Bitcoin's market structure has changed: Matt Crosby on ETFs and long-term holders

Transcript

This cycle has been very, very different. Especially over the past two years, we've seen an almost non-stop period of long-term holder profit taking on Bitcoin. What's up everybody? It's LG Doo here and welcome to the Milk Road Show, the daily crypto show where conviction changes faster than price and the charts never apologize. Today we're joined yet again by Matt Crosby and you know him for his deep cycle Bitcoin work, macro-driven models, and for doing something most people in crypto hate doing, changing his mind publicly. Honestly, I have so much respect for Matt for uh coming on our show, giving us really fantastic predictions, and then just a couple weeks later coming back on and admitting that things had really changed for Bitcoin. Obviously, things changed for him and a lot of really good analysts like him this year.

And he's one of the guests I've been looking forward to the most to interview for these prediction series because I want to know what he's thinking for 2026. I want to know what changed for him and we already covered that on the last episode, but does that still hold and what he thinks will really happen in 2026 considering that his thesis recently changed. So, I want to know that. I'm excited to have him back on the show. And before we get to him, today's episode is brought to you by Reserve ETFs, the onchain equivalent of ETFs. Chain Link links Web 3 to Wall Street and Bridge send stablecoin payments instantly. Simple, global, frictionfree. Let's get him over here. Matt, you're back. What's going on, man?

Welcome to almost the last episode of the year on Milk Road. >> Yeah. Well, it's always a pleasure coming on here. I always look forward to coming and chatting with you all about Bitcoin data and everything. And hopefully this time we can give some good predictions and outlooks. Obviously, it's a very difficult market to predict right now, but we do have some good confluence in the data that I'm seeing. And of course, things can change and we're going to get on in in January and I'm going to have completely won 18, I'm sure. But looking at things right now, I'm pretty happy with the analysis that we've kind of put together at BM Pro and I think it's a little bit different than a lot of other analysts in the space maybe looking towards. So I'm excited to share everything.

>> Okay. I want to know Matt before you've prepared as usual some wonderful charts for us and I think these are my favorite episodes whenever we do them. Before we do that, I want to ask you, you know, and I I've I've been picking on you this episode in the intro and in the last run. I'm like, Matt changed his mind. Isn't that so crazy? You know, uh but I I really appreciate and admire it. As I said, how often in your crypto career have you changed your mind like that where been like, you know what, what I've been tracking has been wrong and I need to I need to come out and say that uh even if it's public or or private, how often has that happened to you um in your crypto career?

>> Honestly, not that often. And it's it's obviously easy to say this in hindsight. I'm sure at the time there were periods of some uncertainty and doubt, but from 2022 2023, that tail end of the bare market, once we'd kind of reclaimed the 365day moving average, had some more bullish onchain date at around $20,000. I was I was pretty cemented on a bullish thesis then. I remember making content at the time saying at around $18,000, like I'm going all in here. Like, I'm I'm very bullish longterm. I'm seeing all of the pieces of the jigsaw that I want to be seeing for a more bullish period of price action. And following that up until we broke beneath $100,000 after spending around 6 months above that for pretty much 2 three years, I was really quite bullish. And it was

only when we start to saw this weakness on chain, once we saw a lot of long-term holder distribution, once we saw this divergence of Bitcoin really lagging behind things that I kind of switched my mind. And this is the thing, I'm more than happy to say mistakes were made. I know no analyst is ever going to be 100% right, but I'd much prefer to be flexible and be able to kind of tweak my outlook based on the data and right now is genuinely a very difficult time if you imagine almost a poly market or Kelchi prediction market percentage where previously my bullish thesis was you know 90 95% and then as we broke beneath $100,000 it dipped beneath 50% which to me puts me in in defensive mode bare market thesis mode and right now it's kind of jumped back up a little quicker than I expected. I know

typically for Bitcoin we we have these almost year-long bare cycles where we have these big 60 70 80% plus draw downs but because we didn't really have this big massive euphoric blowoff bull market I think the bare market outlook has also changed considerably as well. So I don't want to say that I'm not someone that changes mind too frequently because if anything the past few months has shown that I change my mind fairly regularly when when we're at a a more confusing and conflicting time in terms of the data and the stuff we're seeing on chain. But I think right now, again, subject to change like it always is. I think right now looking at the data, I have a fairly good expectation, an idea of how I could foresee 2026 playing out.

So, as I said, I'm going to come back in a few weeks time. I'm sure I'm going to have changed my mind once again. But I like to almost have a more macro thesis, look at the market from multiple different perspectives because I mean, if we zoom out and look at Bitcoin from a 10-year lens, man, I'm crazy bullish. I don't know if we're going to be flipping gold in the next 10 years at a 20 to30 trillion market cap, but that's the general direction we're going towards. So, if we look from a long-term lens, incredibly bullish. I've been that way for probably about seven or eight years, as long as I've really been in Bitcoin. It's more the medium and short term that things can change a little bit more frequently. But, I'm hoping now I can kind of stick to this thesis. But,

as always, it's much better to react to the data than predict. So, of course, as always, almost like a get out of jail free card for an analyst. If the data changes, I'm going to change my view as well. Yeah. And of course I I think saying we'll be higher in 10 years. I hope so. And also easy to say, but man, I hope so. I hope that's >> Yeah. And you know, I and I just want to caveat too that we are recording this like pretty much two weeks before you guys listen to it. So, right now we're at the point where we have been fluttering uh flirting with trying to break out around like 93, 94K, now dipping back below 90K, around like the high 88s. Uh just for context because we know that things can change very

quickly, Matt. And even if you we did this, you know, doing a podcast two weeks in advance is something we really don't do on Milk Road. So just a caveat there that we don't know where we're going to be at. Maybe Matt will give us a little a little two week prediction, but we don't know where we're going to be at by the time you guys are listening to this. So just just keep that in mind. And that's kind of the fun of these these prediction episodes. >> Yeah, 100%. I'm actually looking forward I I'll I'll maybe tweak a little bit of what I was going to say to almost give a twoe prediction so we can almost verify my outlook going forward to say, "Wow, we got the last two weeks right." Or maybe it's completely wrong and then we can disregard everything. I'll have to

change your mind once again. But >> okay, no matter higher or lower in two weeks right now, like literally this moment I'm looking at price of Bitcoin is $88,700, let's say. So higher or lower than that in two weeks. >> I'm going to say higher. I think we close that yearly candle at about $93,000 green. I think we're marginally above that, but I think it's going to be a rocky road to that point in two weeks time. >> That is some zooming out right there, man. The yearly candle. I don't think I've ever looked at that. Okay, let's get into it. Dude, you you've prepared a lot of really great great an uh analysis. U we always love your charts.

So, let's bring them up and take a look. >> Sure. So, first and foremost, we can't look forward before without initially looking backwards. So, 2025, I'm never sure if I'm allowed to swear on these shows, so I'll keep it politically correct. It's been not so great. I'll still I'll still keep it PG-13. We're currently down 3.48% as I film this. Like I said, I could actually foresee Bitcoin closing the year positive. I think that'll just be a good psychological way to really kickstart 2026. But realistically, we have to admit it's been a pretty poor year of price action. Even if we close slightly above that at $94,000, this year really hasn't lived up to expectations. Now, there's a lot of different reasons we can look towards, but I think one of the reasons why it feels so bad is the fact that Bitcoin has really lagged behind

other markets. If we look to equities such as the S&P 500 or the NASDAQ or individual stocks within those indexes, they've absolutely skyrocketed. And then commodities like gold and silver are absolutely mooning to new all-time highs. And Bitcoin has just been kind of rangebound in this never-ending period of chop consolidation and boring sideways price action. So what's the main reasoning behind that? I think a huge part like the thing that dictates price action in any market is supply and demand economics. Now with Bitcoin, we're in a pretty unique phase of Bitcoin's life cycle. Historically, if you were buying Bitcoin at less than a dollar or just a few dollars, you only really had the opportunity to sell that Bitcoin to actually scale out and exit the market at these big market cycle

peaks when we had this retail FOMO coming into the market just to provide enough liquidity for you to actually sell. If you look at the whale shadows here, which is looking at different age bands of Bitcoin holders. So, this pinky purpley color is the 79year age band. So all those that have been holding at least a 100 Bitcoin for 79 years before transferring. And in previous cycles, what we could see is these didn't really start spiking to the upside until we had these big massive euphoric rallies in price action simply because they provided the liquidity to allow these OGs, these big whales to actually start selling. If they were to try and start scaling out of their positions at any point midway through the bull market or in the early stages of a bare cycle, for example, then they're going to have a

big impact on the price action. it's called slippage. They're going to essentially move the market to the point where they're going to be almost priced out of the point that they actually wanted to take profit on. Whereas this cycle has been very very different, especially over the past two years. We've seen an almost nonstop period of long-term holder profit taking on Bitcoin. And it's not just 7 to nine years. We could add all of these different age bands on and see that we've had a monumental amount of profit taking like we've never seen before. So, this data is a little bit messy to look at. It looks like I've just spewed colors all over the chart. But what we can do is if we aggregate all of these and averaged out over a 28 day period.

So we're kind of removing these anomalous singular days of exponential movement on chain and we're kind of aggregating them all together. So 10 year, four to 5 year, everything in one. So what we can see for the past year, Bitcoin has sustained more constant whale selling than at pretty much any point during the previous bull market. We had three very slight instances as we first surpassed around $40,000. this big capitulation event after Bitcoin had retraced 50% and then again just after we'd surpassed that 68 $69,000 all-time high. We had a couple instances again in 2017, but nothing like we've seen in this cycle where it's just sustained this constant non-stop selling pressure on the market. Now, when we were above $100,000, it's one of these, of course, I'm going to try and find the the best

way to explain everything, but above $100,000, sustaining this level of sellside pressure while making new all-time highs was actually a fairly bullish thing to see that Bitcoin could sustain all of this supply hitting the market. And there was such sufficient overwhelming demand from institutional buyers, treasury companies, high net worth individuals, retail participants that we were still climbing to higher prices. But eventually the scales tipped. And if we look at the long-term holder supply on this chart, for example, what we can see usually, like I said, we we require these big exponential moves in price action before these long-term holders of Bitcoin really start distributing and taking profit on their coins. Whereas in this cycle, we've had multiple distinct peaks, price action we haven't really

seen before. So again, if we kind of slightly warp the data a little bit, slightly transform it to rather than looking at individual long-term holder supply of Bitcoin as it moves, if we cumulatively look at this over the course of a cycle and change that data so it's looking at the percentage of circulating supply. So if any point this seems confusing, please intervene because I know this is slightly more advanced complex data we're looking at here. >> No, no, hold on. This is good. I I do want to pause you just so I can recap what you've said, Matt. So, you're telling me in 2025, and I think we've covered this before, too, but it's good reiterating, is that you're saying you've just seen so much more long-term holders selling for Bitcoin than in previous cycle and cycle tops. Correct.

>> Exactly. Yeah. And it is genuinely in the millions and millions of Bitcoin. So, everyone points to the Treasury companies, Michael Sailor and Strategy, and the ETFs is like, "Oh, these are propping up the market. This is the only buy demand that we're seeing." And of course, they have bought a lot of Bitcoin, about 2 million Bitcoin. But if you look at the long-term holders supply that we've seen actually distributed, we can see from around 16.3 million in the first peak to around 14.7 to about 1.5 million. And then again from about 16.1 million, about 14.2 million, nearly 2 million Bitcoin just there. >> And most recently from about 15.9 millionish to again about 14 million. If you aggregate all of this Bitcoin that's been sold during this cycle from the market cycle low we say in 2022 it's

somewhere around seven eight million I forget the exact number but it's a monumental amount of Bitcoin that has been transferred by these long-term holders. So again >> has this surprised you? Is this something that surprised you? I want to know your opinion on this because I think that's one of the things I wanted to ask about 2025 is, you know, what what has what besides your, you know, big opinion change, uh, thesis change, what what has been a metric that has really blown you away that you didn't expect and is is this the one that you didn't think would happen this way? >> Yeah, I think it was this kind of non-stop selling pressure that we'd seen within the market. Initially, when we broke through $100,000, I thought it would be this big psychological barrier where we'd maybe struggled beneath it for many, many months, and we'd break

through it. And at that point, it would almost signify to big institutional investors, big people who' maybe been skeptical and even retail participants who maybe have been burnt in the past that Bitcoin is here to stay. And we'd see capital just start pouring in. But that didn't really happen. We broke through $100,000. And at the time, it was almost this disappointing event where we broke through and nothing really happened. Then we just ch kind of chopped above and beneath it for a while. And I think a lot of the the supply and demand economics and market dynamics that we've seen this cycle have been very heavily influenced by the ETFs. Like I said, in last cycle, we had these big exponential periods of price action where price would absolutely skyrocket. I mean, in 2017, it was around December the 1st, we were at $10,000. And in two weeks time, we were

at $20,000. We doubled in two weeks time. And this was just due to the fact that the absolute demand for Bitcoin was sky-high. It had never reached these levels before. Whereas this cycle, it's almost been a passive demand. We've not seen these big cyclical flows of Bitcoin moving from long-term holders to short-term holders in very short quick bursts. It's been a much more gradual period of sell pressure. If we just go back to this chart here, like we can see in previous cycles, this moves up exponentially fast to the upside. The amount of Bitcoin that actually been transferred by these whales, whereas this cycle has just been a constant sellside pressure. Now, like I said, this is almost bullish to see that Bitcoin sustained above these prices for so long and made new highs. But at the same time, in hindsight, it looks a

little obvious that this kind of limited our upside potential. So, I think this is the number one thing that surprised me. But again, one of these in hindsight, everything makes a little bit more sense. Previously, we didn't have this liquidity. We didn't have these passive flows. We didn't have this guarantee almost that sailor going to be buying billions of dollars worth of Bitcoin every week. We didn't have the ETFs buying tens of thousands of Bitcoin every single week. And of course, this changes the psychology from these long-term holders. If you were holding from just a dollar or two and you held for over a decade and now you can massively improve your lifestyle and know that when you sell, you're not going to have this huge influence on the price action. You can start scaling out of your Bitcoin at $100,000 and a week later it's probably still at $100,000.

If you look at previous cycles, you really had to start scaling out very aggressively when market was pouring into the market because very quickly, just as quick as the price moved up, price can move down. At this point, you see long-term holders think, well, maybe I missed my opportunity. Maybe I now have to wait till the next cycle. Whereas now, Bitcoin is almost a stable coin, or at least it was a stable coin around $100,000, which not only provided this big psychological level for these early adopters that, yeah, now I can start scaling out at this huge six-f figure territory level, but I also have the availability to do so because I'm selling directly to these huge deep pocket investors who aren't going to allow the price to move massively. This is the biggest year ahead for crypto, AI, and the macro. But the real moves

aren't in predictions. Join Milk Road Pro today to see our live portfolio, buy, sell signals, and the AI investing portfolio, which launches in January. The link is below. Thank you for explaining that. >> Why do you think Why do you think though, Matt, that there's two massive dips? I think that that's one thing looking at this chart. And for the people listening audio only, we're basically looking at a chart that has this long-term holder supply uh graph that shows that every time Bitcoin would moon in the last two cycles, there's a huge drop of long-term holder supply, right? Which is normal. Bitcoin moons, they sell, Bitcoin comes back down, they buy back up, and we peak again. But in this I guess cycle, if we're calling it a cycle, there are two distinct dips here versus in the previous ones there's

only one big distinct dip. So what why do you think we've seen kind of the almost the I guess you could on this chart you could almost call it two tops. Yeah. Well, I guess because we've had this almost stepping in price action. We've had these big explosive volatile moves to the upside and sometimes to the downside and then following that these multi-month periods of choppiness and consolidation. And I think at that point it resets investor expectations and almost sets a price action foundation going forward because like I said previously we'd have this big rally to the upside and then typically see a 30 40 50% plus draw down in price action.

So long-term holders would see the opportunity to start taking some profit and then once we start seeing the Bitcoin price action massively decrease to the downside, they'd say, "Okay, maybe that was the cycle. We wait till the next time. We strategically accumulate again at the market lows." But given the fact after we had these big moves to the upside price of course we had these 10 20% moves to the downside but basically stayed stable for multiple multiple months at that point in time I think long-term holders realized okay we're gearing up for the next move to the upside and as well as that there is also some dynamics that long-term holders have to come to fruition from short-term holders. So all of the people who were buying Bitcoin from these long-term holders as Bitcoin first rallied to above $73,000 or when it first rallied to above $100,000. If

you look where these second peaks occur, it's usually about 6 months after we see the steepest part of decline. So, it's typically these long-term holders selling to short-term holders who are the new short-term holders are becoming long-term holders once again. Now, it's a bit of a disputed almost name to call them long-term holders. Bit of a disputed topic because we're only really classifying long-term holders as those who have held Bitcoin for 155 days or more. So, between five and six months. Now, that doesn't sound like a very long period of time. There's lots of people who bought Bitcoin many, many years ago and think, "Yeah, but I'm still actually relatively new to the market." To be a long-term holder, you need to be an OG who bought all the way back here. But statistically, if you hold Bitcoin for 155 days or more, you're less likely to

sell it than you are. It's almost a tipping point where you're more likely to hold it for an indefinite period of time, whereas those who hold Bitcoin for less than 155 days are usually just in it for a bit of a quick buck. So the fact that this cycle we've seen many many short-term holders who have accumulated this long-term holder distribution becoming long-term holders also changed the dynamics on a long-term basis because suddenly it's not speculative asset anymore. Suddenly it's not retail buying for a quick buck resulting in these massive volatile swings to the upside and the downside just due to the massive capital flows that we see. We're actually seeing this Bitcoin being sold to the people with this longest time frame horizon, the strongest conviction, the Michael sailor of the market, the ETF buyers of the market. We're happy to hold for two,

five, 10 plus years to actually see Bitcoin realize its potential and not just in it for these quick books to the upside. So, I think that's one of the main reasons that we've seen this shift in dynamics. I don't want to divert too much from from your next chart, so I want to get to the next one. But really quickly, what do you think the role is for for or what's the impact going to be for the DATs and the ETFs in 2026 now that it's they seem a little bit tired, I guess you could say, or their impact on the at least the speculative part of the market has definitely slowed down because we know that they're here. We know they're going to buy. We know that we can see the flows and it's no longer this, you know, coming out moment for Bitcoin like it was two years ago when

the ETS started to launch. Right. >> Yeah. 100%. And and it's a good point you bring up. I'll skip forward a few charts to to a great point. No, happy to do so. I try and formulate a bit of a story with the data, but we can skip back and forth in the chapters. No problem. So, if we look at the ETF cumulative flows, everyone's looking towards these institutions. We're seeing outflows. We're seeing billions of dollars worth of Bitcoin hitting the open market. and these ETFs losing conviction. But if you look at the cumulative amount of Bitcoin that the ETF buyers had actually aggregated since January 2024 and look to since the peak that we set in October to today, they've only really sold about four to 5% of their Bitcoin holdings, which is absolutely nothing. If we look at the

long-term holder distribution of Bitcoin, it's substantially higher than this. long-term holders, these OGs, these retail participants who bought when Bitcoin was considerably lower are much more susceptible to these short-term emotions and capitulation. Whereas, we're almost seeing Bitcoin as this more mature portfolio asset from these more passive investors who rather than thinking, you know, I need to get to one or 10 or 100 Bitcoin so I can make X amount of dollars, it's more of a hm, how can I scale into 1% of my portfolio, 5% of my portfolio. So again, it's a much longer time frame horizon looking at these longerterm new market participants. Now, it's one of these as Bitcoin transitions from this cipher punk retail asset to this Wall Street instrument of asset and wealth

generation. Is that a good thing for Bitcoin long-term? I guess we'll have to wait and see. But the main thing that's driven this most recent downtrend in price action, the main thing the main thing that's really dictated the past year of price action is individuals. As I said, the ETFs, treasury companies are really only two million Bitcoin, which of course isn't a small amount of Bitcoin, but considering around 8 million Bitcoin from long-term holders has actually been distributed, 75% of the market is still individuals and retail participants, which is still a massive massive influence on the price action. And even though we are seeing diminishing volatility, dampened upside potential, this is resulting in diminishing bare cycles as well. And we'll get into a little bit of how the bare cycle could play out into 2026. But historically, Bitcoin experiencing a 30%

draw down is completely normal. If we just quickly go back here, if we look to 2018, for example, Bitcoin had multiple months of more than 30% draw downs. Whereas now, of course, we've had a 17 and a bit percent draw down a couple times this year already. But realistically, compared to previous periods of volatile moves to the downside for Bitcoin, even during bull cycles, this really isn't too bad in the grand scheme of things. And as I said, it's it's just Bitcoin maturing as an asset class. And of course, as we move from billions of dollars to a multi-t trillion dollar market cap, the capital inflows and outflows required to have this volatility increase so exponentially that we almost can can predict Bitcoin's diminishing volatility. But again, the fact that we've seen this monumental amount of

selling and Bitcoin has held at these relatively high prices, I think just reiterates the strength that we're seeing. Now, back to the chart we were discussing previously. If we look at the percentage of Bitcoin held by long-term holders in relation to the circulating supply, so currently we're around 19.8 million Bitcoin in circulating supply. I think if we look at the percentage of Bitcoin held by long-term holders and look at the cumulative amount of Bitcoin that they've sold. So, as I said, about 8 million Bitcoin, but as Bitcoin is changing from this peer-to-peer electronic cash into this more store of value, you know, institutional asset, we're seeing more Bitcoin held by long-term holders. So, if we look at the cumulative percentage of the circulating supply that was held by long-term

holders and then sold during this previous cycle, it topped out within just.5% of the previous two cycles, which is pretty impressive to say the almost patterns that we're seeing, how reliable this cumulative percentage of long-term holder distribution has been. And if then we look at the bare cycle distribution that we see, because again, many people look to long-term holders and think they're immune to these big swings we see. They're immune to the emotions, but that really isn't the case. They're just as susceptible to these fears and capitulation feelings that everyone feels. And if we look at the bare cycles again, we can see that the typical percentage of long-term holder distribution during the previous two bare markets was very, very similar.

And we're really quickly approaching this level already. And this bare market bare market has only been around for about 2 months. Typically, this takes about a year to reach this level. So, it be one of the most closely watched data points for me personally at least to maybe give some indication of when the bare market really truly has ended. But it's just really interesting to see that as much as Bitcoin changes, as much as the narrative and participants adapt and evolve, the more things really stay the same. >> So, this is a this is a bullish chart that you're showing me, basically. >> It's not immediately bullish. This is the thing. It's not it's not something that I'm looking at.

>> Well, you said it in a bullish way. You're like things haven't changed so things will we'll have lows but then we will continue upwards basically right maybe >> maybe maybe essentially if you if you look at the periods of time the time elapsed from bull market peaks like we saw up here in 2021 all the way to the bare cycle lows in 2022 it was almost exactly a year of consistent sellside pressure by these long-term holders and in 2017 into 2018 it was a similar story we did have this big exponential ial capitulation event as Bitcoin fell pretty much 50% in a very very short space of time from around 6K to around 3K which felt really bad at the time but again they topped out at a very similar level around 10%

of Bitcoin held by long-term holders is capitulated at the bare cycle lows and now like I said in just a few weeks time we've already seen a monumental amount of Bitcoin distributed by these long-term holders and we're down what 35% from the highs from the low to the lows It's a relatively small percentage draw down compared to what we historically have seen. I mean in previous bare markets at this point we were already down 50 60 70% and we still had more downside to go. So like I said we haven't reached this level yet. I don't necessarily think that the bare market lows are definitely in especially considering maybe here's my two week little prediction especially considering the funding rates are still slightly positive indicating that people are

maybe a little bit bullish. We're still seeing active accumulation by treasury companies etc. So, it wouldn't surprise me to see a big wick down potentially beneath the average accumulation price of Sailor and the ETFs to around $75,000 to $70,000. Finally get this big capitulation event. Blood in the streets, everyone shorting, massive un uh realized losses on the network and at that point would maybe see a big capitulation from these long-term holders and that would really set up the rebound and potentially the start of the next mini bull market, mini bare market, whatever it may be. Sure, tokenized financial products are the future, but there is a big sticking point. They all need to speak to each other. This is a tough problem to solve. But chain link does exactly that. It's the universal

language for financial markets, linking Wall Street to web 3, banks to blockchain, and so much more. See how chain link is linking the world by going to milkroad.com/chainlink. Stable coins are the biggest use case in crypto right now. But let's be real, using them on chain is still way too complex. That's exactly the problem Bridge is solving. Recently acquired by Stripe. Yep, that's Stripe. Bridge helps businesses send, store, accept, and launch stable coins instantly. Explore the future of global financial infrastructure at milkroad.com/bridge. >> Uh Matt, maybe something you can take us through again. You've taken us through on on previous episodes and and I feel like maybe you have a chart for it here and if you don't, that's okay. We can also move on. What I find interesting

about these the bottoms for short-term or long-term or whatever is that we rarely stay at that exact bottom price for very long, right? You you you always have a bottom bounce of that low price, but then we use that low price forever as the low of that current cycle or whatever it was. And even if you look back at your monthly percentage chart, one thing that that doesn't show is the actual divergence within the month and not at the open and close. Right? So even at these lows, you can't see like the April April 2025, of course, we bounce back between April 1st and 30th, but it doesn't it doesn't there that doesn't show you the actual bottom that we hit. Right? So what I'm asking you is if we will hit a bottom on this bare market that you're saying in 2026, how will we know it's the bottom without

having you come on and tell us to to to slam the buy button? How do we track that? How do we know that we're at the bottom based on some of these metrics or anything else that you might follow? Yeah, I mean it's a great question. It's one of these where we try and look for confluence. We try and look for not just onchain data or macroeconomic data, but multiple different pieces which can kind of paint the picture of where we may be in the cycle. So, little bit of a divergence, but I'm all I'm all for it. I'm happy to do so. Like I said, in the derivatives market, it gives us some great insight into the kind of consensus of leverage traders within the market.

So if we look at the Bitcoin funding rates for example, this gives us a good idea of the expectation of the degenerate traders within the market and their expectations going forward. So of course slow internet's going to take this a second to load. But if we look at the coin denominated daily funding rates is one of my favorite to look at. What we can see is the unfortunate reality is most people are wrong most of the time. You can see when this turns incredibly negative indicates an overwhelming amount of market participants are shorting the market, betting on the Bitcoin price action moving to the downside. And this typically coincides with major market lows. And the same is true for the upside. Once we see a huge amount of longing in the market, a huge amount of euphoria, everyone thinking it's going to go up forever, that

typically points to a market cycle peak. Right now, we're actually slightly positive. We have flirted with going into negative territory but nothing that really points towards a big capitulation event. Alongside that, alongside the derivative market, we can look unchained. We can look at realized profit and losses on the network. So something like the spent output profit ratio. And again, this is looking at the price of Bitcoin accumulated or the UTXOs and the USD denominated price associated with that from when it was first accumulated and then next distributed. So, if you bought Bitcoin at say $10,000 and sold it for $8,000, that'd be a realized loss on the network. Now, once we aggregate all of this data into a spent output profit ratio, again, very similar indications that we see in the funding rates. One,

lots of people are selling Bitcoin at a loss. They're completely capitulated. They think Bitcoin's going to zero. They regret every decision they've ever made. Typically, it's a good time to do the opposite of what they're doing. And again, same is true for the upside. Once we see a huge amount of realized profit on the network, everyone feels like a genius. Everyone's moving around taking screenshots of their favorite exchange app to show how much money they've made, etc. Good time to typically do the opposite. So, this is just two quick examples, but if we look to onchain data, derivative data, if we look to the macroeconomic data to see what's the US dollar strength index doing, what's global liquidity doing, etc., what uh the Treasury company stock price is doing, because that's a potentially new way that we can maybe gauge sentiment, not just in the Bitcoin trading and

investing community, but it gives us some insight into Tradfi expectations as well. Once these are all kind of pointing towards capitulation and they kind of all point towards all hope being lost, Bitcoin dying, it's thousand and thirst death. At that point, it gives me some good indication to react to the price action that I'm seeing. Whether that's at $75,000 or $50,000, especially if we see some technical confluence as well, lining up with previous all-time highs or lining with some key moving averages, then again, that just kind of increases the probability of that playing out. Again, it's one of these things. People look towards analysts like myself and plenty of others in the market as surefire bullish or bearish thesis people, but that really isn't the case. If you look at the market like a

poly market prediction, if you think there's an 80% chance that Bitcoin is going to be higher in a year's time and there's a good asymmetric opportunity to accumulate some discounted BTC, then that's probably the thesis that you should be playing. Whereas, if you think that there's over a 50% chance that Bitcoin is at a lower price, then again, maybe you play a little bit more defensive and wait until there's these big obvious turning points in the market. But it's not an exact science. There's no holy grail indicator. There's no one thing you can look towards with 100% certainty. You kind of have to put these things together and work in probabilities and react to the data rather than try and predict it.

>> Excellent. Okay. Thank you for diverging for me. Please continue with the other things you had actually planned for our show. >> 100%. I'd love to. So, like I said, we're measuring this as well in USD denominated terms, the long-term holder distribution. Now, that might not be the best way to actually measure Bitcoin. Like I said in the very, very start, 2025 has felt incredibly poor. Even though we've been around flat, like a pretty much neutral gains for the year, when we see other markets doing exceptionally well and we're not, that feels terrible. If we were pretty much flatlined for the year and equities and commodities roll down 20, 30%, we would be celebrating, hollering. Everyone would think that Bitcoin had just surpassed all expectations and great.

It's when we compare to other markets, but that does give us some good idea of the purchasing power and maybe relative strength of Bitcoin. Now, I know we covered this in the previous episode briefly, so I won't stay on it too long, but if we look at Bitcoin priced in gold rather than in USD terms, we're actually down over 50% since that market cycle peak we set pretty much a year ago. And we've down we've been beneath this 350day moving average, the 50we moving average pretty much since August. So that was my line in the sand in USD valuations for when Bitcoin had entered bare market territory. But we'd actually been beneath that level in gold denominated terms for many many months already. But one thing we need to consider, like I said, it's been pretty much a year that we've been beneath our all-time high in gold denominated terms.

If we actually look at the relative length of bare market time in in gold denominated terms rather than USD denominated terms, we can see that the average BTC versus gold bare market is about 390 days. Now, we're about 350 plus days from that all-time high already. So, there might be some indication that we're already around 90% of the way through this bare market. So, again, quickly playing into the two week outlook. It wouldn't surprise me to potentially have a bearish end to 2025. Maybe a final flush out of leverage, liquidate some final participants, some degenerate leverage traders, finally ruin everyone's outlook on Bitcoin.

Everyone's finally expecting the worst 2026 imaginable. And at that point, again, maybe a good time to play contrarian. But if we analyze Bitcoin not just through the lens of a diminishing fiat currency, which is pretty much resulting in all asset prices increasing, but measure it versus other comparable investing assets, it maybe gives us some better indication of where the market could go and maybe what's been happening under the hood rather than just looking at one USD number. Like I said, I think a good bottoming price if we are to see a little bit of a lull into 2026 or maybe we just rangebound for the next few weeks and have a little bit of a poor price action start to 2026 then a good level I'll be watching is the average accumulation price of strategy which is

currently around 74 to $75,000. Now imagine the headlines. MSTRI who have been buying Bitcoin for years since 2020. They now hold over 660,000 Bitcoin and they're now at a loss on their Bitcoin positions in terms of being beneath their average accumulation price. I mean already they're beneath their net asset value premium indicating you can essentially buy a dollar worth of Bitcoin via MSDR for 85 which isn't too bad if you ask me. Of course there's a little bit more risk and reward to to go with this. I wouldn't necessarily say apint treasury companies. If anything, micro strategy is like the Bitcoin of the treasury company market. And the more speculative you get, the further down the list of treasury companies you go, the more like altcoins they are

where they're much less likely to succeed long term. And I imagine a lot of these ones all the way down here, almost all Bitcoin is a get out of jail free card maybe aren't going to stand the test of time. I imagine those shareholder meetings when they're already down 50% and the share price is down 80 90% are a pretty tough place to be in. So we may actually see some treasury company, treasury companies buying the Bitcoin of the force sellers of these ones that maybe bought Bitcoin again just to try and pump share price, these zombie companies which maybe don't have the the best thesis long term, but again we'll get past that. If we look to the Bitcoin production cost, now I'm not sure if we actually covered this in the last episode, so I'll just very briefly touch on it. This is the electrical cost

to mine one Bitcoin. And what we can see is this has historically acted as an unbelievable floor price for Bitcoin because again almost like the asset value premium of treasury companies. If you can buy one Bitcoin for less than it costs to mine a Bitcoin historically that's a pretty good deal. And we can see all the instances historically where we've been at or beneath this electrical price. It's been an unbelievable accumulation opportunity for Bitcoin. Now again this can move to the downside. We're already seeing some early indications that miners may be at least capitulating in the short term. We're seeing the hash rate declining slightly.

We're seeing the difficulty adjustments again pointing towards the fact that miners are maybe capitulating a little bit. So, this may move slightly to the upside or the downside. But as soon as we start getting towards this price where you can maybe buy a Bitcoin for less than it costs to mine a Bitcoin and this is excluding the hardware costs, then again, this provides another point of confluence to maybe be able to accumulate some cheap BTC. And along with that final one, if we look to the cycle mass chart, which is looking at a number of different onchain metrics and combining them for confluence to give these almost fair value or under or overvalued levels for Bitcoin, we can see that this blue level here, this undervalued line which acted as support historically throughout this cycle already and resistance in the previous bare market is currently around $70,000.

So I think between that 70,000 to 75k which again aligns with the previous bull market peak I think could be an unbelievable area to accumulate some discounted BTC and along with that we'd see a huge amount of shorting on the network a huge amount of capitulation on chain the headlines would be terrible it would be a true ultimate extreme fear event in the market this black swan event which everyone would just think that bitcoin can never recover from and at that point I'd be really aggressively accumulating bitcoin around 70 to 75k and if this happens in the next 2 weeks or in the next month or two. Again, I'll be taking action. But from that, I think we actually could have a little bit more of a bullish 2026. Like I said, the bull market was a little bit underwhelming and I think the bears expecting a

terrible catastrophic draw down for BTC again are maybe in for a bit of a surprise because I think the bare market may be a little bit underwhelming from their perspective as well. >> I like that. I like I like you. Last time you told us that what what point you would be buying and I think you're telling us the same thing again. So, I'm very keen to to keep tracking that. And I think uh I think whenever that happens, Matt, the most important part is that you ping me and we you come back on the show like immediately. Like we'll just move everything around to have you come on. In a way, I hope it doesn't happen cuz I feel like we're going to be totally melt. Everyone's going to be melting down at that point. But if it does, you're coming right back here.

>> I'm just happy to there was something I didn't change my mind on. So, I'm glad I'm glad that there was some uh some consistency there from myself. But like I said, I I'll I'll carry on with story time. If we look a little bit further on, if we look into 2026 from a macroeconomic perspective, things actually still look fairly promising. And I know everyone's going to say, "Yeah, but stocks are way overvalued. There's too much debt, etc." There's not a onetoone correlation between economic strength and valuations in the stock market. For example, people put their money in things that will generate wealth or protect wealth during downturns. If there's huge liquidity injections coming into the market, consistent federal rate cuts, and a diminishing purchasing power from

currencies like the US dollar, we're going to see valuations skyrocket even further. I always like to look to 2020. Global economies had shut down. Everyone was at home. No one was really working and stocks were marching on towards new all-time highs because just the dry powder, the capital available was just being poured into markets. And what we can do is if we look at the US dollar strength index which everyone knows the DXY but rather than looking at it just on a standard basis if we look at it on a yearon year to look at the rate of expansion or contraction or positive influence on its purchasing power and add a 100 day offset to almost allow these changes in macroeconomic policies to really start impacting markets. What we can see is when we apply to the BTC chart, this inverted US dollar strength

index year-on-year with this offset, it's almost perfectly mapped out the Bitcoin price action that we've seen this cycle. Now, it may be a little bit controversial because everyone was looking to the Global M2 charts that we'd seen this cycle, and we've had this big divergence there. Although, I will say very quickly, I'm going to skip ahead. If we look to the year-on-year basis chart of Global M2, we've actually been a period of not necessarily contraction, but slowing expansion from June. So, everyone looking to the Global M2's chart saying, "Oh, it's useless. We've not followed Global M2 like we histo." If you look on a year-on-year basis, it's a slightly different story.

But back to this, what we can see is this is almost pointing towards more negative price action leading into the tail end of 2025 before a big rebound to start off 2026. Now, what we can also do, what I've applied onto this chart here is a Crosby ratio indicator, which I I think was created by one of the most handsome analysts in the space. I'm not sure exactly who, but it's essentially just measuring the rate of change in a one-mon moving average. So, it's more of a technical base factor. What we can see once this aligns in these oversold condition periods as the US dollar strength index is bottoming out on a year-on-year basis, they've marked major turning points for the Bitcoin price action. And we're once again at these periods of time. These are incredibly rare signals and especially as we've

seen the US dollar strength index give us this indication that the start of 2026 is likely to be positive alongside like I already slightly gave away more federal funds target rate decreases. There's a good chance that 2026 continues to see more liquidity being injected into the system. We may start to see this global M2 year-on-year chart start turning to the upside. And again, all of this is pointing towards more positive macroeconomic conditions for Bitcoin, especially due to the fact we're also seeing quantitative tightening ending. Well, we did on December the 1st, we saw the end of quantitative tightening. The three previous instances we'd seen that happen almost all resulted in immediate bullish price action for Bitcoin. I think all of these are just pointing towards almost

this debasement trade which I've seen many people reference where it doesn't necessarily mean that Bitcoin is going to skyrocket to $200,000. But the fact that what we're measuring Bitcoin against the US dollar is diminishing at such a rapid rate, it's almost inevitable that assets like Bitcoin, gold, and equities are going to rise potentially above what may be considered fair valuations. ETFs provide investors with a structured, disciplined, and diversified approach to crypto, which is cool, but the world is moving on chain. We need a crypto native equivalent. That's exactly what Reserve's decentralized token folios bring to the table. Reserve ETFs are rule-based baskets of crypto assets packaged into a single token like Coin Market CMC20, crypto's version of the S&P 500. Go to milkroad.com/reserve

to find out what's on offer. All right, Matt, you've painted a nice picture for us for why 2026 might be positive. Towards the end of these charts, you always give us a pretty hard prediction. And you always I love your presentations always have at the end and be like and Matt Crosby's prediction for this next phase is this. So are you ready? Are you ready to give that or do we have more charts to go through? We have more charts. I want them but I'm tell I'm ready. I'm ready. >> I'm ready. Okay. Give it to us. What is it? >> What's limbering up? So >> here we go. >> Like I had said I think it might be better to start looking at Bitcoin through a slightly different lens rather than just looking at USD valuation terms which are maybe losing its importance somewhat. Like we could see, Bitcoin

made a new all-time high in October, but it didn't feel euphoric. It didn't feel great because we'd really underperformed where we had should where we should have been based on a relative performance. So rather than give a direct price forecast in USD terms, I'm going to change it slightly. What we're going to do is look at the Bitcoin versus gold chart. Now, this is the just standard BTCUSD divided by gold chart. What I've done is add these Fibonacci levels. So essentially what we can see how many ounces of gold to buy one Bitcoin. Now we can see we did actually set an all-time high this cycle in December 2024 at about 40.73 ounces of gold per Bitcoin. Now what we can do is almost work backwards. The gold price is currently around $4,300.

Now keep in mind that is changing. So these targets are going to change slightly. But if we work backwards and say what would 40.73 ounces of gold at $4,300 result in terms of a Bitcoin price? It's around $175,000. Now, what I'm going to say is I don't necessarily think we're going to reach those highs in 2026. I think the start of 2026 could look quite positive, but predicting a year into the future is a fairly difficult task. And I know in midterm elections, the years can be a little bit muddled and we may see some recessions globally. So, I'm actually not 100% positive that we're going to make new highs versus gold in 2026. But what we can do is again almost work backwards. say the next level of support

beneath us is $18.29 which is just beneath $80,000 around 77 $78,000. So again providing that confluence that if we are to just have one final flush then that could be a good level to watch. But if we are to match up potentially to the 2021 peak that we set 37.46 ounces of gold per Bitcoin then again we can work backwards 37.46* 4300 which again is based on the current gold prices. Do not take these as gospel. all these are changing targets, then that's around $160,000.

Again, that might be slightly optimistic, but I think that could be a good bullish outcome for how high Bitcoin could go. But do keep in mind that's in its USD terms. That would still put it beneath the high that we set in this cycle. So, it really depends on how you define a Bitcoin bull or bare market because I think we could have some chopping and consolidating sideways on the BTC versus gold chart because I think Bitcoin still has some reassurances it needs to provide to investors. What we typically see in markets is strength attracts strength. Gold going exponential to the upside. Many people may point to that and say it's unreasonable. We're way overvalued.

But investors look to that strength and they don't care if it's overvalued. They think it's going to last indefinitely. This is how we have bubbles. It's a natural boom buzz cycle that occurs in every single market. So when we see these overvaluated markets, it just attracts more capital going into it. like we could see with Nvidia, like we saw with tech stocks in the early 2000s with the dotcom bubble, like we saw in the housing market in the late 2000s. Once things start getting out of hand, doesn't mean they can't get even further out of hand. So, I think if we can start to see Bitcoin showing some strength, reclaiming some key levels, that $100,000 psychological level now aligning with that one-year moving average and realized price, once we can start climbing above that, then we can maybe start targeting that previous all-time high. we can maybe start

looking towards which is 27.55 here. The next Fibonacci level on this chart which again based on current gold valuations would give us a price of around $120,000. But if gold matches on to 5K then again we might even reach higher levels than that. But versus gold in terms of purchasing power, I actually don't think we're going to make new highs in 2026. >> Excellent. Okay, that's that's a good take. Um what if gold goes down as well? What if they both go down? because then the ratio wouldn't change. >> It's a very valid point. Yeah.

>> Or or the ratio would go up, but it doesn't mean that Bitcoin's rising. I mean, I I'm sure that's happened at times. >> Yeah. So it's it's one of these where a good way to look at I didn't prepare this chart but if you look at the gold versus silver chart almost gives some good insight on riskadjusted expectations going forward because gold is this safe haven inflationary hedge asset and silver is almost its speculative little brother who massively accelerates to the upside with great volatility then to the downside sorry can also move down very very rapidly. So what we've actually seen in the gold versus silver ratio and similar to the gold versus S&P ratio as well is we've almost seen a top in this level. So silver for example is now starting to outpace gold's move to the outside indicating that we're having slightly

more risk on conditions. Now they're both moving up in tandem but it's just the pace of acceleration to the upside. What we typically see when silver stats outpacing it suggests that risk on conditions are set to continue in markets. So hopefully we'll start to see some rotation from these more safe haven assets such as gold into more speculative assets like silver and equities and then from that again it can start rotating into Bitcoin if we can show the initial signs of strength to actually attract that capital to begin with. But there is of course an outcome where gold is rising, Bitcoin's rising and they're at similar rates. So we just stay neutral on this level. But Bitcoin is still a relatively small asset. We're going to move at faster rates. We typically move at faster rates than we see in gold. And if gold actually starts

moving to the downside, as long as we see equities continue to move up, which have historically been more strongly correlated to the Bitcoin price, again, we see this rotation of capital from market to market, then again, Bitcoin could stay neutral and gold could start moving to the downside and this ratio would move up. So looking at this chart, it doesn't necessarily indicate that its USD valuation is set to absolutely skyrocket or plummet to the downside. it is dependent on other markets especially when you're using this more relative strength valuation rather than just purely its fiat currency terms. So if we're looking at USD valuations again it depends how crazy the macroeconomic factors come into play but I think the previous all-time high $120,000 is going to be a key key level of resistance. So

that $118,000 level I outlined previously would be a pretty key big level that I'd be watching to see Bitcoin break through. And I don't necessarily think it would break through immediately. But overall, I think the year will be positive. I think if we do see Bitcoin start realizing and benefiting from these macroeconomic factors, as all markets likely will, then we are going to see high USD prices, it's just if Bitcoin can attract enough capital and show enough strength to start outpacing the other markets, which over the past year it just hasn't done.

>> We would be ecstatic if we got back to 120K anytime soon. It's funny how that works, but we would be I think I think even just you saying like, "Yeah, I want to see it break 1181 120." Even being there, I think people would be thrilled to be back at that level, not even the all-time high. All right, Matt. Well, I mean, this has been a fantastic episode. We've run very long, but I think it's been worth it because you've shown us again some fantastic charts, and we wanted you to come on and recap the year um and look ahead. And I think I think you've definitely done that and painted a nice picture at the end of these episodes. And I think this is the part you're actually really excited for is we do what I promised you is a a rapid fire

round. And this this is going to require you to answer things outside maybe your expertise because there's not many Bitcoin questions in here, okay? It's not just about Bitcoin. This is like we talk about Ethereum, we talk about a few other things. And if you don't know, that's fine. But if you have a quick answer off the top of your head, that's what I'm looking for. >> Okay, let's do it. I'm excited. >> Okay, we'll start the easy one. Matt Crosby, what will be the Bitcoin high and the Bitcoin low price in 2026? >> I think the Bitcoin low price will be $72,000.

It kind of depends on how we close 2025, but I think slightly lower than the lows we set in 2025 so far. >> And I think rapid fire, man. There's no there's no explanation. This is just this is just the this is just the number. >> Highs 120,000 >> 120 and 72. Okay. Ethereum high and low in 2026. >> Low, I don't even know what price it is now. Low $2,000. High $4,000. >> Okay, great. >> I don't know what price it is. This is hard. >> It's like 3,50 or something. Just just middling there.

>> Two and a half and four. Yeah. >> One asset everyone will wish they held from now until the end of 2026. And try to not say Bitcoin or Ethereum. Is there anything else? >> Quantum computing stocks. Oh, okay. The next question was which sector has a potential of 10x this year? And I'm assuming that that's the same answer for you. >> There's a very similar answer. Yeah, I'd say the quantum computing space is is by far. Outside of that though, because I think that's a bit boring. I've already answered that. I'm going to say nuclear, energy, and uranium stocks. >> Okay. Which AI app will grow the most in 2026?

>> Google Gemini. I think they have unlimited capital to burn. >> Okay. And the last one is give us an absolutely wildcard prediction. And this is something that is the least likely to happen but is absolutely crazy. And if it happened, we would all look to you as an absolute like fortune teller. The craziest wild card >> thing out of the box. Okay. I think that there's going to be either signs of extraterrestrial life within our own solar system or some historic fossilized example that points towards maybe it's already existed on our planet for some time before and it's going to completely shatter all existing understandings of the world, biology, evolution, etc. to know that we're not alone in the

universe and there's actually plenty of life out there. >> And you know what those aliens are buying is XRP. That's the end of that. They've come to buy XRP. >> Exactly. >> I like how far you went with that. Most people just said like a finance answer, but I you took that and you're like, I have I know what I want to say for this one. >> 100%. Yeah, we're going we're going way way out there with that one. >> Way way out there, literally. Uh right on. Well, Matt, Crosby, dude, it's been great to have you on the show this year so many times. Um we'll see you again hopefully many more times in 2026. And uh thanks for joining us for the prediction prediction episodes. >> Always a pleasure. I'd love to come back anytime. Want insights on what's moving crypto markets and how we're trading

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