Latest / Simply Bitcoin / Bitcoin’s Climb to $1,000,000 Is Inevitable!! | Checkmate Explains Bitcoin’s New Market Structure

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Bitcoin’s Climb to $1,000,000 Is Inevitable!! | Checkmate Explains Bitcoin’s New Market Structure · Simply Bitcoin

• 0:00
  People saying like the price should be higher and I, I've
• 0:02
  kind of defolded now to my base. My base response is based on
• 0:06
  what? Why should the price be higher
• 0:07
  and where should it be? Bitcoin is actually trading in a
• 0:09
  way that it hasn't traded before.
• 0:11
  However, this kind of market structure is very normal
• 0:14
  actually, and it's actually very, very healthy.
• 0:16
  Does that mean the parabolic runs are over our our our our
• 0:19
  dopamine receptors? Never going to get a 2017 type
• 0:23
  hit in the price. Yeah, well, look.
• 0:26
  It's insane. Those two are the assets of
• 0:28
  people saying if you want to defend yourself against the
• 0:31
  storm that is coming that we can all see coming, then nothing
• 0:34
  stops this train gold and grudgingly Bitcoin.
• 0:38
  But that's what we we did it guys.
• 0:39
  We mean this thing into every macro podcast, much to the point
• 0:44
  where they hate it, but they have to say it because they know
• 0:46
  it's true. Find me another asset where
• 0:48
  you've had managed to put a trillion in and get to 1.5
• 0:50
  trillion out over the span of 15 years.
• 0:53
  It's a massive, massive wealth creation event.
• 0:55
  Love it. People will often see my
• 0:57
  analysis like why is this dude always talking about selling?
• 1:00
  Because selling is the most bullish thing in Bitcoin and let
• 1:03
  me explain why. All right, what's up everyone?
• 1:08
  Welcome back to another Simply Bitcoin IRL.
• 1:11
  We got a great RIP for you guys today with an awesome guest.
• 1:15
  James check of check on chain founder, lead analyst, I would
• 1:19
  say one of the best on chain analysts.
• 1:21
  So we're going to just dive straight into it.
• 1:23
  And I think the question that everyone is asking, I know our
• 1:26
  audience is asking this, has the Bitcoin market structure
• 1:30
  changed? And really the idea is, are we
• 1:33
  going to get bored to death to $1,000,000?
• 1:36
  James, welcome. What?
• 1:37
  What's your thoughts on this? Thanks for having me on, mate.
• 1:39
  Yeah, welcome to the world of chop solidation.
• 1:41
  This is the, this is the spice and flavour of the cycle.
• 1:45
  It's it's it's amazing because like, in my time learning about
• 1:49
  markets, Bitcoin was the first asset I ever bought.
• 1:52
  And it was actually price that initially interested me.
• 1:55
  Like I didn't really understand Bitcoin.
• 1:56
  I was trading amongst everything else.
• 1:58
  Like I never right clicked until the end of the 2018 there.
• 2:01
  And I, you know, I was learning about how price structure works
• 2:05
  and you hear this, what I got termed as quiet and trending
• 2:09
  markets up sideways, up, sideways, up sideways.
• 2:12
  And I looked at Bitcoin. I was like, it never does this
• 2:15
  cool pattern. Like for me, it was just red,
• 2:17
  right? It's just red and volatile to
• 2:18
  the downside. I was like, this sucks.
• 2:19
  What's going on? But there was something about
• 2:21
  price that fascinated me. And then in 2019, very, very few
• 2:25
  people were kind of paying attention to it because it was
• 2:27
  the end of a bear. And then suddenly, and I
• 2:29
  remember it crystal clear because I was looking at on
• 2:32
  chain data, I thought, I've got a year where we're going to chop
• 2:34
  around down here at 3K to 4K. And I had my shitty engineering
• 2:37
  salary. And I'm saying, oh, look how
• 2:39
  much corn I'm going to stack. And then April Fool's Day.
• 2:41
  And I know because I was on site, I was in London at the
• 2:44
  time, I was working up on site and I could not for the life of
• 2:47
  me, if I wanted to actually buy. I was, I was just completely
• 2:50
  offline for a couple of days. I could see the price, but I
• 2:52
  couldn't do anything about it. And then up sideways, up
• 2:55
  sideways, and it just started ripping.
• 2:57
  And next thing you know, right, we're in July and we're trading
• 3:00
  up around 14K. So we've gone from 4K to 14K.
• 3:02
  It's a super powerful move. And that was the first time I
• 3:06
  ever felt I've been left behind. I didn't buy enough that and I,
• 3:09
  I keep that memory to this day, like like paying to the upside
• 3:14
  now in our current market structure, zoom out, have a look
• 3:17
  at the price chart. That's exactly what it's doing.
• 3:19
  Up sideways, up sideways, up sideways.
• 3:21
  And the difference is that period in 2019 was 4K to 14K,
• 3:26
  you know, three months to maybe 2 1/2 months here.
• 3:29
  It's taken us three years now we've gone up quite a bit.
• 3:33
  We've gone from 15K to 120K. But it's much slower.
• 3:37
  And you get these like 8 months, six months.
• 3:40
  And there's, you know, people will say, oh, it's not really
• 3:42
  sideways because it goes down. But it's like, you know, my, my
• 3:45
  thesis when I describe what chop solidation is, close your eyes,
• 3:49
  come back six months later. The price is exactly the same.
• 3:52
  But the bodies of long and short traders alike line the body,
• 3:56
  line the road on the way to get there.
• 3:58
  And that's more or less what we've seen You close rights for
• 4:00
  six months, The price is dead flat, hasn't gone anywhere, but
• 4:03
  people have been liquidated all over the place.
• 4:05
  So market structure has changed, but it's also not new market
• 4:10
  structure. So Bitcoin is actually trading
• 4:12
  in a way that it hasn't traded before.
• 4:14
  However, this kind of market structure is very normal
• 4:17
  actually, and it's actually very, very healthy.
• 4:20
  So very, very constructive and the best way that I can help
• 4:23
  people think about this when we rally, historically, we've gone
• 4:27
  too far too fast. And what's happened is the
• 4:29
  market has then had to correct back down.
• 4:31
  It's overcorrected to the downside, and then you've got
• 4:34
  this slingshotting around until it finds the right level.
• 4:37
  In many ways, what Bitcoin is doing is it's repricing only
• 4:40
  slightly above where it should have been, and then it's
• 4:42
  consolidating those gains. And what that allows is investor
• 4:46
  psychology to become accustomed to.
• 4:48
  So think back as 20/24 at 73 K. It was exciting as anything
• 4:53
  about 3-4 months later, you're like, you know, feels normal at
• 4:56
  5060 Ki can see we're shopping around 8 months later, you're
• 4:58
  like Bitcoin belongs above 5060 K.
• 5:00
  We're like acclimatized to that zone.
• 5:02
  And then we did the same thing might we doubled.
• 5:04
  We went from a trillion dollar market cap to 2 trillion and
• 5:07
  then we chopped sideways between 90 and 100K, right?
• 5:10
  Yes, there was a deviation through that air pocket in in
• 5:13
  between 7585, but imagine telling yourself in 2023 or 2022
• 5:19
  that 100K would feel normal. Like it feels normal right now
• 5:23
  if we went back to our I'm like, that's a discount.
• 5:25
  So the way that this effects human psychology is so powerful
• 5:29
  and it actually allows the market to just keep grinding
• 5:32
  higher. And that's why we're not getting
• 5:34
  the downside, right? We've got 232% corrections and
• 5:36
  they lasted like 4 hours before the market bounced.
• 5:39
  So we're not getting the downside, but we're also not
• 5:41
  getting the ripping explosive upside because we're a multi
• 5:44
  trillion dollar asset. We're not going to get that as
• 5:45
  often at this point in time. Yeah, absolutely.
• 5:49
  I like just my gut feeling. That's exactly what I'm seeing.
• 5:53
  I've been joking actually the last couple of weeks.
• 5:55
  It feels like we're trading the S&P 500 now is like, what are we
• 5:58
  doing here? We're like boomers trading the
• 6:00
  S&P 500. This is it's over for us.
• 6:02
  But you said a bunch of interesting stuff and I'm sure
• 6:05
  there's a bunch of rabbit holes that we can go down.
• 6:07
  But I think the one that's really popping out for our
• 6:10
  audience here today, if we have changed the market structure,
• 6:14
  does that mean the parabolic runs are over?
• 6:16
  Are are are our dopamine receptors never going to get a
• 6:20
  2017 type hit in the price? I don't think we're going to get
• 6:24
  100 X moves like we. Saw in 20. 17 So I think, I
• 6:27
  think people do need to just back away from that a little
• 6:30
  bit. Now if we get the way I look at
• 6:31
  things, if you do get a parabolic run, that should be
• 6:34
  considered in the gravy portion where you're just like, I was
• 6:37
  already very happy with the way that the market was trading and
• 6:39
  me, I look at the market structure.
• 6:41
  Here's the way I would describe how different it is now, my old
• 6:45
  man, I got my old man to buy into Bitcoin in 2020.
• 6:48
  He rode the bull and believe me, he rode the bear and he told me
• 6:51
  all about it every step of the way.
• 6:52
  When's it going to go up, mate? When's it going to go up?
• 6:55
  And he actually sold a little bit on the way up.
• 6:57
  Like in, in Aussie terms, I think it would have been like
• 6:59
  136 K, something like that, which is probably like 90 maybe
• 7:04
  before we hit 100 and 110 or whatever.
• 7:07
  So he sold at 135. He's now asking me, hey, should
• 7:11
  I actually step back in and start reallocating because he
• 7:13
  doesn't know what else to do with his with retirement money.
• 7:16
  So we've now got an like somebody who is very, very
• 7:19
  conservative in their retirement years is now comfortable with
• 7:23
  the volatility. So whilst you and I, who are
• 7:25
  used to that high octane, super crazy moves, swings way too
• 7:29
  high, which are then corrected by swings way too low, they're
• 7:34
  now getting what it Bitcoin is kind of doing what it's supposed
• 7:37
  to be doing. It's gradually repricing, just
• 7:39
  stair stepping higher. And this makes people like my
• 7:41
  old man. And we've got to remember where
• 7:43
  is a lot of the wealth in the world that's in much more
• 7:45
  conservative pools of capital than a couple of 30 year olds
• 7:48
  swinging around their paycheck. So if you think about that pool
• 7:51
  of capital, these guys can now start coming in, whether they're
• 7:54
  retirees, whether they're money managers, whether they're, you
• 7:58
  know, they're not even in the world of hedge funds.
• 8:00
  Now we're talking about pension funds that are really starting
• 8:02
  to think about this. This kind of price action allows
• 8:05
  them to bring big money. So the trade off guys is you may
• 8:09
  not get the vertical move to the upside, but you're also not
• 8:12
  going to see your net wealth disappear by 80%, which by the
• 8:16
  way, you know what helps adoption?
• 8:18
  Not going down 80%. That's really, actually quite
• 8:20
  good for adoption. Slow, steady grinds.
• 8:23
  And I think there's a really cool concept here.
• 8:26
  Most people in the tradfly world, they don't know that
• 8:28
  Bitcoin traded at 1 cent, two cent, 100 bucks, 500 bucks,
• 8:32
  $1000. They see ibit trading from 25 U
• 8:35
  to 100. That's what they see.
• 8:36
  That's their price chart. They don't know anything.
• 8:38
  They just see one uptrend that never goes down.
• 8:41
  That's an awesome story. Yeah, no, 100%.
• 8:44
  I've been saying that for a little bit.
• 8:46
  It's like, hey, OK, maybe we aren't getting the parabolic
• 8:48
  blow off tops, but at least we're not going to go back into,
• 8:52
  you know, prolonged bear market. And especially us, you know, I
• 8:56
  know you've been talking about, hey, we're a lot of us young
• 8:59
  guys, we're getting a little older, you know, we're maturing
• 9:01
  a little bit. We need we probably like a
• 9:04
  little less volatility. Personally, I can tell you the
• 9:07
  last bear market being all in, you know, just 100 plus percent
• 9:12
  in Bitcoin. It was a brutal bear market and.
• 9:14
  You want the Vol until you get the medicine, which is the other
• 9:17
  Vol. The other Vols really really
• 9:19
  shit. Exactly.
• 9:20
  Living off your Bitcoin during a bear market is pretty brutal.
• 9:23
  So hey, if we don't get a, you know, whatever, 100 X 10X move,
• 9:28
  at least we won't get 80% drawdowns ever again.
• 9:32
  I think I'm OK with this, though.
• 9:33
  I do have a couple of questions in regards to just the market
• 9:36
  structure. Or rather what do you think was
• 9:38
  the catalyst? Do you think that when the ETF
• 9:40
  got launched or just a new institutional investor coming
• 9:44
  in, like is it one or both of these things that's
• 9:47
  fundamentally changed the market structure of Bitcoin?
• 9:49
  Yeah, there's a lot of components here and and so the
• 9:52
  truth is every cycle is different, right?
• 9:54
  So there's this, this, what I love about markets is there's
• 9:56
  always this dichotomy. You can look at a price chart
• 9:59
  and you can go just stick an extra green candle on it and
• 10:01
  you're like, oh man, that's the most bullish chart ever.
• 10:04
  And then you swap that around and put a red candle.
• 10:06
  You're like, oh man, that's a double top.
• 10:07
  It's over. So like it's very easy to hold.
• 10:09
  You have to be able to hold 2 views at the same time.
• 10:12
  So the way that I look at it this time is always different.
• 10:16
  And also the thing that when when people say it's the four
• 10:18
  most dangerous words in finance, it's because human nature is
• 10:22
  never different, right? The hardware that's in here
• 10:24
  between areas hasn't changed for hundreds of thousands of years.
• 10:26
  So the human response to things wake up.
• 10:29
  There is a possibility that we have a blow off top.
• 10:31
  This can absolutely happen. But every single bitcoiner
• 10:34
  should be like, Oh no, here we go again.
• 10:36
  I've seen this before, right? So you've got to keep those
• 10:38
  things in mind. Now, what is different about
• 10:41
  this cycle? Obviously the ETFs, but
• 10:43
  ultimately the ETFs are an access vehicle.
• 10:45
  They just simply allow new money to come in.
• 10:47
  Now something I think is really worth highlighting.
• 10:50
  The options on I Bit went live on, I think it was late November
• 10:55
  last year. If you look at the dominance of
• 10:58
  I bit over all the other ETFs, if you look like a big dominance
• 11:01
  chart up until November last year, it basically looked like
• 11:05
  GBTC was losing dominance and everything else was growing.
• 11:08
  From November onwards, everything else stopped growing
• 11:12
  and ibit started taking over both sides.
• 11:15
  So not only is it consuming GBT CS market share, but it's
• 11:18
  actually consuming all of the new market share.
• 11:20
  So that is telling you something very, very important.
• 11:23
  Options really matter. And this gets slowly into the
• 11:26
  derivatives and the, the paper trading and all that stuff that
• 11:29
  people love to talk about. But if you think about what that
• 11:32
  really means, and this has been my, I wrote a piece a long time
• 11:34
  ago called paper Bitcoin. And my take there was, I know
• 11:37
  everyone likes to talk about paper Bitcoin and how it's
• 11:39
  killing Bitcoin, but the truth is if a big money manager can
• 11:43
  hedge a billion dollars worth of risk, they can buy a billion
• 11:45
  dollars worth of spot via the ETS, they can now hedge the size
• 11:49
  of their portfolio. Without the hedge, they can't
• 11:51
  put the portfolio in. So we're in this interesting
• 11:53
  world where in order for big institutions to come in,
• 11:56
  derivatives actually enable them to hedge that risk.
• 11:59
  It allows speculators to take risk away from those
• 12:02
  institutions, and this allows the big money to come in.
• 12:05
  So that's a big factor. As a result, as these derivative
• 12:09
  markets get bigger, you then get things like volatility capture,
• 12:12
  covered calls, sold puts, strangles, all sorts of things.
• 12:16
  And because these are leveraged instruments, it's actually
• 12:18
  easier for many entities to defend certain levels.
• 12:21
  So let's say they've sold a bunch of covered calls.
• 12:23
  They don't want the price to move because then they're on the
• 12:25
  hook for those covered calls. What they can do is they can
• 12:28
  potentially sell into the spot market for a period of weeks,
• 12:33
  months, just to keep the market below their level.
• 12:36
  So they maximize their returns, allow those positions to roll
• 12:38
  off and then they can allow the market to move.
• 12:40
  And some people will say, hey, that's manipulation.
• 12:43
  But I would just say we'll look the other side, the one who
• 12:45
  wants it to go above their call option.
• 12:47
  They've also got leverage. They can use the same machine
• 12:50
  guns in the same battle to try and take control.
• 12:53
  And any trader who knows how markets work knows that we don't
• 12:57
  go up or down in a straight line.
• 12:58
  There's always corrections. There's always consolidations.
• 13:01
  So that's essentially how institutions trade this thing.
• 13:04
  They know that the market has to cool down sometimes, and they
• 13:07
  look for periods where it's ready to cool down.
• 13:10
  And then they take those options positions because they know that
• 13:13
  the probability that the market's going to keep going is
• 13:15
  slim. Great example if we look at
• 13:16
  gold, Gold added like $7 trillion to its market cap this
• 13:21
  year alone. Like a massive, massive run.
• 13:24
  And when it got to 35, I think 3500, if you look at its
• 13:28
  distance from the 200 day, 200 week moving average, it was so
• 13:31
  stretched. It was so unbelievably
• 13:33
  stretched. It doesn't take a genius to say,
• 13:36
  look, gold is probably going to be much higher in 10 years time.
• 13:39
  It's probably not going higher and higher in the next three
• 13:41
  months. Every derivatives trader in the
• 13:43
  world sees the exact same piece of information and goes, yeah,
• 13:46
  I'm going to start selling calls and put some stuff around this
• 13:49
  to just capture some money because it's probably not going
• 13:51
  anywhere. It's going sideways or pay maybe
• 13:53
  even lower for the next four or five, six months.
• 13:56
  I'm going to capture that volatility, get paid to wait,
• 13:58
  and then I'll jump back in on the spot side when it wants to
• 14:01
  start moving again. So this is just how markets
• 14:03
  work. Yeah, 100%.
• 14:04
  It really is kind of a a perfect zeitgeist of a market maturing
• 14:09
  in real time. Obviously we love the Wild West
• 14:12
  of Bitcoin, but as you said, you know, this time is different,
• 14:15
  not in the the classic way of everyone saying this meme, but
• 14:19
  new institutional investor, new products being released.
• 14:22
  It it does fundamentally change the market structure here
• 14:25
  because there is a new investor in the market as you would like
• 14:29
  to talk about. You know, everyone's seen the
• 14:31
  Wall Street psychology CHEAT SHEET.
• 14:33
  Humans are humans, our psychology is the same and with
• 14:36
  a bunch of capital, they're going to basically trade Bitcoin
• 14:39
  in a fashion that they're so used to, which is what we're
• 14:42
  seeing happen right now. It really kind of leads me to my
• 14:46
  next question, which while you were talking, I was thinking
• 14:48
  about, you know, us Bitcoiners, we've been talking about hyper
• 14:50
  bitcoinization forever. You know, it's always a fabled
• 14:53
  it's happening hyper bitcoinization super cycle this
• 14:56
  time now we're seeing it seemingly happen, but it's just
• 15:00
  not happening how we thought it would.
• 15:03
  A lot of people thought it'd be like an S curve adoption.
• 15:05
  What we're seeing if you're just looking at the data, just, you
• 15:08
  know, with without any kind of colored lens on it, it seems
• 15:12
  like we've entered this stair step functioning forever, just
• 15:16
  going to continue to step upwards.
• 15:17
  So is this how hyper bitcoinization happens, James?
• 15:20
  Is this how we're going to take over the world is through this
• 15:23
  stairway to heaven instead of this like S curve adoption?
• 15:27
  What's your thoughts on that? Yeah.
• 15:29
  Well, look, if there's a metric that I can point to that is in
• 15:31
  fact the hyper bitcoinization chart in one metric, it's the
• 15:34
  realized cap. So everyone's familiar with the
• 15:36
  market cap. Take the entire supply times by
• 15:38
  the last traded price and we all know that's not a realistic view
• 15:41
  because a lot of coins are lost. All of them don't trade, they're
• 15:44
  hot or whatever. The realized cap is a much
• 15:47
  better metric because it prices every coin at the time when it
• 15:50
  last moved. So for all you SAT stackers out
• 15:52
  there, every single time a coin has hit your cold card, you're
• 15:55
  Swiss stamping. At a database level, we can
• 15:58
  stamp and say, well, that UTXO is valued at that price, right?
• 16:01
  It's going to be an estimate of your cost basis that just passed
• 16:04
  a trillion dollars and it's in this beautiful long term
• 16:07
  uptrend. So if you think about that, if
• 16:10
  you bought $10,000 worth of Bitcoin back in 2019, that is
• 16:14
  saved at that $10,000 price point.
• 16:16
  So that's the amount of wealth in 2019 dollars that you
• 16:19
  invested and stored in Bitcoin you entrusted to this asset.
• 16:23
  And that thing is just grinding higher and it's just past a
• 16:26
  trillion. So Bitcoiners have collectively
• 16:28
  trusted a trillion dollars of hard earned serious proof of
• 16:32
  work from their lives to this asset that is real measurable
• 16:36
  value. And if you think about the
• 16:38
  market cap of like 2, let's just say 2 1/2 trillion for easy
• 16:40
  math, that means that the amount that the their appreciation, how
• 16:44
  much value they've actually grown.
• 16:46
  So they've put a trillion in, but they're sitting on about 1
• 16:48
  1/2 trillion of unrealized profit.
• 16:51
  So that's the profit margin on the amount that's gone in, which
• 16:54
  is quite a remarkable sum when you think about it.
• 16:57
  Find me another asset where you've had managed to put a
• 16:59
  trillion in and get to 1.5 trillion out over the span of 15
• 17:02
  years. It's a massive, massive wealth
• 17:05
  creation event. And as I said, go back to my old
• 17:08
  man. He now feels willing to trust
• 17:11
  more of his savings to this asset.
• 17:13
  So yes, hyperbit quantization is going to happen over a long
• 17:16
  period of time. I think when we talk about it,
• 17:18
  we need to really think about like, what does that actually
• 17:21
  look like? What does that mean?
• 17:22
  Is that like replacing the dollar?
• 17:24
  Because I fall in the camp where I think the odds of us replacing
• 17:27
  Fiat are very, very slim for several reasons.
• 17:29
  But first and foremost, people just don't, like, change.
• 17:31
  This is why even hyperinflating currencies, they'll still use
• 17:34
  the hyperinflating currency. Yeah, they'll save in dollars
• 17:36
  and apples and anything else, but they still transact in it
• 17:40
  because they're forced to. And the other one is that
• 17:42
  governments won't let go of the printing press.
• 17:44
  So you've kind of got this double edged sword where the
• 17:46
  populace actually won't let it go and neither will the
• 17:47
  government. So, you know, look around you.
• 17:49
  How many of how many times when you've got those two working
• 17:52
  against you? This is why Bitcoin is like 2%
• 17:54
  of the population. We're a slim, a slim minority.
• 17:56
  So the vast majority of people probably won't give up their
• 17:59
  fear anytime soon. However, more and more people
• 18:03
  are trusting more and more serious capital.
• 18:05
  And you know, I listen to a lot of macro podcasts, a lot of, you
• 18:09
  know, finance, all that thing. The amount of people that I now
• 18:12
  hear begrudgingly, and I love that it's begrudgingly, they
• 18:15
  say, if you look at the environment around us, fiscal
• 18:17
  dominance, this, that and the other.
• 18:18
  And they go, you know, it's gold.
• 18:21
  And I hate to say it, but it's probably Bitcoin like that.
• 18:24
  And it's those two. Those two are the assets of
• 18:27
  people saying if you want to defend yourself against the
• 18:29
  storm that is coming that we can all see coming, then nothing
• 18:33
  stops this train gold and grudgingly Bitcoin.
• 18:36
  But that's what we did it guys. We memed this thing into every
• 18:40
  macro podcast, much to the point where they hate it, but they
• 18:44
  have to say it because they know it's true.
• 18:46
  Yeah 100% guys you know don't let your memes just stay dreams
• 18:51
  or what is it I forget what how they they changed it the Bitcoin
• 18:53
  exchange it. Yo, I want to tell you about the
• 18:56
  best place to build your automatic self custody Bitcoin
• 19:00
  stack. I'm talking about
• 19:01
  bitcoinwell.com. What makes bitcoinwell.com
• 19:05
  different is that it's a completely non custodial
• 19:08
  platform, meaning as soon as you buy Bitcoin and the funds clear,
• 19:13
  it goes straight to yourself. Custody Bitcoin wallet address
• 19:17
  and that perfectly aligns with simply Bitcoin ethos of the
• 19:19
  separation of money and state support Bitcoin on ramps that
• 19:23
  are self custody by default. To get started, go to
• 19:26
  bitcoinwell.com today. Takes 2 to 5 minutes to sign up
• 19:30
  and by being bada boom, you're ready to buy Bitcoin.
• 19:33
  You brought up lost coins and I think the last this last week
• 19:37
  and, and you might have the, the amount of coins that moved this
• 19:40
  last week more clearly in your head, but we saw, you know, 10s
• 19:44
  of thousands, if not 100,000 coins basically move last week.
• 19:48
  And there's two questions that I really want to kind of dive
• 19:51
  down. 1 is the idea of lost coins recently, you know, for,
• 19:55
  for or rather historically in Bitcoin, we have this kind of
• 19:58
  idea. There's probably like 4 or 5
• 19:59
  million lost coins. The last week we saw some 2010,
• 20:03
  you know, 2011, 2014 wallets open up, move, do some
• 20:07
  transactions. And it really begs the question,
• 20:09
  is there that many lost coins? And then the second part of
• 20:12
  this, James, is just the fact that we had someone do an
• 20:16
  $80,000 or 80. 1000 Bitcoin transaction and the market
• 20:20
  barely blinked and everyone was just like oh, why are they
• 20:24
  selling all this coin? And you're like, guys, let's
• 20:27
  take the positive of this. They sold 80,000 coins and you
• 20:32
  know the the earlier days when the Barewell came in, he had
• 20:35
  30,000 coins nuke the market. And now Bitcoin is still at
• 20:39
  what, what is it 115 right now? Like this is a sign of a very
• 20:43
  healthy market. So, James, you can take both of
• 20:46
  those questions or or run on one of those.
• 20:48
  Now I, I think these are really instructive events.
• 20:51
  When these old coins come back to life, it's so important
• 20:54
  because you, you do remember that there are, there's actually
• 20:57
  people out there, very few of them, but there are people out
• 21:00
  there who have huddled 2010 and they've gone through that whole
• 21:04
  cycle. And then people, the immediate
• 21:06
  question is why on earth is he selling?
• 21:08
  That's like, bro, he's up ten billion, $10 billion.
• 21:13
  You can buy a country with this like and, and, and you know,
• 21:16
  take it for what it's worth. This is what Galaxy said because
• 21:18
  they were the one that did the, all the OTC and the sales and
• 21:21
  all that. They said it for inheritance,
• 21:23
  you know, if you're trying to move ten billion between however
• 21:26
  many people in that inheritance plan, that's all you need a
• 21:28
  legal team to sort that out. That's massive.
• 21:31
  So, you know, they, they could just be at a phase of their life
• 21:34
  where like money literally isn't an object for them anymore.
• 21:37
  It's so beyond irrelevant. Like they they can fund whatever
• 21:40
  they want forever. So don't worry about profit that
• 21:42
  they're in profit. They're done.
• 21:43
  They made it. And by the way, how many more
• 21:46
  80K clips has that dude got? You know what I mean?
• 21:48
  Like that's one of them. So I think the first one is it's
• 21:51
  a reminder that you're right. I still believe that the lost
• 21:54
  coins are probably up and around 4 to 5 million probably.
• 21:57
  You know, I think the last time we estimated like 18% is likely
• 22:00
  to be live at the end of the 21 million.
• 22:02
  It's something 18% also. And we'll be live at some point.
• 22:05
  A lot of those coins will come back, right?
• 22:07
  If you run technology long enough, whether it's quantum or
• 22:09
  something, eventually a lot of those coins will come back to
• 22:11
  circulation at some point in time.
• 22:14
  So the idea of lost is always, it's ephemeral.
• 22:16
  It's a it's a temporary measure of coins that don't have the
• 22:20
  private key right now, but the private key still exists.
• 22:23
  And if someone can obtain that private key, then those coins
• 22:25
  can move. But I think the point you raised
• 22:28
  about the sell side is so important and people will often
• 22:31
  see my analysis like why is this dude always talking about
• 22:34
  selling? Because selling is the most
• 22:36
  bullish thing in Bitcoin and let me explain why.
• 22:39
  Every single sold Bitcoin has the same weight as every single
• 22:43
  other sold Bitcoin. One sold Bitcoin is 1 sold
• 22:45
  Bitcoin. The difference is we're now
• 22:47
  seeing it as you said, at 120K versus 10K and yet the market
• 22:52
  went down. I think the total was 10/9 and
• 22:54
  1/2 billion or something. The market went down 3 1/2% and
• 22:57
  then did a Dalai Lama candle straight back up.
• 23:00
  When we're measuring sell side, what we're actually measuring is
• 23:04
  2 things. Buy side because you need a
• 23:06
  buyer for every seller. So when you see a lot of sell
• 23:09
  side, yes, that is the thing that can temper out a bull and
• 23:12
  slow the market down and top things out.
• 23:15
  But if it gets absorbed, you're actually also measuring demand.
• 23:18
  So I will often look at sell side pressure as a proxy for
• 23:21
  demand. And when I see the market absorb
• 23:23
  9 1/2 billion and not go down, guys, we've got imagine who is
• 23:28
  buying the size and scale of those buyers.
• 23:31
  And the other thing it's measuring is the rotation of
• 23:34
  holders, the house from 2010. They have done their job.
• 23:38
  They came in, they supported Bitcoin at its weakest point in
• 23:41
  time and they huddled 80,000 odd Bitcoin for 14 years.
• 23:45
  They got Bitcoin to 100 KA 100 like 100K was the dream scenario
• 23:51
  that Oh my God, that's our million people have come in in
• 23:53
  later cycles. That's the million target for
• 23:56
  us. They hit it, they got there,
• 23:58
  they made it. They can't really make it more
• 24:01
  like what's the difference between 10 billion and you know,
• 24:04
  20 billion? It's like I'm, I'm in the
• 24:06
  billion club. It doesn't matter.
• 24:07
  So for them, they've already made it, but they're rotating
• 24:10
  those holdings. All right.
• 24:12
  Think about where you got your coins from.
• 24:13
  You got your coins because someone else was willing to sell
• 24:16
  and that's given you an opportunity.
• 24:18
  Like for me, if if nobody sold the coins and we went straight
• 24:21
  to a million and we repriced immediately, straight up to the
• 24:24
  level. And actually there's a good
• 24:25
  analogy here. If you look, if you just observe
• 24:29
  the shit coin world, they're going through a crisis because
• 24:32
  what they would do is the VCs would bid up the token to
• 24:34
  massive premiums and then they would list it on Binance and it
• 24:37
  goes down only forever. And you know what that does?
• 24:39
  That destroys people's confidence.
• 24:41
  And then they want to hold the thing, the process of the market
• 24:44
  actually helping people get ahead.
• 24:47
  Like if you weren't able to buy your coins with 1000 at 10,000,
• 24:50
  at 20, at 50, then you wouldn't have any coins.
• 24:52
  It would just go to $1,000,000 and you'd be like, oh, look at
• 24:54
  all those guys that were been around since 2011 and they insta
• 24:57
  got giga rich. That's actually not a healthy
• 24:59
  thing. The process, right?
• 25:02
  The process of markets and the process of Bitcoin getting
• 25:05
  there. And the fact that we don't just
• 25:06
  teleport to 1,000,000 is actually why Bitcoin is special,
• 25:09
  because it is the journey that we've all been on.
• 25:12
  And I like to also think about it from a more philosophical
• 25:15
  standpoint. What is the important part of
• 25:17
  Bitcoin? We can talk about the consensus
• 25:19
  rules, we can talk about mining, we can talk about the blocks, we
• 25:22
  can talk about all that stuff. At the end of the day, it's the
• 25:24
  UTXO set. It's the journey that that
• 25:27
  holder base has gone through, the collective intelligence of
• 25:30
  coins, changing hands, moving between exchanges, going between
• 25:33
  cold cards and whatever else. And then eventually we get to
• 25:35
  where we are today, which is after all that proof of work.
• 25:40
  This is the current standing of that Ledger.
• 25:42
  And if the all the other pieces broke, proof of work breaks or
• 25:45
  this breaks or that breaks, moving that UTXO set somewhere
• 25:48
  that's going to look after it. That's actually what Bitcoin is
• 25:51
  in my view from a very philosophical standpoint.
• 25:53
  So the history is what matters, and that's also the only thing
• 25:56
  you can't replicate. I absolutely love it as a
• 25:59
  philosophy major myself, a trained philosopher myself, I
• 26:02
  love going down philosophy rabbit holes, but there was
• 26:05
  something that you said that I, I think begs the question.
• 26:08
  You mentioned it earlier in the show paper Bitcoin summer.
• 26:12
  You know, this is all the rage right now amongst bitcoiners.
• 26:15
  This, this idea of all the paper Bitcoin, but it leads me through
• 26:19
  the question because we're seeing also right now the
• 26:22
  Bitcoin treasury hype like this is the new hype of the cycle.
• 26:26
  And you basically I I think we're leading into that.
• 26:29
  It's like if you think of how much capital is coming into
• 26:32
  scoop up 80,000 coins, these are some really deep bags.
• 26:37
  These are some really wealthy people.
• 26:39
  And a lot of people have been wondering, hey, if we have all
• 26:43
  of this liquidity coming into Bitcoin, like why is the Bitcoin
• 26:46
  price not mooning yet? You know, are they actually
• 26:48
  buying all this Bitcoin? Are these corporate treasuries
• 26:50
  actually buying UTX OS? Do the ETFs actually have this
• 26:54
  Bitcoin? And of course, you're one of
• 26:56
  the, I don't want to say guru, but you're one of the on chain.
• 26:59
  So I want to say guru, one of the on chain gurus here.
• 27:02
  So I know you're tracking where the buys are coming and I, I
• 27:06
  think you're kind of insinuating that these ETF holders, the
• 27:09
  institutions and the corporate treasuries, they are actually
• 27:12
  scooping up all of this coin right now.
• 27:14
  That's who's buying this stuff. Yep, yeah.
• 27:16
  And and I often get this. So people saying like the price
• 27:19
  should be higher and I I've kind of defaulted now to my base.
• 27:22
  My base response is based on what?
• 27:25
  Why should the price be higher and where should it be?
• 27:28
  Mr. I believe that I should be able to dictate where the price
• 27:30
  of Bitcoin should be. Why?
• 27:32
  Why should it be higher? Like at what level?
• 27:33
  Give me a level and give me a rationale.
• 27:35
  And what I always get is blank stares and complete nonsense.
• 27:38
  Oh, but it should be higher because of all this buying.
• 27:40
  It's like, what about all this selling?
• 27:41
  So we're not the way that I approach this thing is we know
• 27:46
  we have a lot of evidence. There's now there's a lot of
• 27:49
  errors and changes and challenges with with on chain
• 27:51
  data tracking entities. You'll know this because if you
• 27:54
  see exchange balances are always in decline and they're always at
• 27:57
  two and a half million Bitcoin, always forever.
• 28:00
  For my entire career they have always been in decline.
• 28:03
  And at two and a half million Bitcoin, it's always two and a
• 28:06
  half million Bitcoin, right ±100,000.
• 28:08
  Every data provider has a different set of labels.
• 28:11
  Some of them do or don't include custody.
• 28:14
  It's just it's a mess. It's hard to track.
• 28:16
  So First things first, you can't have any confidence in the data.
• 28:18
  That's the first thing. So if you're looking at an
• 28:20
  exchange balance data, I can go out there and find you an
• 28:22
  exchange balance data that's going up because it includes
• 28:25
  different exchanges or ones that you haven't thought about.
• 28:28
  So that's the first one. What we do know is that no
• 28:32
  matter which one of these data providers you look at, when they
• 28:35
  look at Coinbase, they know they've got millions of coins.
• 28:39
  So the challenge actually, in my opinion, people say that
• 28:42
  Coinbase is selling paper Bitcoin to these ETFs.
• 28:44
  I'm like, well, we can see Blackrock's address.
• 28:46
  We can see Fidelity's, which is not a Coinbase.
• 28:48
  We can see all of these ETFs. We can kind of see in the coins
• 28:51
  because they have a very particular behavior the way the
• 28:53
  what do they call the APS actually move coins in and out.
• 28:57
  We know Coinbase has a lot of coins because they have on their
• 28:59
  financial statements, which would require fraud by both
• 29:01
  Coinbase and their auditors. So we know that they've got
• 29:04
  these assets. We can see them on chain.
• 29:07
  And I can also look at when the market rallies, we see lots and
• 29:11
  lots of old coins come back to life selling.
• 29:14
  So I just look at that spread of information and I'm like, what
• 29:17
  is the story that it tells me? But they have the coins and that
• 29:20
  every time the market goes up and people start saying we're
• 29:22
  going up forever, Laura, that people start selling and we stop
• 29:25
  going up forever Laura. So I look at that and I'm like,
• 29:27
  it looks like there's sell side that's stopping us from going
• 29:30
  higher. And then the paper Bitcoin stuff
• 29:31
  goes out the roof and everyone like, man, they must be selling
• 29:34
  fake coins. They're all FTX.
• 29:36
  It's like, guys, based on what? Because I've never, not once in
• 29:40
  the whole time that I've talked about this, sometimes someone
• 29:43
  will send me some backwater article from 2018 about Binance
• 29:46
  maybe having a market maker that did something.
• 29:49
  It's like, OK, you're going to trust Coindesk on this guys.
• 29:52
  Like really? That's your, that's your source
• 29:54
  here. Really serious.
• 29:55
  So like, come to me with some real evidence because otherwise,
• 30:00
  and to quote the dude, that's just your opinion, man.
• 30:03
  Like that's just your opinion. Based on what?
• 30:06
  So look, and by the way, I think it should make it very clear
• 30:10
  paper trading, paper Bitcoin is a real thing.
• 30:12
  People trade derivatives. FTXS exist out there.
• 30:16
  And I put out a tweet some time back being like, there is
• 30:19
  probably an exchange out there that's unbacked and you've
• 30:21
  probably never heard of them. They're probably called like,
• 30:23
  you know, you know, BX or something, some weird thing
• 30:26
  you've never heard of in some backwater country that you don't
• 30:28
  even know exists, right? And they've got 12 Bitcoin.
• 30:31
  These entities aren't big enough for you to care about.
• 30:34
  The actual risk guys, is that Coinbase has so many coins like
• 30:37
  like 3,000,000. That's a huge problem.
• 30:39
  That's a honeypot risk. So the risk isn't that they
• 30:42
  don't have them. So they have way too many.
• 30:43
  So, you know, I'd love to see some evidence and some data.
• 30:47
  I just simply look at market structure, see price go up,
• 30:49
  people selling to me that makes that's enough like that's
• 30:51
  enough, enough data. Providers have seen the
• 30:54
  exchanges and seen the ETFs that like.
• 30:56
  Until you can prove those guys wrong in aggregate, then it's
• 31:00
  just a really baseless case in many views.
• 31:03
  Yeah, no, I'm, I'm the same way. Just like give it given the
• 31:06
  simplest argument here, guys, why is the price not moving?
• 31:10
  There's a lot of sellers in the market and this last week was
• 31:12
  one of those like perfect examples.
• 31:14
  It's totally why isn't the the the price moving?
• 31:17
  It's like, guys, there was like 100, I think it was 107,000
• 31:21
  coins that like hit the exchanges and got sold.
• 31:24
  You're like, Yep, I don't know. I don't know about you guys.
• 31:27
  He's the other one, scooping up 10s of thousands of coins.
• 31:30
  Yeah, you see these big wallets move and I've seen some people
• 31:33
  saying like, that's the first time I've ever actually seen an
• 31:35
  old holder selling. And I'm like, well, look at the
• 31:37
  rest of the chart of, I call it revived supply coins that are
• 31:40
  old that have come back to life. Isn't it funny how that spikes
• 31:43
  literally every single time we go up, Literally every single
• 31:47
  time we got up a lot to a new all time high revive supply
• 31:50
  kicks higher. They must just be doing a
• 31:52
  consolidation. They must just be doing UTXO
• 31:54
  management because 100K was just like the right time for them to
• 31:56
  do it. It's like, no guys, they're all
• 31:58
  selling. It's just how this works.
• 32:00
  And by the way, that's OK because you're swapping over the
• 32:02
  holder base. And here's actually the really
• 32:04
  bullish thing about this. Think about we've talked a lot
• 32:07
  about institutions, big entities like price insensitive people,
• 32:12
  massive institutions who are not buying Bitcoin for today.
• 32:14
  They buy it because all their macro views are saying gold and
• 32:17
  Bitcoin for the next decade. Strap in, get as much as you
• 32:20
  can, sit tight. That's what they're hearing.
• 32:22
  Their cost basis for their first purchase is 100K.
• 32:27
  They are in at 100K. They don't care.
• 32:29
  Traded AT1K or 10K or 20K or 50K.
• 32:32
  That doesn't even exist on their price chart.
• 32:33
  They bought in at ibit and FBTC at 75 and 100 bucks and they
• 32:38
  know Bitcoin's 100K and that's it.
• 32:39
  That's their starting position. So when you entered the market
• 32:42
  as a bitcoiner, go back and think about your first price.
• 32:45
  This is their first ever price, so everything above there is
• 32:50
  what they're buying for. They're not buying because they
• 32:52
  want it to go from 100K to 75K. They're buying it because they
• 32:56
  also think 75 K is a discount. So the the ceiling above us is
• 33:01
  much higher, but it's going to take a lot longer to happen.
• 33:03
  And by the way, that's great. That's actually a really, really
• 33:05
  good result. Yeah, you just made me even more
• 33:07
  bullish than ever. You know, I I came into this, I
• 33:10
  have one of my friends. This is a little tangent story.
• 33:12
  He's been tweeting me his his chart boy stuff and he's traitor
• 33:16
  stuff. And he's like, dude, it's going
• 33:17
  to double top. And I just, it takes everything
• 33:21
  in me to just start trolling him.
• 33:24
  Yeah, exactly. He's like, dude, my my lines,
• 33:27
  you know my lines and my bearish dibs on the daily.
• 33:30
  And I'm like, dude, do you not see what the investor capital
• 33:36
  flowing into the market right now?
• 33:37
  And you're just saying it's like, just think about it.
• 33:39
  Your first buy, you know whether you bought it 1005 thousand
• 33:43
  10K20K. If that is your first buy
• 33:45
  number, you're like, this is going up way higher.
• 33:47
  I'm not I'm. I don't pay about 20 billion, 20
• 33:50
  billion in fresh dollars come into the ETFs since the April
• 33:54
  low, just in that window. Since the April low, we've seen
• 33:57
  20 billion and in total that's about 35 or 36% of the total
• 34:01
  capital flowed in. So 30% of all the dollars that
• 34:04
  have flowed into those ETFs have occurred in the last like what
• 34:07
  is that 2 1/2 months, something like that, Three months.
• 34:10
  That's what we're talking about here.
• 34:11
  It's mega, mega bullish. And that's the thing when I talk
• 34:15
  about sell side, it's actually bullish because you're seeing a
• 34:19
  bullish selling now, you're actually seeing people rotating
• 34:22
  their coins, new holders coming in and they're coming at a size
• 34:25
  that is just really, really hard to wrap your head around.
• 34:27
  And by the way, Mr. 80,000 Bitcoin can only sell that once.
• 34:31
  And Mr. Pension Fund, he's buying because he's looking long
• 34:35
  term liabilities. He's not a seller, Michael Sale,
• 34:37
  he's not a seller. A lot of holders out there,
• 34:39
  you're not sellers. There's this pool of old holders
• 34:42
  that once they're flushed out and they've done their thing in
• 34:45
  100K is the perfect place. And there's another line that I
• 34:48
  see very, very often that I should probably just touch on.
• 34:51
  People say, but we were at 123 K, why didn't they sell then?
• 34:55
  Like why are they now selling at 115?
• 34:57
  It's like, first and foremost, the difference for them between
• 35:01
  10 billion and 9.8 billion is irrelevant, right?
• 35:04
  So they're already that big up. Second of all, things take time
• 35:07
  and things change, right? Think about where you were.
• 35:10
  Like if you go back to 2021, a lot of people bought 58K58K
• 35:14
  gang, imagine how much your life changed between 202158K and
• 35:20
  202458K. Some of you probably had kids,
• 35:23
  you probably bought a house. You probably need to like
• 35:25
  upgrade your lifestyle. Things have gone right, things
• 35:28
  have gone wrong. Life changes over a five year
• 35:30
  period. Now granted, you know, we're
• 35:32
  talking about over a short period of time, but if you're
• 35:34
  trying to move around 10 billion, your lawyer may not be
• 35:37
  able to sort stuff out for like 6 weeks, right?
• 35:40
  This is a big thing to move around.
• 35:42
  Like it takes time. So you know, there's just a
• 35:43
  process to everything and markets, I like to use this line
• 35:47
  marketer, a process, not a result.
• 35:49
  And you can really use that for life as well.
• 35:51
  If you're living life hoping for that $1,000,000 price point
• 35:54
  because you're going to unlock something in your future, you've
• 35:57
  missed the point because the journey between here and a
• 35:59
  million, that's the fun bit. That's the part that we're
• 36:01
  actually here for. So enjoy the ride, because once
• 36:03
  you get to the end, it's just not as good as the fun you had
• 36:06
  along the way. Totally true you did just just a
• 36:09
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  today. I I do want to.
• 37:24
  Definitively get you. I, I think to, to destroy the
• 37:30
  idea of the supply shock. I'm, I'm just like you.
• 37:33
  I'm like, look, there will always be a certain amount or a
• 37:35
  certain price that people will sell Bitcoin.
• 37:38
  I like this is just how the market works.
• 37:40
  And I've been seeing you go back and forth and one of our good
• 37:43
  friends that you actually go back and forth with him on
• 37:45
  Twitter about the supply shock. He's also Australian as well.
• 37:48
  I'm sure you know who he is, but what is your take on the supply
• 37:52
  shock? I know you touched on the
• 37:53
  exchange numbers or Bitcoin on the exchange, and I know there's
• 37:57
  a lot of memes like the mother of all supply shocks, like the
• 38:00
  supply shock is coming. You know it's coming.
• 38:02
  It's coming soon, man. Yeah.
• 38:04
  So what's? The second coming of the supply
• 38:06
  shock. Yeah.
• 38:08
  What do you think of the memetics around the supply
• 38:10
  shock? Or rather, is there any
• 38:11
  factuality to this? Yeah.
• 38:13
  So look, I'm going to put this in the same bucket as market
• 38:15
  manipulation and price suppression.
• 38:18
  Yes, the market is suppressed and manipulated.
• 38:21
  That is also how markets work. In the short, that depends how
• 38:24
  you want to frame it up. Every time you buy Bitcoin, you
• 38:26
  manipulated the price a little bit to the upside, but you did
• 38:29
  manipulate the price. Someone else out there just has
• 38:31
  more money than you and they are trying to make money off other
• 38:34
  people who have more money than you.
• 38:35
  And sometimes, like if you actually go down into the order
• 38:38
  books, it's like a fist fight and you'll see it.
• 38:41
  Like if you're looking at like 1 of the big exchanges and
• 38:44
  actually it's not hard to draw Mr. TA Man's lines, right?
• 38:47
  Big resistance. And look, next time Bitcoin gets
• 38:49
  to the all time high, if you're lucky enough and you're sitting
• 38:52
  at the screen, pull up Binance or Coinbase and watch as it
• 38:56
  trades up towards, watch the order book as it gets up towards
• 38:59
  the all time high. The moment it gets there, it
• 39:03
  lights up like crazy. People are just buying and
• 39:05
  selling and chopping and changing.
• 39:07
  And you've got to remember that they're buying spot and selling
• 39:09
  spot, but that's because they've also got options over here and
• 39:11
  futures over here and they're trying to defend this and they
• 39:13
  want to get to this. Like it goes chaos.
• 39:16
  So there's this phase where like, yes, some people call it
• 39:19
  manipulation, but it's also just how markets work.
• 39:21
  It's like a big fist fight down there now.
• 39:23
  So that's manipulation is there, but over the very, very short
• 39:28
  term, over the small time horizon.
• 39:30
  So there is truth to it, but it is not the reason.
• 39:33
  Like, you know, I find it hard to believe that there is market
• 39:36
  manipulation and we're trading at checks notes $115,000, you
• 39:40
  know, with no pull backs. It's they're really bad at their
• 39:44
  job. If this is their view of like
• 39:46
  this is the outcome. We've done the job.
• 39:48
  Supply shock is in the same camp where there is truth to it.
• 39:51
  The idea is every time the market just rips higher, it's
• 39:55
  because we ran out of sellers. Now 100K, this zone is a very
• 39:59
  obvious place where we're going to have a lot of sellers because
• 40:01
  it's like a stretch target for so many people.
• 40:03
  There's going to be a lot of selling.
• 40:04
  It's going to take time. Once a coin gets sold, it
• 40:07
  doesn't just go from one guy into a cold card and sit there
• 40:10
  forever. Sometimes it's got to trade
• 40:12
  between 10:50, thousands, hundreds of thousands of
• 40:15
  different transactions until it finally gets out of the market
• 40:17
  and goes into sailors wallet or your wallet or whatever else.
• 40:20
  So marketer process coins have to actually be absorbed and that
• 40:23
  takes time. And people's lives change, so
• 40:26
  and so forth. There are periods in time when
• 40:28
  there just are no more sellers. And when there are no more
• 40:31
  sellers, the marginal buyers who are coming in.
• 40:33
  And this can be your SAT stackers, it can be sailor, it
• 40:35
  can be whatever. And This is why you'll rarely
• 40:38
  see Michael Saylor buys 2 1/2 billion dollars.
• 40:41
  Market's usually sideways or down because what he's done is
• 40:44
  he's taken a pool of coins out that are not going to get sold
• 40:47
  in the future, but he doesn't necessarily hit the market bid
• 40:50
  and just send the price to the moon because that's not a good
• 40:53
  idea. No one wants to do that.
• 40:55
  But those coins will not be sold.
• 40:56
  So over the course of the next three months, he's tightened
• 40:59
  things up. He's brought those coins out of
• 41:01
  circulation. There are points in time where
• 41:03
  the supply squeeze is literally there's no more sellers.
• 41:07
  But what happens when the price goes up?
• 41:09
  And This is why I say, like anyone who's sharing exchange
• 41:11
  balances, If it's ±100,000 coins from the from 200 and from 2.5
• 41:16
  million, mute. Or just get rid of that chart
• 41:18
  because it's useless, useless information.
• 41:20
  It's always been there because when the price goes up, you know
• 41:23
  what happens? Some other 80,000 whale goes,
• 41:26
  that's my price, it's time. And then they sell.
• 41:28
  So they bring coins back to market.
• 41:30
  And just think about it from your perspective.
• 41:32
  Imagine you're the only guy in the world who's going to sell
• 41:35
  and the price goes to 200 K, 300 K400 K500K.
• 41:38
  Just just just keep ratcheting it up.
• 41:40
  At some point you're going to go, Oh my God, I have I'm sorry.
• 41:43
  I that's it done. And you'll sell some at some
• 41:46
  point. It's like the marshmallow test.
• 41:48
  If you leave the Kim the room with the single marshmallow,
• 41:50
  you're going to get 2 marshmallows.
• 41:51
  If you don't eat this one and you leave them for six hours, I
• 41:54
  guarantee you that marshmallow's gone.
• 41:56
  If you leave it long enough, you're going to eat the
• 41:58
  marshmallow. So it's just what human beings
• 42:00
  do. And this is how I try to frame
• 42:03
  it up for people. Just because you can't see why
• 42:06
  you would sell at this price, put yourself in someone else's
• 42:09
  shoes who's been around for a lot longer.
• 42:12
  They've got different life constraints, they've got
• 42:13
  different needs, they've got a lower cost basis, whatever it
• 42:16
  is, they may be selling your entire stack and that's them
• 42:20
  peeling off one of the Utxos. You've got to used to think
• 42:23
  there's these people of all sizes in this market.
• 42:26
  So yes, the supply squeeze, like market manipulation, it's a
• 42:29
  thing on the small time. But this idea that we're just
• 42:32
  going to gap up to 1,000,000 if we wake up one day, and here's
• 42:35
  here's a pro tip. If you wake up one day and we're
• 42:38
  $1,000,000, put your seat belt on because we're probably going
• 42:40
  down about 80%. You don't want the market to go
• 42:43
  straight up because that's going to create a really, really nasty
• 42:46
  drawdown. Because, and this is a great
• 42:48
  example before, but why didn't they sell at a million?
• 42:51
  Because we're at a million for 25 seconds.
• 42:53
  We're now at 900 K. Do you like that?
• 42:55
  Yeah, you like that. So what about 8:50?
• 42:57
  What about 7:50? The next thing you know, we're
• 43:00
  at half a million. That's actually still a really
• 43:01
  good price. Let's keep going, keep going,
• 43:03
  keep going. Oh well, back to 100K.
• 43:05
  Well, I can't sell now. It's back to my cost basis.
• 43:08
  I'm going to start buying in. So that's just how markets work.
• 43:11
  Absolutely love it. I I couldn't agree with you
• 43:14
  more. And and you know, you're able to
• 43:16
  use the on chain metrics and, and your experience in markets
• 43:20
  and really just being like in the trenches and analyzing this.
• 43:23
  And for me, I'm just like been around for long enough where
• 43:26
  you're like, guys, let's just think this through a little bit.
• 43:29
  Like you just think of how you work.
• 43:31
  But as you said, a lot of people can't really get out of their
• 43:34
  own one kind of point of view here.
• 43:36
  And you can tell they're like, no, I would never tell you.
• 43:38
  Like, yeah, I get that. But like.
• 43:39
  Someone else would, someone else would thing on chained data at
• 43:43
  the end of the day, what is it like?
• 43:44
  A lot of people just like, oh, it's on chained data and they
• 43:46
  just like call it on chained data.
• 43:47
  What is it? It's actually just metrics
• 43:49
  describing you, me and everyone listening to this podcast, every
• 43:53
  single person who holds Bitcoin. We're just looking at the UTXO
• 43:55
  set and saying how profitable is it?
• 43:57
  Where is the average guy? How profitable are guys who
• 43:59
  bought six weeks ago versus people who bought five years
• 44:01
  ago? And oh, well, look, we're at,
• 44:03
  we're at a level right now where people who bought a long time
• 44:06
  ago are so profitable that they usually start selling.
• 44:10
  Oh, look at that, they're selling.
• 44:11
  How funny, their incentive structure hasn't changed and
• 44:14
  they're doing the exact same thing that they always do at
• 44:16
  this level. So what Unchained data really
• 44:19
  is, it's just a measurement of us.
• 44:20
  And it helps a lot of people that, that a lot of my
• 44:23
  subscribers just say it's like a second opinion.
• 44:25
  I've got my Bitcoin or In Sync. I've been around markets long
• 44:28
  enough that I've just kind of seen how Bitcoin trades and then
• 44:31
  I see the market not going up and then I see the sell side and
• 44:34
  then I see how much profit people are in like, yeah, you
• 44:35
  know what? That actually makes a lot of
• 44:37
  sense. Like my Bitcoin instinct is
• 44:38
  confirmed and it helps me tailor and and hone in and really have
• 44:42
  a decent read on what's going on because it's all of us.
• 44:45
  It's just our collective decisions in in chart form.
• 44:47
  Yeah, I, I used to say until the chat kind of corrected me on
• 44:50
  this, I used to say the Bitcoin price is a real time metric of
• 44:53
  people's understanding of Bitcoin, of what it is.
• 44:56
  And they're like, no dude, it's the, it's the lows.
• 44:58
  Like it's the Bitcoin lows of people's real understanding of
• 45:01
  Bitcoin because they, you know, they're true believers and
• 45:04
  they're huddling. I'm like, yeah, that makes
• 45:06
  sense. But as you're talking, I'm like,
• 45:08
  no, I think it's the on chain metrics.
• 45:09
  It's the real time understanding of what we all collectively
• 45:12
  think about Bitcoin. I absolutely love that.
• 45:15
  I'm going to definitely take. That and look, we're in a phase
• 45:18
  where somewhat like I wake up every day expecting metrics to
• 45:21
  break because the market cycles changing and things evolve and
• 45:24
  all the rest of it. So far, nothing has broken.
• 45:27
  I've been actually quite surprised.
• 45:29
  So I live in this world again. You got a called 2 views at the
• 45:31
  same time. I live in the world where I'm
• 45:33
  expecting every single one of my metrics to break every day.
• 45:36
  And then every day that it doesn't break, it's, it's, I
• 45:39
  keep using it, right. I'm not going to, I'm not going
• 45:40
  to lose something and drop something off the back of the
• 45:42
  radar until it breaks. But what I am doing is being
• 45:45
  very flexible in how I think about things.
• 45:47
  So, and it's because I'm in the trenches of this data deeper
• 45:51
  than most people. I actually don't look at them as
• 45:53
  like, oh, it has to hit this level and that's a top.
• 45:55
  And here's my horizontal line. I actually don't look at it from
• 45:57
  that perspective. I look at it as just a source of
• 46:00
  information. When a metric is moving higher,
• 46:02
  it's telling me people are more profitable, they're starting to
• 46:04
  sell, coins are coming back to life, people are hodling.
• 46:07
  I just look at it as packets of information.
• 46:09
  And I use it as part of a broader picture to say, OK, if
• 46:12
  that's happening, let me go and check this.
• 46:13
  Oh, and now I need to go and check derivatives to see what's
• 46:15
  happening over there. So to me, it's all just
• 46:17
  information. I'm trying to piece together my
• 46:19
  best possible read of what I think's going on because in many
• 46:23
  ways I just want to prepare for if we go to 150 Ki, don't want
• 46:28
  to be surprised. I want to know exactly what I'm
• 46:30
  going to do in that scenario. If we go to 75 K.
• 46:33
  And I was writing about this in, I think I started in my first
• 46:35
  piece on that air pocket was in December.
• 46:37
  So we're trading like 105 K before we've had any of the
• 46:40
  tariff tantrum. And I said, guys, I'm not, this
• 46:43
  is not a prediction. I don't know if this is going to
• 46:44
  happen, but that zone down there between 86 and 75, no one bought
• 46:49
  coins in that area on the way up.
• 46:51
  We might go back down and just find out what happens down
• 46:53
  there. And this is not because I can
• 46:55
  predict the future. I absolutely cannot.
• 46:57
  No one can. But I was saying mentally
• 46:59
  prepare and think about what you will do if you wake up in the
• 47:03
  price of 75 K. And we went to like 74, eight.
• 47:06
  And I just never want people to be a deer in the headlights
• 47:09
  because like it might happen. I don't know if it will, but it
• 47:12
  might. And if it does, this is probably
• 47:14
  why and this is what it means. So you can kind of reason about
• 47:17
  it months and weeks in advance, then you can make a decision.
• 47:21
  And for me, like even me, I'd already been talking about 75 K
• 47:24
  and then the price went to 75 K and I was sitting on my couch
• 47:27
  and my best mate and Co founder walked past me.
• 47:30
  So I was like, bro, you look a little bit white.
• 47:32
  And I was like, yeah, I kind of just put way more money than I'd
• 47:35
  intended into Bitcoin because like I'd already made the
• 47:38
  decision. So my conviction was high.
• 47:40
  It still felt awful, right? I do this for a living, studying
• 47:43
  this and I'm like, this feels horrible.
• 47:45
  Like I feel like I'm making a horrendous mistake.
• 47:48
  It wasn't a horrendous mistake because I'd made that decision
• 47:50
  with a clear cut mind. Because you don't want to make a
• 47:53
  decision when the market is doing this or when it's water
• 47:55
  falling down. Both of those are really bad
• 47:57
  times. We're making like a life
• 47:58
  decision. I try to make them well ahead of
• 48:00
  time. Love it.
• 48:02
  Yeah. I mean, even even as Bitcoiners
• 48:04
  have been around for a while, you know, catching knives hurts
• 48:06
  every single time. It doesn't feel good.
• 48:08
  And then in hindsight, you can rationalize it however you want.
• 48:12
  But actually, while you're talking, it was making me think
• 48:15
  of how much credibility do you give the CME Bitcoin futures
• 48:19
  gaps? Yeah, I put it in the same
• 48:21
  bucket as what I call air pockets.
• 48:24
  So when I talk about it, an air pocket from an on chain
• 48:26
  perspective, it's, it's a zone where the price goes up too
• 48:30
  quickly or down, but usually it's up goes up too quickly that
• 48:33
  there's just not enough transactions in that zone.
• 48:36
  So I like to think about markets as a confidence machine.
• 48:39
  And in that chopped solidation range in 2024, we developed a
• 48:43
  very, very strong collective global consciousness that
• 48:48
  Bitcoin belongs above a trillion dollar market cap, which is 50K.
• 48:51
  We every single time went below there, the dip was bought.
• 48:54
  We proved to the world that we belong here and the next step
• 48:57
  we're at 100K, which is double that 2 trillion.
• 49:00
  We don't know what happened there was like, we know people
• 49:03
  like it at 75 and we know people like it at 90 to 100, but we
• 49:07
  have no idea if anyone likes it at 85 and 75 S.
• 49:10
  The market went back down there to revisit it to say, well, you
• 49:13
  loved it at 95 and you bought all these coins at 100.
• 49:15
  Do you like it at 75 again? Like are you still there?
• 49:17
  Do you still have that confidence?
• 49:19
  And the market said yes because it bit it and then away we went.
• 49:22
  I would put CME gaps in the same thing where over the weekend
• 49:26
  when the CME isn't trading, the market opens and it's at a
• 49:29
  certain level above or below it's, it's always happened.
• 49:33
  I've, I've read trading textbooks from decades ago and
• 49:36
  they all talk about these weekend gaps and they just
• 49:39
  become targets. They're just one of those things
• 49:41
  that the collective consciousness goes, we don't
• 49:44
  actually know what the confidence is here.
• 49:45
  Let's go and find out. Let's go and test it.
• 49:47
  And they just become magnets. So there's many, I'm sure
• 49:50
  there's 1001 forces out there that force this to happen.
• 49:54
  I just have seen it happen enough times.
• 49:56
  Even our current market structure, 116 to 110 air gap,
• 50:00
  where are we in the air gap? The market just had to go and
• 50:03
  find out, just got to test it. So it's more about just
• 50:06
  understand that these things exist.
• 50:08
  I don't, I don't look at CME gaps, but I look at these air
• 50:12
  pockets in the on chain space because the bigger they are, the
• 50:14
  more, the more challenging it is, right?
• 50:16
  No one wants to go from 100 to 75, but you want to be prepared
• 50:20
  for it in case it does. Love it.
• 50:22
  You know, before we started, I I didn't know we were going to
• 50:25
  just kind of check off every Bitcoin trader fallacy here that
• 50:28
  we all constantly talk about, but we we are doing that.
• 50:31
  So I'm going to just double down on that.
• 50:33
  Let's go. Let's go.
• 50:34
  Yeah, the next one is what is? What's your take on diminishing
• 50:38
  returns? That seems to be all the rage
• 50:39
  right now. Well, so my my base case is
• 50:44
  what's your anchor point? So for example, my my current
• 50:48
  thinking on the way this cycle plays, as I think the top
• 50:51
  actually looks somewhat similar to other tops.
• 50:53
  I don't think we get anything that's overly different.
• 50:56
  My biggest concern, what I'm doing a lot of time work in the
• 50:59
  background analyzing is I can spot a euphoric period.
• 51:04
  That's that's easy enough to see.
• 51:06
  What is much harder to see is if it just dies with a whimper and
• 51:10
  like, you know, we just kind of fold and there's just no energy
• 51:13
  and it goes. So that's where I'm paying a lot
• 51:15
  of attention to because like that's harder.
• 51:16
  That's much, much harder the spot.
• 51:18
  I have some tools to try and track that, but I'm building out
• 51:20
  my suite now. So those are the two things I
• 51:22
  can kind of track my base case. What are my expectation is if I
• 51:26
  had to kind of plot out the next 12 months, I think we have your
• 51:29
  typical top. It'll be driven by all these
• 51:32
  treasury companies once the market starts moving.
• 51:34
  I think we're close to that euphoric phase.
• 51:37
  Open interest is climbing a lot. There's a lot of leverage coming
• 51:39
  in. People are willing to speculate.
• 51:41
  You can you can smell the speculative fever in the air at
• 51:44
  the moment. It hasn't quite gone yet, but
• 51:47
  you can see that everyone's like one click away from like taking
• 51:49
  some proper risk. So that's that's where we're at.
• 51:51
  We've kind of got the all the kindling is built on the fire.
• 51:54
  We just need to get moving. My base case is that people
• 51:57
  don't know where to start the next bull market from.
• 52:00
  So let's imagine that we peak it just for simple numbers,
• 52:04
  somewhere between 150 and 180. Just imagine that we peak there,
• 52:07
  there'll be a lot of people who are like, oh, diminishing
• 52:09
  returns, blah blah blah. What if we pull back 40% and
• 52:13
  then we bottom out? It takes eight months, maybe a
• 52:15
  year, and then we start drifting higher again and we don't get
• 52:18
  the big 80 or the 50 even that people are expecting.
• 52:22
  Will people go and change their cycle charts?
• 52:24
  You know those ones that show like performance since the cycle
• 52:26
  low, Will they re anchor to the bottom of that correction?
• 52:29
  Like how big does the bear have to be before it's a bear now?
• 52:33
  And what if people just kind of lose track?
• 52:34
  Like, Oh my God, it's a super cycle.
• 52:36
  It's like, what if we've already had three cycles this cycle?
• 52:40
  What if we had the first one up to 73 and then we actually have
• 52:44
  to anchor back down at 49 K for that chop solidation period when
• 52:47
  the yen carry trade blew up? What if we have to anchor from
• 52:49
  there? And then what if the next one
• 52:51
  was the tariff tantrum and that was another like miniature bear
• 52:53
  market? What if we're actually
• 52:55
  discharging a lot of this bearish energy by just going
• 52:58
  sideways and chop solid for 8-6 months?
• 53:01
  What if that's the process now and people are just like,
• 53:03
  where's your diminishing returns?
• 53:04
  So based on what, from where, where's your anchor point and
• 53:09
  all of these questions? I don't think people get lost in
• 53:11
  the bull. I think people get lost in the
• 53:13
  bear that follows. And for me as an analyst, I'm
• 53:15
  super excited because like, that means I have to be on my toes
• 53:18
  trying to just look at every day by day and just see how it
• 53:21
  evolves and see how data changes.
• 53:23
  And it's fascinating. I love it.
• 53:25
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• 53:28
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  15% off anything on the store. Yeah.
• 54:19
  Now you made a great point because I was looking at the
• 54:21
  chart the other day and I was kind of doing the like cycle
• 54:24
  theory, like, and I was looking at the chart.
• 54:26
  I'm like, well, where do I even? And I was just kind of trying to
• 54:29
  do a comparison of like, okay, if the last cycle was like 600%,
• 54:34
  let's see where just, you know, kind of just having fun.
• 54:37
  And I was looking at the chart. I'm like, where which one's the
• 54:39
  bottom is it? Is it 24?
• 54:41
  Is it 23? Is it 22?
• 54:44
  Like which bottom do I actually, you know, start to make these
• 54:48
  crazy, just fun predictions from?
• 54:49
  And, and I think you made a great point.
• 54:51
  It's like, do we readjust the cycle bottoms because now we're
• 54:55
  in this new market structure, like where's the bottom of the
• 54:58
  last market? At another level, bitcoins
• 55:00
  always have this weird property where like it tops in December
• 55:03
  and it bottoms in November and December.
• 55:04
  It's like it just has this weird like date thing.
• 55:07
  Well, we had the the N carry trade in 2024 was like the 5th
• 55:10
  of August. We had the a sell off recently
• 55:14
  on like August, which we could set some kind of a low and start
• 55:16
  moving. So like we're actually getting
• 55:18
  these dynamics where like the same dates keep showing up.
• 55:21
  And like when I write a report, I'd be like, I'm pretty sure I
• 55:23
  wrote about this like a year ago and I literally go back a year
• 55:26
  ago. I'm like, holy shit, I did write
• 55:27
  about this a year ago. It's like exactly what's going
• 55:29
  on. So you get these like there's
• 55:31
  like this new internal patent that's starting to happen.
• 55:34
  And by the way, if we top out in the next like 30 to 60 days, the
• 55:38
  cycle is exactly the same as every previous cycle.
• 55:41
  But is that the top or is that a top?
• 55:45
  And this is the thing that's going to break and break
• 55:47
  everyone's noodle. They're not going to know
• 55:48
  whether it's the top or a top because every the top starts as
• 55:51
  an A top. We don't know until it's like
• 55:53
  deep into the Bay. Like, OK, it turns out that was
• 55:56
  the cyclical beast. Because like, that could have
• 55:58
  been it. People were calling a bear
• 55:59
  market in late 24 and they're saying, I think it's over.
• 56:02
  And that was just like the shittest cycle of all time.
• 56:04
  And then next thing you know, we're at 100K.
• 56:06
  And then people are saying no, it's another top.
• 56:08
  And it's a double top. And like, yeah, it's hard
• 56:11
  people. People are losing their mind.
• 56:12
  And I love it. Yeah, no, 100%.
• 56:14
  And actually right when you were just wrapping up here, you know,
• 56:18
  the constant kind of classic Bitcoin trope of the Bitcoin
• 56:23
  price is the least interesting thing about Bitcoin.
• 56:25
  And you're like, yeah, you know, I, I can see where you're coming
• 56:28
  from, but the way you break it down, you're like, no, that is
• 56:31
  literally the most interesting thing about Bitcoin.
• 56:34
  Yeah, I absolutely love it. All right, so people just got
• 56:39
  basically an hour of how to think about the price of.
• 56:42
  Bitcoin. Think about the price of.
• 56:44
  Bitcoin, I'm sure they're sitting here like, okay, cool
• 56:48
  bro, like I really appreciate all this analysis and and, you
• 56:52
  know, points of view here, but like, where is the price going?
• 56:55
  You know, has the bull Run even started?
• 57:00
  Guys, we're up 7X from the bottom.
• 57:01
  Yeah, it started, we're deep in it.
• 57:03
  So often the way that I try to break up the market structure
• 57:06
  and there's, there's various price models I use as like my
• 57:08
  thresholds for this. I would generally say that we're
• 57:13
  on the cusp of 1 foot in with stepped into.
• 57:16
  We're in that process of the euphoria phase.
• 57:19
  So and it may not feel like that and you may not believe that,
• 57:21
  but the underlying structure of the market certainly looks a lot
• 57:24
  more speculative. And this really started in April
• 57:28
  actually that April bottom that we put in everything up until
• 57:30
  that point I would say was like I actually couldn't construct a
• 57:33
  bear case. I really, really struggled
• 57:36
  because it was very healthy spot, very like the ETS were a
• 57:38
  big factor, MSTR was a big factor.
• 57:42
  There was a a very clear spot dominant market and open
• 57:45
  interest wasn't like it was increasing, but not
• 57:47
  aggressively. Since that April low, the
• 57:51
  derivatives have really crept up.
• 57:52
  We've got a lot more both options and futures.
• 57:55
  We're at all time or just off all time high.
• 57:58
  If you take all the open interest in the system and you
• 58:00
  compare it to the Bitcoin market cap as a size comparison, we've
• 58:04
  just blown out to new all time highs and it continues moving
• 58:06
  higher. So the market is now more
• 58:08
  speculative. You're seeing penny stocks with
• 58:10
  a cold card getting bit up by, by retail traders like all these
• 58:14
  treasury companies, Like there's, there's varying
• 58:16
  degrees, like everyone thinks they're a sailor, but sailor
• 58:20
  sailor, right, There's a, there's a very, very, and I can
• 58:23
  put as many varies as you want here, large gap between 620,000
• 58:27
  Bitcoin and six Bitcoin. There's a very, very large gap
• 58:30
  and most of these companies just ain't there.
• 58:33
  And there's a long way for them to get to where sailor is.
• 58:35
  So there's a lot of people willing to speculate on those
• 58:37
  smaller companies and that's fine.
• 58:40
  But it is just a, it's important to recognize that we're at that
• 58:44
  phase. We're at this phase where people
• 58:46
  are willing to take some stupid risks and the market can reward
• 58:50
  some questionable decisions and paint it and say it's actually
• 58:55
  the next coming of Sailor. And like in six months time
• 58:57
  you'd be looking at going, I was an idiot.
• 58:59
  So you just got to be careful with those kind of things.
• 59:00
  So we're there. I can see the explosive move
• 59:05
  once this thing gets going and once we kind of exhaust this
• 59:07
  100K zone of sellers. I mean, people who are buying at
• 59:12
  100K, they're not selling at 110, right, or 120 or 130.
• 59:16
  They're they're looking for a proper move.
• 59:18
  If we get to like the world is just mean reverting.
• 59:22
  You can choose whatever metric you want.
• 59:24
  There's they all kind of cluster around a similar ballpark.
• 59:27
  Once we get to 150 K, it's very, very possible.
• 59:29
  By the way, in a bull market, we would hit that level on all of
• 59:32
  these mean reversion metrics. 150 is totally in play, but
• 59:36
  we're starting to get to like the 10% tail.
• 59:38
  If you think about like a, you know the bell curve, if you
• 59:41
  think about the bell curve, the right hand side is like bull
• 59:43
  market extremes. 10% of all days have been higher than that.
• 59:47
  Once you get up to the 180 zone, we're talking about like sub 5%.
• 59:52
  So the odds of us we can get there, but we've only ever got
• 59:55
  there 5% of the time. So the way to think about this,
• 59:57
  the higher we go, the more the mean reversion models like a
• 1:00:02
  like a slingshot being stretched too far in One Direction.
• 1:00:05
  At some point it's just it's just gone too far.
• 1:00:07
  So unless the slingshot breaks, which is you not not not what
• 1:00:10
  you want to see, it's going to want to swing back towards the
• 1:00:13
  mean. Periods of chopped solidation
• 1:00:16
  are very good because they allow that mean.
• 1:00:18
  So you kind of pull the slingshot back, but then instead
• 1:00:20
  of letting the slingshot come back, you actually allow the
• 1:00:23
  your hand to de stress the thing.
• 1:00:25
  So you take tension out by allowing the means to come up.
• 1:00:28
  Could be the 200 day moving average.
• 1:00:30
  For example, you chop sideways for 200 days, the 200 day moving
• 1:00:33
  average is going to come right up to your level and you've
• 1:00:35
  actually de stressed that mean reversion model.
• 1:00:38
  So the longer it takes to get there, the more these price
• 1:00:41
  models can go higher. The more demand that comes in,
• 1:00:44
  the more these price models can go higher.
• 1:00:46
  But as it stands right now, one, 5010% of days are up there. 180,
• 1:00:52
  you're really in thin air. If you want the ultra moon math,
• 1:00:56
  sometimes we get to it 2.4 times the 200 day moving average.
• 1:00:59
  That's like 240K and if you wake up and it's a 240K, the odds are
• 1:01:05
  it ain't going to be there for very long.
• 1:01:07
  That's not a sustainable level. We can get there, but it
• 1:01:10
  probably not staying there. We'll get there eventually and
• 1:01:12
  stay there, but it's probably not going to happen tomorrow.
• 1:01:14
  Love it. Love it.
• 1:01:15
  OK, one one last question before maybe maybe we dunk on my friend
• 1:01:19
  real quick. How how long do you think?
• 1:01:23
  Like it sounds like you still kind of believe in cycle theory,
• 1:01:26
  but you're saying maybe these these kind of run upwards are
• 1:01:30
  elongated here. So do you think the cycle theory
• 1:01:34
  is still intact or are you going like, I think we're just going
• 1:01:37
  to kind of, you know, run up, chop sideways and it's like
• 1:01:41
  maybe a, you know, a longer four year cycle, which I, I mean just
• 1:01:46
  by saying that it, it broke the four year cycle.
• 1:01:48
  But that's what I hear people saying right now.
• 1:01:50
  It's like, no, it's going to be an elongated 4 year cycle and
• 1:01:52
  you're like, that's literally by definition breaking the four
• 1:01:56
  year cycle, right? Yeah, yeah, exactly.
• 1:01:57
  It's a, it's a good question. And like truthfully, I don't
• 1:01:59
  hold any, any views about how long the cycle should or could
• 1:02:02
  be overly strongly. I could probably look at all the
• 1:02:05
  information I've got and be like, show me when bull market
• 1:02:08
  things are ending and bear market things are starting.
• 1:02:11
  That's the way I look at it. Now what I will say is that this
• 1:02:14
  euphoric phase and as I said, we're probably like we've
• 1:02:16
  stepped into it. We haven't run into it yet.
• 1:02:18
  We're not sprinting, but once we're in this phase, as you all
• 1:02:22
  know, bull markets kept like euphoric bulls where it's just
• 1:02:25
  unstoppable upside. They just have a half life.
• 1:02:28
  They cannot keep going indefinitely.
• 1:02:30
  So this stair stepping stuff, go back and look at gold's price
• 1:02:34
  when they, you know, from the 2000s up to 2008 that just kept
• 1:02:38
  going like 2012 was just this long 8 year, 10 year long bull
• 1:02:42
  market. So these things can just keep
• 1:02:44
  happening for Bitcoin, we may be in one of those events and
• 1:02:47
  that's where like the bear market won't be as deep and it
• 1:02:49
  kind of breaks everyone's perception and like, have we
• 1:02:51
  stopped? Is it new cycle?
• 1:02:53
  I don't know. A lot of those things can
• 1:02:54
  happen, but euphoric phases. And This is why I often say to
• 1:02:58
  people, you actually don't want retail to come on board because
• 1:03:01
  now you've just subscribed yourself to a year and a half of
• 1:03:04
  horrible price action. You actually don't want that to
• 1:03:06
  happen. You want retail to stay as far
• 1:03:08
  away as possible because they have to be clueless because
• 1:03:11
  that's the end. That's then, it ends now.
• 1:03:13
  Yes, it's very exciting, but it's fleeting.
• 1:03:15
  It's brief. You don't want that.
• 1:03:17
  So you know that. That's how I think about it.
• 1:03:19
  I'm looking for the signs and my general framework is too many
• 1:03:22
  people buying too many coins are too high of a price.
• 1:03:25
  So what we see is that lots and lots of people buy lots of
• 1:03:28
  Bitcoin, which means people sold at the top, the price falls down
• 1:03:32
  below their cost basis and suddenly unrealized losses shoot
• 1:03:35
  through the roof. So far we haven't had an event
• 1:03:37
  where the losses get so high. I'm like, I think that just
• 1:03:40
  broke confidence. The best example I can give
• 1:03:43
  people who are probably going to recognize this, that sell off in
• 1:03:47
  mid 2021, the China mining ban, May 2021, that sell off, If you
• 1:03:52
  lived through that, you knew deep down in your gut that even
• 1:03:56
  though it bounced the new all time highs, you knew that
• 1:03:58
  something was wrong there. That sell off didn't feel right.
• 1:04:00
  It was angry, it was nasty and it shattered confidence.
• 1:04:03
  That is exactly what happened. The more I study that sell off,
• 1:04:07
  it killed the bull. Doesn't even matter that we went
• 1:04:09
  to one of the all time high. That bear market that followed
• 1:04:12
  was baked in the cake because confidence was just dead and the
• 1:04:14
  market never recovered from that.
• 1:04:16
  That sell off until FTX blew up. We have not had even remotely
• 1:04:20
  close anything like that. I'm waiting for that kind of
• 1:04:23
  event before I flip over and say, all right, guys, I think
• 1:04:26
  it's, I think it's cooked. Love it, dude.
• 1:04:29
  This is an incredible comment actually.
• 1:04:30
  Actually, I do want to dunk on my friend real quick.
• 1:04:32
  And everyone's like, why are you doing this?
• 1:04:34
  Because there is a point here. He was telling me he literally D
• 1:04:38
  texted me today. He's like, you know, doing some
• 1:04:40
  TA chart stuff. It's like I told you it was
• 1:04:43
  going to drop and I'm going to sell some right here.
• 1:04:45
  So to people that are thinking right now, you know, I'm going
• 1:04:49
  to ape out of this thing. What would be your advice?
• 1:04:52
  Well, first of all, this isn't financial advice.
• 1:04:54
  You know, we're not doing that, but just so I can dunk on my
• 1:04:58
  friend who is telling me I told you this was going to dump.
• 1:05:02
  It's over, bro. Next leg up I'm selling out and
• 1:05:05
  I'm like no. Why would you do this?
• 1:05:08
  Yeah, I've got 2 points for this.
• 1:05:09
  The first one, which I find very funny, we were over in Nashville
• 1:05:13
  for the conference last year and I did my talk and it was
• 1:05:17
  specifically on this topic. I went back and looked at.
• 1:05:20
  I took away all the axes. So you don't know what the
• 1:05:21
  metric is and I showed an on chain metric and me buying the
• 1:05:25
  top in 2017 selling the bottom on the first sell for thinking
• 1:05:29
  don't worry I'll buy it back lower buying the next top.
• 1:05:32
  So I put my personal buys and how perfectly incorrect I was,
• 1:05:37
  and then I bring in the metric that I was talking that I now
• 1:05:39
  understand what it is showing me selling at a loss, thinking I'm
• 1:05:43
  a genius, buying in profit because I found some new
• 1:05:45
  indicator that told me we were going to the moon selling it
• 1:05:47
  again because I realized I'm an idiot and just like getting
• 1:05:49
  everything perfectly wrong. So I now I now look at that and
• 1:05:51
  go, I'm going to do the opposite of my 2018 self.
• 1:05:54
  And The funny thing about that talk is sailor was all at the
• 1:05:56
  same time. So as you can imagine, I had
• 1:05:59
  eight people in my room. It was a very Andreas
• 1:06:01
  Antonopoulos moment. I'm talking to 8 people and
• 1:06:04
  sailors got a crowd of, you know, the whole room telling
• 1:06:06
  them it's going to going to 13 million.
• 1:06:08
  Like, by the way guys, which one's more actionable and
• 1:06:10
  useful? You know, like, I know it's gone
• 1:06:13
  to 13 million, but like, when? OK, yeah.
• 1:06:16
  So there's that kind of component.
• 1:06:18
  And then, sorry, remind me your friend was talking about like
• 1:06:21
  selling and buying back like. A char and it dumped and he did
• 1:06:25
  like a you know it's going to have another leg up and this is
• 1:06:28
  what you sell on this part and then it's going down and I'm
• 1:06:32
  like. Good luck.
• 1:06:32
  So so the statistics show the the stats show that Bitcoin goes
• 1:06:36
  and this is what happens with these day traders.
• 1:06:37
  This is why they get wrecked. The stats show if you look at
• 1:06:40
  where the Bitcoin price goes on a daily basis, 40% of the time
• 1:06:45
  it doesn't go ±1% in either direction.
• 1:06:47
  If you can believe it, for almost half the time, it doesn't
• 1:06:50
  go in either direction anywhere. 30% of the time it goes up, 30%
• 1:06:53
  of the time it goes, it goes down ±1%.
• 1:06:56
  So now think about a day trader. They go levered long, right?
• 1:07:00
  There's a 70% chance that it's going to go sideways or down.
• 1:07:03
  And in both of those instances, they lose because they lose by
• 1:07:05
  funding rates or they lose because it went below their cost
• 1:07:08
  basis. They've already got a 30% chance
• 1:07:10
  that they're going to win one in three, less than one in three.
• 1:07:13
  That's a really shitty odd. But now if you take that exact
• 1:07:17
  same study and you do it on a quarterly basis, it massively
• 1:07:20
  fused to the upside. So what happens is most of the
• 1:07:23
  time Bitcoin goes nowhere, chop solid 8 in 1/4.
• 1:07:27
  And every so often there's a 100% plus quarter.
• 1:07:31
  And if you're chopping around and thinking you're a genius
• 1:07:34
  trying to get in and out of this market cycle and be like, oh,
• 1:07:36
  don't worry, I'll buy it back later.
• 1:07:38
  I actually ran this study. It's not a perfect study, but it
• 1:07:40
  gives you a good example. I looked at all the previous
• 1:07:43
  market bulls and I removed the 10 best days.
• 1:07:48
  So this is your day trading. You get out of the market and
• 1:07:50
  then we just have one of those green candles.
• 1:07:52
  You're like, oh shit, I missed it.
• 1:07:54
  If you miss the best 10 days, you're flat or down on the
• 1:07:58
  entire market cycle. So every red candle you go
• 1:08:01
  through, every sideways boring candle, you go through all the
• 1:08:04
  ups and downs and highs and lows.
• 1:08:07
  You missed those 10 best days. You actually missed the entire
• 1:08:10
  Bitcoin cycle. What are you trading around it
• 1:08:13
  for? Are you going to pick those
• 1:08:14
  exact 10 days to like get out before and get in?
• 1:08:17
  And then by the way, if you do the opposite and you try like,
• 1:08:20
  why are you day trading? Because you want to miss the 10
• 1:08:22
  worst days. So to the trade off here is that
• 1:08:26
  the market cycle might go up 10X or 6X, whatever it is, we're up
• 1:08:30
  7X from the bottom. So you might go up 6X7X if you
• 1:08:34
  just missed the 10 worst days, you're up like 10X.
• 1:08:37
  OK, that's great. That's obviously a much better
• 1:08:40
  return. But you're risking an actual
• 1:08:42
  literal 0 for the last five years in order to get that extra
• 1:08:46
  cream on top. Just sit and hold with Bitcoin,
• 1:08:49
  guys, What are you doing? And the last thing I'll leave
• 1:08:51
  people with if you, because there are going to be people out
• 1:08:54
  there who do want to take profits and that's probably
• 1:08:56
  totally OK. Make your plan and have your
• 1:09:00
  decision framework for when that's going to happen.
• 1:09:02
  What price levels where you actually do want to do anything,
• 1:09:05
  buy or sell, whatever. Write it down right now while
• 1:09:08
  the price is going sideways and doing nothing, while you're
• 1:09:11
  cool, while you're calm. The worst thing you can possibly
• 1:09:14
  do is when the market is ripping or waterfall selling off, adjust
• 1:09:19
  your plan. Don't do it.
• 1:09:20
  Follow your plan because you're making that decision right now.
• 1:09:23
  When you're actually thinking clearly in the heat of the
• 1:09:26
  moment, you will adjust your plan and you will end up making
• 1:09:29
  bad decisions. And most of the time that's
• 1:09:31
  actually lump sum in way too much money at the top because
• 1:09:34
  you think it's going up forever, Laura.
• 1:09:36
  It is going up forever, Laura, but it also goes down a lot and
• 1:09:39
  it goes sideways even more so like don't make a decision in
• 1:09:43
  the heat of the moment. Write it down now.
• 1:09:45
  Have a plan and stick to it. Do not trust your euphoric or
• 1:09:49
  your terrified self because you will make bad decisions by
• 1:09:51
  comparison. Well, James, I think this is a
• 1:09:54
  great combo. I learned a lot.
• 1:09:56
  I know the audience learned a lot.
• 1:09:57
  It really kind of confirmed a lot of the intuitive feelings
• 1:10:01
  that I have here. And I'm like, OK.
• 1:10:03
  Man, first you go. Yeah, it's like you're, you're
• 1:10:05
  right side of the bell curve, baby.
• 1:10:06
  I'm like left side of the bell curve.
• 1:10:08
  And I'm like, hey, I'm not, you know, I'm at least I'm not a
• 1:10:10
  midwin here and I'm not trying to day trade.
• 1:10:13
  The midwin is the majority, by the way.
• 1:10:15
  That's the whole point of the you want to be on either tail,
• 1:10:18
  right? And the midwin thinks they can
• 1:10:19
  trade this thing. The Jedi and the and the Grug,
• 1:10:23
  they're both like Bitcoin. Good orange coin, good number,
• 1:10:25
  go up. Just just orange coin, good
• 1:10:27
  number, go up. Sit tight.
• 1:10:28
  Orange coin good not selling. This is the way.
• 1:10:31
  Well, James, check AKA check maybe on Twitter.
• 1:10:34
  Guys, if you like what James is saying, I'm going to have to
• 1:10:38
  plug your newsletter. Go to check on chain.com, join
• 1:10:41
  the newsletter. You're giving this this type of
• 1:10:44
  insights constantly and I think the people should follow along.
• 1:10:47
  So James, thank you so much for coming on today, guys.
• 1:10:51
  I'm sure you learned a lot. Probably rewind this video and
• 1:10:54
  watch it again because there was a lot in there so.
• 1:10:57
  I have one more tint that I think is let's carry.
• 1:11:01
  A lot of people ask me what I'm going to do this cycle and I'm,
• 1:11:04
  I'm very honest. I tell everyone what I do in my
• 1:11:05
  newsletter. My approach is like what at the
• 1:11:09
  end of the day, what do I not want to do?
• 1:11:10
  I've been around Bitcoin long enough.
• 1:11:11
  I don't want to buy the top again.
• 1:11:12
  I don't want to buy everything at the top again.
• 1:11:14
  Like I've done that. I've done it multiple times.
• 1:11:16
  It's, it sucks, yes, it's great in the long time, but like,
• 1:11:19
  imagine if I didn't do that, I'd be better off.
• 1:11:21
  So what is the end result here? If I don't want to sell my
• 1:11:24
  Bitcoin, there's a point in my model.
• 1:11:26
  So my decision, what I've written down, I'm just going to
• 1:11:28
  stop buying. I was going to stop, turn off my
• 1:11:30
  DCA when the market's over here, I'm just going to stop buying
• 1:11:33
  because then what do I end up with?
• 1:11:35
  I keep all the coin that I've already bought and I have spare
• 1:11:38
  cash. It's literally like selling
• 1:11:40
  minus the any tax liability. It's the best thing to do.
• 1:11:42
  So that's my plan. My plan is I'm just not going to
• 1:11:45
  buy as much at the top. Like that's, that's a perfectly
• 1:11:48
  valid plan. So that's another way to think
• 1:11:50
  about this stuff, right? You don't actually have to sell.
• 1:11:52
  You can also just like not buy and that's there's nothing wrong
• 1:11:55
  with that. Dude, that's blasphemy telling
• 1:11:58
  bitcoiners not to buy Bitcoin. But then you can buy more later
• 1:12:01
  on. That's but you.
• 1:12:02
  Can buy more later on. Because you've all done this
• 1:12:05
  before. You don't want to be 58 K gang.
• 1:12:08
  Like if it's 580K gang like strapping fellas, it's going to
• 1:12:11
  be a long ride. Yeah, if it's 580K gang, you
• 1:12:15
  know, just start buying maybe a little bit and you have more
• 1:12:17
  money when it comes back down. It's it's kind of a no brainer.
• 1:12:20
  All right, James, that was awesome.
• 1:12:22
  I'm sure the audience loved that.
• 1:12:23
  Really appreciate it guys. You already know the deal simply
• 1:12:27
  Bitcoin IRL. Go check out our live show.
• 1:12:30
  Go check out all our other content.
• 1:12:32
  We are simply Bitcoin. We'll see you next time.