A (2:15)

Well, I'm generally confused, but I would love to hear sort of what your thesis is, especially in context of this move down below 100,000, the altcoin action, I think the dust settling from the October 10th liquidation event, which you and I haven't even had an opportunity to speak about. So given we're recording this on a Thursday, it'll come up on Saturday. Bitcoin could be 90 or 110 and it wouldn't surprise me by the time this comes out. But we're, you know, we're treading water just above 100 right now. So what are you thinking generally?

B (2:45)

So look, I, I've got to like, I'd say the following. There's a 30% chance that the bull market's over. Why do I say there's a 30% chance that the bull market's over? None of the bull market top indicators hit hit the cycle. Not the, the, not the YouTube views, not the MVRV score, none of the traditional bitcoin metrics that mark the top of a cycle hit. There was no blow off top, there was no euphoria. I mean, we actually didn't even get to extreme greed on the fear and greed indicator. Funny enough, we got there for like one day. And usually when you get into a top, you usually get certain behaviors of exuberance and those behaviors of exuberance weren't displayed. However, those behaviors of exuberance are measured with retail type indicators. So the fear and greed is measured by retail type fear and greed. And you know, all Those indicators, the YouTube views are measured by YouTube views which are very much a retail indicator. And so there is a small chance that the cycle actually is over if you look at the halving cycle. Because if you go strictly by the halving cycle, the top would have been around October 6th, which actually was when the top actually happened. So that's why I say that you can't write off the fact that it may have been the top of the cycle. Having been here for a few cycles. I don't. It didn't feel like a top, but, you know, that's it. Tops can actually catch you by surprise. My, my bigger thesis, and the one that I'm more inclined, where my 70% lie is something that I tweet, I've been tweeting for, or I tweeted for a while. I'm actually going to put it up on the screen just so, so we can see it. And I said the following. This is after the October 10th correction. I basically said that the correction will end when everyone's convinced that that was the end of the bull market and, and that it lined up exactly to the 6th of October top, which was where it is. And then ever since then, I've Been waiting for people to believe that it's the end of the bull market. And I think that a couple of things are happening which are quite interesting. I'll show you, I'll show them to you on a chart. So what you know about bitcoin bottoms is that bitcoin usually tends to wick down and then it usually comes back and it sweeps the lows with another wick. Right? And that you can see that in that, in that bottom over here. Pretty much if you go back in bitcoin and you know this because you're a man of the charts, you can see it over here in 2021 you can pretty much that's how bitcoin usually bottoms. It goes down and then it chops and then it takes out, it takes out the wick. Now the wick that we had was the October 10th wick, which was that wick over there. And what you can see is that right now we're taking out that wick over there. Now what we also know is that that period of the first flush to the takeout wick is somewhere between 30 and 50 days. So if you look at traditional cycles other than in 2021, which was a slightly different scenario, which was this one over here, which took something like 70 days, if you that wick to that one was 75 days or 70, 70 days more or less, let's just call it that. Generally the time to take out the wicks is between 30 and 50 days. And if you look at what, what we did was we, we bottomed on at that level on October 10th. We recovered like a typical recovery would actually happen. And then we came out and we took out, or we're taking out the wicks at the moment. So my thesis is that there's a 30% chance it's the end of the cycle. More realistically, there's a 70% chance that we will take out the hundred thousand dollar psychological level. And I think that hundred thousand dollar is a psychological level that has to break because I think when it does break it psychologically a lot of people will run for the hills. And that's what would take the market down to 95 to 98,000. ETH will go to 3, 2 and Solana will go for 1 to 145. Now notice that that's a tweet that I published on the 26th of September. So that's not something that I came up with. Now that was like a month and a half almost two months ago when Bitcoin was trading at 115,000. And I said 32.

A (6:41)

Yeah. And Bitcoin, I mean it didn't stay there, but it almost got to 98. I mean, you're close.

B (6:46)

Yeah. So I think, I think psychologically it's important that bitcoin closes behind under the 100,000 for a couple of days. The other thing that I'm seeing which is pretty interesting is usually in a bull market the bottom is marked by a period of extreme fear that lasts for about a week. And if you look at the, the bull market indicators, this is on the 4th of November, the 5th of November was also extreme fear. And today we're in fear. And I think if we carry on like the markets are bleeding today, which is Thursday when we speak, we'll go back to extreme fear. All those are bottom indicators for me. And if that, those are bottom indicators and I kind of stick to the thesis that the market's going to fool everybody into believing that it was the end of the cycle and then it's going to turn around and essentially turn around and, and, and leave everyone behind and we're going to go for another leg up or maybe either one more violent leg up or other, or another long leg up or something like that.

A (7:45)

There's a lot to unpack there. So I don't see how this correction is so different from any of the other six corrections we've already had since the lows at the end of October 22nd. Or like Bull markets of the past where price drops 20 to 50 to 60% in the middle of the bull market. You just showed 20, 21, which obviously was that crazy summer of strange consolidation between the Bitcoin 65 and 69 peaks. Right. And that, that was definitely a bit off. But we're down like 22% here from the 126 high. We've had five, this is the fifth correction this size just since the lows. And we've had two that were larger in the 30% range. I mean, to me it just feels very normal with the classic overreaction. So it feels like we're in that time based capitulation phase rather than the price based capitulation. That said, bitcoin is not the only asset and alts have just taken a repeated beating. If they come up, they get knocked right back down. And I think that what we're seeing, because we get our sentiment from crypto, Twitter and our audiences, is that the crypto natives have just gotten absolutely destroyed left and right. And there's effectively been no bull market for most People in crypto.

B (9:04)

So let me, let's unpack that a little bit. So the first thing is, the only difference between every other correction and this correction is that this correction lines up with the end of the four year cycle, okay? And like, like it or not, there's a big cohort of people that believe in the four year cycle. A lot of them respectable people like Ben Cowen and whatever else. And I think that's why people are more concerned now than a normal correction. The second thing is, let's talk about the damage that October 10th did. So October 10th did a lot of damage. Pretty very similar to Luna actually. Because what you're realizing now is maybe not as big from a protocol point of view, but what you're realizing now is that yeah, certain funds did get destroyed and certain defi protocols actually aren't that solvent. And what you're seeing, I don't know if you remember after Luna, but after Luna we saw a whole lot of the body started to rise. So first Luna went down and then Celsius went down, and then all those went down. And I kind of believe that we're having the same fallout after October 10th. October 10th was a massive, massive, massive systematic failure. It was like the centralized entities in crypto failed dismally, headed up by binance. I mean, in fact, let's just call it a spade, a spade. Binance failed dismally on the 10th of October, and as a result, everybody else managed to bore the brunt of it. And I think that, you know, like 1.1 million people got liquidated. Just think about like what that means. That is like going to battle. That's like going to battle with X million troops and then losing 1.1 million on one day. Because those guys that got liquidated, like this was a bad liquidation, Scott. These guys ain't coming back or not coming back.

A (10:47)

And that's an important thing to note for people. There's a difference between I have a bitcoin long open as part of my portfolio and I lose on that trade and get liquidated. If you look at this between auto deleveraging, which we can discuss if we want to, I don't think we need to. But cross margin people got entire portfolios liquidated because of either one or two bad positions that sucked out all of their margin because of the way it was structurally built, or because everything went to zero and the engine couldn't even fire their stop losses. So it liquidated all of their margin. So this was full portfolio liquidations as opposed to position liquidations.

B (11:25)

Well, that's the thing. So the default setting on most exchanges is cross margin. And the problem with cross margin, or unified margin as they call it, is that it starts hitting your spot bags for your, for you, as margin for your leverage, for your leverage bags. And that's what most people lost. And I mean, I'm seeing bodies rising even close to home. Like there's people inside our organization. One guy came up to me yesterday and said to me, I just want you to know that I lost half my portfolio. And I said, how did you disrupt your portfolio? Yeah, he said he had a, a 2x long open on a token. And that token went down 95 and the 2x long got liquidated, but it.

A (12:00)

Was only down 95 for a split second and then was probably right back to where it was. So that's what's so kind of insane.

B (12:09)

Don't discount the amount of damage that was done. By October 10, the bodies are going to rise to the surface as they did in the 2021, 2022 Luna collapse. And yeah, I think, look, I don't. Luckily, luckily this cycle is driven by institutions or the majority of the flows in the cycle are driven by institutions. And that's why I think anybody that's playing in any tokens that are outside of the institutional plays. And when I say the institutional plays, I don't mean only bitcoin and eth, I mean bitcoin, E Soul, the major plays on base Hyper liquid Binance. If you're playing outside of the top 10 top 20 coins, then I mean, I think you got bigger balls than anyone that I know because there's just no liquidity there. And after 10th of October, it's going to be very, very, very long before you manage to get the liquidity back there. And so like, because of, because of what I've just said to you, I find myself in actually quite a liberating position. And when I say to a liberating position, my portfolio is the strongest that it's ever, ever, ever been. Like, I'm holding.

A (13:15)

Because you've consolidated into those assets that you're talking about.

B (13:19)

Yeah. So what I've done is I basically said, look, I don't know if it's the end of the cycle, not the end of the cycle, and because I don't know if it's the end of the cycle, not the end of cycle, I should only be in plays that I'm willing to hold for another full cycle. And so that by default you cut down your portfolio to 10 coins. Like it comes down to you cannot have in this market, you, you cannot possibly have conviction in more than 10 or 12 coins. Like the coins that I have in my have conviction in Bitcoin, Eth, Solana, zcash, Aerodrome, Some of the perps Dex is hyper liquid bnb, like that's. Those are the type of tokens that I'm holding now, which is like for me, a little bit uncharacteristic. Usually I'd be a lot lower down the higher up the risk curve, but given the fact that it could be the end of the cycle, I've actually, you know, like, to be honest, like in the October 10th correction, it's the first time that crypto has had a massive correction and I lost less than fifty grand. When I say lost, like positions that went to zero were like small, tiny, tiny, tiny leverage positions that I had that I used as demo accounts and I lost like 50 grand. And the rest pretty much I'm just holding because I know I'm going to hold them for multi cycles, right?

A (14:32)

So paper gains were obviously larger, but you're talking about actual sustained losses, which is minimal and almost nothing. So hard to use leverage with any confidence in this market already. And after that, I literally think you have to be a psychopath to consider doing it. Especially on altcoins. I can still see people doing it obviously on maybe large caps, Bitcoin, etc. When you talk about the bodies rising. Well, there's a few questions here. So I know obviously that you've invested in probably hundreds of tokens over the years, right? Beyond liquid positions, whether it was like pre seed, you've made a lot of investments across every part of the ecosystem. Does that mean that you've effectively just liquidated those and put them into higher conviction plays? Or do you still, like the rest of us, have dust bags that you just don't even count anymore? Because I have wallets that are worth a thousand bucks. They have 100 tokens in them that might have been a multimillion dollar wallet at some point.

B (15:28)

Scott, let me teach you the best thing that I ever, ever, ever did. At the beginning of the bull market beginning, I said to my team the following. Every Friday you have to buy a certain number of like bitcoin. So it was almost like, guys, you.

A (15:43)

Have to go find the money, right?

B (15:44)

Every Friday, for example, every Friday you have to buy bitcoin. It means that every Friday you have to find 100 grand. So what are you selling? So they're not going to sell Solana and Eth and that. So what do they do? They go and look for all the dust. And as a result, they've completely dusted everything. Because every week they scrounge around looking to fill that one bitcoin. Right.

A (16:08)

And those things they scrounged through, by the way, are down another 90%, if not more.

B (16:12)

Doesn't matter.

A (16:14)

I'm just saying it's amazing because you got out of them. Actually. They may have been down, but they're way up versus where they are now.

B (16:20)

Correct. And you know what? I'm happy because it's like, you know, in the life cycle, what landed up happening was I didn't actually have a mechanism to deal with all the, the token, the small tokens. And as a result, they just all ended up going to zero. Right. Because I didn't have time to pay attention. And you know, every week they went down a bit more. Now I've got the guys into such a discipline that they just have to find that bitcoin every week. And then, you know, like, you look at our portfolio. Portfolio is totally clean.

A (16:47)

It's unbelievable. I, I have things I never even managed to claim.

B (16:54)

You see, what they do is on Friday, they all, they, they scramble to the claim portals. And actually the one guy, actually the one guy now, like, I mean, we're quite far down the bull market. He sent me a text the other day and he said, look, like this claim process, I'm spending hours and hours and hours and all I'm. All I'm claiming is one or two grands worth of token. And they said it's the best one or two grand I make every week. You know, like, just keep dusting those old tokens.

A (17:17)

Yeah, I need to take, take up on that. So I want to talk about the bodies rising. So obviously we know that 1.1 million people were liquidated. As you said, you have people in your office. There's a lot of speculation, you might have more inside baseball than me, that larger entities blew up. And I don't think we've seen that rise to the surface yet beyond that speculation. Right. There was obviously this week people were talking about Wintermute potentially suing finance. Then Wintermute said that that was not the case. There were people who thought that Wintermute blew up. I don't really see how that would have been possible. It's just not. But have you heard of anything that really has your spidey senses tingling that there could be a bigger systemic issue?

B (18:01)

But there was the one liquidation, the one insolvency which was announced, which was that that, that fund, I can't remember the name of the fund, starts with an S. And as a result, multiple defi protocols had to be frozen and stuff like that because, because, you know, the pools were drained, etc, etc. There was also a hack this week, the balancer hack, which was quite a big hack. Yeah. So I think, you know, like, you know, you know, when, when, when you're in a bull market and excess is high and profits are high, then these hacks in that wouldn't really matter. The problem is now no one's got margin left and every little, every little poke and every little hack is being felt. Right. This reminds me very, very much of the tenderness after Luna and the tenderness after FDX collapsed where everyone's on tenter hooks and doesn't know when the next bad news is going to come and what ricochet that next bad news is going to, is going to bring now.

A (18:55)

So funny because that bad news is so within the echo chamber because when you go outside the echo chamber, it's literally nothing but good news.

B (19:04)

Yes.

A (19:05)

Which is different than RTX and Luna because we didn't have institutional announcements every five minutes back then.

B (19:12)

Exactly. I think, look, as I said in the beginning, I think it's lucky that, that this cycle is being driven by institutions. And so 70, 80% of the capital, you know, the institutions probably didn't even know about October 10th because they went to work, they left work on Friday, bitcoin was at 115 and they came back on Monday and bitcoin was a 112. And in between they enjoyed a good round of golf and spent some time with their families. And they had no idea that most the crypto market, the retail market was liquidated. No idea.

A (19:41)

I didn't even know. On Friday evening I was at dinner and I checked bitcoin price and saw that it was down. And it took me till Saturday night when I turned everything back on to know that that had happened in the altcoin market. Now, given that affected a lot of tokens that I hold, but I don't have a portfolio tracker on my phone as a, as a principle in life because I don't want to even care about that volatility. But I looked at bitcoin, it was down, you know, 5, 6, 7%. Whatever it was at the time, to your point, I was like, oh, a liquid weekend, whatever. And by Monday, 19 billion in liquidations. I couldn't believe it.

B (20:15)

And then you saw, and then you saw. Then, then you looked at the data and you're like holy shit.

A (20:20)

This is the, I mean like when you look at the sheer size of it, 12, 13 times bigger than FTX. But the good news is as you're saying, like there is no that we know of FTX or Celsius or Voyager that blew up as a result of this.

B (20:36)

So hopefully they can't have blown up because I think the industry is a lot more cautious. I think the, the collapse was of a much smaller magnitude and the collapse was contained to people who had leveraged accounts and that it wasn't an unchained collapse. Unchained didn't collapse on chain was perfect. It was people that had leveraged accounts in exchanges. So the only thing that we've done is we've killed a million of our troops. And to get more troops is going to take a long time. The recruitment, the recruitment process of, of new troops requires time and it requires price go up because remember, we only recruit new troops when price go up. When price go down, we don't recruit new troops, unfortunately.

A (21:17)

Yeah. And it's interesting, I have heard people say this wasn't a bull market at all. It was a bull market for bitcoin. But that is effectively the same price as a year ago now. Right. So you can say that the last year has actually been a sideways range sort of, you know, in the 125 to 100. I mean lower obviously in the last year I think we were over 100 since June. But we had BNB ecosystem go crazy. Solana had its meme coin craze. We've had these little bubbles of alt action but largely bitcoin went up and went sideways and most things have floated down since.

B (21:56)

Well, this is the beginning of January. So this is the chart. At the beginning of January we're trading 1% higher. So we're 1% higher than beginning of January. Which means that treasury bills outperformed Bitcoin government. US government T bills this year outperformed Bitcoin 4x4x4x.

A (22:14)

I mean it's crazy, it's ironic but, but at no point did we stop referring to this as a bull market in the last.

B (22:23)

Well, well yeah, so I mean it was, I mean the reason is because we, we did go up slightly by 20%. But I don't think that you can go back and say there was a bull market, you know that you can go. Let me try and find it first. You can go back on CoinMarketCap to snapshots. Let's just quickly go to coin market.

A (22:41)

Cap like kind of like the Wayback Machine.

B (22:43)

Yeah. So you can go back to coin market cap and you can actually get a snapshot. A historical. A historical snapshot. I'm gonna try and find, try and find where you actually do this. But when you, when you do it, it's funny because solana was at 220 in the beginning of the year. Eth was at about where it is today. See if we can find it. See if I can maybe find it here. I'd have to work out how to get the.

A (23:11)

Yeah, I know it's there somewhere. Somebody showed it to me and I actually couldn't find it, but I went to look myself.

B (23:17)

Let me see. My research team can send it to us. Snapshots.

A (23:26)

But it's wild. I mean, the point as we wait to show it is that even the strongest assets aren't really up and some are down. I think that Solana is trading at 156 as we're talking. If it was at 220. Right. Obviously, that was last January, right before inauguration that the Trump token launched. So Solana was at a high. We were in meme coin craziness. That makes sense. That's way down 30% below that price.

B (23:54)

BNB's up. I'd say 50%. BNB's up like 50%, but that's pretty much the only thing that's up.

A (24:02)

XRP, when did you re enter BNB? I remember us having a long conversation, actually, to some degree. You convinced me. And it was very rational at the time when bnb, when Binance was, you know, in the crosshairs of the United States government. We had a long conversation. We were both like, it's kind of hard to imagine BNB doing particularly well.

B (24:19)

Right.

A (24:19)

If we're going to call balls and strikes and things. We were wrong on, you know, Maybe BNB was 200, 300 bucks back then at some point, obviously got out afterwards.

B (24:27)

I got in after 600. 600 bucks somewhere around there. And at that time, CZ was a free man and an end. And that's what I got back in.

A (24:35)

See, that's what you call us. Strong opinions loosely held. You know, you had high conviction that BNB was done. And when given new information, you re entered. Even though most people would say, well, I sold it at 250. I'm never buying that again. Right.

B (24:51)

I don't play the emotion game anymore. I try not to. Like I saw, you know, the circumstances changed. I was almost sure Trump CZ would get a pardon. He got the pardon. Yeah. So I think it was Pretty, pretty easy.

A (25:05)

So here's something I want to ask you. You obviously spoke about 30% chance that we have peaked and that we're going into a bear market, that the cycle is over at least. So that means 70% chance it's not. If there's a 70% chance that we're still in a bull market or entering one, if we agree that we've been in a sideways market, that fundamentally means that we no longer believe in the cycle. Those two things can't exist at the same time. Right. Because if it's a four year cycle, it should be over now. Ish. And if we're just going to ramp up 70% chance that we're going to go to new highs, then we have to give up on the entire notion of the four year cycle.

B (25:42)

So I don't believe in the four year cycle anymore. I think you can believe in both. If you believe in the four year cycle you can believe it is going to be one last push up. Right. Because it can happen. Most cycles had a big correction, then you had the last push up, which was the big push up. That can happen. I mean the four year cycle doesn't have to end to the day. If it ends right.

A (26:02)

That can happen in a month or two months and it would still look intact. Right.

B (26:07)

That said though, I think the four year cycle in my mind is invalidated for two reasons. The first reason is the traditional economy which is now powering the two biggest assets in crypto, which are bitcoin and ethics via dats and via ETFs isn't powered by the four year cycle. And at the same time the bitcoin halving, the effect of the bitcoin halving given the amount of dilution that it currently has is much, much, much smaller in the big scheme of things. And so I think when you combine one and two and you say, well institutions power in the cycle, their power is much, much stronger than these tiny, the tiny effect that the halving is having. Because you know, I mean we're really like so far down the halving and I don't actually believe in, in the four year cycle anymore. I much more believe in the, in us following the stock, the risk on risk of stock market cycle. Right. And to that end I have another concern and maybe this is a concern that you can help me with because I'm not really the best chart person in the world. But I do know that when you look at a chart that looks like this and you take the channel which has been going for I Mean, let's go onto a monthly. I think monthly probably paints the best channel in the whole world. That's an eight year old channel. And then you get to the top of the channel and you get strongly rejected. Right. That's quite a scary chart. No, like as a chartist, that's a scary. That's an 8 year old S&P 500 chart and it's just got to the top of the channel. Now as a chart, as a non charters chartist, I would say that there's a couple of options here. The most unlikely option is that we just break through on first touch and just go through an eight year old channel at first touch. Great. Next option is we reject and we tap and tap and tap a couple of times and maybe that you can see on a weekly chart slightly better. So that's a weekly chart. We tap and tap and tap and then maybe we break through. That's a likely scenario. But probably the most likely scenario is the one that seems like it's playing out at this stage, which is the rejection. And then something else. And that something else in my mind can look at like two things. It can either look like, like this.

A (28:29)

Right. All the way to the bottom. Right.

B (28:32)

All the bottom. Which would bring the S and P back 30%. Or it goes down and we try and put in a higher, high slightly up here. Yeah.

A (28:43)

I mean look at 23 to 24 on that chart. What it did at the lows. Right. It kind of bounced around and touched that line three times. So that could be what you're talking about. And this could extend for another year. Just kind of bouncing around under the top.

B (28:56)

Yeah. So it can happen. I'm just saying, you know, like we've got to be cognizant of a little bit of a stock market correction. And the question is what would happen to bitcoin if the stock market corrected one is that bitcoin's already corrected and the stock market hasn't. Bitcoin is down 25%. The stock markets at all time highs. Two is that the stock market corrects and then that pushes bitcoin back down to the 95, 90. 95 90, that level that I was talking about. And, and then we, we hover at that level. And. And that's what it is. Yeah. So here's the historical chart of the of coin.

A (29:32)

Nice.

B (29:33)

That's okay. Let's see. This previous week we can actually go. We can actually go. We can only go all the way back. Let's see, let's see which year okay, so we can go back there, we go 20, 25 and we can go to Jan 5th. That was Jan 5th. So Bitcoin was at 98, 000 which is pretty much where it is now.

A (29:56)

ETH was higher.

B (29:57)

East was higher.

A (29:58)

Solana was 760 or 70 higher. Right.

B (30:02)

BNB is slightly, slightly lower. And then I mean USDC is still trading at where it was trading and the rest.

A (30:08)

Good job. Stayed stable people.

B (30:10)

Was at almost six bucks. It's at two dollars now.

A (30:13)

Yeah, it's been an atrocious year when you look at it this way. Yeah, but that's what I'm saying. So that's why you can have the fear and greed index at such lows when you have prices at such highs. I'm not sure if you've seen this. The S and P Fear and greed index is at more extreme fear than the Bitcoin crypto Fear and Greed index. And the S and P is within 2% today it might be 3% but was when that happened was 2% off the all time high. Have you ever seen a market where you're in extreme fear at the all time highs?

B (30:46)

So it's actually quite a common phenomena and I'll tell explain to you why it's a common phenomena. Almost think about it like a, you know, like a particle that gets hot and then gets, is about to explode. So as the particle gets hot it starts shaking because of the, the, the energy in it. When it gets to the top of its energy the movements are quite crazy. Right. So like you get the, the image that I'm trying to portray of like when something go rises very quickly and a lot of people make a lot of money and there's a lot of energy behind it. The problem is that there's a lot of nervous energy. And you know when people have made money they very, very, very scared to lose the money. And so what happens is they get very nervous at the top. And that's what's going on at the moment that the top and the market's in extreme fear. It's because people are very, very, very nervous because everyone's expecting a crash now.

A (31:34)

Yeah, you get very fearful that the party's over basically and instead of. But usually you know, when there's extreme fear it's a buying opportunity, not a selling opportunity. So I think that it definitely confuses a lot of people. But okay, so let's say that the 70% that we're continuing to the bull market. Let's continue to pull that thread. What does that look like to you, does it look like one more peak and euphoric top or does it look like slowly rising Bitcoin through 2026? And you know, the climb to 300,000, whatever it is, whether that's the cycle or next, is just boring. Right? The same way the stock market climbs, you just kind of invest and over a couple of years it goes up 30, 40, 50%. And I guess, more importantly, once again, what does it mean for altcoins? I've made the argument that we've had alt season. It's just been with Circle Bullish, Etoro Nakamoto and everything else that's pumped and dumped in public markets.

B (32:30)

So let's just quickly talk about if, if we don't follow the four year cycle and we follow the stock market cycle, what happens? So I don't know if you saw, but earlier today the jobs numbers came out. The jobs numbers showed they were very bad. It's the, the, one of the largest job losses in, in, in. In quite a significant period of time. Same time inflation is at 3.1%. The target for inflation is 2%. Yeah, we're in stagflation. Only thing is, the Fed doesn't have any tools to fight stagflation with, right? They can't reduce interest rates and they can't print more money because both are very, very bad. And they can't contract because there's going to be no jobs. And then you've got this little monster called A.I. which is like, as if things weren't bad enough, now the Fed has to deal with this thing called AI that's stealing everybody else's jobs because these job losses we're getting now, they're not AI job losses because AI, Bill Barhardt wrote, wrote a very good if it's a medium article or just a very long tweet, but he broke down how he says AI is an assistant facilitator and a companion. But it certainly hasn't replaced humans in the workplace yet. It is and it will, but it hasn't yet. And so, and so you've got a situation now where the economy, the market is very strong. The economy is obviously not as strong as the market. And at the same time the Fed's got an inflation target of 2% and that 3.1% and rising, unfortunately. Now the Fed's blaming the rises on tariffs. Okay, maybe they're right. Maybe that takes us from 3.3.1 to 2.8. That's still 30% above their target. So I think the Fed's caught Between a wrong, a rock and a hard place. And I'm not sure how the Fed gets out of it. I think that Jerome Powell will struggle to get out of it, but he gets replaced in May. And so I think we could have three turbulent months now or a couple of turbulent months now until the market sees May. And then they say, well, look, in May we're going to get someone dovish, someone bullish, someone more Trump esque. And when that happens, the market will get bullish again. I think let's just call a spade a spade. And it's not like, it's probably not what people want to hear, but I think it's important that tell people what we see. Like, if I look at, if I look at this, I don't know how else to say it, but I'm seeing a correction.

A (34:58)

Like, by the way, it makes sense. So like it's the old saying, markets can remain irrational longer than you can remain solvent by almost any metric. I listen to Mike McGlone literally like every Monday by almost any rational metric. We should have had a big correction, right? We know that there should have been a recession. Maybe there was and they just called it by a different name. But there are a lot of reasons to believe that we should see that correction. I'll throw one more in. Not that I'm necessarily predicting it will happen, but if there was a time for the government that wants stocks to be high and the market to be eventually raging for elections, if there was a time for them to let it fall 30%, this would be it. And then come back with the narrative you said in May, get a new Fed chairman, rage through the summer, right into midterms, and it would be forgotten that there was even a correction.

B (35:49)

So question is, there's midterm elections at some point, right?

A (35:52)

So yeah, they'll be in a year from now. So that's what I'm saying. If you, you would want to correct in this six months and not the next six months after that 100.

B (36:00)

I mean, look, I mean you got to look at some other things. Like you've got Buffett, Warren Buffett's cash pile being the highest that it's been in a long time. The value of the total value of the US stock market is 255 times the country, 245% the country's GDP. So it's like crazy, you know, like the market is exuberant at the moment. Just let's call it. And that's what I said. That's why I tweeted the other day and I said the biggest risk to crypto right now is a 5 to 10% correction, the stock market. And if that happens, it'll take bitcoin down to 95 level at least. And then I think for me that's the end of the correction. And then we start moving up again.

A (36:35)

I mean, there's so much confusion. I can see why we're in a market right now where you have people who believe that the market can never go down, euphoric, it's only going to go up, the economy is strong, things are perfect. And then you go to the other poll and it's the Fourth Turning Great Depression incoming haven't seen this since 1929 and very few people in between. It's a very strange time.

B (37:00)

Yeah, it's a, it's a, it's a very, it is a, it is a, it is a very strange time. Very strange time. I wonder what your views are around the US Government being closed and reopening. Is that like a bullish thing for markets or a bearish thing for markets? Arthur Hayes published one of his very well written documents and I'll actually put up on the screen again and he does. I mean, I don't know if you've been watching, but the treasury general account has also been replenished and over replenished. So the treasury general account, which was sitting at $800 billion has been replenished to the tune of, I mean it's currently sitting at 957. So they've, they've taken an extra $100 billion out of the economy. And then Arthur Hayes in his thesis says between now and when stealth QE begins, one has to husband capital. Expect a choppy market. Until the US Government shutdown ends. The treasury via its debt auctions is borrowing money but not spending it. The treasury general account is above the 850 billion target by 150 billion. And this extra liquidity won't get released until the government reopens. Also on the 1st of December. Remember QT, quantitative tightening ends. So if the government goes back to work and just starts spending again and stop hoarding the money and they release the treasury general account and quantitative tightening ends, that could feel like a little bit of an ease on the markets.

A (38:24)

Yeah, I think that nothing can happen while the government shut down. So a lot of the tailwinds, we have Clarity act approvals of ETFs en masse. You can expect none of that to happen while the government shut down. And I don't Think you can expect there to be much liquidity while the government shut down. But that said, I sort of agree that once it's not, we just go back to the never ending party. QE is coming one way or another. I like how he says stealth QE because I, I don't think Fed cuts really matter. And I've been saying that for years. I think when you're in a fiscally dominant situation, the debt is out of control. Like what is another 50 basis points by the Fed really going to do for the economy? And if you read the job numbers today, you know it was 100 and whatever thousand jobs lost when they asked why people would say either AI or you know, kind of restrictive hiring environment like Fed rate cuts are not going to cure AI coming for jobs.

B (39:26)

So I challenge you on your assumption of qe. And the reason is why would you ever do QE unless interest rates were close to zero? Remember like the Fed has weapons and the weapons are either loosening or tightening of monetary conditions.

A (39:38)

That's why I think it'll just be some like stealth qe, as Arthur said, some sort of buttons and levers we don't track that are happening in, in the background.

B (39:47)

But what do we need the liquidity for? Like they don't want to overheat the markets because the inflation is high. They don't want to overheat the markets. If they overheat the markets now, inflation's going to go back to 4 and 5% and they can't afford that.

A (39:58)

Do you think there's a serious question Trump and percent. Do you think they would rather have inflation rising and markets remaining high or.

B (40:05)

A reset of both inflation rising and markets remaining high? If it's, if they had their way, they want inflation up and they don't care about inflation actually as long as markets are moving faster than inflation. Let's just call a space.

A (40:18)

I mean that's, that's kind of what I think. So I think that, you know, that we know what's coming in May, as you said. So I think there's a lot of time till then, but I think they're just going to let everything run hot the minute that they can, at least their midterms.

B (40:29)

Yeah, I agree, I agree and I agree and I hope you're right and I hope Powell plays the game with him. Yeah, as for crypto, I think we're very close to a bottom. Like we really are close to a bottom. I actually made a list of bottom indicators I'll put up here just so we can see it again. So, like, I just, I was just messing around actually, and I made a list of a whole lot of bottom indicators. And I said, okay, well, what are the things that, that, that, that can tell me that we're almost at a bottom? So I said, look, let's look at the first thing. I said this. There's three things that you need to look at. Charts, sentiment and on chain. And like, once you've looked at the three. The three, then you can understand whether we're near a bottom. So in terms of the chart, the liquidity sweep, where you take out the low, we've taken out the loan. Now have we got the average drawdown of like 23%?

A (41:14)

We've done almost exactly, yep.

B (41:17)

Is the sentiment extreme fear for four, five, six, seven days in a row? Almost two more days to go? Is the liquidity increasing? And actually it is. So if you look at Willy Woo's. If Willy. We actually had a thing and I should try and find it first. Here it is. It is here. So if you look at. Let me try and find it first.

A (41:43)

You have the most impressive tabs.

B (41:46)

Here we go. So that's Willy Woo's liquidity indicator. And you can see the liquidity starting to come back into the market. So that, that's, that's one that. That's probably worth looking at. Hold on, let me get my list again. I have a lot of tabs, as you can see. Okay, then you've got, you've got open interest dominance, which is the altcoin interest. Open interest versus Bitcoin. Bitcoin needs to get to 50% before we bottom. In other words, all the altcoin leverage gets flushed. We're at 47% and moving up. So we're getting pretty close there. Then supply and loss. So generally, when about 30% of the supply is in loss, we bottom. So that's from. From crypto quant. And you can see that we've just hit that 30% level, 28.1% level. So we've hit the supply and loss, the weekly RSI. In bull markets, the weekly RSI usually remains at about 45. And here's the weekly RSI. The weekly RSI is at 45. In the bear markets, it goes below 45. So in a bull market, if it is. If this is a bull market and we're about to bounce, this is the bounce zone. Then the Bollinger bands, usually in bull markets, we just touch the bottom of the Bollinger bands, which measure the volatility. So if you look at this chart over here, that's the Bollinger bands. You can see in the bull market. We usually just touch the bottom Bollinger band and we, we go up, we've just touched the, the bottom Bollinger band. So that, that's a, that's a good one for me.

A (43:11)

I. Yeah, outside of your four. Okay, finish. Sorry, go ahead.

B (43:15)

Short term hold capitulating. The short term holders have capitulated already. This cycle happens. Yep, that's happened. They're gone. And then the bull market over. I think, I think more than 2/3 of people have to believe the bull market's over and about 50% of people believe the bull market's over. So once you hit those things, like Scott, we've been here for long enough, we know that if this is a correction, it's a normal correction. If it's the end of the bull market. Didn't feel like the end of the bull market to me. I don't know, it just didn't.

A (43:47)

Didn't feel like the end of the bull market to me. I would say that it almost feels like there was no bull market, which I kind of alluded to before because 90% of the stuff that people are holding didn't do well. So. And on that note, we talked about obviously the fact that altcoins have just steadily drawn down, right? So if you believed in the four year cycle and you believe this was a true bull market, the first six months of this year, that January to May, whatever you want to call it, five month period, should have been crazy for altcoins and it just wasn't right. In fact, it was basically we saw a top put in on altcoins by Trump token in January to some degree, right? I mean, you don't give it a higher ceiling than the president creating a token. So I would say that most people who were waiting for their dead tokens to come back have been disappointed. So no bull market for them. We both know that anything that's launched minus a couple names, but let's say 99% of the people who have attempted to launch something have effectively trended immediately to zero or close. Right. Or way down. So there hasn't been many particularly hyped releases. So anybody who is investing in new tokens hasn't been done well. I talked about the fact earlier that we've had a bit of an alt season in public equities or crypto adjacent equities, but even those, but even those look like old alt seasons where you get two good weeks and Then it's like a Christmas tree chart and you're down the other side. Right. So even those people have lost money and then even the most like ardent bitcoin believers, to some degree at least the big whales and the bigger names have lost money on digital asset treasury companies. So even the people who are the most inclined to just dollar cost average buy bitcoin. And yeah, they're even, I guess over the last year, but who should have done exceptionally well. Even some of the biggest whales and institutions have lost because structurally we had this crazy bubble with digital asset treasury companies where they pumped before the companies could even register shares or obviously buy any bitcoin. And by the time they could, they were back down and are now trading it. You know, what's a discount or close to nav. So who has participated in this market and done particularly well, I guess is the question, like who is this a bull market for if we've had one?

B (45:59)

I don't know. I'm actually starting to question whether 20, 2025 was a bull market.

A (46:03)

Yeah, that's that. I think that's what I'm drilling in on here. When you take a look, everything's down this year. There's been very random things that have been up and all the things people have tried have failed.

B (46:15)

Yeah, no, I think, I think I, I think in hindsight probably 2025 wasn't a bull market. We had some, some, some, some flames, some good performances, but it wasn't a bull market.

A (46:31)

Yeah, that's pretty sobering conclusion.

B (46:36)

Yeah. Which means the bull market may be coming. Yeah.

A (46:40)

So, yeah, listen, the silver lining, you can do the half glass empty, half glass full, half class empty. It's already over. We've kind of been in a sideways to bear market anyways and we never got the bull market we were promised. Half class full is holy crap. If we are at a hundred thousand and the bull market hasn't even started, where are we going? Yeah, yeah, that one feels a lot better.

B (47:03)

Yeah. Look, Scott, I know what pain feels like and I'm not going to say we're at max pain, but we're at good pain, extreme pain. And usually when this happens, I think we turn. And now the question is, if we turn, do we take out the 125,000 high, which is, you know, this, this higher high on bitcoin over here, and then, and then, you know, effectively the bull market as we, as we name it is back intact and we're putting in a higher high. Or is it a, a trap that ends somewhere Here and then just comes all the way down. I think that's the only question. But I definitely think there's. There's a bounce imminent. It's just. I think I know this. I know the. The heartbeat of the patient too well. And I can tell you that the. The patient needs. Needs a. Needs a bounce.

A (47:49)

I haven't even deeply questioned that we're not going to bounce relatively soon. Like, and that could be 90 or 89 or 96 or here at 99, where we bottomed. But all of my personal anecdotals, signals have happened, right? I mean, as you laid out, that entire list, which is much more comprehensive than mine, but, you know, we're. I mean, I guess the daily is not quite oversold on rsi, but most time frames are oversold. We've been sideways for a long time. You can tell the fear and greed. You can feel it in the community. And we're only down 23%. This feels like all the 23 drawdowns that we've had in both markets.

B (48:28)

You say we're only down 23, but we're down 23% for an institutional asset. It's not the same cycle, Scott. Like, we're down 23% for an institutional asset. That's quite serious.

A (48:39)

But that implies that the future should have much less volatility both to the up and downside. Right? So if 23% is now a big drawdown for bitcoin, what does that mean?

B (48:50)

Let me show you something else, and I think this is something else that you should probably be cognizant of. So let's talk about altcoins, and let's talk about reasonable altcoins. I want to just bring up one or two reasonable altcoins, right? Radium is the biggest decks on Solana. Okay? Like, just. I mean, so radium is. Is the biggest X on. On. On Salon. Let me just get rid of this indicator over here, and I want to just take you to where it was. Here. $9. It's down 85%. Like, that's quite a serious correction. Like, call it what you want. That's. That's quite a serious correction. Even like, you know, let's look at Sui and Suey again. Is like, I call these decent altcoins, right? They're not. They're not the blue chip. Blue chip. Blue chip, but they are decent. And that Token is down 70 this year. 65 this year. And let's look at, like, Sonic or Phantom or whatever you want to call it. And again, I'm not using Bitcoin, Solana Eth, and Hyper Liquid, because those are the ones that have really performed. But let's look at like Phantom, which is, you know, another altcoin that a lot of people are holding down. 71. This is a serious correction. Like, this is a very serious correction. Call it what you want.

A (50:00)

Yeah, all coins are abysmal.

B (50:03)

Yeah. Unless you are in Hyper Liquid. Zcash, by the way, zcash is doing fantastically well. I. I must say, I don't know if you've been following the zcash story. Have you been following?

A (50:12)

Very little. Very little. It just felt like a, like, coordinated to me.

B (50:19)

No, Scott, you're getting this all wrong, bro.

A (50:21)

It is funny. I was in Vegas last Monday, 10 days ago, and a guy I was sitting with, I think his Zcash was like 350 is like, it'll be 500 in a week. I guess I just realized that, and.

B (50:33)

I think it's going to go to a thousand and even ten thousand. I mean, I can explain. Okay, let me explain to you. So the Bitcoin is amazing. It's a great store of value, but it's not private. And the problem with it not being private is, you know, the problem. The one is that every transaction you make, every barista can see your balance, every wallet you've ever interacted with. That's not really practical. Also, institutions. If you're going to bring institutions into crypto, they ain't going to transact unless it's private. Let's just call a spade a spade. Banks are private organizations. Now, the previous administration was very hostile to crypto and much, much, much more hostile to, to private crypto. I mean, we know that Tornado Cash founders got arrested, etc. Etc. Now the new administration actually acknowledges the right to privacy. And so they've opened up a new narrative. And the narrative is privacy, but compliant privacy. Now, zcash is what you call compliant privacy. You can shield your transaction or unshield your transaction. In other words, you can either hide it or not hide it. And the transaction is always auditable and traceable if you need it. Right. And so it's got the same proof of work protocol that Bitcoin's got. It's got the same 21 million coins, about the same halving cycle, only that Zcash uses zero knowledge proof to remain private if you want it to be private. And so my thesis is the following. There is a need for private money. If we want, if we want this industry to succeed, you need compliant private money. There is no other contender that I know of for compliant private money that has proof of work, Bitcoin security proof of work, Bitcoin's algorithm that everyone knows and loves and trusts at the moment and that is compliant. And so I say that even if the private money only equals 10% of the non private money that gives Zcash evaluation of $10,000. Right. And that's my thesis. I've been buying this since about a hundred bucks and, and I mean I've been buying it ever since 100 bucks. And I kind of really, I'm seeing. Scott, you remember, do you remember in the old days how that cypherpunk movement used to coordinate on Twitter and on Reddit and they used to work towards a common goal and that goal was decentralized money. The same culture and the same people are now moving towards another goal which is privacy.

A (53:01)

And seen that and that's a noble.

B (53:03)

Yeah. And the private money is zcash. So I mean like I've got two big players here in privacy. The, the private money is, is, is zcash and Z. Zcash is doing very, very, very well as you can see over here. The other one that I'm looking at is a thing called ZK Sync. Now ZK Sync is a layer. Yeah. So ZK Syncs a layer 2 on Ethereum. Except the only thing about ZK Sync is it's private using zero knowledge proofs, which is the same technology. And you know, you can, you can kind of see that we were buying this at about 30 cents and it's now back at like 75 cents. But I think that this is, this privacy narrative now is a real, real, real narrative and I don't think you can discount it. Now I'm not telling you to buy zcash now because the things up a thousand percent in two weeks, but I do think that it is a good hold to have in your portfolio for a long period of time.

A (53:53)

Interesting. I'm gonna have to do a much deeper dive. I mean, I know it's kind of at time here. I think the grand thesis is maybe 2025 wasn't a bull market and we both largely think that we're probably bottoming in this area and that things are going to improve. Is there anything I missed?

B (54:10)

No, I think that, I think you covered it pretty well and I'm glad we actually did this. I actually love these chats. We should do them so much more often.

A (54:16)

Yeah, we really should. Yeah. You gave me a lot to think about. I wasn't really taking a serious look at zcash. Cause it just felt like the one thing that's pumping because a bunch of people are talking about it. But maybe the one thing that's pumping in a market like this means you should definitely be looking.

B (54:31)

You get it?

A (54:34)

Yeah. Awesome, man. Well, thank you so much for the chat. I know you probably got to get home and hang out with the kids, man. I really appreciate you taking the time to do it. Let's do it a lot more often, as you said.

B (54:44)

Thanks, buddy. Nice to chat to you.

A (54:46)

You too.