John Gillen on the hidden bear market theory for crypto

Transcript

Now, why haven't I loaded up on a lot more smaller cap altcoins? I'm watching very closely Bitcoin at this moment in the market. I've been saying this for a couple of weeks, but I think that the longer this goes on, the more likely it is we reach a decision point here. And I do want to see confident decision-making from Bitcoin in market action and market price action in order to know, okay, we're going one direction or another here. >> What's up everybody? It's LG Det here and welcome to the Milk Road Show, the daily crypto show where the host has never done this show in a bull market and now I have no idea what to do with myself. Today is May 11th, 2026. Is this finally it? We've had a few people on the show in the last couple months tell us that Crypto Winter actually started

way back in early 2025, like Matt Hogan and Matt Crosby, and that has now set the stage for what we're seeing today, a very potential bullish setup and a nice little pump. But does that mean that we should go hard into Bitcoin and ETH, all our favorite majors, or is there kind of like a sneakier bit going on for L1's? We'll dig into that on today's show with my wonderful co-host, John Gillan, and even talk about whether all those sweet little AI buildout stocks are due for a pullback this month. Today's episode is brought to you by Cape, the privacy first mobile carrier, Feros, the layer 1 built for real, and Nexo. Earn interest, borrow and trade crypto. John, good morning, sir, or good afternoon, good night. See you next time.

>> All the above. Welcome to the show, LG. It's good to be here. >> Welcome to the show. Yeah, welcome to the show as well, sir. Um listen uh I I I actually want to I I I teased a lot of different stuff uh in the intro and we will talk just for people are like sometimes say like talk more about crypto. We are going to spend a long time talking about crypto. We'll talk about clarity act. There's a lot of different stuff that I want to cover. Um, but really I do want to start with kind of the I mean as crypto people the narrative that we hear all the time, right? Is that and even I think Martin said this this morning in the creator huddle in our meeting or in the meeting I wasn't there but we may have said this uh that the the AI bull market might

might completely erase the potential of an of a crypto bull market. Um, and what I want to know from you, John, you know, as our macro expert, as well as you write our our macro pro reports and our newsletters, um, how are you looking at this current economy, right, with the the Iran war is is no longer front page news despite being still very relevant to what's going on and still very much not resolved. Uh, and the market the S&P at all-time highs. What is what is your kind kind of current overview on what's going on? So I do want to just say that I think this morning there is a ton of uh crypto news. There's a lot happening in the digital asset space and so that's a really exciting thing. So to your point like we we do talk about a lot of other

things that are happening in macro but there is a lot of really exciting things happening in crypto right now which I've been spending all morning you know getting bugeyed over. Um but so what what was being discussed over the weekend in the discord was just like what we're seeing with um some of the the the bullishness around artificial intelligence and how that's playing out the particular path that the capital is taking um and cascading through the market. So to kind of like uh back up a little bit I think from a macro perspective the biggest things driving the market right now are scarcity. So macroeconomics economics is the allocation of scarce resources. The two major scarce resources that the market is trying to figure out how to allocate right now are energy and computing power. That scarcity of these two things that are in such high demand is driving

the prices for them much higher that increase in prices is driving valuations of businesses that are selling those things much higher. So you're getting earnings outlooks and estimates from companies that are benefiting from this rising a lot and then capital chasing that in speculation about continued cash flows, continued growth, etc. One of the places where we're seeing that is in the Korean stock market. Um, and there are a lot of memory stocks in uh the the Korean market that are just parabolic right now. Um, and so without going into a ton of detail on that, historically speaking, a trend that we have seen, and this is to tie this all back to crypto, right? Historically speaking, a trend that we have seen, and we'll see if this holds this time. And that's actually something I'm curious to see. Does this trend hold? But the the Korean stock

market going up usually is an indication that there is going to be economic growth and acceleration um and speculation in the business cycle because the things that are drive the the Taiwanese and the Korean markets are a lot of these semiconductors are a lot of things tied to frontier technology. That's a big part of what drives their their uh their economy. So when their stock market goes up, you usually see an acceleration in the business cycle that leads to and there's a lot of machinations that happen economically to lead to this, but it leads to an acceleration in the business cycle. You usually see the ISM manufacturing PMI surveys tick up above 50 um in that environment. So what that means is that uh PMI, it's it's uh production or uh yeah, procurement managers index or

something like that. Purchasing purchasing managers index, that's what it stands for. Sorry, there's a lot of things that are PMIs and some of them are have different names, but purchasing managers index, it means that new orders, purchase orders for manufacturing, for industrial activity, for economic activity are increasing and accelerating, which means that there's more investment in economic activity, more investment in in business activities and just a general acceleration of the business cycle. That um indicator that that survey has been above 50 and is holding above 50. um the the acceleration of the the Korean markets implies that that ISM um PMI survey is going to go higher from here directionally towards 60 is what some people are forecasting in that

environment that ties back to crypto you usually see speculation on risk assets that usually results in the the valuations of digital assets crypto assets going higher the one that has a I think the tightest correlation to this um are are Bitcoin and Ethereum um but particularly once you these small caps like the Russell 2000, Russell 1000 um start to move higher and accelerate, that's when Ethereum starts to go and this is what people in crypto refer to as alt season. So, this is a long-winded way of saying that I was kind of talking in Discord about historically some of these cascading patterns that we've seen in markets. And I'm not necessarily saying causality, but there's like correlation to some of these things that has resulted in speculation, overvaluation in digital assets that

could be something that materializes here. Um, but it also could be a situation where we're going to see a deviation from what we've uh seen behaviorally historically because now when capital is looking for speculation and outperformance now maybe instead of looking in crypto or in the altcoin space, maybe it's going to continue seeking alpha in speculating on AI stocks and and AI things. Um, but you know, my my caveat on that is that I think that the intersection of crypto and AI is a huge area where a lot of speculation, a lot of capital is going to go. And so it's it's I think a little bit too soon to call how all of this is going to play out. But I think just generally speaking, we at Milk Road have remained very bullish on the business cycle on um this bull run that a lot of

people were calling dead or stagnant, which has really come back with full force. And we do still anticipate that's going to lead to valuations in the digital asset space in the crypto markets that are elevated much more much more beyond where we are today even though we still haven't seen that major breakout or breakthrough on altcoins or on Bitcoin yet. Um but yeah, that's some of what we've been talking about as it pertains to to the to recent changes in the the macro landscape. >> If you're not seeing this, you're trading blind right now. There are real moves happening behind the scenes that most people don't see until it's way too late. Inside Milkro Pro, you can track exactly what our analysts are buying, selling, and what's on their watch list before it moves. You can try it out for just a dollar for seven days. The link

is in the description. So, do you think so does that mean So, you're basically telling me that the as these indicators like the Russell start to move, typically there's a correlation between that and crypto moving as well, specifically something like Ethereum. But kind of further to kind of my original question is that we may not it's really up to the market to decide if it's going to do that to maybe pivot into some crypto stuff or if crypto is going to catch a bid as a result versus continuing to pump a lot of these I guess they were smaller caps maybe now midcaps large capsu uh like buildout stocks for memory and semiconductors and

everything into like a whole other level despite many of them being way beyond all-time highs as well, right? Like and that's kind of my first question for you. Um is that is that's basically what you're telling me. >> So yes, and I'll kind of explain how I think about this and sort of the pattern people have observed around this. Um and you know whether or not this actually plays out is still to be seen, but the the theory goes um so the Russell 2000 is not an indicator, it's an index of small caps. And usually what happens is you're going to see some of the bigger things, the bigger market leaders, the blue chips, the larger market cap assets lead the market in overvaluation and speculation. And uh, you know, to put this in crypto terms, usually Bitcoin moves first, it moves really strong, it

goes up, but then you get beta to Bitcoin. In other words, the the smaller cap plays in the space will then follow Bitcoin higher as capital that's already gotten strong returns from Bitcoin is seeking greater returns in the space, more risk. So when you see that in the the equities markets, you're going to see that from the the large caps, the MAG7s, the semiconductors, you know, the things that are leading the rally, the big market caps and the big market movers. But then as that, you know, gets into a later phase of that cycle, you generally see capital looking for more speculative plays, that's when you start to see the small cap indices like the Russell 2000 start to move. And that usually corresponds with capital also seeking exposure in risk assets um or like altcoins like Ethereum, etc. So that's kind of the the flow of capital

as it goes through this kind of cycle pattern. Whether or not that holds, whether or not that looks the same way, we'll see. And then just like you said, the market has to decide where it wants to look for that speculation in that later phase. If that's all coins again, we'll see. Um, but that's kind of the theory there, >> right? So every kind of major market cycle and this is this is you know this is what I learned this in crypto in the last six years is that the major assets typically Bitcoin these days especially I think ETH used to be a little bit more uh coupled into that but they they will pump kind of change where they are either break through resistance or break down or something like that but let's just let's think in in green candles today u they'll pump to a new range

which is kind of where Bitcoin has gone into right after kind of you know chopping in that 65 to low7s range for a couple months we've now broken into this 80 and then as a result sometimes you see once if that sticks you'll see movement in the next asset in the smaller cap assets but that zooming out to the rest of the economy and this is probably how a lot of cycles go for either specific narratives like AI narratives what do you call it narratives build out whatever um or other other uh things in the past um we've seen the same thing on AI where 2025 was the year to build bid on the mag 7 making up 354% of the S&P, right?

And we even, you know, one of our favorite guests on the show, Amit, told us this at the very start of the year. He wrote this huge blog post about it as well. He was like, "Listen, the 2026 we're going to see that rotation into midcaps. The big caps, they've pumped like crazy." We're still seeing it happen. Google's still going up on deals and other things that they're doing. But now that thesis is playing out where you're having all the other kind of like lower companies that are part of the bigger picture, but are not the large players that aren't hyperscalers. You're seeing them get that bid. Um, and you're telling me that even part of that speculation is that the next bid after that is something like the Russell, which is even smaller companies, and that within that to bring it all the way

back to crypto, we may see bids on crypto as well as just the whole pie starts to pump as all as as the tide rises. >> Yes, I think that's a pretty good way of of uh summarizing that. And I think, you know, tangentally to this, this is not really related to the exact same thing we're talking about, but we are seeing some really encouraging signs in my opinion in the altcoin space right now. We've seen strong movement from um that the the Venice project, which is a lot of speculation on the intersection of crypto and AI. We've seen Ando move up 60% on a series of major partnership announcements um and projects that are happening there and the the tokenization of real world assets space. uh then you've seen SUI break out and and pump pretty strongly. Um which is you know a retail darling in terms of um uh just

like being an L1 in the space that a lot of retail investors are very bullish on and very speculative on. So that moving is an indication to me that we're seeing some some positive sentiment come back to crypto. Um and I'm not going to go down the whole list, but what I what I am seeing is that you know Bitcoin has held this rally off of the the February lows much longer than a normal or typical um bare market rally. you know, we would have expected a a bare flag to break down by now. Um, and there are a lot of bullish catalysts on the horizon. A lot of uh VC capital coming back into the space, new projects being launched, a return of some ICO activity. There's a lot of things we could talk about here, but we're starting to see some of this

um positive sentiment be reflected in performance and strength in digital assets outside of just Bitcoin while Bitcoin is continuing to hold its strength. And that is the beginnings of green shoots that a lot of people are starting to think, okay, there may be a setup where some kind of an alt season starts to materialize here. It's not gonna look, history never repeats, but it does rhyme. So, if you're looking for the exact same alt season we got in 2020, you're going to be disappointed. However, there are a lot I've been saying this for a long time. There are a lot of very strong fundamentally sound businesses and projects in the digital asset space that the market has been super bearish on for sentimental reasons, not fundamental reasons. And we're starting to see the the first time um the sentiment start to shift. And I think that the result of that is going

to be the market radically repricing a lot of these things based on their strengthening fundamentals. We can talk about a lot of the other news in the crypto space right now, but I think it's a really interesting time um and a lot of things to pay attention to right now. >> Totally. Yeah. And I think I think you know you're talking about Swing and Ono and they're getting those types of that type of news that they've gotten those partnerships and all that kind of stuff. I feel like we've seen a lot of those headlines the last 6 months, John, and it's done nothing, you know? Like I think that that's that's how you know that we're back in good conditions is that when news and headlines and partnerships that are good for those companies, for those tokens actually have actually catch a bid on the

announcement versus uh you know I feel like went through six months where like how is this super bullish announcement not doing anything for the price of that token or whatever. You know what I mean? Like I think like that's that's now how you know we're actually in a in a much better to territory. Uh and it could be a good time to to to revisit your favorite L1's or your alts or or whatever you think you have confidence in. Um that that >> that good news moves moves the market finally because we haven't seen that in a long time.

>> Yes. I mentioned this and pointed this out to in our discord over the weekend or or the end of last week as well because I think that's a big signal if if you're getting positive uh news announcements and it's not moving the market so the market's still dumping in the face of it like we saw this with the the Black Rockck and Uniswap partnership the UNI token pumped and then immediately like I don't think it lasted 24 hours it immediately sold off well now you're getting positive announcements and positive news and that's acting as a bullish catalyst capital is coming in to to speculate on that that's a huge signal of sentiment shift um and I think you know another thing I'll say too is we saw these DeFi hacks. Um but one of the results of this has been the community rallying around

itself, you know, bringing in capital through DeFi united, strengthening um becoming more more robust, re-underwriting a lot of their security protocols. One of the big beneficiaries of this has been chain link and the link token. There's been a lot of projects moving to migrating to link using them as a security solution leveraging a lot of the products and services that chain link offers offers which are you know are in some cases simple but are industry standard like best-in-class globally and necessary fundamental infrastructure that is indispensable to doing this really you know lucrative business. Um so chain link has benefited a lot from this in terms of capital and partnerships coming back to chain link coming into their ecosystem and you've seen the price respond to that strongly as well. So that that fundamental adoption, that vote of confidence from

the market is also starting to translate into a breakout in the price of the link token. So just like you say, I strongly agree that's a big signal and it's something that's uh been getting my attention a lot recently. I'm pretty excited about it. The way we build wealth is changing. Stocks, savings accounts, real estate, that playbook is getting rewritten in real time. Nexo is the platform built for what's next. It's an all-in-one digital wealth platform where you can earn interest on your crypto, borrow against it without selling, and trade a wide range of assets, all in one place with 24/7 support and institutional grade security. Oh, and by the way, Nexo is back in the US with new US clients getting 30 days of Wealth Club premier access. That means elevated interest rates, lower borrowing costs, and crypto cash back on trades. Benefits usually

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Plus SIM swap protection that puts you in control of your number so no one, not even Cape, can hijack it. Use code milkroad at milkroad.com/cape for 33% off your first 6 months. And just to bring this back to AI stocks for a second, John, too, that's actually what we've seen this year is that all these, you know, all these midcap uh semiconductor memory data center uh bottleneck companies and stuff, they are seeing these 20 30% 80% candles on announcements on partnerships, you know, oh, this company has signed this deal with this company and boom, there goes the stock. we knew, you know, and and to our to the credit of our AI guys, especially Melvin, big shout out to

Melvin, um he's the one tracking all this, you know, he's the one who's been able to be like, listen, this company's going to make a deal. They're looking for this kind of partner. They've got this kind of data available. They got they've got all these chips for semiconductors or whatever. Um he's been able to do that. And again just to kind of just I'm finally understanding as a market participant the parallels in how these how markets move uh and what what signals because there will always be partnerships and deals uh but what what you know even on that simple factor what what uh signals to you that the that particular market is in a healthy place at the time and that's again further to the AI buildout and why there's probably still some legs left this year uh and very soon is that you're see you're

still seeing those stocks move based on announcements uh and earnings as well. That's another thing that that stocks have that crypto kind of has, you know, started to kind of shift to that in the last couple years is that earnings do matter and and obviously stocks have, you know, uh a regular regular scheduled date to show off their earnings. Um so that's kind of interesting and I'll just give a quick plug for anybody listening who wants to be part of that. Actually, let's do, you know, let's do this. We never really show what our portfol we never showed the whole picture for our portfolios, but I think we can do that today. Um because we really, you know, getting a look at this for you guys is only a dollar. I know we say this every week, but I I really we've had a lot of

new people join in the last couple weeks and and from what I've heard from the feedback we've gotten. They really enjoy uh this new approach to Milk Road Pro, which is just basically like all these different portfolios. We're I'm showing you the whole holdings right now. So, this is a one time only. You're going to get a look at it if you want to dig into it yourself. It's a dollar. But what's funny, John, is that the biggest combined holding across all Milk Road people is still Bitcoin and ETH. Those are still number one and two. uh despite all these gains on all these other AI things, uh everybody's up like crazy on AI stuff. The number one through uh I mean Tesla's number three, but you still have Galaxy, Coinbase, Robin Hood, those are still all the top holdings across all the Milk Road analyst portfolios. Uh

before then you have a lot of other um you know AI buildout stocks. So I'll just I'll just read them off. And this is again credit to Vincent Melvin who have just been absolute demons in calling these especially Melvin lately uh with Bloom Energy which is up I think over 110% from Vincent uh Nebius and Corning from from Vincent but Micron which is one of the biggest stories right now that I see like literally Normy's talking about it all the time uh reaching unprecedented heights um and AMD as well. So there's a lot of great stuff in here. If you guys want to get access to those calls make sure you check out Milkro Pro. The link's in the description and again you just pay a dollar for seven days. So, if you want to go and see the entirety of Melvin's portfolio here and how he's up 35% the

last like 2 3 months uh across all his holdings, you can go and check that out. And of course, John, what's in your portfolio? That's the part we want to know. Uh everybody's curious to know and I want to and that's the question I'm going to throw to you, John. With these bullish conditions, are you tempted into any of these L1s? You added one of the things you just mentioned to your watch list last week after our podcast, but you have not pulled the trigger on it yet. Is this is this are we going to see some action in the John Gillan portfolio this week as a result of these conditions? >> So, I'll answer I want to comment on a couple of things you brought up here.

Number one, you use the word healthy in terms of referencing some of these markets here. Um, I think that there are a lot of things that are pumping in the markets right now and you know, you you commented on how Bitcoin is still the most commonly held asset amongst Milk Road Pro analysts uh in our portfolios. I think that is a is a reflection of this, right? like there is there are assets that are fundamentally sound that have market adoption um you know network effects they're kind of ingrained into the financial ecosystem and they're less speculative they're more stable and they're a safer bet that's the bedrock of your portfolio and that's what I think is going to last from these things there are going to be things that outperform that but that is going to be you know some of those are going to be

very speculative so an example of this I think I'll just go back to chain link right chain link I think is one of the strongest examples in the digital asset space of a very fundamentally sound, long lasting, robust business that straddles Tradfi and digital assets. I I've been very bullish on Chainley for a number of years. Actually, I talk about it so much my younger brother got annoyed with me once, but um I think that is a very sound business. It's not been wildly overvalued in terms of speculation. I mean, you could make an argument that it is in certain ways, but it hasn't had one of these like huge blowoff tops in in recent days. it's just been quietly building a very strong business that'll last for a very long time with very stable uh cash flows um and and a moat around their business.

Allirds pivoted from making shoes to AI and pumped 800% in a single day. Now, I'm not saying that they don't have an opportunity to become a viable business, but I'm saying there's a difference in those as investments, right? And so that is what you're seeing reflected in people's portfolios of voting for Bitcoin as a stable store of value, something that is going to grow and still give strong performance. Um, but it's it's less of a risky bet as opposed to some of these micro cap altcoins. I would strongly encourage people as we go into this part of the market. Things are going to get frothy. There's going to be a lot of emotions. You're going to want to chase green candles. You're going to sell things to chase to buy something that pumps and then find out what you sold is now what's pumping and try to go

back. You just don't don't get caught up in emotions and don't let these green candles um make you dizzy. Um, so I wanted to say that to begin with. Now, why haven't I loaded up on a lot more smaller cap altcoins? I'm watching very closely Bitcoin at this moment in the market. I've been saying this for a couple of weeks, but I think that the longer this goes on, the more likely it is we reach a decision point here. And I do want to see confident decision-making from Bitcoin in market action and market price action in order to know, okay, we're going one direction or another here because I think this move we've seen has been very strong. We've made it to 82,000. We haven't seen a strong like breakout candle. So, if you look at where we got to how we got to here,

right? we saw these sort of capitulation candles, right? There was the October 10th candle and we just dropped many thousands of dollars. There was the the last time we dropped was um the Clarity Act was postponed and a lot of speculation um about that passing was what was driving the markets up. When that postponement was announced, Bitcoin dropped really drastically, several thousand really quickly. What we've done to get to this point of $82,000 is just climbing a wall of worry, going a little bit forward, a little bit back, a little bit forward, and just slowly going up and up. But we haven't seen decisive action from the market. If we see the market decisively break out past 85k or go to 90k or something like this, that to me is a vote of confidence from the market and clarity from the market that Bitcoin is rejoining the bull run and

will continue higher and then I'll feel more comfortable committing more capital to altcoins. I already have a pretty sizable allocation to Ethereum though because to me Ethereum is not an altcoin. Ethereum is an alternative part of the digital asset market and needs to be in a portfolio um along with Bitcoin, but we'll leave that aside for the moment. But that's kind of what's driving that for me, right? do have a lot of confidence in these alts. I do think you'll see significant outperformance. I'm encouraged by a lot of these breakouts, but I think that there's a lot of moves still to be made in the alt space and there's no reason to try to frontr run this. If Bitcoin gets rejected from here and this does turn out to be just another bare market rally, like say the Clarity Act doesn't make it through Congress, which it's

still unclear if that's going to happen, there could be some selling, there could be a dip, you could get a chance to see Bitcoin at or below 75K again, you could get better entries on some of these alts. So, I don't see any reason to force it. I think I'm very comfortable with the allocations I have to digital assets and I'm watching closely on a lot of things. But I do want to see some confirmation here before I start committing even more capital to to the crypto space because I think you could you could very easily see either better entries in the short term before we go higher or you know we could we could just uh kind of go to Valhalla. But either way, I think it's just a good time to pay attention. But that's sort of my thinking around this at the

moment. >> So you're just waiting for a big green candle before you've been on alt. waiting for a signal that we well I mean effectively that would that would be a clear signal right but like >> a strong flip of resistance and holding it as support. of like Bitcoin goes up over 85K, lands on it, comes back, retests, holds it, stays there for a week, right? Like I'm also looking at how long we can hold these levels because we've seen this in the past in bare market rallies and retests of resistance where Bitcoin has gone up, challenged some of these key resistance levels, even gone through it in some cases, but then ultimately come down and made new lower lows. And you know, I I bring him up often because he's an important analyst in my mind and in my education. But Ben Cowan uh does a great

job of reviewing some of these prior market cycles. Obviously, things change every cycle. It's not always the same. But if you look at Bitcoin's history, there there are times where it has gone through the the bare market resistance band, looked like it was going to break out, rejoin the bull run, and then ultimately collapse back down a week or two later. So, I I don't think there's any reason to to rush on this. I think it's it's a good idea to wait for confirmation. Remember, Bitcoin like broke 100K and then just held above it for almost a whole year before it made its next decision, right? So I think you have to be patient and that's something that's really hard to do when the markets are ripping and moving so quickly like this. But I would really encourage people to stay patient, stay fundamentals driven, stay data focused

and don't get um you know carried away by optimism or euphoria or speculation because these markets have been and will continue to be volatile both to the up and downside. Um and so you have to be kind of I think just prudent and circumspect about how you're allocating capital in this environment. What what is Ben Cowan saying right now? What has he said lately in the last like week or two? >> I think he's still expecting this to materialize into a a lower low and a continuation of the bare market. And you know, until we break these key levels, I think there's ample evidence to support the thesis. That's why I'm not completely um you know, siding with the bulls here. Although for I have had a bull bullish bias for a long time and I've been very encouraged by the thing

for me is not just like what price we've gotten to but how long we've held it and how long we've been climbing this wall of worry. This is not behaving like a typical deadcat bounce like a bare market bare flag. Um it does seem to be sentiment and structurally sentiment-wise and structurally different than previous bare market rallies we've seen. So there's a lot of things that have made me want to side with the bulls here. But until they can win this battle, I'm not going to assume that they're going to win the war. >> What we we teased in the intro um this idea that we've been in a bare market since early 2025, right? And that's something that uh I I really wanted to revisit with you because I know it's something that you you tend to agree with, I believe. Um, and we first heard

this, and if you listen to last literally last podcast in this feed, um, from last Friday with Matt Crosby, he was the he was the first person to tell us about this way back, I think, in like November, December, um, when he finally kind of capitulated on on this this bare market happening for Bitcoin. He f he he focuses solely on Bitcoin, just so people know. Although, in that podcast from last Friday, he takes a shot at ETH and then I I'd take a couple shots back at him uh, a couple minutes later just to kind of even the score. Um but he had presented this idea that uh just just to circle just to reexplain it for people who maybe only listening to this show uh that uh basically crypto and bitcoin have been in a bare market since early 2025 and that that was a little bit muddled.

those indicators were muddled by the bid from digital asset treasuries, right? From DATs, uh, from Michael Sailor, from from Tom Lee, from everybody else, had kind of muddled that a little bit, but really if you remove that that the price action would have gone lower much sooner. Um, and that was also something that was presented by Matt Hogan from Bitwise, one of our favorite guests as well. Uh, he wrote a a blog post about it on X. He came on the show and discussed that as well, I think back in February. And again, this is when Matt Hogan's uh you know, theory on this came at a very convenient time because it was it was midFebruary there. That was after we had another big liquidation day and it was like even eternal optimists like him and like you at that point we're like listen something is something

clearly clearly there's an issue here right now. Uh and and we got to you know think outside the box a little bit as to why this is happening. So, John, at this current point in time, that would put this bare market that started not in October, but let's say way back in January. It would put it at a 16-monthl long bare market. Although, maybe we saw if we if you count the bottom being in February. Uh, that would put the bare market at closer to being a year, which is also what a lot of analysts point to typically being a bare market in crypto is roughly a year. Again, that's that's just uh male astrology math the saying that and there's no there's no it doesn't it doesn't it'd be nice if it worked like that. John, are are you still kind of holding this theory based

on everything you just told me? >> I think that this is going to continue to be a kind of conversation uh that people are going to have because you're going to get differing opinions on, you know, whether or not we ever actually had a crypto bull market. So, look, there's a difference between Bitcoin and crypto here and I think that's the fundamental distinction to be made. If you are looking at the crypto industry and the crypto asset class overall, I think that you can make a sound argument that we have not seen a crypto bull run, a crypto bull run since 2022. However, we did see a Bitcoin bull market. This was fundamentally driven, I think, by strategy buying and by ETFs bringing a lot of new capital into the market, but we never really saw the same kind of like, you know, blowoff top over

speculation. Like Bitcoin 2xed its previous all-time high. there was a bull market in Bitcoin, but Ethereum barely made a a new all-time high and it only held it for days, week, maybe something like that, right? So, that's that's the distinction here. And so, how you look at this and how you're analyzing that, you can get different interpretations of the the market, what the market's telling us. And I think that's what Matt is calling out in his um analysis there. And I really admired him and respected him for saying that because it showed to me that somebody who is managing institutional capital understands the distinctions of these things, right? um because a Bitcoin bull market and a crypto bull market are slightly different things. We haven't seen these things exactly play out the same way.

So, you know, I'll go back to the 2021 cycle. If you look at a lot of fundamental onchain indicators, you can make a very strong case that the actual top of the that Bitcoin bull run and that crypto bull run was in April. Um at around like I think it was like $64,000 62,000 64,000 somewhere around there. I I have to look at the charts. Um Ben does a better job of this than me. But then we saw the bull market continue and we saw what was effectively a dead cat bounce that produced a new all-time high at $69,000 but then quickly sold off again. Right? So um those fundamental uncction indicators never got to the same levels that they were at before even though we saw a new all-time high in price. So that's another example where you can make an argument. Okay, well on certain metrics and indicators

we topped in April. Certain other ones like price which is a big one we topped in November of that 2021 bull run. looking at this time, you know, I think that whether you want to say that we are having the shortest crypto winter ever or we've had a 16-month crypto winter, you know, however you want to measure this, there are a lot of things circumstantially in the market that make it appear as though this bearish period for crypto seems to be ending or at least the market is kind of at this decision point of maybe it ends, maybe it doesn't. And we'll see. And you know the other thing I will say I respect a lot about Matt is that as you get more information from the market, it changes your backwards looking appreciation for the trend that you've been in because you know what the market tells you about

is is is information and you have to take in that new information and fit it into the story that's been told so far and the the history of price action we have so far and reappraise that. Matt is not dogmatically pounding the table on that, but he is saying like, hey, this is another way to look at this market here and that changes the outlook. There are a lot of and this is the thing that's really important for me and this is the big thing I think is different from prior bare markets after the the collapse of Luna BlockFi Celsius Voyager Ter like uh FTX all these things there were a lot of just like devastation in digital assets and there weren't a lot of strengthening fundamentals or bullish things to be you know like looking at right now we have the strongest fundamental adoption and bullish support

for the fundamentals of the digital asset space ever combined with just apathy and disinterest and poor sentiment in in the investor mindset. That doesn't mean that there's nothing fundamentally strong here. Okay? And I'll just give you a couple examples of this because we're not going to have time to cover all of this today, but there was an announcement today. Circle did an initial coin offering for their ARC layer one for their their settlement layer that they're building. Um, and the the participants on that, it's a $3 billion valuation. I think they raised $222 million. the it's Arc, it's um A16Z who we had on the channel last week to talk about their their recent fund raise. It's Black Rockck, it's it's it's so many different people. There's a lot of capital going into that space. Canton Network also announced a deal recently.

Um they're they're raising to to launch more and expand their operations. Um and there's a partnership between Galaxy and Sharplink to bring more capital from Wall Street into DeFi. So the the angle that BMR is going for right now at least they could obviously pivot this later but it seems to be they're trying to provide the market a a DAT solution that offers institutional grade staking and um they're doing their own proprietary staking solution on that sharp link you know that's got Joe Luben um who was one of the co-founders of Ethereum it comes from consensus one of the the the founders and leaders of the Ethereum ecosystem from a technology point view the co-CEO is is Joe Shalom and he comes from Wall Street background and Black Rockck, you know, we worked together at

Black Rockck for a while and he's really close in with institutional investors. They're trying to pitch um Sharlink Esbet as a play to have investors uh into their DAT get exposure to DeFi at preferred rates and with preferred um outcomes and also combining with that institutional grade security as well. Uh there's so many things going on right now. I I can't get them all out, but I I'm going to kind of get lost if I keep going here, but just the the fundamentals have never been stronger. The strength of the market has never been stronger. And this week we're seeing the Clarity Act go forward with Markup um on Thursday. I'm having Alex Thorne on the crypto channel tomorrow from Galaxy Digital to talk to him not only about this partnership with ESB, but um what he his views his views are are there. Does the Clarity Act actually

pass and what does that unlock for for the digital asset space? So there's just a lot of things that are going on right now that the fundamentals are so strong that I think whether or not you want to look at this as a 16-month bare market or a four and a half month bare market is a little bit immaterial to me. the the strengthening fundamentals are resulting in a price appreciation and that you know there's a setup there for a bull market to come back but whether it does now or later it's going to come back and it's going to be very strong and it's going to have a lot of fundamentals to support it when it does. So I'm just like very bullish on all of this and I'm a little bit like not concerned with the timelines. That's why in my portfolio I'm still so heavily

allocated to Bitcoin and Ethereum because four and a half months of everybody getting, you know, apocalyptically bearish is just an opportunity to accumulate in my opinion when you see all this fundamentals getting stronger all the time. So, sorry for the rant. I I tend to do that sometimes on these episodes, but there's just so much happening. It's hard to cover it all. >> Trillions of dollars in real world assets are stuck offchain. Real estate, commodities, private credit, all locked behind outdated systems that weren't built for a global 24/7 economy. The fix? Bring those assets onchain. Problem is, most blockchains weren't designed for that either. Ferros is. It's a layer 1 purpose-built for real, a real world financial infrastructure that lets assets be tokenized, verified, and traded at institutional scale. We're talking parallel execution for serious throughput, compliance baked in from day

one, and infrastructure that actually connects onchain and off-chain systems. They've got a $10 million incubator backing builders who want to make real a reality. Join the Atlantic Ocean test net and start building at milkroad.com/faros network. >> These aren't rants. This is a podcast, man. That's that's that is that is the podcast content. You know what I mean? Like I'm interviewing you and trying to steal airtime with a few of my random anecdotes, but otherwise this is this is a podcast where you share your thoughts. You can just if you look at it that way, then every other podcast where we interview people, they're just on a rant. They're a 40-minute rant every single time. Uh can we talk about Clarity Act really quick? cuz this is again like I I'm actually keen for this just to be over one way or another because I feel like the whole time I've

been doing the podcast like clarity clarity clarity which it is very important of course um but there was a lot of optimism through the week last week poly market 80% chance as of this morning now dipped down to 60 uh and I think that there's one dude who's kind of causing that >> yeah so there's this guy I think his name is Rob Nichols he's the head of the American banking association not the head he's CEO of the American Banking Association. Um it was leaked this morning um that he sent out an email to the American Banking Association basically saying we need immediate urgent engagement. Um this this is what I like here that we believe the current proposal would unnecessarily incentivize the flight of bank deposits into payment

stable coins. And my response to that is good Rob that is what will happen. Yes, that is >> I want to say this. So, the head the the president's um executive director of of of digital assets um for the the president's council on this is a guy named Patrick Wit, who I've met, who's a really nice guy. He took over for Bohines, who'd left to go to Tether, but he Patrick personally invited Rob to the White House for the the negotiations on this to try to find this compromise and work out this compromise on stable coin yield. Rob declined to attend. And Pat's Patrick's uh his guess for why was that nobody wants to have to argue what Rob is arguing for in public because it's like pretty openly like hey you should create a moat around our business and

allow us to continue to extract value away from the American public just because we want to. Um and you know obviously I'm being a little bit hostile and I don't want to like speak out of turn or like color these people as you know outright pirates. Um but you know there's a reason why we in crypto want to go bankless and this is one of them. this guy doesn't trust you to not steal the pen that he keeps chained at the desk there. So, he doesn't trust you to manage your own money, and that means I don't trust him. But, uh, look, I think at the end of the day, there's a lot of capital and attention going into this. There's a lot of people on the Senate Banking Committee, um, that their votes are are still a little bit undecided here. Um, Christian Gillibrand of New

York said a consensus that unless there's some sort of ethics provision put into this bill that's basically a non-starter for her and the Democrats, which is a way of saying it's specifically targeted at Trump and his family and wanting to get them out of a lot of the digital asset projects they're working on because they view this as abusing public office for self um, you know, self-improvement and financial gain. To whatever extent that's true or not, that's a big political sticking point that is going to be difficult to get the president to sign on to if they put that kind of a bill on his desk. So the compromise here is still far from certain. The stable coin yield um question was a big sticking point like like we just discussed. There was an agreement reached on that but it seems like the banks are still pushing back on even on

the agreement that was reached. So it's still uncertain. I think that like I said I'm interviewing Alex Thorne about this tomorrow. We're going to try to pay attention to this because it's like really coming to a head here. If they don't get this through though at this point, I do think that the bill kind of does die because they've kind of broken their spear on trying to get a compromise here and it seems like it's just going to have to wait to another Congress, which could be many years from now. But, um, that's sort of where we are at the moment. I really am hoping they get this through because I think codifying a lot of these things would be really good for the country and for a lot of other parts of our our economy. Um, but if they can't get that deal done, we're just going to have to rely

on the SEC and the CFTC and the guidance that they've given the markets um to provide a foundation for going forward with digital assets in the United States. >> John, um, with all that in mind, what's what what to most relevant this week? And this could be across crypto or macro or anything else, but like what are you what are you actively watching this week? Like what's the biggest question for you? >> I don't know if it's a question. I'm really curious to see what happens with this trip to China. Donald Trump is going to China on Wednesday. He's taking apparently this morning it was announced Elon Musk is going with him. I think he's invited the CEOs of dozen or more major American companies and they're going physically to China to meet with President Xi. I think that Trump has also invited President Xi to come to

America for a meeting later this year as well. So the the thing that this is a signal to me of is that somewhere behind the scenes, deals have been made, compromises have been reached, announcements are going to be made. This is going to be a huge media attention moment for both of these presidents of both of these countries. They're going to use this as an announcement of a lot of things that they've already worked out behind the scenes. What that is, who benefits from that and how the market digests and reacts to that. Is it buy the rumor or sell the news? Is it something that's going to unlock even more speculation and investment of capital? We'll see. But to me, that's the kind of the big thing that's happening. Um I believe tomorrow from a macro perspective, we're going to get inflation print. We're gonna see how

much this oil shock has impacted um inflation in the United States. That's something to watch, I think, because eventually if inflation gets certain to a certain point, you know, it makes rate hikes uh something on the table for the Fed. Not an immediate concern, I don't think, but I I do want to see where that inflation print comes. And then Thursday is when the Senate Banking Committee moves into the discussions of markup on the Clarity Act. This is I think obviously a big deal for a lot of people. Um, but then yeah, just there's just so much capital moving, deals being made, ICOs coming back. There's just a lot happening in the digital asset space right now. And I really encourage people, I say this every time, but stay safe, stay educated, stay bullish, lock in, like pay attention. There's a lot going on that's going to lay out a lot

of what um gives us u direction or, you know, clarity about the markets for the rest of this year. It's a really great time to pay attention. Trump has uh suspended tariffs on beef. He's talking about um suspending the federal tax on gasoline. a lot of these things are trying to, you know, goose his his numbers for the midterm elections and make Americans feel richer, put more dollars back into people's pockets. Um, so there's just a lot happening right now really quickly. And, uh, yeah, it's a great time to be in crypto. You know, I was going to make a joke about how I keep seeing tweets lately about how like random food commodities are outperforming your beef tariff thing. Made me think of that that I've seen a lot of chatter. It's a completely different topic, but it's like

>> being outed by potatoes. Yeah, >> that's it. We're getting outperformed by potatoes and tomatoes and beef and like corn and like all these things which is a result of a lot of the stuff that you've been telling us on this show, right? That with like fertilizer prices going off or like the major supply shock there. Um that's something to see and and personally for us is going to hit our wallets pretty soon if not already. So, uh definitely something to watch. John, thank you as always for all your thoughts. Um, I know you're not I know we haven't seen those big green candles yet, but but we're in We are It seems like we are at a more likely scenario where that may happen now than we have been for the last couple months. Put it that way.

>> Yes, I agree with that. It's a great time to watch closely because things could move really fast and they usually do. >> Excellent. Well, we'll be tracking it right here on Milk Road. Uh we'll be back Thursday. We have another research meeting podcast with the rest of the crypto crew here. Uh and we'll be back here Monday as well every week on Milk Road. So, thank you guys for listening. Uh thank you John for all the great insights. Uh and we'll see you next time. >> Thank you LG. Great to be here. Want insights on what's moving crypto markets and how we're trading each event? Subscribe to our channel and join the Milk Road Daily and Pro Newsletters and start investing like the top 1%. This show is for educational purposes only.

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