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- [00:00]
A
Foreign.
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B
Hey everyone. Welcome to the report. The question today, has the hot money rotated? It is April 22, 2026. So we are six months into the bear market. The question today is how much of 2025's hot money, all that new money that invested in bitcoin, how much of that has actually rotated? That is a key milestone we want to check in on in the cycle. And this is where Mike opens today's report. Imagine you could analyze the cost basis of every Apple shareholder. What percent bought the Peak, who sold the 20% drawdown, whether long term holders bought the dip on chain. Lets us run that for bitcoin. That's the focus this week. How much of 2025's hot money has rotated to the new hands? We're six months into the bear market. We're going to check in on this. This would be like a cost based cohort analysis and we're going to look at these cohorts and how they match the 2021 cycle and how they match the 2017 cycle. In order to answer the question, how close are we to the bitcoin bottom? Also stick around to the end. Mike, I think earlier this week has made his first altcoin buys of the cycle. I want to check in on what is motivating that actually maybe just start there. So you have said and you still believe in today's report that we're firmly entrenched in the bear market, that bitcoin has not hit its lows. The lows are not in yet. Yet. Yet earlier this week it caught you buying some altcoins. That was the TDR Pro portfolio alert. So what flipped on Monday? Why'd you do that?
- [01:45]
A
Yeah, so you know, my thinking's a lot evolving. We've talked a little bit about how, you know, a lot of stuff will bottom when bit coin bottoms and, and you know that is a strategy. You can, you can probably wait on a lot of this stuff. My thinking is evolving a little bit on, on this topic just because we've seen some other tokens, high quality tokens, start to do stuff slightly independent of bitcoin. Hype is an example of this. And we're getting into the zone of the bear market here where it looks to me like we, I can start to build a case that a lot of these altcoins are pretty much washed out. You know that doesn't mean that we're not going to go lower or if bitcoin has more weakness that we can't go lower. But I think you can make a case that the Solana ecosystem, parts of the Ethereum ecosystem have been in a pretty deep bear market now for over a year. And bitcoin dominance tends to drop at the bottom of bear markets. So I sort of think we're kind of in this phase now where some of these charts that I'm looking at on some of these assets that we've been doing research on, on trading volumes just continue to decline. And some of these charts just kind of look like they're, they're sort of starting to flatline a little bit. And to me that's like a zone where you can start to, to, to think about making some buys and starting to scale in. So, so we're starting that process. Maybe I'm getting a little too impatient but, but like I said, it, it think things are pretty washed out and like the focus is really kind of on building the portfol, trying to get some better, you know, fat pitches on, on BTC here. So.
- [03:24]
B
All right, at the end of today's episode we got to flip the hood on that and check in on the portfolio. But, but first, of course we got to talk about bitcoin cohorts. Before we do, we want to thank our friends and sponsors over at Galaxy. If you have not checked this out, Galaxy One is a consumer app for you TDR listener. They're launching staking on Solana. So if you're already holding soul, you need to be staking that soul. Otherwise you are losing like 6.5% in terms of rewards. And right now on Galaxy One they have their own Solana validator infrastructure and if you stake with them, there's no commission fee all the way to the end of this year. It's all integrated. You can buy Sol there other apps, you can transfer it. Once you stake, it just compounds automatically. So you can kind of set it and forget it. As long as you're holding Sol, you may as well be staking on Galaxy 1. There's a link in the show notes. All right, the price, Bitcoin price. At the time of recording we are hovering below 80k. So about 89k. It's looking a little bit bullish. You might say this is short term bullish. I know you talked about 80k being resistance. 80 to 85k. Maybe we'll get to that. That's where we are at the time of recording. Now let's set up what we're going to do in today's episode which is the cohort analysis. This is a cost based analysis and you said in the opening note Imagine you could do this for, for Apple. Tell us the structure of this, like why is a cost based analysis useful for any asset? And then in particular why is it useful for Bitcoin? And what, what are we really analyzing here?
- [05:04]
A
Yep. Yeah. This is like when I first got into crypto, this is like what hooked me is the fact that this data is different, it's unique. I remember when I first started looking at Bitcoin and I can't even remember what data company it was. But like you could see the flow of capital on chain, you could see when holders were sending coins into exchanges, things like this. This was like something that just kind of really grabbed my attention. It's really what kind of drew me to the space. And you know, we opened with that because when I explain crypto and on chain data to somebody from like traditional finance and that, you know, when you typically do fundamental research and in tradfi, you know, you're going to be looking at the asset itself and doing the fundamental research and building a case for that sector. Maybe you're folding in some, you know, macro analysis or what the, you know, where you're at in the business cycle. But you don't really have this, this extra layer of data here where you actually can understand the holder base of the asset itself. And this is particularly helpful in crypto because things like Bitcoin are just store value assets. Right? It's really just a supply and demand asset. It trades more like a commodity. And what's interesting is I've had a lot of readers of the DEFI report that come from the oil and gas space and this is the type of analysis that they do to determine if they're going to be risk on or risk off in oil markets. And I've had a lot of them reach out to me and like compare what I'm doing to what they actually do.
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B
Really it must be so much older for them to, so much harder for them to get all of the data required to do this type of analysis though.
- [06:46]
A
Correct, correct. And you know, we work with data providers to get a lot of this data. But what I think this is really helpful particularly at this stage of the cycle because we're about six months into the market. I want to understand sort of not only the supply and demand of, of in the market out there, but what has happened. You know, typically in these cycles you get a new cohort of, of investors that come in typically later stage in a bull market. And we want to understand like, you know, how, how strong are those hands and we want to understand, like historically what has happened, you know, maybe six months into a bear market, how many of those coins, what percentage of those coins have rotated. And then like, it really helps me understand just in some ways the psychology of the market and sort of dip buying behavior. And we just fold this into our analysis with everything else we're looking at on fundamentals and cycle awareness data and things like that.
- [07:43]
B
So cohort analysis, the type that we're doing today is particular. It would be great if we had this for Apple for equities. But it's particularly useful when it comes to commodities. You know, the faith and flow type assets. Assets like oil, assets like gold. And now, unlike any of those other assets, all of the data is available to us on chain. And that's the basis for the analysis that we're doing today. So you open this report with a graph. Bitcoin cost basis clusters. This is the number of bitcoin and I guess the percent of supply. Is that. Is that correct? Held at each price range. Walk through what this bar chart is showing.
- [08:22]
A
Yeah, this is showing the, the cohorts. This is as of April 20th. This is Glass Node. This is data from Glass Node, and it's showing all of the cohorts, the current cohorts. And what we can see is, you know, there's a percentage there on the top that's the current number of coins held within that cost basis, cost basis band. And then you have the, the actual number of coins on there as well. And you know, what we've been observing here is not surprisingly, the 66.2 to 78k band there has been growing the most we've been in this trading range for bitcoin between 60k up to about 79k or so now for 2 and a half months or so. And we're observing like, you know, lots of, lots of dip buying activity at this level. So coins are, coins are changing hands out there. And really what I'm looking at is like trying to deeply understand how this played out in the last cycle. We can't predict where the price is going, obviously, but it's interesting to sort of see, you know, how what percentage of the coins from that came in at the top of the last cycle, what percentage of them had rotated, you know, six months into the bear market. We were at a similar stage back in 2022, where Bitcoin is trading around 30k at the, at this stage of the cycle. And there was another leg to drop. And we can kind of see does it, does the dip Buying opportunity does a dip buying behavior at this stage, six months in, in 2026, what does that look like compared to 2022? And if we get further weakness, what, how might this, you know, start to start to shake out? So I think that's the takeaway. Lots of dip buying in that zone and we can kind of get in. There's a lot of nuance here that we can kind of get into with some of this data.
- [10:09]
B
Yeah, let's get into it. So these different cohorts based on the price at which they likely purchased their Bitcoin, right. And so everything over, I guess Every. Everything over 78k or 79k at the time of recording, I suppose they're underwater on their purchases. That would be kind of the newer money. And then we have some of the. Actually, you know, in order to understand this, you know, in a human friendly label type way, I actually ran some of this through, through Claude Mike and I'm wonder what you think of this, which is these various bands. So there's a new money band. It seems to me that's a pattern in 2025, right now that band is if the new money purchased between 108k and 126k. The young money is the band that purchased between about 66k to 78k. So we got the new money, the young money, and then we have old money, which is the band right now that purchased between 56k and 66k. And then we have like the ancient money and they purchased below 21k. And these same bands show up every single cycle. So we always get new money. Those would be the new cycle buyers or the new purchases that an existing cycle buyer made during that cycle. And then you have the young money and then you had the old money and you had the ancient, the OG type money. And these types of labels and these cohorts repeat. Now, of course, the prices are different each cycle. So in 2021, the new money they purchased between 56k and 66k rather than 108k and 126k. But so the bands are different, but you see the same sort of cohorts of buyers each cycle. I think that's a important underlying principle when we're doing this cohort analysis. So what do you think of those labels? Does that work for you?
- [12:07]
A
It does, it does. I think this is a good way to lay it out. Thank you for throwing this together and maybe getting into some of the takeaways here. If we compare the new money. So this is the 108-126k band currently in this current cycle. That relates to the 56-66k band last cycle. What we can see is that roughly at six months into the bear market in the last cycle, about 46% of the coins held in the new money band had been rotated to do hands. So, so 46% in, in 2022 of new money. Where are we at today with, with the new money from this current cycle? Down 43%. Right. So, so lines up very, very similarly. We also looked at, you know, where did these land, where do these cohorts land? At the bottom of, of 2022, that new money cohort actually ended up selling about, you know, reducing their holdings by another 14% as the cycle went on. Obviously, you know, price action drove a lot of that, that behavior. But it's interesting to me that there was still a lot more of a shakeup that, that kind of came out later in the, in the cycle. And what, what's particularly interesting to me is that this, this, this band that's picking up all of the coins today, this is the 66 to 70. This was equivalent to. This is the young money. It's equivalent to like 29k to 34k in the last bear market. And that was the band that grew the most, you know, in the first six months of the last bear market, which, which was interesting. And it's also the band that's growing the most in this current bear market. What's interesting, as the cycle played out for another six months in 2022, that cohort actually finished the cycle down, down three and a half percent and it's holding. So it tells you like people were jumping in too early. And then it seems like they were coughing up those coins later. We might have a similar setup in play today.
- [14:21]
B
So what we're seeing is, I guess, similar patterns across these cohorts in various cycles. This is another graph that Claude helped me output of the different cohorts in 2021. And what, there's the new money, the young money, the old money, and kind of like in 2021 and where we are today, it looks like the new money in 2021, it seems like they actually sold. They just like bleed steadily down. So that's kind of the bottom line in red, right? So at this point in the cycle last time they were down 46% in terms of the amount of bitcoin supply that they held. So they were selling and I guess psychologically new money kind of they purchase this fantastic bitcoin product because everyone tells them number go up, and then they become disillusioned and disappointed when number didn't go up and they're down. And so they capitulate. And so this is the crowd in the cohort that capitulates the hardest. And in 2021, at this midpoint, they were. They capitulated 46% of all of their bitcoin. By the end of the cycle, they coughed up 60% total. So there's still more capitulation in store for them. Now, the young money, this cohort, at first they accumulate.
- [15:44]
A
Right.
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B
Which is kind of curious. So during the first six months of the bear cycle, they're still buying. They still have some faith, I suppose, given they're not yet underwater or they're barely underwater and they buy too soon, is what you say you are saying. And then what happened in 2021 and 2017 is that they, they cough it up later in the, in the second half of the bear cycle, the second six months, and they, they end up actually with 3 to 4% less than when they started. And but the old money, and this is what's interesting, the old money tends to be kind of the, the patient, I don't know, diamond hands, smart hands, they draw down a little bit during the bear market, and then they rapidly accumulate.
- [16:34]
A
Yes.
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B
Right. So the old money in 2021 was up 356% because they continued buying during these dips. And this pattern, this trend, you're saying persists. You saw it in 2017, you see it in 2021, and now you're kind of looking at some extrapolation. Extrapolation in 2026.
- [16:55]
A
Yep. Yeah. Just helping me understand the holder base, trying to get in the minds of the market a little bit here. I think it's helpful. And yeah, I think that's the big takeaway is, is that the, the old money was actually down, you know, six months into the bear market. And in 2022, this was like 18K to 21K, which also aligns with the prior cycle top, which is kind of interesting. So that, that cohort was actually down in its holdings six months into the bear and finished the 2022 bear market up 356%. So there was a ton of buying late in the cycle from this cohort, potentially even from people that were buying in the cohorts above them. Right. That were buying too early. And then they, they, they still, you know, started buying, buying the dip later. We're getting, we have a similar setup. I, I think that the Equivalent of that cohort today is the $56 to $66k aligns with the prior. It's down 18% and it's holding. So that also looks similar. It's down 18% six months in. We will see if that cohort, it's only about 5% of the supply right now, and the band above it is 10%. We'll see if that flips potentially if we have some more weakness in the market, I think.
- [18:10]
B
Okay, so let's make sure we get the takeaways that you have in your report from this cohort analysis. So there, there's four key takeaways here. I think they're all worth worth highlighting. So let's start about the this. Start with the first. We continue to believe the same setup is in play today. Similar cohort pattern. If we are correct, we expect to see the 66-78K cohort holdings decline as the bear market drags on. Assuming bitcoin revisits the early February lows, that's 60k and possibly drops further. Okay, so that's a, that's a takeaway, I suppose. What would you say about that?
- [18:48]
A
Yeah, I think, I think that's, it's sort of like, you know, I think the takeaway is that people are potentially getting, getting back into the market buying dips a little bit too early. And we won't know until, you know, the price, you know, potentially comes back to some of these levels or drops for further. But the setup here looks very similar to 2022.
- [19:12]
B
So the second is we should see the 56 to 66K cohort, currently 5.7% of the supply, increase its holdings. So you'd expect to see that as well in the next six months.
- [19:23]
A
Yep, Yep, exactly. And that's the cohort again, lines up with the prior cycle top. That would be the cohort that grew the most in the 2022 bear market.
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B
And then number three, you'd expect to see investors just chopped up, in other words, particularly the new money. And I guess the young money gets chopped up by rushing too early to buy dips. And in fact, that's kind of what we're seeing right now, potentially.
- [19:52]
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Potentially, we can get into sort of what's going on out there right now as well. And this could be totally wrong.
- [19:59]
B
Right.
- [20:00]
A
If the price doesn't, you know, just ends up establishing support at some of these elevated numbers, you know, maybe these dip buying opportunities don't come into play and the, the coins don't rotate as, as much as normal. That would that to me that's an anomaly and I, I want to anchor to kind of what I think is, is, is more likely to play out. But yeah, I mean, it's kind of interesting. We've been in this, this band here for two and a half months or so. It looks like a pretty typical bear market rally from my perspective. And what we saw like a move up towards 878k or so early this week last maybe last Friday, and we're now making another move back up there. What's interesting is like, there's a lot of negative funding out there, so the trading community is fading. This rally and shorting into this right now, it's the most like negative funding, which is just an indication that people want to be, you know, shorting the market. It's the most we've seen since April of 20, 2025. So what's interesting is like that could, you know, there's been some short liquidations, short squeezes that have been going on over the last few days and I think that's sort of pushing the price up into these like resistance zones and we'll see. You know, I'm also looking just, you know, are there, is there some indication that like, people are really kind of coming, coming in and going risk on or the ETF flows picking up, you know, large, large inflows? Not, not really seeing that on chain. I think the one bright spot is just Saylor. You know, he bought another two and a half billion. He's relentless in the, in the bear market. And so he bought another two and a half billion. I think by my count, up to roughly 10 billion of purchases so far in 2026. So that's, I think the big question is like, does that have the same sort of. Is that pouring gasoline on the market like we typically see during, during bull markets, or is he just sort of able to quietly go in, buy, buy spot bitcoin over the counter, you know, not move the price really. And he's not necessarily like, you know, sort of, you know, buying up all of the, you know, the supply that gets sold in the next capitulation. We'll see. So, yeah, I think that's a setup. I don't see any, I'm not seeing like some, any activity that makes me think like this is a real durable push just yet. And, and so we'll see. Like this is. It looks to me like a pretty typical bear market rally that Maybe extends into 85k zone or so. But these next few weeks are going to be really interesting to See how this, how this shakes out.
- [22:46]
B
Are you leaving open the possibility, Mike, that Michael Saylor's buying activity has just blunted the crypto winter and made it a much milder crypto winter than we would normally experience. And so we won't see that dip, that capitulation.
- [23:03]
A
I'm open to it. I still think like, you know, bitcoin is a supply and demand market and if we do have, you know, I don't know what the catalyst would be. There probably needs to be a catalyst potentially for this move. And you know, we've sort of been moving away from macro and like, less focused on what's going on over in Iran markets, sort of moving past some of this. But there's always a chance that that actually re escalates and causes some turbulence in the markets. But I'm really, I think the thing that I'm mostly anchored to is just this is a supply and demand asset. Like one buyer can't blunt, you know, you know, a multi trillion dollar asset. I don't think I could be wrong on that. But I can't build an investment, I wouldn't be able to build an investment case on just one buyer in the market.
- [23:54]
B
So you think there's more rotation that needs to happen before this whole thing plays out, that the new money coins from last year, they haven't fully rotated and we won't conclude the bear cycle until that rotation happens. Essentially that, that's, that's your base case. At least.
- [24:14]
A
That's, that's the base case. And you know, we have kind of like a view of that. And it does look like there's just more, you know, there's more coins that, that, that need to, to sort of change hands here just to really establish that bottom that we're looking for. And then, you know, hopefully we get some sort of catalyst in the, in the, in the market from a liquidity perspective that, that sort of leads bitcoin, you know, back out of this on the other side. So we'll see. We're coming into a very interesting zone here. This is the latest battle between the bulls and the bears. I think I'm seeing more sort of positive sentiment around bitcoin, more bullish sentiment out there. It's been a rough few weeks in crypto broadly. I think everything that you would look for at the depth of a bear market is playing out, I think actively in the market right now. That's one of the other reasons that we want to be in a little bit more of a risk on stance, even though we think there may be some more weakness coming for Bitcoin.
- [25:13]
B
Just this week, talking about sentiment, there's some defi has failed. Crypto is dead. We've got this barrage of hacks that are hitting us right now. That's a low market sentiment indicator. So with these cohorts, I suppose you're going to be continuing to watch them to see how well they fit the pattern. In particular now the, the new money has to capitulate a bit more. You'd expect to see them selling same with the young money and you'd expect the old money to start accumulating maybe somewhat aggressively into the future. And if you see those signs, then you have further indication that it's fitting the cohort rotation cycle that we've seen in previous cycles.
- [25:52]
A
Yeah, exactly. And that's, that's the base case. And I should just mention too like this, this data is, is evolving with time. So the data that we're looking at is on chain data. This comes from Glass Node. There is some data that's out of our purview, right? That's the ETFs, that's 6% of the supply. And then there's some, some of the supply is held on centralized exchanges. We don't have a view into that. So we've, we're, we're working with about 80% of the data. This has been, you know, high signal for, for us, you know, as, as investors through these cycles. But I just want to just let people know like it's there, this data is evolving and there's other ways to analyze ETFs and things that are happening on exchanges as well.
- [26:34]
B
Okay, let's talk about the portfolio moves. Earlier this week, as I said, I received a TDR Pro alert that the portfolio had changed. I excitedly opened up that email and I saw a few purchases, a few altcoin purchases. So we won't talk about the exact percentages, maybe we won't cover them all, but you made a few moves. Do you want to talk about those moves? What can you tell us? I know the full story is reserved for TDR Pro members, but what do you want to share about this?
- [27:03]
A
Yeah, so what we're doing here and, and I'll preface this to say that like some of the best moves we made in the, the last bear market were, you know, kind of focused on similar research that, that we're doing now trying to identify the stuff that is, you know, deeply oversold and somewhat overlooked that that was working well in the last cycle. That's getting Somewhat overlooked and maybe there's attention currently. And so that's, that's the focus. What we're trying to do here is find stuff that we can get into for at least a one to three, you know, year holding period. And I'm looking for like venture style returns where we can outperform Bitcoin over, over that whole holding period.
- [27:45]
B
What's venture style? Is that like a 10x to you?
- [27:49]
A
We, we had a few 10xs in the, in the last cycle. Those would be, that's, that's a venture style return. Like to me like anything over 5x or so is really what I'm looking for. And I'm looking to outperform bitcoin over over.
- [28:01]
B
So is that like a 5x on Bitcoin or and a 10x on Bitcoin or is that on say dollars?
- [28:07]
A
I guess my base case is probably that Bitcoin, you know, may be able to get to like 250k or so through the next expansion. Maybe, maybe, maybe higher. But that's kind of like a, you know, kind of a base case to set. And so I'm, I'm trying to identify where, where's that bottom going to be? What are those returns look like. And then like any, any other capital that's going into the market, I want to have some thesis for why that, that could outperform Bitcoin, you know, across a cycle. And again these are like, you know, one to three year holding periods. And you know, we started buying Solana in 2022 at $30 in the last bear market and we bought it all the way. And, and this is an example of what can I, I think it was down close to 90% or so at that point. And you know, we did have another move down. We kept buying it and then ended up in a position where our average cost was about $15. That was our, you know, that was one of our best moves of the cycle. And we, we also did pretty well on Bonk. So if people are following some of the moves that we made here, you may see like some similar themes where we're, we're looking for things that we, that worked really well in the last cycle that are somewhat overlooked that are down, you know, 90% or so. They're pretty washed out. These charts are, you know, there's very low trading volumes. These charts are starting to flatline a little bit. You know, I'm looking for seller exhaustion at some point even with, even if there's sort of risks on macro and there's risks in the market at some point crypto just gets washed out and like there's, the sellers are somewhat, you know, somewhat depleted out there. And that's kind of what I'm looking for. As we start to move more into risk on, we have a number of themes that we're focused on and I'm trying to find the category winners and be able to build a portfolio around these like kind of high conviction bets.
- [29:57]
B
So you're buying these assets and I think it was four assets on the week and they're all in deep value territory, fair value at least, but, but deep value territory. Are you worried at all that it's still a little bit early given we haven't seen the bitcoin macro lows or like. Because if, if I would guess that your base expectation is if we hit lower lows on bitcoin, then the rest of the down market stuff is going to go to lower lows as well.
- [30:25]
A
Correct. And I would, you know, expect, expect that. There's also a chance that, you know, as I look at sort of the setup on some of these things, there's also a chance that they actually don't hit like a lower low on like their bitcoin pair. So some of the analysis that we were doing before we made these purchases is looking at where they're trading on, on their bitcoin pairs and they're all like almost at their, you know, you know, all time low in that regard. So that's one thing that can help me say like, well, even if bitcoin shows weakness, these things are already like undervalued against, against bitcoin themselves. And so, so I think you can start to think about being a little more risk on. But yes, like, that's why I kind of preface this with like saying we were early on sol last time it was still our best trade and it looked like maybe that was a bad move for six months or so, but it was still, still turned out to be a good trade.
- [31:18]
B
So and there are some factors at play that are, let's say exogenous of bitcoin demand this cycle that maybe we haven't had in previous cycles. So we have some revenue generating assets. For instance, we have things like stablecoins. Right. And these things can go up even if bitcoin stays muted. The demand structure there is, is a faith and flows assets. It's very much a store of value demand. So that can impact the decisions in terms of when to buy. Well, it's been fascinating being on this journey with you and reading the journal every single day. We should say to TDR listeners, if you are not subscribed to TDR Pro and you want access to the portfolio, including the moves we just talked about, there's a link in the show notes you can subscribe. I think generally, what, there's a one month free trial, Is that right?
- [32:03]
A
One month free out there so people can access that link, get access to the portfolio. See, see what we're doing?
- [32:09]
B
So everyone listening can go see the moves that we talked about in, in detail. Right. And if you want to try that for a month, welcome to do so. I gotta let you know, of course, 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.