B (2:40)

Crypto is absolutely never boring. Some stats from November showed that whales are starting to accumulate again after a lot of that OG selling that you were talking about. What do you think that means?

A (2:52)

Yeah, I think it's a very interesting statistic because what we have seen really, that the bitcoin market itself has been in an equilibrium from the large OG sellers, really, and that's really the wallets, the wallet cohorts holding more than 1000 BTC. The buyers have really been the, you know, the Bitcoin ETFs, the microstrategies of the world. And we know that, for example, MicroStrategy and BlackRock, they hold their BTC in around 500 different wallets. So they fall into this 100 to 1,000 whales category, but not in the mega whales. That starts really at a thousand btc. And we have really seen this massive distribution from the mega whales, which are tentatively the early investor, the OG investors, to the whales, which are the newer investors now, because, you know, they can only buy 100 or 500 BTC per wallet, really, and then they spread it out more, more evenly. And I think that's really quite an equilibrium that we have seen taking shape over the summer. And that's really where we are arguing that volatility is going to get crushed and crushing volatility. We're going to see an unwind, really, of this whole digital asset treasury company, you know, momentum really, because of the lower volatility. And I think that was a key feature then for us to really, you know, recommend more, more or less the selling upside calls and downside puts because we were expected to stay in the range. But then the whole game actually changed end of October. And that was really right the time when a lot of people suddenly were talking about the OG selling and people were kind of, you know, defending them. People were saying, like, how could they do this to us? They should have just been holding forever. But in the end, actually what happened end of October is when when Fed chair Powell turned unexpectedly hawkish and almost clearly ruled out that there will be a rate cut coming in December. That's actually when we saw that the bitcoin market actually jumped into an imbalance really because suddenly the ETF buyers turned into massive sellers. So of the 14 trading days following the FOMC meeting, we have already seen US$4 billion of outflows. And it's no longer just the OGs that are selling, it's really the whales that are also selling. And the whales are really, as I was saying, the newer entities, you know, the BlackRock IBIT ETF basically holders, but also other entities that fall in and probably like newer investment managers, investment funds and so on. So our big theory here is that investors probably have decided, you know, we are overexposed in Bitcoin. ETFs have bought around US$24 billion worth of Bitcoin year to date. Ethereum ETFs have bought another 10 billion. Ethereum is down right now in the middle of November. So ethereum is down 10%. Bitcoin is down 4 or 5%. So this is like $36 billion of capital deployed really in the, in the market, but it's not making any return. And that's why we think probably institutional investors are selling here, because it's very difficult to defend why they have such large positions when the market is not performing well.

B (5:58)

Let's unpack that a little bit more. Do you think there is an almost institutional fatigue and when will we see institutional investors come back to the ETF for Bitcoin and other crypto assets?

A (6:08)

So I think it's a very important question here. When are these, you know, institutional investors, these ETF buyers are going to come back? When we look, for example, Bitcoin is marginally down year to date, but the ETFs have net bought 24 billion. So it's almost like they are US$24 billion too long here. Of course they will not sell 24 billion, for example, in March, April, they only sold like 5 billion. So it wasn't really that much. But now they sold already 4, 4 billion, you know, 14 trading days after the FOMC meeting. But nevertheless, we are coming now into the end of the year and it's probably not where a lot of institutional investors going to put on a lot more risk. And it's not really that you need to bargain hunt Bitcoin here as long as the Fed is not really dovish. One of the key reasons, for example institutional investors, hedge fund managers bought Bitcoin was really because of the dollar devaluation trade that was supposed to happen. But of course the US dollar has gone sideways. It has not gone down anymore. So the rationale for this trade is really not there right now. And I think end of the year, institutional investors are probably more focused on cleaning up their books and taking more risk. And I think what was also very crucial was of course, the October 10th crash that we saw, where Bitcoin went down from 122,000 to 102,000. There was a $20,000 decline. And I think that brought probably to people's mind that, yes, there can be a lot of volatility in Bitcoin, even intraday, even on the weekends when no institutions are really in the office. And it's because Bitcoin doesn't have circuit breakers like other listed institutional futures, basically. And I think that's why we probably go into January, wait there for the next FOMC meeting until they turn a little bit more dovish. And if that doesn't happen in January, then we might actually get into like March and probably that's like the time.

B (7:57)

I want to talk a little bit about the Soul and XRP ETFs. The XRP ETF launched by Canary Capital, Bitwise's sole ETF. The two of them took the first and second spot for first day performance out of all ETFs launched in 2025. But yet XRP and Soul's price performance didn't really mirror Bitcoin's price performance after the launch of that etf. Can you give us a little bit of insight there and how you expect some of these alternative asset ETFs to perform as we move into 2026?

A (8:26)

Yeah, all these alternative ETFs, the second third tier crypto coins or tokens. I don't think there's going to be a lot of success. I don't think there's going to be a lot of marketing spin. I think we even have seen that Ethereum was struggling, except, you know, the two months where basically Bit Mine was really just, you know, lifting the market. But of course we know also that Bit mine is down $3 billion on their investment so far. And I think it's very interesting when you just look at the Ethereum ETF inflows, you know, US$10 billion, but it was just basically in two months and the rest was like nothing. So it's very difficult to see how investors really would jump on xrp, on Sol or any other these coins, because institutions are not buying those institutions getting the narrative, of course, of Bitcoin as digital gold, but not on the other value propositions.

B (9:13)

Well, let's talk about that gold outperforming Bitcoin this year. That narrative as Bitcoin, as digital gold is that one that you think will continue to remain and have momentum.

A (9:24)

Of course, the narrative that Bitcoin is digital gold, we're going to be staying with us almost like forever. Because Bitcoin was of course invented as a peer to peer payments system. But you know, since the upgrade in 2017, it actually has become digital gold because the block space has actually become, you know, small and therefore it cannot really be used as a payment system. So it's definitely only a storage system. And of course that's a story that BlackRock has been communicating while they have not really pushed the Ethereum etf. You know, I would argue because we haven't really seen consistent inflows, we haven't really like a big marketing push from them. And I think the story is really that institutional investors are not too interested in, you know, buying Ethereum or any of the, the other stories. But I think what's very interesting based on our analysis is actually that Bitcoin is more dependent on actual money flow. And I'm not talking about global liquidity that everybody, you know, tries to argue because that metric is, I would say is not really too relevant over the longer periods because everybody just shows the chart of the last 18 months with sort of like a 13 week lag mysteriously, because it doesn't really tend to work much longer. And it goes through periods where it works and then it goes to periods where it doesn't work. And those periods last, you know, two years where they work and two years where they don't really work. And it can also be negatively correlated because it doesn't mean if the central bank prints money that the money goes automatically into Bitcoin or there will be some trickle down effect. What's more important is of course the actual inflows through stable coins, you know, liquidity in the market, futures, open interest, you know, increase. Something that we can actually really measure for the crypto market. What Bitcoin measures then is really this, this, you know, the whole market structure, liquidity. And of course we can see a lot of the stuff in the on chain signals. But the difference is that Bitcoin, again on liquidity versus Gold, Gold is actually more anti US dollar trade. It's really the inverse when there is interest rate cuts, when there is projection of interest rate cuts. And not necessarily that Bitcoin reacts to it. It's really the difference that gold is really a monetary asset versus Bitcoin, the liquidity asset. And a lot of people kind of mix these two. This sort of reminds me that you know, money printing is the same as inflation and of course it's not. But I think that's something that people also mixed up kind of like during the COVID crisis basically. But that's how we look at it and I think that's why it was a little bit clearer that bitcoin would maybe lack a little bit, you know would be driven by other factors versus gold would be probably more the direction anti dollar trade that trade that benefits if the central bank cuts interest rates if the Fed is more doish. But of course it's a big tailwind for bitcoin if it actually happens. If actual liquidity comes into the market.

B (12:42)

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A (13:28)

Well, end of 2025 I think we were among, you know or we were actually the most conservative ones and I think our analysis was based on liquidity. So we projected initially 140 while everybody else was 200 or much higher. But we already like indicated during the summer the last time we spoke that this 140 might actually not be achieved. And it's going to be difficult because it takes so much capital of net inflow really and this is what we said earlier is really the difference or you know the over the overhang from the OG investors from the mega whales to the whales and I think we probably struggle here further into year end.

B (14:06)

You mentioned some of those big calls, the 200,000, 250,000 by year end and you just mentioned Bitmind just a few minutes ago. I believe Tom Lee is still calling for $7,000 ETH by the end of the year. Do you think it's realistic?

A (14:20)

Well if the price target for end of this year is 7000, I mean that's like super bearish for him, right, because he was expecting 16,000. I think this is just, for example, like unrealistic because there's only one buyer of Ethereum this year, basically, and this has been bit mine. And nobody else was really following, you know, bit mine really. And nobody was buying into the narrative because I think the narrative is also, you know, a little bit flawed because it's not really that that, you know, Ethereum benefits a lot if there is a lot of stable coins being issued because very little value actually accrues to the Ethereum network. Ethereum is currently not, you know, widely used for defi applications or anything. It might be something in the future, but I think right now it's really not there. And I think the, that's sort of like the misconception. I think a lot of crypto people are not really buying into it. And I think the narrative is really also not, you know, resonating with Wall street yet. I think people kind of like see how actually little value really accrues. And I think it's the same argument if OpenAI would be, you know, listed on the New York Stock Exchange, I should buy US Dollar right now because in the end, you know, the shares will be trading in US dollars. I mean, that's sort of like, I think an argument that not many people have, have followed. And I think it's just very interesting how, you know, it was really able to push up the price in the summer, but, but then again it was just two months and then it's sort of, it all, you know, crumble, crumbled down. And I think here it was really a nice management of SEC filings and it was very difficult to analyze where the nav was or is and you know, was a pipe shares. I think there was like really interesting way done. I think we, we couldn't figure out how many, you know, because there were like, like a hundred SEC filings, for example, is very difficult to catch up. And for example, how much management team is getting in terms of like, you know, 1% every year, that's like a hundred million payout. So I think this is all the things where people sort of like, you know, are kind of like, they want, they want to see that really, you know, extra yield is being generated. I think even for a lot of the other digital asset treasury companies, I think they can generate yield. But it's no longer like in the past where you depend really on retail exuberance, where you really depend on the, on the wide nav premium. Really. I Think it's more kind of like hedge fund institutional style asset management where you use call options to override your positions, where you manage it around and you can probably still generate 10 to 20% yield but you have to be a lot smarter, a lot more financial market savvy than capital raising savvy.

B (16:51)

If we look now to the end of 2026, what's your Bitcoin price projection there?

A (16:56)

I think there is a, there's a real possibility that we entering a longer term bear market unfortunately. And this is you know, on the one side of course a four year cycle that everybody starts to talk about. But what we're seeing is actually US stocks tend to perform quite poorly during midterm elections. And of course next year is a midterm election year. That's usually where the S and P doesn't do, you know, a whole lot until really just shortly before. But it also coincided with the last three major bear markets for Bitcoin. And Bitcoin actually has tended to go down by you know, around 60% on average during those years. Unless we really come into a period where inflation prints lower, where the Fed becomes really credibly dovish, which there might become with a new Fed chair. But I think there might be like a little overhang where it might be really tough for the market to really find its footing here. And I think it's also that we might have actually missed a lot of the institutional buyers and they might really not return until there are some other opportunities, especially if the equity market goes sideways. I think it will be very tough. But it's not just a four year cycle. It's not just the midterm elections. It's also we're seeing a lot of the data in the on chain data. When we look at the MVRV or the futures open interest indicators or the realized versus the market cap indicators, I mean those are like all have been turning, you know, since October. And this is when we provided to our subscribers various presentations, various research reports, various where it became quite tricky because once we broke this 110, 112,000, I think that was really like a big level. And what's really also interesting, I think what people don't really think about, yes, we had this huge distribution over the last couple of six, seven months where literally millions of bitcoins were moved from the OG wallets to the newer wallets. But the newer wallets are all Underwater now by 10, 20% and at one point they just have to sell. And I think that's sort of like very difficult to see how they have been the only real buyers, you know, those, those new whales. It's really interesting how they going to pump in even more money into the market when they're already down so much because I think it's very difficult for an institution to justify to adding even more and more money into a losing position, no matter if you're like bullish over the medium to long term. But historically in these midterm election years, we sort of like go up, we go down, but we sort of like grind, grind lower. And it seems like we are slowly going into this rhythm because there's not a lot of support for the, for the market overall. I think one of the big disappointment was of course that some of these IPOs that were launched, the crypto IPOs, they were not really that successful. I think unfortunately, they were not the right companies that were launched to bring really this retail exuberance. I think that we wish we could have seen, I mean, we calculated beginning of the year that we could see something like $130 billion in market cap being IPOed to really build this sort of like digital asset sector. But of course, so far we have only seen that, you know, Coinbase has been selected in the S&P 500. We have seen Robin Hood, but not a lot of whole other crypto companies. And I think these, these IPOs, which were of course mostly exchanges being listed, are not really the ones that people really, you know, dry feed the big momentum. So I wish I would have seen something like somebody like Kraken with bring a lot more retail investors into the market.

B (20:18)

You know, Marcus, a lot of folks are looking to the signing of where the passing. Sorry, of the market structure legislation in the United States as a catalyst for the markets. But it sounds like what you're saying is even if market structure legislation gets passed in the coming months, there are a lot of other factors here that are going to hang on the markets.

A (20:37)

Yes. I personally don't think that the market structure bill is going to be such a, you know, like a momentum where a lot of retail investors or institutional investors allocate capital. I think that the market needs more stories, needs more narrative and nothing really happened. I think when you look also, you know, with the Genius act, which is of course well timed with a circle ipo, but also circle has come back, you know, massively. And I think similar with bitmind, with a lot of investors from Korea, I think Korean investor, you know, put in like a billion dollars in bitmine. They put, I think three, four billion dollars into circle at one point. But of course they have withdrawn some of the money and that's why the stocks has gone down. And I think it's really that even those market structure bills, if they, if it would come and I think it would not really drive new momentum because the market really needs new stories. It needs something like a coinbase IPO that we had a few years ago. So maybe, you know, Binance can IPO or something where people really resonate, you know, themselves with. And I think, you know, that the market really lacks these stories. And then of course the institutional investors might be just a little bit burned here because the futures traders, the perpetual, you know, crypto native ones, they quickly sold. So they are like flat in terms of leverage year to date. Bitcoin is sort of like flat just a little bit down is really the ETF holders that have, you know, that's had 24 billion pumped into the market, which is doing nothing right now.

B (22:00)

Marcus, thank you so much for joining me. Reflecting on the year, unpacking your projections for next year. I hope you have a great day, December and happy New Year. If I don't see you until next.

A (22:10)

Year, all the best to you too.