Benjamin Cowen Assesses the Crypto Bull Market

Transcript

hey bankless nation welcome to another episode of state of the nation this is the episode where david and i get into the charts well not just david and i we brought a special guest who did we bring on today's state of the nation david yeah benjamin cowan from into the cryptoverse who is my favorite charter when i go and decide this time to look at the charts and kind of just want to get myself grounded as to where we are in the world and charting it's this interesting word right charting as in like you know the the candles that you see on on a chart but charting is also like charting a course and like navigating a course and so uh on the inevitable uh metaphor of going westward we're bringing in our cartographer to help us map out where we are

in the world of the markets where are we in this markets market cycle are there cycles even more at all uh so we're gonna ask some pretty broad questions uh to ben our our resident cartographer as to where we are in the world of these charts yeah and i i don't look at charts very often it's kind of but it's i do enjoy it it's kind of like candy to me david so it's like i you know i i touch it sparingly or else i'll over indulge myself um but what i love about ben's work is that he looks at the uh kind of the macro market cycle as well so it's not just like what are we doing on the daily or what's the weekly looking but like big picture where are we in this long-term trend so i know we're going to talk about that i know we're going to

talk about cycles i know we're going to talk about the dip that we have experienced just like right now as we're recording this and then i know we're going to talk about the close of 2021 because this is almost a year wrapped up and then what 2022 will bring everyone is curious about that um david we've also got some news in the bankless nation so we dropped an episode with former cftc chair crypto dad chris john carlo the guy who brought us bitcoin futures made a lot of this possible just a fantastic episode it was uh i i think you said the most dad episode ever that we've done on bankless and that's because chris has all of this fantastic fatherly advice that he was uh imbuing on the bankless nation on crypto and you

know and um also he had some great insights from being in the trenches being a regulator so make sure you catch that episode also david you did an episode with g money who's a traitor kind of a chartist himself i listened to that this morning it was fantastic what's the the preview of that episode yeah gmoney is this guy that's just exploded onto this nft scene he's the famous knitted cap ape on crypto twitter uh and really got left uh left crypto after 2017 2018 unlike unlike a lot of people that stuck it through the bear market he was like nah this is this is too crazy i'm gonna leave it's too long he's coming he comes right back right at the start of defy summer the perfect time to just get back into it uh and then ends up

going through d5 and then down the nft rabbit hole and overall i think it's a story of a guy who was focused on trad five markets and then got into crypto and then into nfts and it's also a story of like culture progression where there was zero culture in tradify a decent amount of culture and defy and a ton of culture in nf2 nft so while this guy's story is progressing along different markets it's also closer and closer towards culture and of course that is always where we finish off with every layer zero yeah we'll talk about a guy always being at the right place at the right time too his timing is just impeccable it's really a really cool story um also guys we want to tell you about our friends at opla so they've sponsored this message and want us to let you know

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for the same healthcare and we can all be unified under one single healthcare plan so that's the idea behind opolis yeah check that out at bankless.cc slash opolis that's i o-p-o-l-i-s uh all right david i'm gonna ask you the question what is the state of the nation this week friend yeah i already leaked it a little bit but we are charting we are charting a course the charts always go to the right so when we keep on going right what is out there are there monsters out there would that be lurking in the seas like i said ben is a is a cartographer uh and he's a the actual title is the technical analysis uh quant um but in the world of crypto where we have a frontiers to explore he is our cartographer that's

going to hopefully illustrate what might might be ahead of us as we wrap up 2021 and what might be in store for us with 2022. uh we shall see well guys i'm really excited to hear what ben has to say about this because i don't know what's in store for the next month or the next three months i have a fairly good picture of where we're gonna head in the end destination but not sure uh you know apart from that so uh we will be right back with ben but before we do we want to thank the sponsors that made this episode possible arbitram is an ethereum scaling solution that's going to completely change how we use d5 and now it's live with over 100 projects deployed gas fees on the ethereum l1 sucks too many people want to use ethereum and it doesn't have enough

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many defy applications that are on the ethereum layer one are migrating over to layer twos like arbitrary and some are even skipping over layer ones and deploying directly on layer twos there are so many apps coming online to arbitrarily so go to bridge.obertrum.io and start bridging over your ether or any of the tokens listed and start having a defy experience that you've always wanted living a bankless life requires taking control over your own private keys not your keys not your crypto that's why so many in the bankless nation already have their ledger hardware wallet which makes proper private key management a breeze but the ledger ecosystem is much more than just a secure hardware wallet ledger is the combination of the ledger hardware wallet and the ledger live app and if you're used to seeing all of your

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live and get all of your defy apps all in one space all right guys we are back with ben cowan from into the cryptoverse ben is a prolific charter he's a prolific youtuber and also a prolific live streamer which is perfect because that is exactly what we are doing today ben welcome to the show it's a pleasure to be here thanks for inviting me on excited to dive into the charts with you guys yeah yeah but before we get in there let's can we talk about what it's like to to become knowledgeable in charting what's the what's the background that you have that uh makes you so good at this so i don't i mean i don't even necessarily know that i would say that i have a background in in like your traditional technical analysis like a lot of that stuff i honestly don't even

really know or put too much meridian in the first place especially on the shorter time frames um but so yeah my background i have a bachelor's in mathematics a phd in engineering nuclear engineering and i you know after that i worked as a postdoc and a staff scientist at a national lab and i started doing this stuff you know in 2019 in fact uh one year after i'd started my postdoc and i i thought it'd be interesting to sort of navigate the cryptoverse in a more quantitative perspective uh not not your typical like head and shoulders or um that kind of stuff which i don't really put too much weight in the first place and i i thought it might be cool

to try to more like look at it from a sense of like data science right and you're sort of mining long-term trends in the market that kind of stuff and and then yeah like it it the channel took off and then i ended up quitting my job um and yeah i've just been doing this full-time since january actually of this year so congrats on that ben you've got a fantastic channel uh 600 over 600 000 subscribers at this point in time so some absolutely massive growth um congrats on all the success and i'm curious like why crypto of course you could apply these skills in other industries why did crypto draw you in yeah so crypto drew me in because when i was back in 2010 i i was getting my

undergrad in mathematics and in the spring semester of my junior year i believe um i i took a a class in cryptography actually and uh in the because i was doing a math major and it was one of the electives and i they didn't i mean it's not like they taught us about bitcoin back in 2010 but naturally if you're if you're learning about cryptography i i saw bitcoin um and then i started to follow it some i didn't invest in it at the time unfortunately um uh but then i followed it a lot and then i really was following it while i was in grad school uh just because i thought it was a really cool alternative to you know to to the traditional banking system that we have and and thinking

that bitcoin is basically the soundest money and then you also have ethereum which i i'd more or less just consider them to be the blue chip cryptocurrencies bitcoin and ethereum um and i i saw a lot of people get burned in in 2017 2018 um and i was like all right well you know there's got to be a better way for people to navigate this stuff than just blindly blindly throw their money in uh in a in a bubble mania phase and then basically cash out at the worst possible time and then only to return again at the worst possible time to get um so that was sort of the goal was to say all right well let's let's come up with a method to the madness uh which actually i guess at the end of the day will will

probably help reduce volatility in the crypto space but um yeah that's sort of the back story before one more question before we dive in into the charts ben would you say that you kind of have developed your own style of looking at the charts or have you followed in the footsteps of you know experts that have come before you or is there some sort of um actual like you know history to your style or did you kind of make it up yourself i mean i i i think some of it i made up myself but it's not like everything i do is it's not like i'm the first person to do all the different types of analysis you see i mean i imagine you know you're going to have clients on wall street that are probably doing you know they're probably mining data as well and trying

to look at long-term trends some of the stuff we looked at are like sharp ratios ortina ratios that kind of stuff which is basically looking at your risk adjusted returns of course people are going to do that that's been you know that's that's just sort of classical theory and developed decades ago uh i mean i'm certainly not the first person to look at a logarithmic regression but i i think you know i i think when you when you look at all this stuff and you put it all together and and you mine the data and you look at say the trends between one crypto like bitcoin and then another one like ethereum you can sort of tell you can kind of tell a cohesive story that makes a lot more sense than than trying to say you know what's going to happen today or tomorrow

because i don't i mean i don't know what's going to happen no one does uh i mean not only does no one know what's going to happen tomorrow we don't know what's going to happen next year either but at least we can try to come up with a plan on how to navigate the crypto space uh really no matter what happens is i mean that's the ideal goal well you you said it and i'll say it again no one knows what's happening all these things are just models or predictive models uh but now that that is out of the way ben let's go into the charts so we can try and figure out what actually happened what's going to happen next yeah what's going to happen what's going to happen so yeah so the first question i have is like uh the concept of market cycles

where are we in this current market cycle does the concept of a cycle still exist uh and if it does still exist how do we know where we're at in the cycle are these all fair questions to ask i think it is a fair question and i i think the definition of market cycle is somewhat ambiguous and i think this is it's basically one of those things where the longer we go you know the longer the cryptocurrency asset class is around the harder it's going to be to discern from one market cycle to another um and then you can start questioning well what even is a market cycle what constitutes the market cycle does it have to be an 80 drop is it you know is if the definition is just all right well if if the asset class drops by 80 then you

have a new cycle some people prefer to measure it by the habit right and a lot of people like to measure it by the bitcoin having the problem i have with measuring it from the having is that you know like a lot of times bitcoin can rally significantly ahead of the having and so then you kind of miss out on what happened before then you can also measure it from potentially like a market cycle bottom but you know if you measure if you measure the the roi of bitcoin from the market cycle bottom you get a nice chart that looks like this um of course one of the issues is again there is some ambiguity and what constitutes a cycle because if you just said it's an 80 drop then you could argue that 2013 is two separate cycles you know you could say well this is a

this is a one cycle and then this is another cycle uh so there i think there is some subjectivity there so again it's not something i think you can take to the bank or anything but if you were to allow yourself some subjectivity in what you would constitute a market cycle and say well the first one is more or less the 2011 cycle where we basically just went straight up and then we came straight back down uh then we had the 2013 double peak cycle the 2017 cycle which i'm sure a lot of people are are familiar with at this point and then um and then we also have the uh the most recent cycle and sorry if there's a lot of background noise right now there's someone blowing leaves right outside my my window um but we're currently in the in the 2020 2021 2019

cycle it and one of the things we've discussed is well how do you know where you are in a cycle and one thing you know there are a lot of people that are calling for these crazy moonshot predictions for bitcoin you know right now right like literally like as we as we speak they're calling for these crazy media moves to begin and take us into the very end of the year followed by a year-long bear market and and i think the problem with that is it's it's very deterministic it also gives people i think people are giving themselves too much credit and thinking that they know exactly what's going to happen in the market um to say that everyone thinks that you know it's going to just go to 100k or 300k by the end of the year that's really not how

markets work you know if if a lot of people are expecting something then people are going to front run that and then there's going to be more people that try to front run the people that front run it and then therefore it sort of doesn't really happen it's sort of the same thing that happened in april you know i i was looking at this chart back in april and i i thought look guys this is great and and krypto is doing really well but we're also in terms of the cycle roi we're ahead of schedule and it would make sense for us to have a cool down phase that should last at least three to six months at the very least now the other interesting thing is when you look at these cycles a lot of people assume again they have to happen every four

years a lot of that's built around the bitcoin having but i would argue that if you if you really mind the data and look at it from say market cycle bottom you could easily argue that look the cycles link them right and i think it makes sense that they linked it because every cycle there's more to speculate on right 2011 and 2013 there wasn't really a whole lot to speculate on other than those you know initial sort of narratives about about what bitcoin was and and and you know it's ultimately going to be you know the the it's going to overtake gold and whatnot but then in 2017 you had more to speculate on right you had the ico craze that ethereum brought us and and unfortunately 99 of those were were outright scams uh and and i think

therefore you know people wised up to that and then by the end of 2017 early 2018 you know i think people sort of realize they're throwing all their money into these icos that are essentially just false promises you know some someone with with some basic experience on how to spin up a wordpress site and mint an erc20 token we're promising the the next best thing and it became abundantly clear that a lot of these people were just blowing smoke right and we were we were nowhere close to where they wanted us to be and then you fast forward to this cycle and this cycle is even more it's different in the sense that you you actually have something to speculate on right you have you have decentralized finance right you have all these centralized platforms

that that a lot of people like to use and i mean i get that a lot of people are are anti-centralized stuff but look a lot of people in the world don't want the responsibility of managing their own crypto and that's just the way it is and so there's going to be some centralized platforms and whatnot um but you also have institutions coming into the space not that there weren't any institutions back then necessarily but the narrative this time is certainly stronger than it was last time so i think from a fundamental perspective it makes sense that the cycles should lengthen and then technically speaking from a market capitalization perspective it's going to be hard to push the price of bitcoin another 10x right everyone wants to promise it's going to go up another 10x or another 100x but the truth is is every cycle so far we've

seen diminishing returns and and that's sort of a buzzword that that people don't really like to hear but again even in crypto the returns that you're going to see with you know with assets like bitcoin and ethereum and all coins while while even though even though they may be technically diminished from what was possible in prior cycles you're still likely experiencing returns far greater than you can find in most other asset classes if you take ethereum it was at 80 bucks what 18 months ago and today it's trading for over 4 thousand dollars and technically speaking we are nowhere i mean we're still very much in diminished territory right i mean a one thousand dollar investment into ethereum back in november of 2015 would have been worth two or three million dollars by january of 2018. so that gives you an idea of you know

ethereum can still go up a lot and still experience diminishing returns so i i think it makes sense from a lot of a lot you know from a fundamental perspective from a technical perspective it just seems like it's going to take more time a lot more capital to push you know to continue pushing the price further and further up the curve and therefore you know you look at the chart and i know a lot of people think that we have to end the cycle now a lot of people thought it was over in april a lot of people thought it was over in september um you know because of some various metrics but i look at the chart and say i think we still have a long way to go and i don't think there's any reason it has to end this year the only reason i

think it would end this year is if is if bitcoin went parabolic in the next six weeks right and and i don't think it's going to go to you know 200 000 or something in the next six weeks um therefore i think it's likely that we we still have a ways to go so ben when i see this chart two questions pop up for me because let me ask the first one uh first so what we're seeing is a chart with uh four cycles here we are in the fourth cycle you are you are maybe predicting or contemplating longer cycles for each and indeed this is getting close to the longest cycle and maybe it doesn't peak at um the the place that the other three cycles did but this is um also a chart i believe is this just uh bitcoin

is this just plotting bitcoin is this okay so this is a bitcoin let me ask about that assumption so obviously that was the assumption in the first cycle in the second cycle it was heavy bitcoin maybe in the third cycle in the fourth cycle do we still think bitcoin is the only crypto asset to watch or the primary one to watch why chart bitcoin rather than total market cap of all crypto for instance yeah that's a great question and i i think i think it's important to do both i do think that bitcoin controls the market um you know i know people don't like that and it's not it doesn't mean that if bitcoin goes up everything else has to go up it just means that if bitcoin is healthy then the rest of the

market is free to fly right like look at the last few weeks with bitcoin more or less i mean bitcoin's gone sideways for the last month aetherium has been trending higher we know that if bitcoin is going sideways above its 20-week moving average then a lot of a lot of other cryptocurrencies are are free to run they don't have to stay stagnant just because bitcoin is staying stagnant but if bitcoin is say below the 20 week moving average or you know if it's trending down then what happens is a lot of the off value of the altcoin bitcoin pairs they trend down as well um so not only are you losing money in terms of your your usd valuation of your off points but you're you're losing valuation in terms of what it's what it's worth in bitcoin is if you had converted it all to bitcoin how much

bitcoin would it be worth and i i like to say that that you know it's important to to sort of know where bitcoin is because if we think bitcoin is getting to the end of a cycle and it's going to go down 70 or something over the course of a year then it's going to very likely drag you know 99.9 of the market with it right there's always going to be a couple coins that that do well during the bear market uh but for the most part that's where where a lot of assets go down but you know you ask a good question and and we can look at the total cryptocurrency market capitalization as well so you know this is the the total crypto market count and you can see that last cycle we made it to just below one trillion in terms of the market

capitalization so far this cycle we've been able to break around three trillion right so this one i believe it was around 840 850 i don't remember exactly what it was but and it depends on what what what website you use but we were somewhere over 800 billion so far this cycle we've reached around 3 trillion you know i would argue that we still have a ways to go i'd like to see us hit the top of this you know this logarithmic regression channel and i i think this is sort of one of those things that can help try to provide some guidance to say look you know even though bitcoin you know there could be some evidence that as as the bears have pointed out back in in august when they said all right this is just going to be

a dead cat bounce and we're going to go back down i i think that you can look at the total crypto market cap and say well it still seems like we have a lot of juice left in us but we're not going to we're not going to expend all that energy and say the next two months it's going to take a lot of time for us to really get to the top of that curve and so it it sort of brings in the idea again lengthening cycles and if you if you take the percent difference between the the total crypto market cap which is the white line and then the fair value logarithmic regression trend line which is the red line note again this is a key concept i think that i i really fail i i fail in my end to explain it properly a

lot of times the red line monotonically increases right so it only goes up it doesn't go down so what that means is that the fair value of the asset class as a whole is trending higher and and the only thing changing is how far are we overvalued from the fair value or how far are we undervalued from the fair value and the bear markets are when we're below the line right when we're below the red line that's really where the bear markets are and and that's honestly that's the best time to accumulate crypto you know i mean are people accumulating crypto now of course they are i'm even accumulating you know various cryptocurrencies right now but right now is not the best time to accumulate it might be the best time you

know for you know over a certain time period depending on what your time preference is but the best time is always in the bear market and that was back over here uh you know one to two years ago this was the best time to sort of load up and then now we're sort of in this overvaluation territory but i wouldn't say that just because we're overvalued it means we have to go back down there there's been plenty of examples in the past where we stayed overvalued for for years before going back down to the undervaluation um area and so if you take the percent difference between the white line and the red line and then we shift it by 100 just so we get the undervaluation right here this is what it looks like and so you can kind of see that all right well

as as time goes on we you know the the extension from the fair value is diminished okay so like if you were to go over here and measure the percent difference between the white line at the peak to the red line it's further than this one to here or this one to here and so the argument then becomes well it's likely that the final market cycle peak extension from the fair value it's probably higher than where we currently are but it's probably going to be technically diminished from the fair value compared to the prior market cycle peaks okay now one more interesting observation on this chart is that despite the fact that we are at a higher market capitalization now than we were

back in april we're not as overvalued now as we were back in april and the reason is because our reference point is the red line and the red line used to be you know the the fair value used to be 700 or 800 billion but now the fair value is 1.09 trillion so it's all in reference to what the fair value is and again the fair value is turning higher and you can see you know in in several more years the fair value will be five trillion right the fight for the entire asset class and so it just slowly trims up with time so i i think the question about do you just look at bitcoin it's a good question i think you really should look more than just at bitcoin there's there's a lot of other assets that that are going to grow i think ethereum is is one of the

the biggest ones that's going to do very very well and so i do think it would be a mistake to sort of just look at bitcoin and that's it with that said i think it is important to have charts where you do look at bitcoin so that you can kind of figure out where it is in its life cycle or in its market cycle it's fantastic information ben so my my second question on that cycles chart is is just a question about the concept of cycles okay so some people and i think people maybe say this every cycle like this is this cycle is the end of all cycles this cycle is the the super cycle and we might have dips but we're never going to see the sorts of cycles we we did uh in the past what's what's your i guess reply to people who

believe in the super cycle and you're thinking in terms of a fourth cycle here do you do you lend any merit to that any credence to that well i think a lot of it is sort of like what's the definition of a super cycle i a lot of people say things like well you know to assume that the cycle is going to go in 20 into 2022 is assuming that this time is different right and and a lot of times you know the the the implication of anyone ever saying this time is different is usually they get it doesn't work out so so well for them because a lot of times it's not like this time is not different right it it tends to repeat but i i my retort to the statement this time is different is to say this time would be different if the peak

occurred in december because the prior peaks as we can see have technically lengthened from market cycle bottom right there's several hundred days longer for cycle two than cycle one and and even even cycle three was a couple hundred days longer than cycle two so to assume that the peak has to occur in say december that would actually be assuming that this time is different there and i know that that a lot of people are probably not going to agree with that but that's what i think i think the obvious trend is that the cycles are lengthening and so that's my that's what i think is going to happen i think ultimately the cycles are going to lengthen and and

we're going to go much further out so i i think the question though going back to super cycle is what constitutes a super cycle you know if the if the if the cycle were to extend another year does that mean it's a super cycle i don't i don't i would not consider that a super cycle i think the idea of a super cycle right as you said it's just it's just going to go up and we're occasionally going to get some pullbacks but the the general direction from here on out is up i would disagree i think the general direction is up for a while uh but eventually we are going to hit a market cycle peak and there's probably going to be a whole lot of fun that comes with it you know it could be government intervention or you know government bans or attempted bans um

regulation risk right i don't know you know and a lot of us don't really know what it's going to be yet um but i mean stable coins that's another thing right so but there's always going to be something that that i think is going to to create another bear market and i think to the other point is even this even this year we saw a 55 drop right so we clearly know crypto is capable of dropping 55 we know if you go back to 2020 uh 2020 we saw it drop what 60 70 percent in just a matter of weeks i mean everyone everyone got a rude awakening that morning back in you know march 12th march 13th of 2020 when everyone woke up and their entire portfolio was down 60

basically overnight so i i think the idea that we're never going to experience another bear market is is probably probably wishful thinking it's probably not we probably will have a future bear market um but i also think bear markets tend to strike when people you know they probably aren't going to think they're going to strike um so it could we could get into this phase where everyone kind of just gets into this mood of all right yeah like we're it's a super cycle we're just going to trend up forever and then we could have a brutal you know one or two year bear market uh you know later this decade and it could really sober sober some people up on on the idea that it's only ever going to go up

uh i would say the idea of a super cycle i i think we will have future bear markets but i i do think the cycle will link them with regards to these lengthening lengthening cycles this whole market cycle thing inside of crypto has turned into a total meme it's like oh where are we in the cycle like i i asked this is the first question i asked on the show like the cycle the cycle the cycles and cycles are not really something that you see in legacy markets right like they don't talk about like oh where are we in the market cycle when it comes to like your equities portfolio and so as and especially as we can see these bitcoin charts one is just like very aggressively vertical orange not so aggressively but still very vertical yellow and purple more modest and the

idea is like these things like don't aren't so vertical over time and said they're more horizontal right implying that the market cycles are getting longer at some point it's a logical conclusion of these lengthening markets cycles just turns into the market and we can just remove the whole cycle word from this yeah yeah i think so i eventually eventually we're gonna get to the point where you can imagine that the the slope on a theoretical cycle is just it's not going to be very far removed from the from the x-axis right um and so at that point you could argue that it's more or less just an another typical asset class like the stock market like precious metals like commodities whatever it might be um and that you're going to have you're

going to see it probably generally trend up with time but you know i don't think you can just point towards something like the having or a market or you know what you might call a market bottoms alright well it has to turn up for the next eight years or something because you know at some point at some point you know if if the idea of lengthening cycles continues to play out right the first cycle was you know uh a few hundred day like you know 200 something days this one was like seven or eight hundred days the third one was over a thousand days if this one ends up being 13 1400 days you know eventually you get to the point where if if a cycle lasts like 2 000 days you know what what is how useful is that information if there's still going to be

two or three 60 drops along the way um so i do agree that i i think eventually the whole idea of of market cycles will uh tend to go away but i i still think we're in the phase where we could probably say look there's going to be a bear market at some point and it will it will distinguish kind of the phase that we're in right now uh to the next phase like i think a lot of people can agree that 2018 more or less separated last cycle like the cycle before this one uh because it was just a brutal bear market and basically anyone that wasn't super interested in crypto completely left his face right um i think we will get another year like that another interesting chart by the

way is is to look at this chart on a linear scale and it really shows you the idea of diminishing returns and it's also one of those things too where like you know people people paint me out to be the bad guy if you're saying like all diminishing returns right but it's i think it's something that it makes sense from a fundamental perspective and you can use it to your advantage in fact um to to to assume that the cycle can't outperform the prior cycle right and if it does then i mean look there's always a possibility but i think that it really goes to show you how how close we are already getting to the x-axis when you look at it on a linear scale and look at

at prior market cycles i mean the first one was up like 700 x or something this this one's at 500 x this one was up like you know 110 120 x or so and so each of these times you see this parabolic move right at the very end that leads into the market cycle peak and then here's the other one that leads into the microscope peak here's the third one that leads into the market cycle peak the purple line the the last two or three years of all this bitcoin volatility is summed up in the purple line that you can essentially barely distinguish on this chart so that gives you an idea of what diminishing returns means because again if we weren't experiencing diminishing returns if we were following say cycle two

then we should have already been at two million dollars last year you know but we're not and and so eventually i would expect this purple line to you know i think it's gonna go past past this point right because i mean this one would pass this one this one test this one so i would say eventually you know i imagine it will turn up and then that will be the market cycle peak but i would probably assume that it won't make it to the same roi that the last cycle made it to on these things are so clear whereas you can point to every single one and and so i'll let ryan answer ask his question but i also want to pick your brain as to whether you think a blow off top is inevitable yeah that's a great question yeah why

don't you answer that and then i'll i'll do mine so what do you think about the blow off the top ben that's an interesting question if you you know back in april everyone was saying like yes a lot of people were calling for they they were saying like oh this can't be the top right you know at the top we don't just go sideways for three months right um but i i think the the issue was is i think part of it is the market is maturing and and people want to front run what they think is the market cycle peak um and so rather than get this mania phase we actually got a more distribution like phase i still think there is a decent probability that we will have a blow off top um and but it's i don't think it's going to

happen this year that's the thing i don't think it's going to be this year um i think we have a ways to go but i i think that it'll will likely have a blow off top because at some point i i think bitcoin's gonna break 100k and and then above that i think that's where retail fomo comes back in you know i've looked at my youtube statistics and and my daily views are are nowhere close to where they were back in back in april and may and so when i when i look at when i look at that maybe i can actually pull it up here when i when i look at that i say look there's a there's a decent chance that the money in the crypto space right now

is not new money it's it's just it's all of us you know the people that have already been here for you know for the cycle it's all of us just continuing to um we're just like cycling between coins right now at this point yeah yeah sort of something like that but like look at this chart let me let me show you this chart over here so can you see that on the screen uh yeah yep yep so like here's my my number of new daily subscribers you can see back in in like march and april i was getting like you know 6 000 on sunday like you can see how how much higher it was today it's like background noise right like i mean it's it's still i mean a thousand subscribers a day is a lot right but compared to what happened back

over here you can see that today is completely different now today it's actually gone back up right because everyone's freaking out and everyone's wondering what's going on but but i i look at a chart like this you know or or the watch time and say it seems like we're not at these like this mania phase right now like we're not up in these areas we're sort of all the way down here and and i look at that and say i don't think fomo i don't think retail fomo has arrived back to the market i think that the people that are here for the most part are the same people that were here um earlier this year okay we haven't we haven't ushered in the next crypto class yet daily youtube subscribers is not the

chart i expected to be doing ta on today but here we are that's true yeah yeah you gotta use everything you gotta do so to to me this is not t i don't know what you guys consider ta and what's not but like like some ta kind of loses me to be honest but like this these charts are the kinds that i love like these charts really tell a long term story and i'm you know bank list aren't kind of philosophy is very sort of long-term oriented uh so i love these charts and i i've got a question for you ben too it's like so um we're talking about cycle four lengthening cycles i think you mentioned you know you wouldn't be surprised to see 1300 days 1400 days how long do you think cycle 4 is going

to be and you know what does that imply about how much more time we might have left in the fourth cycle are we talking like 100 days 200 days 300 days i know some people think it will end in december and you don't but like what what do you think how long will cycle 4 be and how much more time do we have yeah so a lot i think a lot of people a lot of people assume it's going to end this year and i will say like i'm not going to sit up here and and promise everyone that it's not going to end this year because if in if in four weeks bitcoins trading at 150 000 like i'm going to be running for the hills to be completely honest i'm not going to be sitting here you know claiming it's going to keep going

up in 2022 if if if like next month bitcoin's trading at like 150 or 200 000 i think that's the point where it's just it's gone up too quickly and despite all the great fundamentals of 2022 that we probably can't sustain those prices but you know realistically i don't think that's going to happen i i think we have a ways to go um i think that and i'm gonna i'm trying to answer your question as methodically as i can if you look at the yearly roi of um of bitcoin and i think i have it on on another on on this one if you look at say the yearly roi of bitcoin and you look at say 2011 was a good year right we went up over 10x 2012 yeah it was what two or three x no one's

getting out of bed for that 2013 pretty good year 2014 that was a bad year right we're below 10 to the zero 2015 no one's getting out of bed for 2016. certainly no one got out of bed 2017 was another good year right 2018 bad year 2019 humdrum 2020 somewhat okay but what you notice is when you when you isolate all the ones that have done very very well it's just 2011 2013 and 2017. and then the ones that have done very poorly are 2014 and 2018 the red ones at the bottom all the other ones are the yellow ones and they're just more or less humdrum right we we sort of went up but we also kind of went down or maybe you can just argue that we we slowly turned it up with time right we

we ended the year higher than where we started it at but we didn't end it with a parabolic rally if you look at the current year the blue line this has been a pretty humdrum year for bitcoin you know it it hasn't been the year of of the parabolic rally for bitcoin right yeah and you can see that on the chart i mean despite what people have promised it just hasn't actually transpired now it could theoretically transpire it hasn't transpired yet so but to answer your question you know i i think that when we look at these charts we can potentially look at a couple different things one of the things we can look at is this analysis here and and i think this one is is probably pretty dubious in fact um but the whole idea is is the

first peak to the second intermediate peak here was a certain time period 672 days and then the time between say the first pete or the intermediate peak to the second peak was another 235 days um if you were to if you were to sort of propagate that over here and take that same time ratio it would actually put the next peak out in in july of 2022 um but i i would say that there still is a is a good chance that that we could go beyond that right and and the reason there's a couple different reasons uh one of the reasons actually this is an interesting analysis uh if you take the if you take the peaks and isolate each peak peak one peak one two and three and then you plot

them when they occurred based on the number of days and then you invert time so you take one over time you get something like this and again this is a very dubious extrapolation i'm not going to pretend like it's not because it is extremely sensitive to when the prior peaks occurred but if you were to fit that curve and then extrapolate out to where the fourth data point would be where would the fourth market cycle peak be it actually puts it in august of 2023 um and and i know a lot of i know a lot of people would probably look at that and say that doesn't make any sense and even to me it's it's sometimes hard to think that like it could go out that long but but i also look at the chart today and say look you know bitcoin is only 3x the

prior all-time high right by this time the prior cycle bitcoin was 100x um or sorry it was 100 x from the cycle bottom right but from the prior all-time high it was up about 20x or so and so i look at it and say yeah i mean i technically a 64k peak or a 69k peak could be you know that could be the diminishing returns that we're talking about but it also seems like we should be able to push a bit higher than that um and so i just look at it and say look you know i think that the next cycle or sorry the current cycle is is highly likely to go beyond this year i think it's it's going to at least go into 2022 and probably beyond the beginning of

2022 as well like i mean q1 while it is a possibility i would still argue it's more likely to go beyond q1 could it be in q2 maybe but like q3 you have q4 of 2022 and then you know then you could get back into that seasonality that people always talk about i always thought that would be pretty funny if if the uh the market cycle peak came a full year after when people were expecting it to come um like you know like let's say december of 2022 or something uh but i think the other the other thing to consider is while i put a lot of effort into kind of like trying to understand you know market cycle peaks and and when they're going to occur i don't really trade that i have a risk metric that i use uh it's

this thing and basically whenever whenever it gets overheated like this i i basically just take profits on the way out and then i just wait for it to come back down and then i and then i move back in again and so i i don't really concern myself so much uh with when exactly it's going to occur because there's nothing about cycle theory that would have told me we were going to have a peak in april of 2021 right no one was saying that that we're going to have a market cycle peak in april of 2021 but this is the this is my the the risk metric that i use and it told me back then that look like we are we are kind of heated right now whereas we're almost as heated as we were back in 2017 and it seems like there's a reasonable chance

that we get a pullback now that doesn't mean it's a market cycle peak as you can see in 2013 we had two of these heated faces but my argument all along is that if this is if this is a double peak cycle it's probably a stretched out version of 2013 not a carbon copy of 2013. you know what's so fascinating to me is your your whole analysis is you're very price-based and time-based and has nothing to do with catalysts right so like you mentioned you know possibly this cycle could kind of end in it could end any time of course but it could end in july 2022 or could get extended to august 2023 or even longer than that it's interesting it's like july 2022 around that time the eth merge should happen right some people have

called this the triple happening but that doesn't factor into the analysis at all because it like maybe over the long time scale these things don't seem to matter is that what this is teaching us it's just like time and price and cycles and if we pay attention to those things then we're okay and catalysts don't matter so much i it's an it's an interesting thing because if i if i say that stuff like that doesn't matter it really has a way of pissing a lot of people off um i'm genuinely curious your perspective right it's like you know i'm not pissed off at all i'm curious what you think it it's interesting because you know you would think that all these things would make a a big difference but i guess the counterpoint is well what if ethereum or to rally to say 25 000

in the next five months and then people could then use that to say then going into into the merge in the summer of 2022 that okay the price is only going to keep going up right because if it's already at 25k uh now then why can't it keep going up after the merge which is only going to make things better right but at some point we have to understand that the the prices that these assets are it's not that they're necessarily being fairly valued it's just that they're we're riding up on momentum and hype around something and then once that something is actually delivered a lot of that hype can actually die back down and it doesn't mean that the project hasn't improved it just means that the hype around it has sort of died off a little

bit and so i i think that you know even in the bear market there's things that happen that are good for the asset class it's just that no one cares about them because everyone's just you know complaining about why the prices are so low um and but in the bull market no one really cares about the bad news either i mean you know in in the in the bull market everyone always shakes off all the all the stable coin fear all the china fear all that sort of stuff you get into a bear market and that's all anyone ever wants to talk about is is oh what did what did elon say what did you know what did china say this week but as far as i'm concerned elon and again this this goes against what a lot of people would say i don't i mean i don't think elon is

responsible for what we saw happen back in may i i don't i think that and i i was saying this back over here i i said look guys like you know people are going to rationalize why why their predictions don't pan out right they're going to rationalize why bitcoin's not at 300k by september or why it's not at their price valuation they're going to call they're going to screen market manipulation or something but look at the end of the day bitcoin went from 3 800 to 64 000 in the span of about a year and and to to say that we can't have a a sizable pullback unless some catalyst causes it i i think is a bit um it's probably a bit ignorant so that's what

that's why i think that people like to use these events to rationalize why why things don't pan out the way they think um but i i think that you know at the end of the day we were just overheated and and also you have to you have to think too again with things like the merge people are it's not like it's a secret so if people are buying ethereum today they're buying it because they expect it to do well probably because they expect the merge to go well right so it's sort of you could argue that it's already been factored into the price anyways um and if it doesn't go well then it could cause a sharp sell-off right uh so you know just because something occurs doesn't mean it necessarily has to affect the price i mean if you go

back and look at what happened to ethereum you know i mean ethereum has done nothing but have i feel like just great news for a long time and you have the network effect everyone's using it i mean the gas fees are high but they're high right but i mean it's also a sign that people are actually using the network you know um so it didn't stop ethereum from dropping from from forty four hundred dollars to seventeen hundred dollars in in the span of uh you know in the span of a few weeks you know so it's a highly speculative asset class we're all sort of figuring out what these you know what these assets are worth and we just have to go through these boom and bust cycles you know over and over again to ultimately reach a fair value i think a lot of that's actually

captured in the logarithmic regression stuff it does you know curve over with time that the best gains are early on and then as you get further in time it takes a lot more time to continue to push up that curve and you can see it sort of folds over as well okay so that's generally the idea absolutely ben uh i think the the label of cartographer is becoming just more and more accurate i feel very very grounded right now in the charts i want to see if i can get you to zoom in on some closer time frames with regards to bitcoin and ethereum because as of the last couple days we've we've uh dumped off a little bit but what meanwhile ether has had this very long sustainable run-up for all of october so we're going to go ahead and get there right after we

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alcomixfi and join the discord to keep up to date with alchemix v2 and to get involved in governance all right guys and we are back with benjamin cowen of into the cryptoverse and uh we've been talking all about market cycles using bitcoin as a frame of reference but here we've got the market cycles of ethereum of which there are only two uh so ben when we look at the market cycles of ethereum do we see a different story the same story what are the differences that we see here yeah the the one issue with ethereum is that it launched at sort of like in in the summer of of uh 2015 and and so the market cycle bottom

for bitcoin was actually january of 2015 so to measure it from the market cycle bottom of the entire asset class is not possible if you try to if you measure it from the market cycle bottom of this cycle and then when it launched which was in the middle of last cycle you get something that looks like this right if you if you translate this to instead start here in march of 2020 which is sort of like you know trying to emulate as if you were starting in the middle of this cycle or say not like in the middle of it but just not at the very beginning like last cycle was and you shift it you get something that looks like this right and and what you notice is that ethereum in in the last market cycle had a very

similar move up and then it just went sideways for a year right everyone thinks about 2015 to 2017 2018 is just nothing but up for ethereum but look this is a span of a year where ethereum just went sideways right here's a span of six months where ethereum just went sideways and ethereum went sideways at around a 30 x up or so from the from the um from the bottom i thought an interesting thing was sort of the double bottom on the return on investment from the from that local bottom in the first cycle was right here you can see it at right right around 20x or right below 20x and also look at this cycle it's also right around that same area um after we had that sort of that

that local top that we had we came back down and we're sort of slowly turning back up so i look at this chart and say you know what could could ethereum go sideways for a while i mean well i mean recently it's just been going up i don't i don't actually have the most recent dip on this chart because i i did these charts like a day ago and then uh since then the market dropped 10 percent um but you can imagine that even a 10 drop is is basically just a pixel on the screen right i mean ethereum's trading now at 4 200 uh i mean we're essentially we're essentially now at the prices that that once upon a time was the the uh you know the blow off sort of top for a theorem earlier this year right so the the prior the prior

[Music] blow off mania phase is now the fud price right um so it really does you know put things into perspective i think into into kind of where we are and i look at this and say you know is it is it possible that we come back down and continue to grind sideways for a while absolutely right of course that could happen i still think we ultimately have higher to go this cycle but it doesn't mean we can't we can't ultimately grind it out for a bit longer hey david if you're talking to your mom no thank you sorry a few other things i'm getting uh hoping to look at is bitcoin dominance is that an informative chart for you what the

bitcoin dominance chart looks like and what what does that tell you as a story yeah so i was trying to like draw out potential paths this is one of them uh but what i'm thinking sort of about the bitcoin dominance more or less is that we know that when bitcoin goes parabolic the dominance goes up right we also know that when bitcoin gets goes down really quickly the dominance goes up so if it goes up too quickly or it goes down too quickly the dominance of bitcoin generally goes up we also know or i would i guess we don't know it i would expect that if the market cycle is going to continue you know into into 2022 and whatnot that in order for it to continue in a healthy manner at some point bitcoin has

to go up right like it can't just stay at 60k forever uh i think it'd be good for the entire asset class at some point if it were to go up to 80k 90k 100k but i would actually prefer a slow grind up as opposed to a parabolic move because the the downside to a parabolic move is it's one and it's done in a few weeks and then you have to spend a year in a bear market so i look at the dominance and say look i mean you know so far it looks like we've had i mean i don't know how much weight you put into these things right but it looks like it had a double bottom around 40 um it has been moving you know it first of all it started you know it started late september it's been moving up from

40 all the way up until mid october it sort of had a local topic 47 48 recently we've been coming down some um my my sort of thinking in terms of where bitcoin's ultimately gonna go with regards to the dominance this cycle i do think the dominance is going to go a lot lower than where it currently is but i don't necessarily think that means the dominance has to go low now right so like assume that the next market cycle peak is is somewhere um like let's say they'll say the dominance is below 32 but it could be somewhere way out here right and it could maybe like this box or something um which would be a pretty crazy time in the asset class uh so

imagine that the final market cycle peak is something like that um then i think the only question is well how do we get there right is it does it just sort of does it just go straight down uh does it does it go up first and then back down again i would argue that that at some point bitcoin is is going to make a nice rally and when it does the dominance will go up but we also know that after that happens the dominance will then probably go further down than it has already so that's what i'm looking at i mean obviously the counter thesis to all this is if as if the bears are right and the market cycle peak is in then the dominance is actually more likely to just go back up right so i would say that i think that if the market cycle peak is

not in which is what i think then the dominance is likely to go down over the next you know 12 to 18 months but if but in the short term it could always go up if bitcoin is moving up too quickly or moving down too quickly but if the market cycle peak is in which i don't think it is um but again in order to prove that we have to wait a while because a lot of people think that oh well that just means by the end of the year no i don't think it has to mean that um if if the market cycle peak is in i would just assume we're gonna go up because then you go back to say 2018 and you can see that once the bear market was ushered in we essentially got rid of a lot of the garbage in the space and

everything just went back into bitcoin right or back into us dollars or something so if if the bear market's in we're probably going to go up um i don't i mean we could still go up in the short term even if the bear market's not in but i would argue that it's more likely the cycles are going to go on for a while uh so we'll probably find ourselves at a dominance that's much lower than the current the current dominance but i don't think we're you know imminently at that time like we still have a ways to go before we could you know see a sharp drop and you can see that this drop happens really quickly when it occurred so you know imagine we were to repeat the phase of say september through through may again at some point in the future you could

still imagine a scenario where the dominance goes up something like that but then it could still come back down if if all coins then rally after it right um so that that's sort of what i'm looking at and one of the reasons i think is you know i think if you look at this it seems like the dominance is generally in a macro downtrend um at least that's what i think i guess i guess technically speaking someone might try to argue well maybe this is an uptrend you know like maybe it's you know maybe it's actually slowly moving up or something uh it all that's the thing i have with ta right like you can tell whatever story you want to tell um as long as you draw the right lines right um so i do think the dominance will ultimately go down but

you know i i certainly do expect bitcoin to put in a fight on more than one occasion this cycle and send the dominance at various phases up you know 10 15 percent higher than where what where it will be when it starts that move ben eath people have been talking about the flipping for a long time okay i'm talking years remember if people are talking about this in 2017. since before the first block was mined yeah so what's your take on that so i mean this maybe there's a story of bitcoin dominance decreasing every cycle do you think that there's the possibility or probability that eth flippings uh bitcoin this cycle it's an interesting question um and one of the one of the things that i

i think is is interesting with it is um [Music] when we talk about uh the flipping a lot of people a lot of people like to talk about other cryptocurrencies right and they say well you know this all coins gonna flip ethereum or this altcoins gonna flip bitcoin i would say you know i don't think anything's flipping anything this year right like i don't think any all coins going to flip ethereum i don't think a theorem is going to flip bitcoin dish like you know in 2021 i've been saying that for you know since 2019 um but one of the things we can look at to answer your question is we specifically want to look at the ether bitcoin valuation right because that's what matters um well maybe technically the market cap

right because the supply isn't isn't necessarily constant but you get an idea generally with the just the ether bitcoin pair and if you go look at say the daily time frame and i think a lot of people kind of think that the flipping can't happen just because it would be so monumental but one of the things you can do as you can see here on june 13th of 2017 so let's go take a look at june 13th of 2017 and this is a historical snapshot ethereum's market cap was at 36 billion bitcoins was only at 44 billion so ethereum did in fact come within striking distance of of overtaking bitcoin once upon a time so i i know it's sort of one of those things that if you say the flipping is going to occur a

lot of people are just going to naturally roll their eyes and say you know you're just you're you don't know what you're talking about but look i mean it came just within a few percent basically of flipping it in the past and and i think another thing to consider that that could that could make the flipping more likely is typically the market cycle peak for bitcoin happens before the market cycle peak for ethereum so you know if if the market cycle peak for bitcoin ends up being like 150k or 200k or something like that then that doesn't mean that we have to compare it to what the maximum price of ethereum could be at that time because it could be that bitcoin goes to like you know 150k or something and then it

and then it drops back to 75k and then it has a dead cat balance to 120k and during that dead cap balance ethereum goes to its market cycle peak of whatever that's going to be so that's the general question is well can we get to that level and my thesis on the ethereum bitcoin valuation and i've we've had i've had this drawn since like 2019 these lines it's just that we're generally just in this macro uptrend channel right where we are slowly climbing higher and recently we've actually broken out of it uh and we're actually sort of writing writing this line up here in order for for me to think that the ethereum evaluation is or that ethereum is going to flip bitcoin this cycle i think it would probably mean the cycle has to go to 2023 i believe um because you know we would

need to we would need to break we need to be breaking up to like these valuations up here and i i would imagine that these white lines by the way are showing where uh 2022 is so anything between these two vertical white lines is 2022. could we make it to this region like say next year i would say it's possible but the problem is that i think that in order for ethereum to go to these really high valuations against the us dollar it's assuming that bitcoin is probably going to have its own parabolic move which means when bitcoin has its own parabolic move ethereum usually takes a back seat for the time being so i what i would be looking for if i were to assume if flipping could occur this cycle i would say that it might occur but it's probably going to be a while if

it's going to occur and and one of the things we've seen with ethereum before against bitcoin is seasonality it tends to go parabolic against bitcoin in january and i'll show you what i mean so in in previous fourth quarters you can see the ethereum bitcoin valuation tends to bleed right this is down in q4 of 2015. where did the parabolic move started the athena bitcoin valuation it started in q1 in january look at this q4 it bled where did the parabolic move start against bitcoin it started in january this one again this one started in mid-december after bleeding for most of the year especially in q4 and then we had this parabolic move that was in the beginning of the year again this one here started in mid-december and it lasted for part of q1 again here you look at a q4 bleed we had

a parabolic move sort of a parabolic move not really but at least that was a nice move to the upside by the ethereum bitcoin valuation in january um same thing last year at vlad and q4 we had a nice parabolic move in january the interesting thing though for ethereum this year so far things can change of course it has not been bleeding in q4 this is the first q4 ethereum's ever had where it's not bleeding against bitcoin right it's it's more or less going sideways if you go look at uh quarterly candles we're actually technically up right now by about three and a half percent now that doesn't mean it's going to stay like that we still have what half the quarter to go i mean we're only at mid november right now but i think ethereum is actually looking

relatively strong compared to where i would have expected it to be um and and you can see it it's really putting up a fight so one of the things i would say is that if it's going to flip bitcoin uh it would be nice to to get a you know a couple more nice januaries under our belt right so not only january of 2022 but also january 2023 and if we can if we can reach that point if we can reach that point and we get a parabolic rally up after bitcoin has a parabolic rally or something then it is certainly possible that it could flip it um but i would argue though i would argue that if it does flip it it probably it probably won't sustain it in

the bear market is is my guess um just because we know that ethereum does tend to bleed a bit worse than bitcoin in the bear market but i mean it also it also gives you more upside on the bull market so it kind of makes sense um so could ethereum flip bitcoin i think it could mainly because we've seen the historical snapshot it's already come extremely close to doing it before it's in a very long macro trend up it seems like time is on our side with regards to lengthening cycles and and it still seems like we have a long way to go the only way that we don't flip it or i don't want to see the only way we don't flip it um but one potential way we wouldn't flip it this cycle as if um as if the cycle you know if it sort of

peters out in a few months like if it only goes say into q1 or q2 or something then i don't think ethereum has has really any chance to have you know to be able to flip to flip bitcoin but if it goes on for another year or something then you're getting into the territory where hey this long-term momentum shift to the upside is is really going and it's not going to take that much longer i mean if we keep riding this line up here by by the summer of 2022 you know we could be at point one right and and point one could be a launch pad to get us to that you know to that that flip that flipping status so i don't want to say that it has to happen but if the cycle extends long enough it certainly can't happen

ben we talked a lot about obviously these cycles and bitcoin and ether in particular you called these two assets sort of the blue chip assets i'm curious why you think these are the blue chip assets right because of course like we've seen other coins have runs you know some only last a cycle you know some this is this is their second cycle and it's hard to know what's what um why do you think bitcoin and ether are blue chip or like are they special in any ways yeah i mean i think they're the two most massively decentralized protocols um and i don't think it's even close between any other assets i think they are um i mean with bitcoin you just simply have the network effect obviously if someone were to launch bitcoin today and and

bitcoin didn't exist it would be seen as like sort of like a dinosaur type type thing but it is the first one the only reason we're all here looking at this stuff is because bitcoin initially existed and sort of gave everyone the insight to hey let's explore this idea um that's where the network effect is if we if you know what what's going to be around in 10 years is these are some all coins going to be around yeah some of them will survive but you just really never know one one great example look at 2013 or sorry 2017. you have bitcoin and ethereum but look i mean you have yeah look at all these coins that aren't even in the top 10 today right some of these coins some of these some of the viewers here probably have never even heard of them right they've never even heard of them

where's the iota supporters on the youtube the nemo go back to go back to say 2013 and take a look i mean look at this you have you have things like not a lot of people have heard of pure coin name coin feather coin nova coin uh don't even get me started on bbq coin um yeah you look at this and it's like you know in 10 years we really don't know what all coins are going to be around but i would say it's highly likely that bitcoin will be around and it's highly likely that ethereum will be around i think that people give ethereum a hard time because the gas fees are high and i mean i've given this speech before right but again the gas fuse are high because people use it and if they wanted to lower the gas fees they could but they

would of course be sacrificing some level of decentralization to do so right if they if they raise the block the block size and and make it so you have more computational requirements to run you know to to run a node it's going to make it it's going to make it somewhat more more centralized and you sort of have that that trilemma um but i think that a lot of other projects sort of tout themselves as being better than ethereum but a lot of them are i mean they're they're just they're not right i mean they might be they might be better at some aspects right like some of them might be faster some of them might have lower fees but they're probably they're they're they're no they're they're sacrificing somewhere else right like it's an engineering

problem it's all about optimizing things so maybe they have higher gas or maybe they have lower gas fees because no one uses the network maybe they have lower gas fees because it's it's extremely centralized right again the binance smart chain originally started as a clone of go ethereum you know it's not like and the gas fees there are are really low it's not like it's groundbreaking technology it's just that they're willing to sacrifice things that ethereum developers are not willing to sacrifice um and and i i think that aetherium is is pretty far out ahead in terms of in terms of uh development and stuff and and and transitioning to becoming uh roll up centric et cetera and so i i look at this and say you know from a

from a technical from a from a fundamental perspective i think they're the blue chips right from a market cap perspective they're the blue chips right they're the safest from a a technical perspective if you were to if you were to measure out the sharp ratio and the sortino ratio ethereum if you if you just ran it against bitcoin and ethereum the optimal portfolio that maximizes your risk adjusted returns is actually 65 bitcoin 35 percent each that's not my opinion by the way right that's just what that's just if you any run can run that same analysis where you where you you figure out what maximizes your sharp ratio of of those two that so two assets and it ends up being 65 bitcoin 35 percent e again if you run the same analysis and

include litecoin in it it comes out with 0.00 litecoin the reason is not to say again it's not to say that litecoin can't go up it's just to say that look if litecoin does go up it's also highly likely that ethereum has gone up a lot more than litecoin right um and and and i i can't i can't pass up the opportunity to to show the litecoin ethereum chart uh just because it really sort of hammers down hammer's home opportunity cost and why ethereum is a blue chip we're talking litecoin which is uh bitcoin silver is that right is that yeah we're talking about it yeah yeah this is what i'm talking about when you're talking about blue checks and people say well why do you you know why why can't you have a large position in some of

these other other other cryptocurrencies you look at you look at these projects and look will litecoin trend up against the us dollar with time yeah probably will it's blood 91 percent against ethereum over the last two years so to me a blue chip i want it to outperform a lot of the you know a lot of the asset class right i wanted to outperform i don't want it to you know to to see this downside i mean and i could go through a ton of different coins that all they do all they do is they they bleed against ethereum over the macro scale right i mean here's xrp it just bleeds against the theorem over the macro scale right here's here's some other coins that were relics of the last market cycle they bleed against they bleed against ethereum over the over the macro scale

so the argument of course just becomes simply put will your altcoin trend up against the us dollar in a bull market yes right but anyone can pick out cryptocurrencies that will probably do well during a bull market you always have to always have to ask yourself and it's sort of become a meme now on my channel right what if it bleeds against ethereum and a lot of cryptocurrencies if you go look at their valuations against ethereum they bleed over the macro scale so if you do have all coins make sure at the very least at the very least that they oscillate against ethereum or if they go up against the fear right if all they do is go down you're essentially taking on more risk for less reward ben this has been extremely insightful

and and it's nice to uh i really appreciate somebody that can draw these charts and focus on the charts while also connecting to the fundamentals i remember uh and you you were probably like this too back from when i was in my first cycle in 2017 2018 i would pull open block folio and check it check it roughly 70 times a day for somebody that has like chart addiction or just like they can't pull their eyes away from their charts what advice would you have to to somebody like this yeah i mean i think a lot of times like these short-term price movements are just noise and you know the likelihood that someone's going to want to sell today anyways is pretty low usually because they a lot of us just you know we're hodler's at heart right and and people just kind of hold on for it for

dear life and whatnot um look you know you can look at it all you want but at the end of the day these are it's an investment and it's not i i think you should and i think people should look at it like an investment gambling is something that i think it's easy to get into and call it investing but it's actually gambling right you these micro caps are gambling using a lot of leverage or any leverage it's gambling um there's a difference between gambling and investing and if you believe ethereum or bitcoin or you know your favorite all coins if you if you if you believe in their mission and what they're doing and where they're headed then what happens today is just completely irrelevant right i

mean and again we're as it's a great time to be saying this because i mean as i'm saying this bitcoin is now at you know it's below 60 000 but again you know i'm sure there's a lot of people out there glued to their screens and wondering what's going on it wasn't even that long ago literally like two months ago bitcoin was at 40k you know so today is it is is the market down this week by about eight or nine percent yeah it is but if you go back a couple years think about think about all the stress that you probably had on this red candle right or or this red candle here or or this red candle or this red candle or this red candle like all that stress that you probably had every day watching the charts 70 times a day who cares

right like you're not you're not here for the little bunny hills right you're not you don't really care about that you're generally here to see the asset class trend higher with time and i believe that's what it's doing so look while there are while there definitely are um you know timed time periods where we go down and stuff i would still argue that the general direction is up and it's going to remain up for a while could we come back down uh and test some lower levels again of course right i mean you will never hear me say that bitcoin has to go parabolic in q4 i think it's honestly absurd that so many people think it does um but you'll never hear me say that i think it's better to to just invest responsibly to get positions and assets you you like and

you want to have in your portfolio and then just to wait for the bubble to happen because it's only it's only a matter of time before another bubble happens whenever you have the next narrative or whatever it's going to be um there's going to be another bubble there's going to be more retail coming into the space at some point so until then i think it makes more sense to just keep your head down invest in the projects you want to you want to be in and and be patient benjamin cowan telling the bankless story through charts i love it this has been a fantastic conversation ben thanks so much where can folks uh check out your youtube and find out more about into the cryptoverse yeah uh go over to my youtube channel um you can just search my name and you can

find my youtube channel and we basically just put out one or two videos a day sometimes we talk about macro stuff sometimes we talk about uh you know some some weekly trends we don't typically talk about like hourly trends or anything like that unless we're watching the one minute chart on the live stream and we're trying to break a certain milestone by price um so yeah go check out the youtube channel go check out twitter and there is my website of course put into the cryptoverse.com guys it is fantastic as well whenever something is going on in the markets when you want to get that price information i always direct folks to ben's channel uh ben thanks so much for joining us we really appreciate it yeah thanks for having me it's a pleasure to come on cheers of course bankless nation none of this has been financial advice never is

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