentially a TRO here at some point. And then we take off again towards the end of next year is kind of how I'm thinking about it.

A (52:08)

There's another take here. I want to get you to weigh in. This is from Chao on crypto Twitter regarding where we are in the cycle. The story is quite simple. He says there's one factor that outweighs everything else, including your favorite liquidity metric. Everything we talked about, basically if the AI bubble pops, it's over. If AI stops keep going up, all bears are wrong. He says it's basically that simple. And so this is very much, you see what you see with kind of the US capital markets trade. So is it something like 80% of all stock moves this year in the positive direction have been because of AI? AI is kind of like holding the entire US economy up, holding the entire stock market up. So are we wrong to even look at these indicators, these on chain indicators if it's all AI at the end of the day fueling kind of the risk on sentiment?

B (52:53)

Yeah, I mean I think AI is fueling like over 50% of GDP right now, which is pretty wild.

A (53:00)

Yeah, at least the growth in GDP for sure.

B (53:03)

The growth, yeah. And all the CapEx investment. Yeah, for sure. This is like what's driving most of the economy. This is what's propping up all the tech companies right now. And so if we did see this sort of bubble, if we're going to call it a bubble pop, this is definitely going to have an impact on the rest of the market similar to kind of what we saw, you know, with, with kind of the tech bubble back in, you know, 2001. I think so, yes. I would say that the way I think of it is if the AI bubble pops, that's essentially the markets that it's, that's the markets sort of rolling over and like heading into a bear market.

A (53:41)

I guess I kind of have a take where I think the AI bubble is being fueled basically by global money supply as well. And so it's sort of a narrative driving price or it's a price driving narrative type thing. Everyone's bullish on AI because AI stocks keep going up, although there could be some things that happen, you know, major disappointments in the progress. ChatGPT6 is not what we thought it was. The interesting thing about like the stock boom and bust in 2020 was that was actually happening with more restrictive Fed policies. So like rates were going up in the backdrop of stocks, like going to nasdaq, going to all time highs, which is kind of different than now. We have easy money, we have gold, we have debasement and then we also have stocks going on a tear. So it's not directly applicable to like 2000 and the Internet stock boom and bust.

B (54:33)

Agreed. And yeah, there's one other chart in here towards the bottom that's just showing the tariff. Here we go. So we're talking a lot about liquidity and sort of where does liquidity come from? You've got the monetary policy side of it and what the Fed's doing and then you also have the fiscal side of it. And that is really what has driven this market. Right. So the Fed, this was not a crypto cycle. I think most of us had the belief that the Fed had to be cutting rates for Bitcoin to do well. And that wasn't really what happened in this cycle. We've had high rates for most of this cycle with Bitcoin doing quite well. And I think what's been revealed is that the fiscal spending is the other side of this and that's been propping up not just the crypto markets but also the, you know, the, the Trad 5 markets. And so we do need to be paying attention to capital flows, you know, from, from the perspective of fiscal. And what this is showing is like the, the tariff tax receipts and the impacts that tariffs are having. And so when you think about, you know, just flow of capital, if, if you have capital moving from the private sector, which is the economy, businesses and households that are producing products and services and that's moving, that's being taken out via taxes and going into the government coffers, you know, that is a transfer of wealth from the private sector to the public sector. That's, that's withdrawal, that's liquidity negative, that's, that's negative for liquidity. So this was, this is another element of kind of a liquidity story that I don't think is being talked about as much. And there's this view that, you know, tariffs are inflationary and that's, that is, I think that's possible from like a one, one time price increase perspective. But I actually think they're more deflationary over the longer period. And so this is something I'm, I'm paying attention to. I don't, I think it takes a long time for this to truly get expressed into the markets. But from a capital flows perspective, I think we're, we're losing liquidity from a fiscal perspective as well.

C (56:37)

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A (58:18)

Let's talk about the gold catch up trade. So gold is at all time highs I think at 4300 per ounce last week is absolutely ripping. Bitcoin is digital gold, right? Okay so we have the other you know the, the it's, it's below silver right now but there, there's gold, there's silver if you want some sort of denationalized store of value. And number three is Bitcoin. Ours is digital right? And so if gold is 30 trillion shouldn't there be a catch up trade for bitcoin where we can reach at least like 3, 4, 5 trillion. What about that?

B (58:51)

There could be, there could be. I think this is one of the, this is that right Tail risk. I would say this has been fascinating to watch the move for gold and like I think last week it starts starting to look pretty toppy for gold. Seeing lines of people outside the bullion shops that I've been seeing on on on Twitter it's starting to feel pretty frothy for the gold markets. I think the RSI was at the highest reading it had ever been. I think gold has added like close to 14 trillion.

A (59:24)

You've done some correlation between bitcoin and gold, and I think you've pointed out it's like barely ever correlated. Right.

B (59:32)

It's very low. You know, there's this. We did see gold sort of have a similar. Not, not, not at the same level as we've seen in this cycle, but gold had a pretty good move in 2020 before Bitcoin had its move. And then bitcoin had a much larger move, moving into 21. And so I think there is some Hopium out there that, that, that we're going to see a similar move here where maybe people rotate from bitcoin to gold. I don't have a strong view on this. You know, like I said that the, the analysis we've done tells us that bitcoin really is not correlated to gold. And what drives the price of gold is not what drives the price of bitcoin.

A (60:10)

I guess where you'd want to see it, right, is those ETF flows and that trading activity, because that would indicate that selling maybe other assets, maybe some gold for bitcoin again. And until you see that, it's hard to actually see the data behind the bitcoin catch up to gold trade.

B (60:26)

Yeah, yeah. And I think, you know, the longer this goes on, so I think, you know, part of the way that I think about this is, you know, bitcoin's trading around what, 110, 111k or so, and we're starting to see more bulls or more people start to come out and say that they're kind of like risk off or they're taking some chips off the table. We know there's been quite a bit of selling from ogs and whales. And so the longer this goes on, where you sort of know that you're recycling the capital base, but bitcoin is holding 110 or so, or it's holding above 100k. I will start to become more bullish if this continues to drag on, because now you're just really consolidating and turning over the base. And then if you have a change in narrative, liquidity, change, whatever, then I think you could potentially move up from, from a, from that type of situation. And so, yeah, I think, I think we're in an interesting spot here where bitcoin is kind of holding its ground as all of these whales sell out and rotate you know, capital into new hands. We've seen what gold's doing. So there's still, to me, it's still very much, you know, to be seen how this, how this plays out for.

A (61:40)

Here and for that story to be true, I guess you'd want bitcoin to hold steady above certain price point levels.

B (61:46)

And that 50 day moving average.

A (61:48)

50 day moving average. Okay, that's a big one to you. Okay. Okay. And we'll come back to that. One other thing I want to talk to you about is just like let's get in our feelings for a minute. Okay. If you don't mind, I'd like to express some feelings that I think a lot of people listening are hearing, which is like, this was the shittiest bull market ever. Yeah, I think a lot of people feel this. So here's a tweet I saw talking about this bull cycle 2025. And this is somebody been through a few, right, and didn't sell the tops on the others, but been through the 2017, 2021 for this one. There was no hype, There was no euphoric blow off. There was no this is the top moment. It was just rotating. L1s dying memes failed per chains. Every pump was sold into every breakup, got breakout, got front run. Retail never really entered in size. Now here we have Bitcoin at 107k. We're barely above 2021 levels. The total three. I guess he's saying most alts are still alts have been obliterated. Most alts are 60 to 80% from their highs. Feels like the alt season we were promised, it never even started. So I'm stuck between these two theories. Either we're early and the real alt season starts in Q4. Okay, that's the hope. Or this was it. It was a silent top designed to trap everyone. He said both are scary because one punishes early sellers, the other punishes believers. I know markets don't give you what you think you deserve as an investor, but this cycle feels kind of disappointing. And there's that nagging thing in the back of everyone's head which is just like we haven't hit these bull bull market indicators from that we've seen hit in previous cycles. It was kind of like, it can't be over, right? It can't be over. That's how we feel.

B (63:33)

I think, I think that's how a lot of people feel. And, and when I look at a lot of these metrics, I think that's a great point that like there's there's certain metrics you expect to be hit to give you a sense that, okay, the market is overheating. And a lot of those were not hit. Like the pie cycle top indicator has not been hit. We've talked about MV RV ratio quite a bit on, on this show. You know that's, that's at like 1.9, right? It peaked at like 6 in the prior cycles. We got to 3.5 in this cycle. Obviously the EBTC ratio hasn't gotten to where we would expect it to be. And so I think there's a few things here. So you have all of that playing out and then you have sort of, in this cycle, it was really a stock pickers market. And so that just makes it way more challenging for people, especially if you're not. If you're just expecting your beta assets, all of them to go up as Bitcoin and eth go up, it impacts sort of what your returns are looking like. And I think a lot of people have been in the wrong assets and that's part of the sentiment that we're seeing out there.

A (64:37)

It's funny that you use the term stock pickers market, right? Because I was like, oh, you mean token pickers market. But actually we mean stock pickers too because a lot of the gains and of the bull market actually happened outside of our crypto native assets and in assets like Coinbase or Robinhood Stock or Circle or even Galaxy more recently. So you actually, in order to capture the bull market this cycle, you actually had to own some stocks.

B (65:02)

And that's totally different because in the past there's been studies on this where people have looked at should I own Coinbase? Like even the early investors in coinbase back in 2015 or so, they've looked at and said, should I have bought Bitcoin or should I have bought Coinbase? And they always came back to it was right to just buy Bitcoin. That did change. We've seen equities Robinhood outperform Bitcoin. We've seen Coinbase, I think at some points of the cycle outperform Bitcoin. So that is a new thing in this cycle for sure.

A (65:31)

It is. And it doesn't trigger any of these bull market indicators because all of these are sort of our crypto native assets on chain. I want to give you another take. So somebody else who's been, I think fairly right this cycle, we've had him on Bankless a few times just because we appreciate his analysis as Ben Cowan. So his take Is it could be over. All right. So he's like, I hear what you're saying, Mike. NATO, it could be over right now. But if it is over, that would be different than all of the previous cycles. Slightly different. And he says it's very possible that we get one more push. So maybe we've been calling that the melt up. So in particular he's saying one more push for bitcoin which then kind of filters over into ether and then possibly an alt season. But the case for this would be a bitcoin top still sometime in Q4 and the bear market later in 2026. But we get that one more push and that this, what we are experiencing now is in downtober, I guess is the final dip before a bitcoin market cycle top. Okay. And so, you know, his case is like, look at, look at what we just said, the bull market indicators. It hasn't been really like none of these things have been hit yet. This can't be it, this can't be the end. And yes, it does seem in certain measures like this is toward the end of the cycle if you go days from kind of the bottom. But a lot of the metrics really haven't been hit. And so maybe we see one more final push into Q4. He says if we do see that, you know, 40% that we'll see the top in October probability, 20% November and 40% December. So keep your eyes on Q4. But we still might have some legs. What do you think about that analysis?

B (67:28)

I think it's fair. I know Ben does a lot of sort of cycle to cycle, period to period. He's very good at just sort of laying out like what has happened in the past and what should happen moving forward. I think it's, I think it's fair given, you know, when you look at all the metrics, it just doesn't, it doesn't look great. But I would say if you're going to draw that conclusion, you still have to say, okay, all of these metrics haven't hit, you know, the probability points to more upside. Okay, what is the catalyst? You know, I would like to see some, something else there to say like what is actually happening in the market that I can tie this, tie this back to and maybe, maybe he has, you know, something there. But I, that's what I would. There's still a missing piece. You can't just say, oh, we didn't hit the metric, so we're going to hit them. You know, we still need to see like a Catalyst is kind of my view.

A (68:20)

It's also like, I guess betting it all on that happening is maybe not advisable. If you're in a position to take some chips off the table would be your take. Okay, let's start to close this out. What would it take to change your mind? Because I know your opinion changes when the data changes. And so what data would you look for that would really change your mind and cause you to leave your cash position, actually deploy back into crypto?

B (68:47)

So a couple things, you know, a nice, you know, basically in a bear market. So Bitcoin down below 80k or so, somewhere in that range is kind of where, where I'm targeting. I think that we will see Bitcoin at 60k or so. So that's one thing. Just we get a bear market and I'll flip bullish. The other thing is, you know, where we're at right now, if I continue to see more and more sentiment that the cycle's over yet bitcoin, it continues to show strength. Kind of like what we're seeing, right? There's, there's, we're sort of building, you know, there's more and more people saying, okay, I'm, I'm kind of leaning risk off. Yet bitcoin continues to hold up. I think that's interesting because we know there's lots of whales that have been selling and the capital base has been rotating. So that's.

A (69:38)

Do you have a number for that, Mike? Do you have a number in mind? Because people are pointing to like it's not over until we see two weekly closes of Bitcoin below 100k or 102k which is the current 50 week moving average. If we get two weekly closes below those numbers, then it's kind of like it's always been over at this point for cycles. But as long as we stay above that 50 week moving average on the close, you start to build more conviction in this market.

B (70:08)

Yes. Yeah, that, that's exactly right. So the 50 week is 102 right now. So the longer we go with the capital base rotating and bitcoin staying above that number, the longer. And then the longer, the greater the chances. Maybe the liquidity, you know, gap that I'm seeing in the market, maybe that gets resolved, maybe the treasury starts to do something to add liquidity. We know the Fed's going to be cutting. So the longer that goes with bitcoin showing strength and then the narratives can start to change behind them. Maybe the fundamentals can start to change behind that. And that's when I'll be changing my mind. Outside of that, I think, you know.

A (70:50)

We talked about the Trump, the Trump money cannon. Is that another one? The other.

B (70:53)

Yeah, that's the other piece is, you know, we know Trump cares about the markets, we know his team cares about the markets. And there are things that policymakers can do to, to add liquidity to markets and so something to that to keep an eye on as well. I saw Secretary Bessant doing an interview, I think last week and talking about, you know, I think there's this view that China is trying to play this long game and potentially hurt the, the U.S. capital markets. He did make a statement saying, hey, we're not going to negotiate to prevent, you know, just because the markets are down, we're gonna, you know, that's not gonna be a strategy. So I don't know, that's not, not what you want to hear for, for kind of more the bullish take. But yeah, I think, I think all of these factors are constantly at play and I'm constantly just monitoring them and trying to have clear eyes about it. You know, one thing that you can get in trouble doing if in my, in my, in my situation currently having gone risk off, what you don't want to do is start to confirm your bias.

A (72:00)

Yeah, right.

B (72:01)

In a bearish slant. Right. You still need to be open minded. You still need to acknowledge the other side and you want, you know, that's sort of the game that I'm playing is I try to make sure I'm, I'm being, you know, I'm acknowledging all kind of aspects of the market.

A (72:16)

No, you have to be definitely unbiased. You like to play these markets. Well, I, speaking of that, when I was talking about the conviction it takes to actually hit the sell button. What like how do you feel like that about that? So do you feel like there's this opportunity cost that you're being hit with, with being, you know, predominantly majority cash position. Just the opportunity cost of what you said could happen earlier in October of eth getting to 8 to 10k and beyond. Like it is scary. I find as a crypto investor, it's scary to be out of the market. So imagine let's say on the tariff scare in April earlier this year, you got washed out of eth at $1700. Right. Only to see just a few short months later recovery to all time highs. That is, to me that is more painful.

B (73:01)

Yes.

A (73:02)

Than just seeing and it, it always has. If you've been in this space for any number of years across any amount of cycles. It's, you're always like, oh, I regret the X that I sold back when price was Y. How do you feel about that? Like, how does it feel to be. Do you feel exposed, I guess in a, in a cash position?

B (73:24)

Yeah. So I agree with you that it's harder to time the tops. I find it easier as well to actually to buy in the bear markets than to, to, to time the tops. And I don't expect to time them right. So I, my strategy is not to try at a time the, that we were selling crypto in Q4, Q1 of last year as well. And my, I'm trying to capture as much of the run as I can, acknowledging that I'm not going to get it perfect. And yes, there's risk, right? There's risk to selling. And you just brought up a great example. I mean the sentiment on ETH was just absolutely terrible not too long ago, six months ago. And to think that it would double its market cap in a couple months after that period is just insane. And, and this is why these markets are so, so difficult to navigate. And for me, the way that I sort of do it in a way that I can kind of sleep at night is like I'm kind of anchoring to fundamentals that I just believe that I have strong conviction that these, I have strong conviction that bitcoin will trade at 60k again is sort of how I think of it. And so I'm okay, missing, you know, 30% upside or so potentially and putting myself in a good cash position, making sure I can sleep at night and knowing that I'm not going to like, you know, drop the ball on something like that. So I think that's what, what makes it easier for me. And you know, you can't lose money taking profits. So that's a good, you know, we try to play a long term game. We're not going to make it all in one cycle. This is a long term, you know, wealth building strategy over many, many years, hopefully decades. And we want to just be playing the game as long as we can.

A (75:05)

The other thing I find psychologically hard is like when you sell high conviction crypto assets, it's just like the question of what do you buy? So like in your case you're buying cash, right? And when I think about cash right now I'm like, okay, the thing that's getting debased, the thing that like the U.S. is running what, a 7% fiscal deficit to GDP this year. Like the thing that we Know, the US Money printer is going to continue to inflate. Like, how do you decide what asset to actually sell for? Do not overthink it. I mean, because you could not sell for treasuries or cash US you could sell for like Swiss francs or you could sell for like something like gold. Does that ever cross your mind? Or do you just, just put that aside and just be like, you know what the long term game is? The US is not going to lose global reserve currency status, you know, in 2025, that, that'll play out over decades. And so you just put that on hold, not worry about it.

B (76:05)

Yeah, so it is somewhat of a risk. I remember actually having this tension in my head actually at the end of the last cycle of like, okay, if I'm going to sell some bitcoin, am I buying, I'm going to buy dollars and hold dollars. And I have this view that the dollars rise. So I totally get it. And you know, I guess where I've landed on this is like the answer is like, I don't really want to buy cash. I don't want to hold cash long term. Like we are getting, you know, it's in high yield savings. So it's not a totally a melting ice cube, but it's like, okay, I don't want to hold that long term. But I'm also acknowledging that there are times where cash is a good position to be in. And if you're going to really take advantage of bear markets, you need to be in a, in a, in a strong cash position. If I was worried that we were like about to go into hyperinflation or something like that, then obviously that you can't, you can't even be messing around going in, going into cash. You don't just buy anything other than cash. I don't have that view though. I think long term that is definitely something that could happen.

A (77:09)

All right, well, we'll wrap it here. So you got Mike's take on the market, where it's going. I gotta say, Mike, I've been really enjoying your work in the DEFI report this year. All the stuff including the calls, including Mike's portfolio where he is deployed right now, the remaining crypto assets he had has, where he's putting those, that's all available in something called DDR Pro, which people can upgrade to and get access to all of that. What's up and coming at the Defi report now that you're in kind of risk off mode.

B (77:40)

So still monitoring the market. So yes, risk off mode but still monitoring the market and we're still going to upgrade day people on our views and how we're. We're thinking as, as, as the conditions evolve. We do most of our best work, I think honestly in bear markets. And so, you know, if we are heading into a bear market, I would just hope that people stay engaged. You know, this is. That's how you start to outperform if you make good decisions in, in a bear market and also, you know, in how you position at the top of bear market bull markets. Yeah, just enjoying it. Sharing everything that we do. Fully transparent. And I think the readers are. Have gotten some good value out of it as well.

A (78:18)

Well, fantastic, guys. We'll end it there. Got to let you know, of course, none of this has been financial advice. Crypto is risky. If you don't know that by now, you haven't been in crypto for too long, you could definitely 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.

B (78:36)

Thanks a lot, Sam.