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- [00:00]
A
Foreign.
- [00:11]
B
Welcome to the report. The question Today, what if 60k was the cycle bottom? Mike here is going to put on his bull goggles for a minute. He doesn't often wear those. But we're going to explore the possibility that the bottom is already in. It is May 20th. A few things we're going to look at in today's report. The realized cap numbers and the percent of supply and profit compared to what that 60k was the cycle low back in February.
- [00:36]
A
I think the strongest case you can make is potentially that the realized cap looks like it may have bottomed. We're going to get into this today. There's some other data points that we sort of got close to. You know, there's a bunch of different cycle awareness metrics that we're tracking and you know, most of them have not fired for where we would think a macro cycle low would hit. But there's certainly a few and we're going to go through those today.
- [00:59]
B
Yeah, the realize cap one, I don't think we've shown that on TDR reports and this is the first time you brought into a report. That's a pretty key signifier for me. I mean it's held up across multiple cycles and it is showing that maybe there is a bull scenario here. So we'll get into that. Before we do, got to thank our friends and sponsors over at Galaxy. This is one for the institutional capital listening right now. Whether you're looking at the future of finance, which is crypto, or the backbone of the next industrial revolution, which is AI. Galaxy is the name you need to know. They are a global leader, not just in crypto and digital assets, but also in data center infrastructure that's powering all the AI we see around us. What's unique about Galaxy is they do crypto and they also do AI. On the crypto side, it's institutional trading, custody tokenization. Best in the biz at that. On the AI side, massive data centers, a Helios site with 1.6 gigawatts of approved power. They are a publicly traded company. GLXY is the ticker if you want to see how Galaxy can help you deploy institutional capital in crypto and AI. Go check them out. There's a link in the show notes. All right, Mike, let's get right into the meat of this. Maybe I should just establish where we are. So we are seven and a half months into the bear cycle. Time flies when you're having fun. Yeah, Bitcoin is about 39% off all time highs. We failed to break down that 200 day simple moving average. So we didn't quite break down. I think you've got a graph in today's chart. And then last week there was a key indicator we were looking at which is the short term holder cost basis and we locked in one week above a one weekly close above the short term holder cost basis, which this is just from memory, but is it like 79.5k? Something like that?
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A
Yep.
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B
And so you said if we locked in a second week and then maybe a third week that would be kind of bear market over. Bear market bottom confirmed. At least that's how it's played out in previous cycles. Did we do that? Did we lock in the second week?
- [03:09]
A
We did not lock in the second week. So it was a, you know, an interesting Sunday close to, to be paying attention to. And you're, you're correct. So if we had, you know, established two consecutive weekly closes above that short term holder cost basis, which is now 78.3k, it was 78.9k last week. It's, it's coming down. That would have been an anomaly that we, we haven't seen sort of at this stage of a bear market cycle. We have had instances where we've touched it or gone above it in the past, but we haven't gotten the two weekly closes. So definitely something to pay attention to. You mentioned the 200 day moving average that is also like kind of serving as resistance right now in the market. So you know, it's, it's been interesting. You know, we've, we've had this, this uptrend which I would say where you know, we're still kind of in this kind of retracement off of those February lows. And the momentum feels like it's starting to kind of shift, you know, in, in the other direction. We haven't seen, it's sort of like we've lost the upside momentum but we haven't really seen a big kind of pullback just yet. But I think today we can get into, you know, what are the, what is the potential that we've actually bought them. Then let's get into kind of, you know what, what is really kind of my assessment of it and what are the probabilities point to. We've had some readers reach out and just request, hey, give us the bull, give us the bull. Take like if we bottomed, what does that look like? That was kind of the intent of this week's report.
- [04:35]
B
Yeah, okay. I was really shooting for us. I was really hoping we would Lock in another couple weeks above that 79.5k mode. But we didn't. So that means the momentum has stalled. However, it does not mean we will revisit the lows that we saw in February, and it does not necessarily mean that, that we will go even lower than we saw in February. And so this is where maybe you can give us the bull case. The bull case being not that the cycle is over, but the bull case in this report being that we already saw the lows, that we're not going to drop below 60 again at any time in the cycle, which has implications. If that's true, it has implications for the fair market value price you should be looking at to accumulate bitcoin and crypto assets. So if we've bottomed, here's why. Let's take a look at the realized cap chart that you teased in the intro. So this is maybe the most interesting chart in the entire report. What are we looking at?
- [05:34]
A
Yeah, so realized cap, we talk a lot about realized price. Realized cap. Realized price is sort of a proxy for the cost basis of all the coins in circulation. The realized cap is kind of the same thing. It's just an aggregate of basically all the entire cost basis of the network. So all of the cap, you can think of it as all of the capital that has been invested into the bitcoin network. It's a little over a trillion dollars right now, which is, you know, a pretty, pretty large number. The reason, you know, we're kind of looking at this at this stage is one way to kind of analyze the realized cap is you can kind of think of it as like capital inflow versus capital outflow. So as an example of this, you know, let's say, you know, you bought Bitcoin for $10,000 or so you sold. That's your cost basis, and that's the 10,000 that would get recorded as part of the realized cap. As that goes into the realized cap, let's say you sold that for, you know, a hundred thousand dollars. You the cost basis of the new buyer now is that a hundred thousand, and the ninety thousand is the change in the realized cap. So the realized cap goes up when someone sells out a gain, sort of like a capital capital inflow. When you sell at a loss, it's almost like you're kind of destroying capital. Right? So if I had bought at 10k and then I sold at 5k, I've kind of destroyed $5,000 of capital. The realized cap is now going to come down because the new buyer's cost basis is 5,000. Mine was 10,000. So when you see the realized cap coming down, it's telling you that like people that were buying are now selling at a loss. It's sort of like the network is experiencing capital outflows. And what we've observed over the last few cycles is, you know, it's hard to kind of, kind of catch this because the, the price is typically going to bottom, you know, a few months before this number actually bottoms and then starts moving up. So that's kind of what we can see in this chart. So the realized cap dropped about 3.8% or so over the, or the first four, four to five months of the bear market. And we can see that it, it looks like it's, it possibly has, has bottomed here. And this was just kind of like around the end of the end of March that it looks like it's bottomed. It's now up like 0.3% or so. So that's telling you that since that time we've actually seen capital inflows, there's been less people that are sort of selling, you know, at losses and it looks like we have capital inflows. So this is one way to kind of think about, you know, kind of getting to those, those macro lows. And I think if you're a bull, you definitely would look at this and say, hey, this is a pretty good sign that maybe we've, you know, at least most of the, the damage looks like it's, it's possibly done. The one issue I have with it is just, you know, we, we still don't know and we're going to get to market structure here. We still don't know, you know, if there's more pain coming from, you know, the macro environment, things like this. There's still a chance that we're going to see some of these sort of top buyers that we call that are potentially going to sell if we get another kind of pullback for bitcoin. So it'll be interesting to see if that happens if more people start stepping in selling at losses and then that realized cap starts to come down a little bit again. We'll see. But I think it's a pretty sturdy kind of long term cycle metric to kind of anchor to.
- [09:02]
B
I think it is a sturdy long term cycle metric. It's been one of my favorites. So you're saying the realized cap right now at 1 trillion or so is basically the cost network of all of the bitcoin in existence. The cost basis, I should say. And so the market cap of Bitcoin is, what is this, something like 2 billion or a trillion. Excuse me, where are we? 1.5 or 1.6? Okay, so the cost basis is 1 and the total market cap is 1.6. And you're saying we're up in terms of realized cap from the bottoms? Just a tiny amount, 3.8%. How has this compared to previous cycles? That's what's not shown in this chart. But the 2022 cycle, the 2018 cycle, how far did realized cap fall? And then at what point during those cycles did it start to creep up and rebound and get back into positive territory? Did that mark the bottom in those cycles?
- [10:05]
A
Yeah, so I think that's kind of the big difference here in terms of the relative comparison to past bear markets. And in 2022, so the entire realized cap cost basis of the network actually dropped about 19% from the peak to the trough. It took about 10 months or so for that to play out. If we go back to 2018, the realized cap fell about 13.4%. It took about eight months for this to play out. So in the current cycle we're down 3.8% and it only took about four months for that to play out. So, you know, it's, it's possible. But I think, you know, again, this has to come back to just like in some ways we're, we're going to get to a place where it's like more about the psychology of the market and sort of what the outlook is looking on macro, I think, because that's how we're going to determine if some of these buyers that came in at much higher prices, you know, 92 to 108k or so. If we see a move down, we're going to find out if that cohort is still diamond handed and still wants to hold onto their coins, I think.
- [11:16]
B
But you still think that somebody could look at this realized cap chart and see that we're up 3.8% from the lows and come away from that being bullish, having a data point that maybe we've already seen the lows of this cycle? I think so.
- [11:32]
A
I think so. I think it's sort of like a, if anything, you know, I think the way we're sort of kind of communicating this, this episode is like, you know, this is really about have we hit the macro low, so we may see more, you know, turbulence here we're at, you know, what, roughly 77K or so it would take, you know, what, about 20% drop or so? To get there. So you could still have that type of move and not set, you know, a lower low here, potentially.
- [11:58]
B
This is the pattern too, Mike. Right. Because what you would expect is to see, as we've seen in previous cycles, a more shallow bear market. Right. Not necessarily a shorter bear market, though we might also see that, but certainly a more shallow one. So this kind of fits that data set and so does the percent of bitcoin supply in profit. So we're seeing some different numbers on the chart, some kind of low percentages that mark the bottom. What are we looking at here?
- [12:26]
A
Yeah, so again, you know, if you want to put the bull goggles on and say that we've, we've likely hit kind of the potential cycle low, this is another one you could point to. And it's just showing that we got to 50%. So again, during that February 5th capitulation move, significant move down, the total bitcoin supply and profit dropped to 50%. That is roughly in line with kind of what we've seen in the past cycle. So we kind of go back to 2022, we came all the way down to 45% of the supply and profit. And then back in 2018, we came all the way down To 40%. And then in 2015 we went all the way to 36. So there's been kind of like this, like sort of steady little uptick in kind of where this bottom's at. And I think you could say, hey, that looks pretty clean to me. That, you know, the network went into most, almost, almost more than half of the network went into losses. And that's historically kind of marked a cycle low. One thing I would point out here is just in past cycles you tend to have like, you tend to not just come down very quickly in like a V shaped pattern and bounce off it. That's the one thing that, that it still gives me pause on something like this. But I think again, you know, kind of a big, you know, high level metric that you could point to, to give you some comfort that like a lot of pain has, has played out here.
- [13:52]
B
Yeah. And I guess in today's report with the bull goggles, you're not saying that the pain is over. I mean, the bull goggles would just say that it's possible that we've already seen the lows. Right. So maybe there's more pain ahead, but maybe we get to kind of the low 70s or the high 60s or something like that. We don't drop below 60k. How about the RSI? Is that showing that we've hit some lows that we hit in previous cycles and maybe that the bottom was in, in February.
- [14:21]
A
Yeah, I think similar, similar view here. So this is the 12 month RSI. So it's a longer term view of this. It's taking the monthly RSIS with a 12 month look back and that, that this is a momentum indicator that's giving you an idea of kind of how overbought or oversold the market conditions are. We went all the way down into that red territory there, which was 41 on the 12 month RSI that was back during the February 5th capitulation. So, you know, you can see historically we've kind of. That's, that's right in the range of, kind of where we've bottomed in past cycles. I think the one thing to pay attention to on this one is again just the timing of it. So this typically takes, you know, roughly 12 months or so to, to play out. And in the last couple bear markets we, we kind of went to a low on the RSI and then established a lower low, you know, later in the year. So it's, it's possible even though we had that capitulation move, it's possible we have another one potentially later and we get back down to 41 or potentially even lower than that.
- [15:24]
B
So the 200 week is also interesting. If you, if you squint, I guess then you could maybe say that we got close enough in February to the 200 week moving average. Just sort of call it, you know, that the big dip of the cycle. I know in previous cycles we could see right in the chart looks like we dipped below the 200 week moving average for at least some duration. Maybe we were close enough in February. Maybe we never have to dip below this line.
- [15:55]
A
Possible, it's possible we touched it back in 2018. As we can see in the chart there, we spent quite a bit of time actually below it back in 2022 and particularly late 2022.
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B
But in 2018 we just touched it. We didn't actually dip below for very long at all.
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Correct.
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B
Okay.
- [16:12]
A
So, you know, so there is, you know, some, some precedent for kind of getting close or just touching it. I think the one caveat, you know, for 2018 is, you know, even though you, you just touched it, you were, you know, you were down, you know, 85% or so. You know, at that stage we're not going to be down 85. You know, we're down closer to 50%. We, we got close this cycle. So, you know, I think if you want to put the bear, goggle the bulldoggles on and say, all right, that's, that's close enough again, you know, you're kind of getting close to like these like long term cycle, you know, metrics where you can say, okay, that's, that's pretty fair. Maybe, maybe it's a good time to allocate and like, I think like one message I'd like to, you know, get across today too is like, we're in a bear market, right? Like, like we, we talk about, you know, sort of getting queued and trying to, you know, really kind of like back into our allocations here on the, on this channel. But if you're playing this for 10 years, like, you know, you could probably.
- [17:07]
B
Good time to buy. Yeah, every week it's a good time to buy. Every week since probably what, you know, November, it's been a good time to buy.
- [17:14]
A
I agree, I agree. So, so people keep that in mind. Don't let me, don't let me sort of bear, you know, get too bearish on you. So because we're buying, we're in the market buying, we're trying to be selective and we can get into that as well later.
- [17:27]
B
I get it. I mean, and you can look at this and you can make the case that this was close enough because we expect a more shallow market because some of the market structure has indeed changed. We have strategy buying in size. We also have the ETFs and the institutional inflow. However, there's this, which is, I think it seems like from today's reports and the other reports that I've been reading from you lately. You still think more coins need to change hands in order for us to fully confirm that we have reversed the bear market, fully confirmed those lows, and that hasn't happened yet. Here's a chart on the market structure update the cost basis analysis in those cohorts that we look at from week to week. What hasn't hit yet, what do you still need to hit in order for you to feel like you've seen the coins changing hands enough?
- [18:19]
A
Yeah, like we've, like we've been talking about, there's been significant pain here. We, we are definitely observing coins rotating hands. And if we observe kind of the, the top cohort buy that, I think that has mostly, mostly played out in terms of people selling their coins, you know, into, into weakness. The, the cohort that I'm still paying a lot of attention to is like the second cohort down. So this is the, from the top. So this is the 9.92-108k or so cohort. And they have only sold 11% of the coins that they held at at the top, which is pretty, pretty interesting. You know, we had the capitulation, we've been down for a little while. They've had a chance to sell into some of this strength, you know, coming back on the retracement. And we haven't really seen, you know, too many coins moving there. The one thing that I would say is it was kind of similar, you know, if you look at the equivalent Cohort back in 2022. So we're looking at the cohort that's just a tier down from the people that bought like the, the pico top. And that would have been like 47k to 56k back in 21 period. When we were at the same juncture of the bear market back in 2022. In terms of the number of days since the price had peaked, that cohort had only reduced its holdings by 22%. At the same exact stage, we're at 11% today for the equivalent cohort. That's the 92 to 108K.
- [19:50]
B
And then they later sold off all the way to 39%.
- [19:53]
A
Correct. And it happened fast. And this is the, this is why I still hold this view that like, there's, there's probably another moment of significant pain or fear that that's going to have to come into the market to really, you know, get coins moving again. And, and the catalyst just has to be something, you know, there just has to be. And we're going to get into the macro and maybe that's, that's the catalyst here. But that's kind of been, my view is like, you can, you can, you can look at this, you can observe it, you can see coins moving. But like, it just, if you've been around for bear markets, like, I don't know, this is more of a feel, instinct type thing to me. But I just think we haven't, like, there's, there's, there's still a little bit of. I just think there's still a little bullish vibes that need to be sucked out of the market before it really, really hit the low. But, you know, we'll see.
- [20:43]
B
The summary is according to you, you, you think it's a good time to buy, but it's not fat pitch zone, given that you haven't seen enough coins.
- [20:51]
A
Yeah, that's a great way to say it.
- [20:53]
B
Let's take a look at macro because there's been Some interesting developments on the week. The first is inflation pretty high CPI print. We were talking about that a little bit last week. It feels like that's confirmed. We've got some treasury numbers as well to take a look at. I had actually not seen this chart that we're showing right now that was in today's report. This is US inflation you have today from 2014 all the way to up to now and then maybe, you know, projected in the future. And, and that's overlaid with inflation from 1966 to 1982. So that was the infamous period of massively high inflation during the 1970s and into the early 80s. And if you overlay these two charts, right, it tells a story that if it plays out, if today's inflation plays out like the 1970s, we could be headed for a double top in the next couple of years.
- [21:50]
A
It's, it's possible. It is kind of eerie how, you know, the inflation track is really kind of following what we saw back in the, in the 70s and early 80s. This is a chart from, from the Informationist. And yeah, I think, you know, we got the 3.8% CPI print last week. We got 6% on the PPI. We've talked about how that's the, you know, that's the producer price index and that's the inputs for producers. That tends to be a leading indicator for where CPI is going. And you know, we were really starting to see the bond market get a little bit unruly here. I think that's kind of what I want to go through here because the two year yield is, is rising and it's rising like pretty significantly past the Fed funds rate. This is interesting because there's a lot of, there are a lot of smart people out there, you know, legendary investors that'll tell you the Fed follows the two year yields. There are other people that will say, well wait a minute, you know, it's kind of reflexive and they, they sort of like move off each other. But there, there's pretty clear evidence, I think if you go back and look that the, when the two year starts to move away from the Fed's target range, the Fed finds a way to, to catch up to it. It's sort of the market forcing the Fed's hand is kind of how I think about this. And you know, we're at 4.14 or so on the, on the two year, the fed funds range is between 3.5 and 3.75. So that's kind of interesting. It looks like the market wants to force something here and it's saying the Fed is behind the curve. And so what we did is I wanted to kind of understand like, what was the sort of like cadence of this back in 2021, 2022, when the last time we had inflation, the last time the Fed had to hike rates, like what, what kind of, what was the cadence of how we got there? And what's, what's interesting is like we, we had, everyone kind of probably remembers kind of the inflation that we saw come in, in 20, in 2021. What was interesting is like we hadn't seen inflation in like roughly 40 years or so, you know, at that point. So it was kind of hard to get this baked into market psychology I think at the time. And I was looking at some of like what the market was anticipating for, for inflation. It was like 3% or so it at 8.5%. But the sequence here was that the two year sort of to take off pretty quickly. It took four to five months for the Fed to catch on to this. And we had multiple higher inflation prints over that period. But this was kind of the thing that forced the Fed to hike in the last cycle. And I'm sort of wondering if we potentially are kind of in that type of setup today. I think the one thing I would maybe push back on that view is that if inflation is going to go high and, and it's largely going to be because of oil prices, like that should cause some sort of, you know, demand destruction in the economy as well. And this is the tricky part where the Fed, you know, if they hike, they might just like actually like really start cause a major growth scare and then they'd have to cut right behind that. So I think it's a, it's a tricky spot for them. But definitely, you know, this to me feels like it might be the catalyst just for some more turbulence, you know, kind of in the, in the near for Bitcoin.
- [25:17]
B
So this is not a great setup when it comes to risk on assets because this could indicate that the Fed is a little behind the curve with respect to inflation and they need to move Fed fund rates up. I think you said now the probability of actually a Fed raising rates by what was this December of this year is at 42%, 42% and rising. And the double top scenario of the 1970s and people maybe who aren't seeing this graph weren't alive then, don't recall it was the early 1980s that we actually peaked above 10% annualized inflation. Right.
- [25:55]
A
Which, which was during a similar conflict with, with Iran. So, oh my God, it's a repeat. And that was a second wave. And like, it's kind of interesting to think about that in terms of the psycho, like, because that is very interesting to me where, like, people are now expecting inflation. So if you look at the University of Michigan kind of consumer sentiment analysis and what is the market like expecting? So that we're expecting 4.5% inflation over the next year or so. Again, if you go back to 21, we didn't have this like, real expectation of higher inflation because we hadn't seen it, I think, because now we've seen it. That is going to be interesting to see, you know, if oil stays elevated, if this starts to bleed into, you know, other, other goods for consumers, I think it could, could, it could get interesting in terms of kind of where, where this goes.
- [26:46]
B
So you're saying there's a reflexive feedback loop in consumer psychology. Now that they've experienced inflation, the inflation of COVID now, they kind of expect it. So they might change their behavior. Right. And certainly their, their allocation. And that can reflexively lead to that double top type of scenario. Now, whether we get as high as the 1980s, oh my God. Above, above 10%, it could be a smaller top, I guess, a smaller peak. But that really required a Paul Volcker to come in and completely, I guess, like, go hard on raising rates. I'm not sure if that will work today. I don't know. Like, the tools in the toolbox seem a lot different when you're above 100% debt to GDP. Right. And so how is besant and how is incoming warsh actually able to handle the rising rates on Treasuries? What's in their arsenal to try to combat this?
- [27:47]
A
It's a tricky one because you're right. I mean, we already have a ton of debt out there, and if they start hiking rates, that's more interest that you have to pay on that debt. The, you know, that could, that you would, you would expect rates to go even higher, you know, if you did something like that. So it's a, it's definitely a really tricky spot. And you know, the, the Fed kind of like consistently was kind of saying that inflation was transitory back in, in 2021. Everybody remembers that, that word. And this is going to be interesting this time because if he comes out and says the inflation's transitory, his first meeting is going to be in June. That's going to be really interesting, especially if inflation starts to keep going up and it's one of those weird spots where historically when debt to GDP gets this high and you're also in a geopolitical conflict, these types of things, the policy that they typically fall back to is this run it hot, inflate away the debt type situation. So that is kind of the playbook that that's being run already I would say right now. And the question is like, are we just going to do it? This is really what is causing all of this. You know, this is probably the reason that the Republicans are looking like they may not win the midterms, right, because of this K shaped economy and everything that's happened. It's all a result of this, these policies to basically try to, you know, I would say inflate away this debt or deal with this problem. So it's a really tough spot for the Fed when you have inflation and you've got debt to GDP at these levels. So I think all eyes are going to be turning to warsh. You know, when, when we came in, you know, we did an episode, we talked about it, we thought he was potentially hawkish. So this is like the moment we're going to really find out. And like I said, I think one thing we, we could potentially see is just like no cuts. And I think in effect we're sort of seeing like liquidity being injected into the market, almost like there are cuts happening without them actually doing cuts. And this is the reserve management purchases that we've been talking about. So I don't know, it's a, it's an interesting setup. I will definitely be watching some of the messaging that's coming out of the Fed over the next month or so.
- [30:07]
B
I mean, zooming out. If the decision, the inevitable decision, which it probably is, is to inflate away the debt that is the bull case for this entire asset class. And let's not forget what you are trying to achieve with the TDR portfolio, which is you're just playing the cycles so that you can buy scarce crypto assets on the cheap. But your plan is to accumulate these for the long run because you think bitcoin is going in eventuality north of a million per bitcoin. Right. So that's the gameplay. And so all of this might be slightly bearish in the short run for bitcoin other crypto assets that are perceived as risk on, but that presents a massive accumulation opportunity so that you could buy when the Fed and the treasury and the US government and all, you know, fiat regimes around the world decide to inflate away this Debt.
- [31:01]
A
Yes.
- [31:01]
B
Key levels. Let's end on this. There were a few key levels you mentioned last week toward the upside. That 78.5k short term holder cost basis we mentioned, which didn't hold. Then you have 81.5k. That's the 200 week moving average. We're not, we're not above that yet. And then the 80, 84k which is the largest cohort of dip buyers. Let's talk about some maybe key levels that are lower than that. You have one which is 75k, that's the 50 day moving average and the 2025 low you say in the report. So on the downside is 75k a key number to watch and then at what point, I mean what's still the Michael NATO fat pitch scenario for four Bitcoin price, is that still in the 60s?
- [31:54]
A
Yeah, I think so. I think so. I think, I think anything below 65k or so, which was our initial fair value target, that was back last October, I would say the, because we've gone on for seven months now of this bear market, we've had a significant retracement. Like my confidence that we're going to deep value back in February has like waned a little bit. So I think like the setup here and we'll see if there's, you know, if the Fed has to hike and things like that. That's, you know, anybody who lived through 2022 knows that that was not a good situation for bitcoin. It took, took a while to get out of that. So you know, if we start a hiking cycle that, that maybe actually brings in those deep value targets potentially. So to me, like, you know, we've kind of like the, the crypto markets are clearly in a, in a bear market. Bitcoin is 39% off its highs. Most altcoins are, you know, down 70, 80%. And we've been you know, nibbling and selectively in some of those areas. So the, the, the error is out of the market. I think, you know, it sort of feels like bitcoin kind of needs to be pushed, you know, in one direction or the other. And like, I think the downside scenario is potentially just this oil situation, what we're seeing with interest rates potentially hiking. So that's kind of the downside. I think if you wanted to think of like what could push bitcoin over the top and maybe over some of these thresholds on the bull side, probably some resolution to the war or something that maybe we're not totally expecting and that could Just because what I'm seeing is like there's just not a ton of sellers at this level and not a ton of buy like there. It kind of needs to get pushed in one direction and then we'll see what the psychology of the market is. And so I think those are like potentially the two scenarios. And I think the, the deep value scenario is like this inflation thing is kind of running away from us and people are sleeping on it and NASDAQ's sleeping on it and we have a, you know, another, another kind of level to drop to. And then that would probably do, you know what I think may be necessary to just like totally kind of wipe out any bull sentiment for a little bit. You know, it's all over and that's kind of how you fully reset the cycle. So um, yeah, that's kind of how I'm thinking about it.
- [34:19]
B
In the meanwhile, you are looking at some other crypto assets as well. Last Friday there was a report on zcash. I will, we'll leave a link in the show notes so that listeners can go check that out if they've missed it. This Friday you're coming out with a report. I think this is going to position hype versus pump, which, so it's hyper liquid versus the pump ecosystem which are two revenue generating coins. And so what's, what's going to be published on Friday and what changes are you looking to make in your portfolio? Because I noticed another buy earlier this week in the, in the portfolio and it wasn't bitcoin. It was down market of that.
- [34:59]
A
Yeah. And people may just, you know, to clarify that, like we kind of think bitcoin probably going to chop around a little bit here. We still have a lot of cash in the portfolio and I've been selectively nibbling on things that I think have strong fundamentals and you know, against their BTC pair, they're already down the chart. Looks like it's sort of bottoming. You know, I'm kind of being selective on, on a few things here. So. Yeah. And you know, the other thing that I'm doing is what's been interesting, you know, at least on my, my timeline on, on, on X. It's, it's like I'm seeing a lot of attention just like really consolidating towards zcash. We covered zcash last week. People can check out that report. Bankless did an awesome episode on it as well. So a lot of attention kind of consolidated around privacy and around hyper liquid and it's been very interesting Those are the two coins that have essentially been outperforming everything else. And that's all anybody's talking about. And it's like becoming a narrative that, like, these are the two coins. So naturally I'm looking, you know, those don't look to me like fat pitches right now. So I'm looking kind of where everyone else isn't. And I think one sector of the market that has been forgotten is this kind of consumer retail Meme coin sector on Solana, which was one of the hottest sectors in the entire last bull market. So we've been looking at a lot of the fundamentals on this and it's very interesting. So we're going to put out a report on Friday that goes through why we think Meme coins are sort of a sticky product. They are, they are quite cyclical, but they're a sticky product. They, they, they cater to an entirely different crypto user than perps do. And we kind of go through why we think this is sticky, why we think the market is kind of discounting it and overlooking it. And then we go through a lot of the fundamentals, which I think are. People will be quite surprised by how Pump is performing.
- [36:54]
B
Yeah, I can't wait to be surprised because I feel like my default case is like, oh, Meme coins were like NFTs from the previous cycle and maybe they're dead and they will never ris. I think that's what a lot of investors think right now. And you might have an alternate take. So I can't wait to read that. That's going to be published on Friday. Of course. And if you are not subscribed to the tdr, the actual reports that we talk about on a weekly basis, you can go do that at the DeFi report IO. Make sure you get these reports in your inbox, including that Friday report that is coming out, comparing hyperliquid and Pump. Of course, got to end with this. None of this has been financial advice. This is an investor journal. We're on the journey right alongside you. Until next time, stay curious.