Is the crypto bull market over? Michael Nadeau's bear case

Transcript

GM good morning welcome to the milk Road show The Daily crypto show that's bullish before coffee and bearish after checking the charts I'm your host Jay Hamilton it's Monday March the 10th Bitcoin is below 880,000 is the bull market over is this the top are we headed down where are we at or is this just another dip that is the question of the week every guest this week we're going to be helping you guys develop your own thesis because that's what you should do as to where we are the cycle and how to position your portfolio for what is coming next to start off the week we have Michael natu joining us founder of the defi report investor educator tweet tour just a guy that has such a good look on the space from both

crypto perspective and the macro perspectives we're going to dive into why Michael put out a report last week saying he is a bear right now and believes that we are entering a bare market and the bull market might be over before we jump in and hear from Michael do me a fav wherever you guys are listening hit the Subscribe button give us a like if you really are feeling the love even in a bar Market or even in this dip whatever it is give us a five star review it's much appreciated today's episode is brought to you by definitive Advanced trading on every chain it's also brought to you by coin shift powering top crypto treasuries with their yield bearing stable coin CS usdl that was a Mel full but you're going to hear more from them later in the show without further Ado Michael

welcome back to the milk Road Show great to be back Jay yeah I was gonna say it's good to have you back but uh I don't know I don't know if I'm excited to have a bear on the show right now I don't know okay uh let's let's start with uh where where are we in the cycle what's your view yeah so you know I've been pretty bearish I'd say over the last last month or so um we put out a few reports we put out a report last week where I kind of came out and and said like the probability is pointing to like cycle toop being in and I went through sort of just a long list of things that I've been observing that's that's really pointing to that and it's really a combination of like just really like

looking at the various sort of stages I think of the cycle that have already played out and just being like really honest about like what we've already seen I think you know one of the challenges for investors that may be coming into these markets later in the cycle when a lot of really bullish news is is playing out getting sort of caught off guard by this because they weren't here you know at the bottom and and in of 202 2022 when we've kind of had like a number of Cycles already play out so really the framework that I'm working off of is like going through these Cycles identifying that hey this is the reality that has played out and then combining that with our onchain data analysis of like more just like truth of what has played out and then looking at

the macro and everything else and trying to sort of read the Tea Leaves of kind of where we go from here so happy to happy to go through some of that with you here today yeah it's uh it's it's not easy to take all of these factors and all these variables and bring them into a concise Viewpoint especially when we really are in one of the we have never it's been a long time since we've had this much economic and market uncertainty uh I think the last time that the economic uncertainty was this high was like back during covid and now Trump is creating that economic uncertainty again so if you're feeling lost out there and like you don't know which way we're going you're not the

only one there is certainly it's it's a very difficult Market to predict right now uh okay let's get into let's get into your your bear case what is what are you looking at what are you seeing that's making you say that that we might be entering the bear and the bull might be over yeah I think a lot of it is zooming out so you know I try to like go for a walk do a little meditation like sort of get out of the weeds because a lot of us are in the weeds we're on Twitter we're in the onchain data we're looking at so many things and there's so many different viewpoints right one guy says he's bullish Ralph pal says he's bullish someone else is bearish like this it's is a hard you know it's a hard to navigate this so the way I'm looking

at this is I'm zooming out and saying okay what is actually what can we say has actually transpired here we bottom you know at the end of last cycle after after FDX at the end of 2022 and then we went up in 2023 so we had basically the first I think leg of the bull market but nobody talks about that as being in a bull market at the time because most people are still on the sidelines so to me we've already had sort of that early bull period we then you know went into like this wealth creation period is kind of how I would describe it and that was really from like October of 23 into March of 24 that was after the BTC ETF came out Bitcoin went up to 72k massive run for salana went from like $20 to

$200 repr pricing of salana defi we had memec coins we had whiff you know do like a 75x during that period we had Bonk um so that was s of the the seeds of like the the sort of blowoff top phase we were planted at that point and then I think we went through wealth distribution from roughly March of 24 to basically when I think the blowoff top happened basically when Trump came into office just after he launched his meme coin salana got up to $285 or so I think it was like a 35 X from the bottom all the way up almost doubled its market cap even though the price only got to like 285 or so so that's kind of like your wealth distribution and then you know what I'm trying to sort of develop

conviction on is to say okay th those phases have played out where are we now and it feels like we're going into this wealth destruction phase which we've seen in past Cycles as well and we were at that point where like the markets are still you know pretty high bitcoin's what about you know maybe maybe it's about 30% off of its off of its high that could be a sort of bull market correction certainly right that's right in that range and so we are in this very diff difficult period to navigate right now where people are trying to say is this a buy the dip or is the cycle breaking down and the Bulls are sort of in denial that it that it is breaking down that's kind of the the sort of high level and then we look at the onchain

data and those types of indicators you know what I'm looking at there is is really like you know sort of animal spirits right so so the casino really played out on salana in this phase right I think everybody would agree that it was ethereum last cycle um with Unis Swap and open sea that really pivoted to to salana in this cycle you know what I'm looking for is to see like are these Animal Spirits like are they hanging in there right are they still trading meme coins are they still as enthusiastic about the crypto markets today as they were you know 60 days ago and I'm seeing that start to to Trail off so like Dex volumes on Sal yeah let me P let me pull up some charts here that you have from your recent report yeah so this chart

we're looking at here this is Dex volumes by Chain so we've got almost all the the chains in here including the l2s and you know salana has dominated Dex volumes I think everyone's seen these highlevel figures that have come out they're doing more volume than ethereum for for all of 25 and and and really the the final quarter of fourth quarter of 2024 this is now dropping off we can see it's down about 80% it's still high right these volumes are still quite High compared to you know where we were a couple years ago but dropped off about 80% for salana here so that's that's concerning the next chart here is showing the token launches right so this is something that you know we we we peaked at about 70,000 tokens being

launched per day on on salana a lot of that's coming from pump. fun we know that about 60% of salon's Dex volumes are you know involve a meme coin right that's that's so far for this year and so what's slightly concerning here is like if this you know if the casino is the lights are turning down at the casino these fundamentals could sort of deteriorate rather quickly because I think it is largely Animal Spirits trading mem coins so that's this is one concern I have and if this breaks down you have to ask yourself like the the so price is very correlated to onchain activ and and fees and things like that that are happening on chain and so if

this breaks down you know what is the next thing is there something else that's going to bring these people back in is there some sort of use case are there other apps being built uh my concern is that yes there are and I'm very bullish on salana long term but you know it may take it may take a sort of like bare Market to sort of you know kind of cleanse itself come back out of this is that's that's kind of what I'm looking at here and what concerns me even more than these charts is so this is like even more concerning I think because what we're looking at here is the percent of percent of addresses that are contributing to 95% of the total gas fees and over the last 30 days it's been less than 1% on salana we're looking at the base plus the priority fees plus the

Geo tips for salana here um so what that is is telling us is that there's essentially the way I've been like writing about this and describing it is you have all these like animal spirits these are the minnow right the minnows that are trading $100 $200 of meme coins and there's quite a bit of that volume happening but there's sort of like this like larger fish uh in in the pond that's like these are the Bots that are basically you know trading off of all this this liquidity that's coming in from the minnows and they're driving the the vast majority of the transaction volume on salana through these Bots uh We've looked at some data that shows that like it looks like 99% of Wallets on salana are people and we we look at

that by basically uh separating out wallets that have had more than 10,000 trades in a day um with 25% failure rate so we basically we'll say it's a bot if it's hit hitting those metrics um so 99% of the wallets are people but 53% of the volume is bots so you have mostly people but then you have a small subset of these Bots algor algorithms that are driving most of this onchain activity why are they there I think they're there because these minnows these animal spirits and if those start to WAN I'm concerned that the the fundamentals will will drop off significantly um so I'll I'll pause there just on the salon we can get to some Bitcoin data as well but

um I'll I'll pause there can you just explain what are who are animal spirits you keep using that term let's just Animal Spirits is a there's a book uh somebody wrote uh it's kind of a term for when you know lots of enthusiasm lots of specul ation comes into financial markets so crypto is famous for this you know lots of reflexivity on the upside and then also on the downside so Animal Spirits is just a term to say like you know people are really enthusiastic about gambling in the financial markets so if you're only trading on centralized exchanges then you're not going to make it the best Traders know the alpha is onchain definitive founded by coinbase alums let you trade any token on salana

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come in come in later and they push us through the euphoric Mania phase blow off the top right and so what you're saying is we've had that phase we had that phase now as you can see in the data we're we're on the down we're on the downtrend and if that phase is over then this bull cycle might also be over that that's the framework I'm working off of and I think what tends to happen and people get sort of thrown off by this because these some of the animal spirits are coming in because it's like oh the government's going to start buying Bitcoin there's a strategic Reserve there's there's new regulation there's you know there's governments potentially buying this stuff so like people are seeing this and that's they're coming into the market thinking

like oh like this is the start of a bull run not realizing that like this is the culmination of like 10 like wildly like bullish catalysts that people couldn't even imagine two years ago that have that have now played out and markets are forward-looking so now it's like what is the next thing to happen and when you're looking forward you're sort of like well all of this is baked into the price all this bullish catalysts are baked into the price so that's that's part of it as well yeah which I think we all we all saw that uh play out in real time last week when Trump announced the Bitcoin strategic reserve and markets puked because it was already priced in how many he' already announced it like eight

times already like we know man we know it's coming okay I want I want to keep going with your bare case I don't want to shift to shift to to Bull yet um because I want to I want to let you get fully through this let's talk about you want talk about Bitcoin what what else you want to talk about on the be side yeah let's look at Bitcoin so there's a couple Bitcoin charts in there maybe pull up the first one that's showing the the mbrb of long-term holders yes so this this is interesting you know one of the challenges I've had as is sort of developing this bear case is like if we have topped um right which is sort of what you know if you're just kind of being honest about what has happened I think we have but you have to look at it

and say well wait a minute like the cryp the entire crypto market cap only went to like 3.6 trillion or so I think we got to three last cycle so it's kind of like a muted cycle in some ways and so I've been trying to look at some data to help me develop conviction that like okay that's it's reasonable that it's a muted muted cycle despite all these crazy bullish headlines um so this is looking at the long-term holder mbrv mbrv is market value to realized value realized value is a proxy for the cost basis of you know all of the Wallets on the network long-term holders are basically taking a cohort of those users and saying these people haven't moved tokens in 155 days tends to be like the smart money of of Bitcoin so what we're

seeing here is like when we peaked in the 17 cycle the mvv of the long-term holder Co cohort was 35.2 so they're sitting on 3,400 per gains uh when they when we peaked if we go back to the the 21 cycle and this is the first peak of the 21 cycle so it was like March of 21 the mvrb of the long-term holders was 12.5 so you could have looked at that and been like you know at the time uh when we were peing you might have been like wait a minute we have more to go here like we haven't even gotten to where we got last cycle that view would have been flawed because there's a law of diminishing returns playing out I believe here um so now if we fast forward to the current cycle we got up

to um like into the high 3es in March of of of last year like in the first kind of phase of the Run we came down and kind of reset and then we got up to 4.4 just in in this past December this is so that would mean that long-term holders are sitting on like 340% gains at that point so you know I think a lot of people will look at that and say like no way like we we've got a longer like this has to go up higher for this cycle the peaking but if you look at the symmetry of the reduction and the peak there it's very consistent so the you basically have a 65% drop each each cycle and it's possible that that's that is reasonable thing because bitcoin's a $ 1.7 trillion dollar asset now it's a

huge it's a huge market cap it takes a lot more Capital to move these markets and I just don't I don't know if we're going to be able to see sort of these these wild blowoff tops where that mbrv just like totally separates from from the where the market value separates from the the sort of cost basis of the network so that's that's one thing I'm looking at as well yeah certainly is it's it's it's one of those things where when you're in this moment when you're trying to develop a thesis for what is a different if if your thesis is correct and we are in the bear then we are a we have broken the pattern we're in a different cycle and it that makes it very difficult and I I gotta give credit

to you man like not enough people have the uh quite frankly the balls to go out there and to go against the the grain when everybody is saying this is just a dip most people are still saying that right um and I know we're gonna have some guests on this week that are going to present that case as well uh so it's it's great to see that you you put together some data that shows that hey this could be a new pattern and here's the new pattern as the asset class class gets much bigger it would make sense that we would have diminishing returns and anything else to look at on the Bitcoin side we had another one in here just looking at the long-term holers yeah so this is just showing this is the total uh number of coins that are being held by by wallets that have been

identified as long-term holder wallets and you know you can see that throughout the Cycles as the markets are peing you tend to see the long-term holder um Supply basically hit it's like its bottom when the price is peing and this is because long-term holders again the SM the sort of smart money of Bitcoin the ones that were here you know most likely during the the bare Market you know they've been you know IR long for a couple years now they're they're sort of passing their coins to New Market entrance and we tend to see you know that that orange that yellow line dropping as the price goes up and we we saw that play out twice uh so we saw it you know in q1 of 2024 this was after

the ETF came out Bitcoin went to 72k or so we saw a decent amount of selling from long-term holders but but not like a huge drop like we've seen in the past and you can sort of see here if you look at the the last cycle and the prior cycle there's a like a law of diminishing returns here as well like the the move down from long-term holders is not as sharp in each cycle and so you know this is something I'm looking at as well where we basically have seen long-term holders like cash out twice now um and you can see that that yellow line is starting to level off so that's maybe they're not selling as much into this you know 80 80k or so maybe now they're starting to accumulate that's

the question are are long-term holders is a money going to start accumulating now develop a base at you know 75 80k and we don't have like this 9 to 12 month bare Market that I'm sort of predicting here and it's actually like more of a a 21 situation where Bitcoin dropped 50% in the middle of 2021 and then we ended up having like another leg to the to the market towards the end of the year that I think that's in play that's possible and we can get to like sort of the bull case here but this is just another data point that tells me that like you know long-term holders have have sort of cashed out here so any other crypto specific concerns to bring

up because then I want to shift to the macro side and talk about that as well yeah I think you know just generally speaking like if we are in this like wealth destruction phase what you want to see is like the charts kind of break down uh and then you know what I'm looking for to confirm this is the charts start to break down short-term holders for Bitcoin are their cost bases is roughly 92k right now so they're in in sitting on losses and what can can happen is you get these bounces so bitcoin's at like 80k let's say the the sentiment gets so bearish that we actually get a bounce up to 90k like to confirm this I'm looking to

see like okay it gets it stalls out of 90k like we just can't because people are selling and people are worried and they want to get out and they're basically seeing these balances and then they start selling so I'm try I'm looking to confirm some of this um based on what I think is going to start to play out with some chop um but yeah happy to happy to go to the bull case or or address anything else uh you so so so you're you're you're not saying that uh and actually we should I should have mentioned this the beginning of the episode just to um I'm going to let you tell us the current um allocation your report for folio just so everyone understands your your portfolio and your bias um but what you you're not saying that hey we're in a

bare market and like everything's going to go to zero like it's like you're not sitting here saying we're gonna fall off a cliff you think that we're going to continue to be in chop and we could go up from here still to 90 that's kind of your your ceiling that you're going to be watching closely uh is that 90 ceiling yes yeah and and like you know if if we got up to 90 and then we like kept pushing up that would tell me there's like there's real flows behind this and like okay I'm probably wrong we're not going into a full bare market and maybe there's another leg and obviously I'm watching what's going on in trafi today has been like a a mess in the in the traditional markets as well and so um paying attention to to macro we can talk about macro as well but yeah

I think you know one of the concerns that I have is like when you get to this level you know if if we are in this wealth destruction phase like what tends to happen is there's like some dead bodies you know once you start to see liquidations um the dead bodies will eventually surface and it you know we peaked um in November of 21 Bitcoin peaked and it we had about five months of chop where it was unclear if we were going to go up again and then teral Luna happened in like April so you you had a five Monon period where the markets were trying to figure things out we're only in you know six weeks to six to eight weeks of this you had you know so this can go on for a while and then you get a

capitulation and then the dead body starts surfacing and then it's like obvious that okay this is we're going we're in the bare Market that to me will confirm like okay that we're bottoming out um so I'm looking those two things are sort of what I'm looking to see play out well and the tough thing the really tough thing is that the the Bulls are going to say the exact same thing right now the Bulls are going to say hey we're in four to six months you pick your time frame but everybody's going to say that we're in chop right now right nobody I don't got anybody coming on the show that's G to say hey the mole Market's on and we're about to go to valala tomorrow or next week right like so um that means that we're gonna have several months of

the Bulls continuing to say hey this is normal we're going into the bull and I think the Bears are probably going to grow you can already see it lots lots more talk about recession coming lots more talk on the macro side about the things not looking good Trump continuing to do Trump things cause more uncertainty let's talk about about Macro for a second um Doge doge is obviously is having a a large effect what are your thoughts there yeah so you know Doge I I've had I've kind of gone back and forth a little bit on this um I my initial thinking was like you know we have a very very large you know Federal uh deficit here and it was 1.8 trillion last year and it's just you know when you look at um some of the really large

you know categories of spending like it's hard to imagine that you know we can take a wrecking ball to all this and keep the economy together with that said I think it's becoming clear and and you sort of have to just take the Trump administration at their word I think at at some point here where and I think the markets are trying to sift through this right now because the when Trump was coming into office I think most people assume he really cares about the stock market and he's not going to let the stock market just you know know go to I I I think you have to start to Pivot off of that a little bit and take them at their word because it's becoming much more clear what the Trump Administration is trying to accomplish

in terms of getting the dollar down getting rid of this fiscal spending and this you cannot do this you cannot sort of get to the other side of this I am bullish on the Trump economy and everything they're trying to accomplish but I don't think you can just get to the other side of that without pain and and they're they're coming out and being transparent about this now I mean it we weren't hearing this 2 three four weeks ago but you know bessent came out uh last week and and literally said like we need to have a detox period he said it twice and it's basically this shift from um the public you know basically uh taxpayer dollars fueling the economy through fiscal spending and and and budget deficits to trying to get off of

that and get the banks lending and get the private sector driving the economy again and that just takes there is a transition period there and I think that's what we're we're going into and I think the markets are still sort of assuming that no he's he's he's just bluffing with all this tariff stuff he's bluffing with all this stuff and and and and he's gonna make sure the stock market doesn't go down we'll see you know today's been a a big move in the stock market my base case here is like there the stock market doesn't go down like crypto goes down because there's a structural much larger structural bid to the stock market um with passive Bond buying of stocks so you know I think it's more of a slow bleed for the and that's kind of what we've been been

seeing play out but I just think sometimes the best trades are not predicting you know what's going to happen and just dealing with reality of what's happening right now and it feels like this is one of those points where you know the same thing to me happened at the end of last cycle where Powell basically came out and said hey we're gonna hike Rate rates there's going to be pain and there were people in crypto and macro people that that's faded that for some reason um and it's just like that was being told to you at that time um and I think it's just like I'm trying to deal with reality a little bit and just say okay let's take them at their word um this doesn't look great if if they're serious about this I am bullish on all of this coming out on this on on

the right side um but I think it might might take a little time so yeah yeah yeah just to let me actually let me quickly come back portfolio just give us your portfolio quickly so so um yeah so my my bias here and we always write about this uh as well you know we largely went to cash uh in December and January so you know that's that's basically my I'm talking my book here because I'm basically sitting in cash we own we still hold Bitcoin uh long-term Bitcoin that I'm just gonna always going to hold on to but yeah been have been moving to cash and and now seeing that thesis start to play out a little bit but if we get really really bearish sentiment and it becomes clear that you know we're bottoming and like like I said I'm watching to see if these sort

of retraces are sold in into you know I'm always I'm always updating uh things as new information comes in so yeah okay I wanted I want to get to uh the bull side and what you're seeing on the bull side because as you said you're you're certainly you're you're open to both sides and you're looking at all the data and you've got some thoughts on the where how we could be positioned if we are in a bull bull bull run still the thing that I find very interesting that I'm hearing a lot right now though is it feels like the Bears and the Bulls are sort of saying the same thing it's just a different view on the timing of it and how long it'll last right like everybody

is in agreeance that we're in Market uncertainty that there's pain to come as you said Scott Besson said it himself we need a detox assets have gotten too high a lot of a lot of assets were driven up by AI so there's a need for this reset and it feels like everybody sees that and and Trump is really doing a massive shift in the American economy that takes time and won't happen immediately and there will be pain through that so like everyone seems to agree with that the thing that is in disagreeance is there's the Bulls that are saying hey this is short-term pain and we're only going to be in this for a few months and then there's the bears that are like no I think this is more like 9 to 12 months or somewhere in that range of of be Market um when when we look at the the

bull side what are the what are the things that are standing out to you they're making you say uh maybe maybe I'm maybe I could switch my tune yeah so I think try to go through everything that I'm seeing out there so I think there's a story to be told with the dollar dropping rapidly last week with global M2 starting to rise and you're seeing like this cross where like M2 is rising and Bitcoin is is dropping into that yeah this is this is the chart here and so you know I try to look into this and say okay you know there is a case there's a story to be told here and I think you know as a sidebar I'm seeing a lot of you know experts out there on M2 right now which is a little bit of a red flag to to to me but this chart is

showing that okay it looks like M2 is ticking up again and and Bitcoin selling off I think real Vision has done a lot of work on this and there's there tends to be a two to three month lag here with Bitcoin and the correlation to to Global liquidity and so um we may start to move up again what I'm trying to do is like forecast you know is it accurate to say that M2 is going to keep going up here and if that is the case then like okay let's let's let's factor that in and what I'm looking at is is really comparing last year to this year so is it reasonable just because M2 is rising doesn't mean that that's like necessarily bullish because you have to look at the rate of change compared to

like what we just went through and what I'm looking at and this is um Michael Howell from crossb Capital does does great work on this stuff stuff and what what I'm looking at here is we had a lot of Shadow QE essentially last year um and he put out he he has some put a number on this yeah if you go down you know 5.7 trillion dollar of Shadow QE in 2024 very early in the in the year there um this is essentially refinancing the debt at the front end of the curve which adds to Global liquidity and then also reverse repo you two trillion dollars that was that was drained out last year and he's basically forecasting like the

Trump admin is is not gonna do you know that Besson has come out and said we're going to keep front loading you know refinancing at the front end of the curve for the next few quarters so he's not changing that policy just yet but all of this these efforts from Doge on the fiscal side um I just think that you know what we're seeing from the FED I don't think the FED is ready to to cut I think they're going to look for more pain I think they're still concerned about some inflation and so when you look at like that setup compared to what we saw last year I think the rate of change for M2 is is probably down or or at least the um and so so that is like why I'm pushing back on that narrative and this is to me the biggest one out

there that I that I see on social media that you know there's a lag and hey just hang in there hang in there m2's coming back there's a lag but I think there's reason to sort of question that question that view I thought we were getting into the bull case here Michael sounds like we're just continuing to be bearish yeah I like to present the bull case and then say well is there do I agree with that view so that that's one that is one view you know we've written about this as well where like the business cycle you know there's ISM data and that was looking good we we covered this uh in January so it looked like the ism was breaking through 50 which tends to be a reason for like Risk assets to start to to move up that called out slightly in February

and I'm wondering if the ism was picking up because there was a lot of like purchasing in in the manufacturing sector sort of front running like tariffs and so maybe the data got a little bit skewed in January mean everybody got bullish a little bit too early um it ticked down a little bit in February so that's that's something I'm looking at we've covered like just sort of small business optimism and other factors as well which which have looked good those are trailing starting to Trail off as well now so um I think from from that perspective there's there's there's some data there's reasons to be bullish but I'm I'm kind of like still poking holes in some of that and then the other thing is like I think crypto Cycles you know can you thinking in Cycles um can be

flawed and this is something I'm trying to work through as well is like you know we just went through if if this if the cycle just peaked you know that was a very different cycle from from what we've seen in the past in terms of you know Bitcoin peaking before the having which was the first time that's happened um really only two years of a bull run we usually see three years of a bull run then then one year of a bare Market you know Bitcoin dominance has uh M essentially like gone up throughout this bare Market which is which is different we T we tend to see Bitcoin dominance drop during like an Al alt season obviously ethereum has had a really tough tough go so it's been a different cycle I think if you factor all that in

it's possible that like okay Cycles are evolving like we maybe we shouldn't be thinking about it like this maybe we are going into just a little pause and then bitcoin's going to have another another run up I think I think like that's where you're saying like the the the Bulls are in the same camp as me like they're not ignoring this data they're just saying okay like you know this has happened before it happened in the last cycle just hang in there and and everything's going to come back we'll see because at some point if we start to see the um destruction the dead bodies Rising like you can't just bounce out of that like there there has to be sort of a cleansing so it's we're in a period of Market where it's not it's not clear this is a tough period to navigate and

let's be clear your um coming into this bull run your projections were were much bigger much yeah we were projecting 7 trillion plus uh total crypto market cap 10 10 trillion for like the the bull case there and like those those estimates are based on sort of the the increase that we saw from the last cycle you know just kind of like mirroring that but again you know law of diminishing returns you know I think playing playing out here um but yeah getting up to like 3.6 trillion that's that's below what our be case uh was so way well below well below so so so maybe we are just in a a new cycle pattern uh

play out for us based upon your current beliefs how do you see the next the rest of this year playing out and what what will you be watching what are the key things that you'll be watching yeah so in the short term trying to confirm that we are in like the kind of the final like wealth destruction phase so like I said really looking for retraces that basically get rejected um so looking for that I am looking at all this onchain data to to determine like is our long-term holders stepping back into the market are we going to see that chart we looked at earlier like bottom out I'm looking I'm looking for that I'm looking for the

Trad five markets to look like they've either capitulated or or bottomed out themselves we have like the the tariffs for Trump coming on Mexico and Canada that was pushed out till April early April so there may be some more uncertainty for the next few weeks around around some of that and maybe there's a resolution there and the markets have bottomed in in the next three weeks or so so I'm looking at that you know generally speaking I want to buy crypto when like the mvrv has dropped to one right during and there tends to be a six to 12 month period in bare markets where you you have those opportunities those are fat pitches to

me and I just don't see the fat pitches out there right now so that's part of the reason I went to cash was just like okay I've been irresponsibly long from the bottoms uh we've gone up you know soul went up 35x Bitcoin went up six six and a half X or so a lot of other things went up much more than that to me like okay let's get out let's wait for the next fat pitch and that's kind of that's kind of where I'm at I don't see the fat pitches I'm kind of just observing and um spending a lot of my time putting together like a bare Market shopping list we've we're doing a lot of stuff with onchain data so like trying to really find the signal because there's lots of noise in Bull markets I like the bare markets because the tide kind of

washes out and you can kind of uh make sense of everything again so yeah that's kind of my mindset I guess for these next few months um and yeah the way I would confirm that I'm wrong about this is just seeing like strength on these retraces where it's not going up to 90 and then people are selling off it's staying there and and there's flows behind it yeah a couple couple comments there one is really like that uh you're not sitting here saying it's it's okay to move to cash and to stay in cash and to watch and to wait until you get a confirmation that we are headed in One Direction or the other and I think that's something that a lot of investors

are afraid to do a lot of them are afraid to so much fomo right and so that's a challenge I think the other thing though that should be pointed out is uh you've done quite well through the bull market because we did have as you said we had basically two years of we've had two years of bull run whether or not it's over and we get the third year as we typically do is the Up For Debate right now but I think it's important to recognize because there's a lot of people who have not done so well that either were heavy on the eth trade I certainly myself would be fit into that category or people came in in December November or more recently and they bought the top how do you navigate if

you're in that position with your portfolio great question great question you know I think I think psychology is plays plays into this and it's important to kind of step back you know because because you're right I think a this this cycle has been very challenging I think for a lot of professional investors as well because you really kind of had to be in Bitcoin or or salana as like your base assets to to do well and so I think a lot of people are sort of feeling like there's no way this cycle is like there's no way I was here at the bare markets or there's no way this is over and for me like you don't want to hold if we are going into like the a 9 to 12 month bare Market you don't want to be buying a falling knife uh thinking that

you're getting like an asset that was a high flyer you know a few months ago at a you know 70 80% discount thinking that that's like a that's like a clean buy a lot of times they drop another 70 to 80% and people should really be be be aware of that like I said I'm looking I'm not looking to buy any these dips just yet because I want to see something that gives me clear confirmation that we bottomed and that it's like a it's more of a fat pitch as is how I would say it um I think that's the the key thing what I would say is like if you're gonna buy a falling knife buy Bitcoin that's the one that like you can make that mistake on and and you're you're fine like it's gonna it'll it'll be fine in three four years couple years but yeah be careful

buying these these falling knives thinking that it's a it's a buy a lot of times when something drops 809 90% it's kind of dropping to like where like the in the early investors got in and so there or potentially sometimes if it's a VC deal and it's still at a pretty decent High valuation they're still sitting on you know 10 20 30X gains even when it's down 80 90% so investors should just be be aware of that and then also the unlocks for some of these projects that are very early stage when you when you lose the sort of flows behind people wanting to buy these to tokens the unlocks come and things tend to bleed out um for for a longer period of time during the bare market so yeah

so you're not sitting here saying that you're you're still long-term bullish right course absolutely 100% very long-term yeah yeah and and it and it's really a it's a positioning of what you're seeing in the onchain data and the macro data that is telling you that being in cash is the decision right now until you see something that would indicate something in the other direction which you're just not quite seeing yet and you're not afraid to miss a you know to miss maybe maybe it goes back up to 90 and then you buy back in then because you see it or maybe it goes back up to 100 and you buy back in then because you see hey we're back on and it's okay if you miss a little bit of

gains in that I think that's one of the most important things is like everybody needs to remember that like there will be Cycles continuously like there is we will have highs we will have lows so if you know if you're whether you're in or you're out there's always an opportunity to get back in or to get out so don't get caught in uh in that position of feeling like it's you know it's up only or down only at any point because it always turns around Michael pleasure to get you back on the show my man I I I uh I little maybe not the happiest or the the the most exciting episode we've ever done um initially you and I were going to do the I wanted to do your coin B report about why coinbase is going to be a trillion dollar asset which would have

been way more bullish and exciting but that's okay it's important to have these conversations and to be real with everybody we appreciate your time today man always always happy to come on Jay awesome thanks for listening in everybody have a wicked awesome day and let us know in the comments I got to know who's a bull who's a bear I feel like there's probably not many bears out there yet but let us know how you guys are feeling thanks for tuning in everybody have a wicked awesome day as always if you liked today's episode please hit subscribe and make sure you follow us so you don't miss out on the next one there's also a link in the description to our free five minute daily newsletter where we simplify crypto for you while making you laugh and if you're willing to step up your

crypto investing game we're going to also leave a link for milk Road Pro you get access to our portfolio where you can see exactly what we are buying this is your number one resource to help you invest successfully in crypto one final note this show is for educational purposes only and nothing we say is financial advice investing in crypto or any asset is risky and you should never invest more than you can afford to lose thanks so much for listening in my friends have a wicked awesome day