Why the bull market may not be over, with Kyle Reidhead

Transcript

you're on Twitter and you see someone going like, "Oh my god, it's below the 50-day or 50we moving average. I'm selling everything." But like, if you're just an average retail person who doesn't trade, that doesn't matter to you. What's up everybody? It's LG Det here and welcome to the Milk Road Show, the daily crypto show that explains why the charts look broken, the vibes look awful, and somehow we are still here and actually bullish long term. Today is November 17th. Bitcoin is below 94,000 if you can believe it. ETH is just holding at 3100. and salon is below 135. And to explain just what the hell's going on, we are joined by Kyle Reedhead, co-owner of Milk Road and one of the sharpest brains we have in the house. Crypto feels kind of weird right now. Prices don't feel like they're

going anywhere. The narratives aren't sticking, and even our experts are sometimes scratching their heads. So, he's here to break down why the market is stuck, how macro and AI are shifting the landscape, and moves he is actually potentially looking at in this super weird market. Today's episode is brought to you by Block Trust IRA. Let AI outsmart the market and grow your crypto while you sleep. Bridge power your business with instant stable coin payments. No friction, no banks, just global finance made simple and figure markets. Earn solid returns on your cash because sitting idle isn't a strategy.

Here he is. Kyle, dude, what is going on, man? Welcome back to the show. I think you were just here last week, but I always love having you on. >> Thanks, LG. Happy to be here. You know, it's crazy to say if you can believe that it's under 94K. I was here in this space when Bitcoin was at 3,000. So the fact that it's at 94,000 is actually something that I can barely believe. So I guess it's all just perspective. >> That's it. You zoom out to the bare market, we would have loved to be here. You told us that 3 years ago, this would have been amazing to be. But [clears throat] Kyle, tell me, man. Like just everybody wants to know what what what the hell's going on? What is happening to this market? Why does the why does crypto feel like so stuck and

kind of hard to explain right now? Uh, and is there like a any real reasons why that the market's chopping sideways? >> Yeah, I think there's a lot of reasons. When when the markets get like this, I look at two things. So, first is I look at, well, what's the macro backdrop saying? Is that setting us up for a good backdrop or a bad backdrop, right? Uh, maybe this has nothing to do with crypto at all. Maybe it's just the macro world. So, I look there. Then the other thing I look at is is just the crypto space in general. What's adoption look like? What's the um, you know, the curve of like is it exponential? Is it growing? Is it not growing? Is there good things happening, not good things? So, you kind of just look at the space overall and to try to tell you what's going on in the

crypto space because maybe it's just, you know, you can see it's different than if you look at Bitcoin verse versus verse uh gold, it's kind of, you know, going the opposite way. If you look at crypto verse stocks, it's kind of going the opposite way. So, you're like, is this a macro issue or is this just an issue with crypto? And then you kind of try to parse it out between the two and figure out what the heck is going on, which look, it's not an easy thing. Obviously, we've been bullish all Q4. That has turned out to be wrong so far. there's still a about a month and a half left. So, I guess you never really know what happens or what will happen. But, um, so far things obviously do not look good. Um, if we kind of dive into why that is, um, and I would say when I say

they don't look good, they don't look good because of the charts, right? Obviously, if you're looking at the charts all day, it's very, very red. I'll even bring up my chart just to give u some context here if I can just share this. >> Here's the Bitcoin chart. Uh, funny enough, last week I actually said, "Hey, I don't think it looks bad enough. Things are bad, but I don't think we should rock it." Everyone was like, "Oh, government's going to uh open up. It's time for us to go up." And I said, "You know what? I think we got to get down to 92 or 93. We need more fear in the markets." Is basically what I said. Uh, and the reason was the fear and greed index chart didn't quite make it into the red, as you can see down here, like it did during the the tariff moments

back in April. We we kind of touched it, but barely. And I was like, "Ah, you know what? before we go up, we're probably going to need to go back down even more and get a little bit more fear, which I think we hit that over the weekend. It feels like, you know, the uh everyone's pretty scared now. A lot of people are kind of pivoting. So, um I also said 1929, I've got this white line here. We are right on it. We touched it over the weekend. I guess this is yeah, over the weekend, closed right on it, and now we're sitting on it. Now, it still doesn't look good, right? You'd expect a big bounce off this. We're not getting that. Now, the question is why? I think two reasons. Uh let's start out on the macro side. Then we'll dive into crypto. On the macro side of things,

there's a lot of confusion right now, right? People don't really know what's going on because one, we don't have any data, right? We haven't had an inflation print for October, which we were supposed to have. We don't have any like jobs or unemployment data. There's just a lot of things that we don't have because the government's been closed for whatever it was 40 days or something. So there's this like fear of well I don't know what's going on in the markets and so I'm going to continue to let that fear spiral and spiral and spiral because there's no news and there's no data to tell you otherwise. Right? So I think the odds of a rate cut in December have now gone from what we're like pretty close to 100% down to I think it's a 50/50 chance right now. So, on the macro side of things, there's a lot

of people just thinking, hey, unemployment is going to be way higher, uh, and, uh, inflation is going to be way higher, and so they can't cut rates, and so we're definitely not going to cut moving forward. So, I think that's kind of the at least the perspective of most people. Um, I really don't think that inflation is, as I've been saying all along, is as bad as people think. I think we might actually be flat if not even lower whenever we get our next inflation print um because of this sort of growth scare we had between the US and China. Uh also because the economy is I mean the economy is good in some parts but the economy is not so great in other parts. So it feels like there's just this kind of battle there. But like the biggest things that move inflation is like oil which has not gone up at

all. If anything it's gone down. I can even show the chart here. Like here's oil which is currently sitting at 60. So it's gone down and down and down all year. Uh so that looks good. Uh and then the other thing is if you look at like shelter which is the biggest part of of CPI that's only gone down. So meaning rents and and mortgages or not mortgages but like the value of people's homes. So that has just gone down. So the biggest components of inflation are down. So I just don't really understand why everyone is so afraid of inflation right now. So there's just a lot of confusion on that side of thing. And then if you look at the even bigger backdrop which is a lot of these governments are in the middle of cutting rates and running their economies hot. this is not just

the US but China and Japan. Uh and so just like I don't know the mac macro backdrop to me doesn't look so bad. Um and then the other side of it I would say and we we'll probably touch on this in a little bit which is uh AI is macro at the moment right like AI is just kind of controlling everything and um there's a lot of fears around this AI bubble which I think we'll probably get to later in the show. Um my prediction or kind of my thinking around this right now is that we are not in a top of a bubble but we are in a bit of a reordering or restructuring or rebalancing of what people hold in those assets. Uh so we can talk about that later but I just think the market needs to digest a lot of random things right

now. Uh and so it's just and then then there's the four-year cycle thing, right? Everyone thinks well because it's four years for whatever reason it's got to be over. So you know the market's got to kind of work its way through that too. So, there's a lot of things for for the the market, I think, to just kind of figure out and that'll just take time. >> Kyle, you mentioned the four-year cycle and so many people are attached to that. Who are these people that are attached to that? Are you telling me the people that control like prices of Bitcoin and ETH, those huge funds, that they're the ones that are worried about a four-year cycle at this point? Aren't they smarter than that? >> Well, I just think you have a lot of Bitcoin OGs who've been around a long time. They've been holding Bitcoin. Like

I said, you know, I'm surprised we're at 94K, not the other way around. And so there's just a lot of people that have literally hundreds of millions to billions of dollars in Bitcoin that are like, "Okay, we're sitting here at 100K, you know, 125K a few weeks or months ago, whatever." And I think they're like, "Hey, you know what? I should probably not just have 100% of my net worth in Bitcoin." And so they're, you know, they're beginning to to diversify their portfolio, right? Which is not a bad thing. Similar to what I was just saying in AI, how there's kind of a rebalancing there. There's a lot of people who holding the majors like Nvidia and Apple and Google, etc. these things are like5 trillion dollar companies now. They're like, you know what, maybe it's time to start to buy something else and rebalance a little

bit. Um, and so I don't think that necessarily means we go into some sort of crazy bare market as a result of this rebalancing. But I do think, you know, we've had been in a bull market since January 2023. I know a lot of people that have been holding alts and meme coins this entire time don't feel like that. But if you've been holding good assets, then absolutely we've been in bull market this entire time. And uh, and so they need to take some profits. they need to rotate, diversify, uh, whatever that might be. So, that seems natural, makes sense. Doesn't necessarily mean that we're going to have some long drawn out bare market as a result of that. Uh, that generally comes because of macro reasons, whether it be the business cycle or liquidity or interest rates, not because there's some big players that are deciding to

diversify. >> I want to touch on your inflation point as well, Kyle. you did say that um you're not as worried about inflation and we also wanted to go over this tweet from the Kovesi letter uh that's giving us a lot of reasons potential for inflation right so I think I want to get your thoughts there just kind of clarify that because there are potential US uh $2,000 stimulus checks in the US which may or may or may not happen um stimulus packages for Japan China uh quantitative tightening is ending at on December 1st um there's that TGA like the Treasury that's that has like of a trillion dollars that's going to come in um and and lots of other reasons that could see a lot of money come into the market. Uh and these guys are saying in what world

is another wave of inflation not on its way? How does that kind of juxtapose what kind of what you're saying about about the CPI? >> Yeah, absolutely. So CPI is looking at inflation specifically in the US. So like a a stimulus package in Japan or in China isn't I mean in some ways it does impact it but a lot less than if the US was doing a huge QE which they're not currently right. And then the you know $2,000 stimulus check yeah that might bring some inflation like we saw in 2021 but remember that was a bunch of stimulus checks. Uh and also we don't know if this is actually going to happen. Scott Besson already came in and said probably won't be like a just a random handout check. It might just be like a forgiveness on their taxes. Like we don't know in which route this is

going to come. So I I don't think that necessarily is, you know, fully like, hey, we're just going to give all this money in trillions amount to all these different countries. It doesn't necessarily pan out that way yet. I think there are versions of stimulus that are happening, but in certain sectors. Um, so I think they can be a little bit more strategic about it. I also think you have AI, which is is doing massive things to help on the inflation side of things in some areas, also maybe worse in some areas. So I think that is is lowering things. you have a sort of K-shaped economy where a lot of the even if they do these stimulus packages, there's still a lot of the world that has most of their money in their homes, if that, in student loans, etc., they're not buying much because they're not making a [ __ ]

ton of money. And so there's just not a lot of ways that I think inflation is going to necessarily spike or at least get out of control. Again, I've said this entire year, inflation should go up, but just very minimal, which is exactly what it's done. The fear is really will inflation jump and spike up to like five, six, seven, eight, nine like we had in 2020 uh and 2021. Um I don't see that world happening right now just doesn't make sense. And then the last month of this sort of growth scare that we've been having. That's going to push down inflation even further. Um and then rates have been fairly high which means not a lot of people can afford to buy homes which means the price of our homes and rent is going down. That's been happening for a while now and that's the biggest component of CPI. So

there's just like there's a lot of reasons why it doesn't really make sense that inflation will go crazy high. Again, I'm not saying it won't go up. Generally in a business cycle when you know the economy is expanding, inflation will go up and I expect that to happen. I want that to happen because that means good things. It means growth is happening. Um again the key is does it spike like crazy? And there's just doesn't seem to be any reason for that. Now, if we get a bunch of $2,000 stimulus checks, sure, that might spike inflation, but before that happens, they're going to have to spend those stimulus checks, which means stocks in crypto are going to go up like crazy before that happens. And then we need to react to that. It's not like the central bank uh or government is ever ahead of

inflation, right? We're always lagging and way behind things. And so, there's a lot of things that need to happen before a lot of the stuff on the Kbasi letter there um is going to impact anything. And so, I agree, inflation will likely go up in the future. It's just not going to be that bad. And if it is that bad, because of the things they're pointing out, the markets are going to go way higher before that happens. >> Yeah, exactly. Bullish bullish for crypto hopefully before before any of that takes place. Uh, and I want to bring it back to crypto as well, Kyle, before we're kind of spiraling into to macro AI, which we will come back to very shortly. Um, but I'd love to know what's happening to the trend. Are we still in an uptrend? Is that trend intact? Because everywhere I look on on

crypto Twitter, including people, you know, I see people like Ben Cohen telling me about death crosses and things that I feel like I only see at scary times when the greed fear index is below 10 or below 20 or whatever we're at. Um, what's happening with our market structure? >> Yeah. So, this week was, if you're a technical analyst, was not great. And so, what I brought up here on the screen, as you can see, this green line, which is your 50we moving average, we we we went below it two weeks ago, but we came back. We never we actually didn't close below it. So, everyone's like, "Yes, we survived. You know, we're we're going to continue to make it. The bull market continues." And then this week, we closed below it on Sunday, and now everyone thinks that it's over and we're in a bare market, and it's done. And and

the reason why is if you look at 2023, uh, excluding down here at the bottom twice, we've gone below the 50 moving average, but we've never closed below it, right? At least in this current bull market, we've never closed below it. Now, that's not to say that we've never closed below it in the middle of a bull market. In 2020, we closed below the 50-day moving average. multiple times for multiple weeks, in fact, multiple months. And yet, the bull market continued on to new highs soon thereafter. In 2020, we were in the middle of a bull market. You know, the bare market ended around 2019. Obviously, CO came in. We closed multiple times before COVID and after CO below the 50 uh week moving average and yet no issues. We ended up in a raging absolute wild bull market, right? So, um I just don't know why so many people

think, oh, we close below 50 moving average, that's it. You know, close your computers, sell all your assets, come back in a year's time. We just that's just never been the case. Like sometimes it doesn't go below and sometimes it does go below. Sometimes when we go below it means a bare market like here, but it didn't mean it here or here. So, why is it that this time it has to be it? Even the NASDAQ, right? Like, let's look at the NASDAQ for a second here. It closed for an entire month, over a month, below the 50-day or 50we moving average this freaking year in 2025. And yet, look at how much higher the NASDAQ is versus when we closed below and everyone said there was going to be this crazy uh bare market, which didn't end up happening. So, I just think this

technical analys matters, but it doesn't always matter. It's [laughter] not that big of a deal in my opinion. Like, it's good to watch, but I just don't think it it means like it's not 100% right. But right now, you have everyone screaming, saying, "Okay, we're below the 50we moving average, so this must be a bare market. It's cooked. The four-ear cycle is intact, and we're done for a year." It just it just doesn't make a lot of sense in my opinion because there's just so many times where it hasn't shown that that is true. Uh so, and even this year, it's shown that. So, I just don't understand why everyone is so fully obsessed over that. Now, it doesn't look great. Don't get me wrong. Like, go back. Here you go. We're under 93,000 right now as we talk. So, this obviously does not look good. Don't get me wrong.

Um, and to be fair, I've been saying for a while now that I'm not overly bullish on crypto, specifically a lot of the altcoins, right? Because I think a lot of it is just uninvestable. I think last time I was on the podcast with you LG, we sort of went through this. Um, and so what I really like to look at is like what is the adoption of crypto right now? And so I really think that what you want to look at is not like users and things, but instead I want to look at how many assets are coming on chain. And so this RWA.xyz is a great chart um to sort of give you the idea of because in order for crypto to be valuable, we need to bring the financial the current financial system onchain, which means all the financial assets that currently

exist, whether that be dollars, stocks, private credit, gold, etc., etc. That's where all the world's capital is, right? The liquidity all exists in stocks, it exists in dollars or fiat currencies, it exists in gold. You know, there's trillions and trillions of that. We need to bring all that onchain and that'll make the crypto assets that we have more useful, right? More valuable. That'll make them go up, right? Um that'll make Sky as a savings platform way, way, way more valuable because there's more assets you can put into that system. That'll make ETH and Soul way more valuable because they can be collateral and they can be, you know, trustless money uh on ecosystems that have trillions and trillions of assets on them. And so, you know, this these numbers look good. To be fair though,

they don't look amazing, right? when I want to see growth, what I want to see in a company or an industry that's growing, you want to see exponential growth. And honestly, we are not there yet. Um, this is growth, but it's very small. Like we're talking a couple billion uh a a week uh in terms of like all real world assets coming on chain, that's actually quite small. Like if you were to value or look at like let's say an AI company or just any tech company, social media, AI, like whatever it is, you're looking for exponential growth that is way way way bigger than that. And so as much as this is exciting, it's not actually that much. And so this is why I've been so vocal over the last while saying like I don't really see a reason for a lot of the crypto space to

go up, right? Um, Bitcoin is different. Obviously, it is more of a store of value. It is something similar to gold. So I am surprised to see Bitcoin where it is today. But the rest of the industry, I actually am not that surprised. Um, a lot of it, as I said, is uninvestable. A lot of the institutions and the capital out there can't buy this stuff. Um, and then its adoption is not that fast today. And so I've been a big proponent of saying we need the market structure bill before we're really going to see any momentum in my opinion in the crypto space X Bitcoin and ETH and maybe Salana because they've kind of crossed the chasm and are available in public markets. But even that the story for Ethan Soul is not that great until these charts are really really taking off. Uh, and so

right now they're not. And I think the big reason for that is market structure. So until we get that I I think that you're going to continue to see crypto bleed versus the broader market. Um, but if we bring it back to the bull market, like just don't look at crypto for a second and look at, I don't know, the NASDAQ or the S&P. Does this really look like a bull market is ending and we're in a bare market? Like what? It's looks completely like there's nothing there. We're down like 5% now. It's up on the day, right? And then the S&P 500, like it just looks so average, so normal to what it's been doing all year. So, I just don't know why everyone is up in arms. Now, again, I know crypto is lagging. That's a different story. Um, but until we get market structure bill,

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Stable coins are the biggest use case in crypto right now. But let's be real, using them on chain is still way too complex. That's exactly the problem Bridge is solving. Recently acquired by Stripe. Yep, that's right. Bridge helps businesses send, store, accept, and launch stable coins instantly. Explore the future of global financial infrastructure at milkroad.com/bridge. So, from what I'm understanding, just to kind of recap your point, which was excellent, is that the 50week EMA is having people freak out because we closed behind under it, and people don't like that, right? Um, and they don't have and we don't clearly don't have much else to hang on to. I think if you're just a crypto person, right, and you expected massive gains at this

point, correct? Right. And if you're hanging on to the four-year cycle, go back to your previous answer, this is this is a danger territory for you. But if you look historically, it's not that big of a deal. And also, all other assets that should go up with the economy like like the S&P and other slightly risky assets are their structure still intact, similar to Bitcoin. That's basically what you're telling me. and that and that the part where you are maybe not so bullish is in things outside of Bitcoin and anything that isn't going to be part of uh RWA coming on chain right that it's basically anything that's not kind of part of those things that isn't like a heavy utility for RWA and isn't just the normal store value in Bitcoin it kind of hard to make larger pool cases for >> it rather than saying the RWAS I think

the better way to put just the the old financial system bringing that onchain right so what assets are going to help be a part of that that's your Ethereum your salana your Sky, your A, etc. Those things are going to do what your Coinbase, your Galaxy, right? Like as institutions come on chain, where do they go? They go to Coinbase and Galaxy. So I think these companies are going to do incredible as they are the the big companies that benefit from the whole world moving on chain. Um, and so I remain very bullish on that sector over time. But again, you got to remember this is a long drawn out process and it's a long drawn out secular trend which right now is halted because we just don't have clear regulation which we've known this for a long time. And so, do I think that macro is cooked and

all markets are are cooked? Absolutely not. And I say that because of what I just explained on the macro. And then if you just look at the stock market, everything looks fine in the stock market. Can we get a bigger pullback? Absolutely. It's only been 6%. This is nothing, right? And so this tells you bull market still intact. The main issue I think that we're having right now is just crypto doesn't have a structural bid because we don't have massive adoption there yet because we don't have a market structure bill. And so, um, it doesn't mean that I'm super bearish on crypto for forever. I'm very excited for crypto. Of course, I've been bullish on this sector for a very long time. I just think we need some clarity, uh, so that capital can start to come in. And so, I want to remain allocated to it because I

think that could happen at any moment. Could happen this year, could happen by January, February. Like, I don't know when it's going to happen, but when it does, I imagine we're going to see that trend really start to pick up, and then it's going to go exponential, and you want to be allocated to that. You don't want to be out of the market for that. Um, and so that's a big thing, but that's also just why I think you just need to hold majors because they're not going to go down as bad. I don't Bitcoin's only down 25% right now. That's not a big deal to me. Again, you got to depend on are you a trader or an investor? And I think this is where people get kind of mixed up. You're on Twitter and you see someone going like, "Oh my god, it's below the 50-day or

50we moving average. I'm selling everything." But like, if you're just an average retail person who doesn't trade, that doesn't matter to you, right? As long as the trend is still intact, then what's the point in trading? because that person is going to buy back in in 3 weeks from now. But are you as a retail investor, is that what you're doing? Are you trading your entire portfolio? Like probably not. I know I'm not. And so when I look at this, I go, "Yeah, doesn't look good right now." But like, well, well, I get paid this Friday. I'll buy some more and I'll continue to hold on because I don't think that crypto is going anywhere, right? Uh it's not going to go to zero. Uh and I just don't really see a reason for a long drawn out bare market here because there's just too good of a macro backdrop. Uh, plus

there's the catalyst of a market structure bill where everything all of a sudden comes unchained. Perfect. >> Before we jump to AI, Kyle, because I think that's that's what kind of how we want to wrap this up too and and allocate a large large portion to AI. Um, very quickly, I want to ask you about some of that sentiment on Twitter and some of those headlines you see. We see this all the time. We've seen it all year. We even have people come on the show and talk about these price targets, right? And I think that it's so obviously it's it draws the eye when you see things like JP Morgan predicts Bitcoin 250 by the end of the year or middle of next year. How do you react to those? You don't really throw, you know, you don't throw darts at the board like

that, which I think is really smart, but but how do you react to those? And and why do those exist? Why do smart people like JP Morgan or smart firms or whatever, why do they say that stuff that then just I think it makes retail people go completely berserk when it doesn't happen? >> Yeah. So, I think the reason why those come out is they're part of a longer bigger report that people don't read. They just see the headline, right? Like when we do reports uh at Milk Road in in Milk Road Pro, we also do not price predictions but expectations because we kind of look at it and go, "Okay, here's the company. Here's its current like uh you know revenue that it's making.

Here's its current profit. Here's its current valuation. Based on that, where do we think it would go?" And we kind of project out well in a year, two years, three years, here's where the revenues could go. And thus, if we look at the same price to earnings ratio, the valuation should be X, right? And that gives us sort of a bare bull uh and neutral case about the asset that we're investing in. So that way when we buy it, we're going in with a game plan where we kind of have an idea. We're not actually thinking it's going to go to that price, right? It's just we've done some, you know, back the napkin math and kind of like valued it out and that's where we got to like, okay, well, it looks like it could 10x in the next two years, right? And the downside is only X

and so it's a 1 to 10 riskreward. It makes sense. let's go for that, right? That's a fat pitch we want to go after. The problem is is that I think media takes those, screenshots it, and says, "Hey, you know, JP Morgan thinks it's going to this." And they don't actually think it's going there. It's just their bullcase. If everything goes well, it could go there. But then they also have one that they don't screenshot and share in their headline, which is if everything doesn't go well, it could go here, right? Uh and so I think people get too stuck on those. In our Discord and our Pro Discord, people ask all the time, you know, about price predictions and do we think it's going to go to this or what price are we selling at? And I always say I don't sell at any specific

price. That's not what we look at. We look at is the trend slowing down or growing and is the macro backdrop getting better and improving or is it getting worse, right? And so price action doesn't really matter that much. If you're investing for longer than 6 months to a year, like the problem is if you're investing right now expecting to buy a home with that money in like 3 months, well, yeah, maybe you should have sold the top, right? Which good luck trying to do. And if you're investing money to buy a house in three months from now, don't invest that money. Probably just put it in something that's going to get you a little bit of yield because market especially in crypto because markets are very volatile. But if you're looking at long enough, then it doesn't really matter.

What you want to say is, is there more capital and more risk going to be taken over the next year or two or going to be less? And in my opinion, the way the macro backdrop is looking is it looks like there's going to be more. And so does that mean Bitcoin will end up going to 150 or 200, 250 or 300? I have no [ __ ] idea. And I actually don't really care. The only thing I care about is when do I think that people are going to stop taking risk and are going to want to go into, you know, kind of a defensive side of things, which I just don't think we're there for the long term. I think yeah, people are obviously going defensive right now, but I don't think that it is a 6 12 month situation.

I think it is just a confusion around markets, which happens all the time. I mean, we've had one of these pullbacks in what was it April of this year? We had one in August of last year. Uh we had one in March the year before that. Like we have these all the time, once or twice a year at least. Uh and so I just think we're in a normal correction, which is is not a reason for me to start making moves or change my price predictions or whatever. >> The the catalyst for the the turnarounds or the pumps the last two times were were the election and then the bottom the bottom of the tariffs. Is there anything specific, Kyle, this time around that you're looking for that you think is like boom, that's that's the match?

>> Yeah, I don't know what's going to be the specific C here's the thing. This one's been a weird pullback or a different pullback because we didn't really have this huge like I mean we did have a huge liquidation event in October, but getting down to 9293 we sort of just grinded down there, right? And then we haven't had this huge back bounce like back upwards either. Uh and then same with like AI, it's kind of grinded down a little bit here over the last few days and you know there's been no catalyst really to bring it back up other than Warren Buffett bought $4 billion of Google over the weekend. So uh you know that got people excited on the Google side. I I think Nvidia giving their earnings on Wednesday is going to be a big thing to hopefully calm the market back down so everyone kind of

realizes, hey, we can actually chill. The AI bubble has not popped. There's still a lot of demand here. Um, so that'll just help systematic because here's the problem is like you have these kind of systematic flows. Thomas talks about these all all the time on the milk macro side of things. Um, and when you hit certain numbers, these like systematic flows start going the opposite way and selling. When you hit a certain number, they start buying, right? Um, you also had over the last month, the buyback period was in a blackout period in I think it's November, end of October or whatever. Uh, and so a lot of the stocks haven't had buybacks on, but those get turned on here in December. And so the systemic stuff I think will start to come back, which should drive things higher. Um, whether that's this month or it's

January, like I don't know. Again, don't really care. But, um, ultimately things still continue to look bullish behind the scenes in my opinion. >> Love it. Uh, I just want to take a quick minute to to to advertise you a little bit, Kyle, because if you guys want to ask Kyle more questions directly, you can do that in our pro Discord. Kyle also wrote this uh Hold on, I got to remove your screen. Here we go. Kyle also wrote this excellent uh report just like at the start of the month that was about the four-year cycle and when to exit. So, it gives Kyle a lot of Kyle's thoughts about uh kind of everything you guys just heard in terms of like when he's when he's in and when he's out and also summarizes a lot of the stuff he said and kind of makes a nice case about

how why our like macro tailwinds are going to extend into 2026 and 2027 largely or heavily tied to AI. So, that is a pro report that you can read uh only for pro members. And while we're talking AI, I also want to point you guys to this macro pro report that was written by Thomas around the same time that is a a novel of a report. It took me days to go through it and understand it from Thomas. Uh but it's fantastic and gives this like amazing massive picture of the global macro, but also kicks off with there is no AI bubble and the bull rally isn't over. That came out a few weeks ago. Still very much uh still very much the theory. And even if you go over to our Crypto Pro Discord, you can even see um you people are

asking Thomas these questions and he's giving all the like just such in-depth explanations about how this stuff works. Uh that's even it's a lot for me to even keep keep up with, but it's incredibly valuable. So for pro members only, uh you guys go over there and check that out. If you want to harass Kyle more uh and and maybe eventually get him to give you a price prediction, then maybe he will. But only for pro members in Discord. That's the only place that's going to happen. Uh, but Kyle, let's let's definitely talk about AI. I mean, this is something you've been hot on last time you're on the show. That's exactly what we talked about is, hey, maybe cool it on on the crypto alts and maybe start looking at AI. Since that time, we have launched a Milk Road AI podcast, which you can check out on

YouTube. Tell me really quick your current thoughts, uh, where AI is at and and why you're still like super bullish. >> Yeah, so the reason why I think AI is so important is one, I mean, it's another secular trend like crypto, right? So the reason we're so excited about crypto and so bullish on crypto is we think that the whole um you know traditional financial system and all of its assets are about to move on chain. So obviously there's going to be a ton of opportunities here. That's a massive change to the world to how businesses work to how money flows to how assets work. So that's a huge huge huge secular trend which is driven by the macro backdrop of fiat debasement. Okay. AI same thing. Okay. It is a massive technological innovation that is changing the way that humans work uh

both in at their jobs but also personally changing the way that businesses work. It's changing absolutely everything about what we do, right? Because we're creating robots and self-driving vehicles and we're using these AI chat bots that do a lot of things for us, help us think and strategize and run companies, etc. So like obviously that is changing the way that the world is is functioning but it's also changing the way that the macro backdrop is set up because right now we are in an AI arms race globally to sort of win AI and this is both from a uh company level. So think of like your Google and your Amazon and your Microsoft. They're all spent in and Meta. They're spending tens of billions to hundreds of billions of dollars a year right now uh trying to win the AI race. And that means they need to buy

land. They need to build data centers. They need to buy GPUs. They need energy sources to power all this. Uh and then they need to create amazing technology around uh the data that they're capturing and the LLMs that they're creating. And there's a bunch of use cases and things you can build from that. So that has been happening for a number of years now. Um and it is continuing to pick up that the the spend that they are are doing on all this is just growing and growing and growing and it's getting to the point where it's actually becoming very important not just for companies to do this but same with countries. So the US and China are the two big ones here that they have, you know, really focused on trying to um make the conditions in their country better and more conducive to growing

this AI sector and winning this AI sector because it's a matter of national defense really, right? Um you know, if you think about if war is ever going to happen again, it's going to be AI and robots. It's not going to be humans. And so they need to win this. And so what's [clears throat] happening is the US is creating better regulations for companies to access energy or build energy. um they are trying to bring manufacturing into their countries so they don't have bottlenecks of their data centers or of the the commodities that are needed the materials needed to build the data centers for the chips for the GPUs for the energy for everything right so the US and China are really doing this like massive massive rush into funding and changing regulations and basically trying to bring in talent from around the world to win this and so

that is really changing the macro backdrop because not only is that a a you know trillions of dollars of spend here that's happening and changing of regulations changes how the macro backdrop works but it's also changing in terms of like how companies work because right now company's earnings are going through the roof yet they're not really hiring because they're using AI and becoming more efficient so like everything right now is changing because of AI and I think that is where a lot of the confusion is coming in the markets because people don't really understand what's going on and then you add on top of that that we don't have any data from the government anyway everyone's just like what the [ __ ] is going not you know what is like is unemployment going up or is it not are companies using AI or they

not is there a bubble or is there not like there's just so many questions and I think the latest that we sort of know and again this is why Nvidia earnings is going to be so key is there's been some delays on like some of the big data centers so like coreweave for example these are the hyperscalers there's been delays on when their centers will come online and when they'll get um the companies that need them will actually get access to it and so people are starting to think that this is the AI bubble popping or kind of slowing down. Um, but I think what we're going to hear in the Nvidia earnings is that hey, demand is still absolutely massive. Uh, there is no concern here.

Really, what's happening to to kind of help people wrap their heads around what's going on in the space is that the innovation and the tech side of AI is growing so fast that it's creating so much demand that the physical side of it can't keep up. meaning we can't build enough data centers or get enough power or even create enough GPUs or chips to actually supply the amount of demand that's going on in AI. And so Oracle and Nvidia and all these guys that are creating the GPUs and the chips, they're sold out for like the next 5 years. And then it takes a long time to build data centers. These are massive, massive, massive buildings that require a lot of like physical commodities to build them.

And that's just slow. That's hard to do. It's not like coding, right? which is very fast and easy. And so we're actually slower on the buildout side than we are on the demand of AI. So again, that is creating some confusion because it's not a bubble in the sense that we've built too much and it's not getting used. It's we're using AI so much that we can't build fast enough. And that's a weird that's a weird dynamic, right? But generally in my opinion, the way that that what that means is that's a bullish setup. There's more demand than there is supply, right? That means there's lots of opportunity on the supply side, right? So either we're going to there's going to be new businesses that are created. Regulation is going to change to support this so that it can catch up. I don't know what

else we're going to do, but we're going to be able to spend more to try to build more on the on the physical side, which is good for the economy, right? It's good for jobs. We need more people to build these buildings and build the solar panels and the you know, whatever else. So to me, I see opportunity in that. Whereas I think some people are just kind of uncertain of what this all means at the moment. And I think that's why the AI trade is getting a little bit murky at the moment. Why do people invest in real estate? Because it spits off cash flow. But I'm not here to manage rental properties. That's why I'm looking at Figure Markets. Their new democratized prime product backs your money with real cash flowing assets and returns up to 9% APY. It's the first real world asset borrow lend pool built

for everyone, not just institutions. Ready to lend like a bank and get more than the 5% A is offering you. Download the Figure Markets app today and get 9% on your idol funds. Go to milkroad.com/figurearkets. Kyle, people can find your AI thoughts on our new Milkroad AI show. Um, this week is going to be your first interview and last week uh or your co-host on the Friday rollup. Duncan interviewed Mike Novograts from Galaxy and that's a perfect uh company that you're talking about that that has these types of capabilities. Um, and then you guys last Friday you did your first rollup episode with Duncan and Patrick. Can you give us kind of the coolest notes alpha from that episode uh and what you guys kind

of learned or or shared with the audience? >> Yeah, so the the big thing on that is you guys should definitely check that one out. We went through all the different layers of the AI stack and how you can invest. And so by layers I mean uh it starts at the very bottom which is like energy, right? So you need energy to power the next layer which is data centers, right? And the data centers they hold all the all the um the GPUs and the chips to process all the data that we have, right? And so that's your next layer. And then from that you have LLM. So that's your like open AI uh your XAI all that, right? Which is um that's just basically your models. And then you have the apps on top of that. And there's two versions of apps. There's like your physical apps which would be

robots that are using AI and then your software apps which could be like your chat GPT or your Sora 2 and all the like things that are being created that we use many of us use online. So we kind of walked through all the different companies and different layers within that which was very interesting. And again the most bullish part of of most of that was kind of this the physical side of it. So the data centers the energy because again there's just so much demand there. That's where the big bottleneck is, which means we've got to change regulations to make that go faster. Likely that it's going to push prices of those things higher. Um, there was a a tweet that someone put out recently which was they were saying like I think a lot of factories around the US which build anything. They could build I

don't know drywall or uh they could power like whatever you name it, cars, like anything. He's like, I think a lot of those guys that have these big huge centers that already have data or sorry, not data, energy from the grid, they're going to pivot and they're going to shut down their existing business and they're just going to go sell their their plants and their energy to the the AI hyperscalers, right? Uh because that's how much demand there is because they know they can make way more money. So again, um not great for whatever industry is going to shut down there or whatever company, but it's kind of like what happened with the Bitcoin miners, right? They were mining Bitcoin. They realized, oh [ __ ] why don't we just go make 5x the amount of money we're making if we just go and be a AI data center

rather than a Bitcoin one. And boom, they did that. They were the first ones to do it. I think you're going to start seeing this more. So, I think there'll be ways for this AI demand to catch up on the on the supply side. Um, and that's what's going to continue this bull market further because there's still a lot of innovation. There's still so much thirst in the in the world, whether it's from companies or people to use and experiment with AI that there's just I don't think that that can be over yet. there's just still so much for us to do there. Um, so anyway, we talked a lot about that. We're going to go over that a bunch this week, uh, on the rollup, which always comes out on Fridays. Um, so we're really going to dive into kind of the bubble side of

things and where the bottlenecks are. Uh, I think on this week, so it should be a good one. >> You guys can check it out on YouTube. It's Milk Road AI, of course, available on you on iTunes and Spotify. And you can also sign up to the newsletter uh which will be coming very soon which will cover these topics a lot more in depth and and uh we'll also have a a pro component down the line. Kyle, let's uh let's wrap this up by coming back to crypto. What um what if any moves are you making your portfolio? How are you approaching uh things going forward going into I mean at this point might as well just say going into 2026.

>> Yeah, absolutely. So look, I think um I I don't know if we go down from here or up like you know, who knows in the short term, but I think we are nothing more than a a pullback and pullbacks remember in Bitcoin can go to, you know, right now it's 25, it could go to 30, it could go to 35, it could go to 40. Um you know, it could we we tend to have these big pullbacks and so that's fine. Expect those. We've been saying this entire bull market it's going to happen. Uh I think we've had now was it six pullbacks of more than 25% uh since uh January 2023. So like we're in you know not unchartered territory by any means uh at the moment. Um and so when I see moments like this what I want to do is position

myself for what is the next leg up in in these markets. And so on the crypto side of things I think it's institutions coming in and building slashallocating to the crypto space. Okay. And so if you think of institutions coming into crypto what does that mean? Well many of them are building they're bringing their uh you know think of banks think of like funds etc. Think of what they do in their normal world. They're trying to move that onchain because it's more efficient for them. It's more cost-effective right they can get more profitable by moving their funds onchain by moving their stocks onchain. Not only is it more profitable but it's a better experience for the the users. And so that's the big trend that we are seeing in crypto right now. Okay. It's not necessarily like digital native like use cases. It's taking the old world and

just putting it on chain so that it's better, right? That's stable coins is the breakout app use case that we have in crypto. That's not something like crazy new. It's just a dollar. It's just when it's on a blockchain, it's way better for both the company and the person. The rest of the financial um assets and financial services are going to move onchain as well. We're seeing it with Robin Hood is bringing their business on chain. Coinbase is bringing their business onchain, right? And you're going to start to see this with banks, with funds. Uh Galaxy's already started to do this. And so what I look at is when all these institutions get that market structure bill, some of them are already doing this without market structure like Robin Hood. Many of them are waiting for clarity. So when they do get approval, and many of them are

already having these discussions, where are they going to go? Well, they're going to go to Coinbase and Galaxy because those are the two most trusted institutional crypto companies in in the US. Right now, I don't know on the Asia side. I'm sure maybe there's I don't know OKX or Binance or something. I don't know who does it over there. But if you think of the American institutions as they come in to use crypto, which we know they will, they're going to hire Coinbase and Galaxy to do whatever it is they're doing, whether it's helping them build, whether it's using their wallets, whether it's custody, whatever it is. And so I remain extremely bullish on those companies and continue to buy them when they have big pullbacks like they do today. What chains are they going to build on?

Probably Ethereum. Probably or definitely Ethereum because it's already happening. Probably Salana. So there's your two assets you might buy, right? And so I continue to be bullish on those. Outside of that, there's not a lot that I'm super super super excited for. There are some like revenue generating DeFi stuff that is pretty cool. Um but again, that's going to take a bit, I think, for this market structure bill and to get allocation there. So I just continue to buy things that I think will enable the next big leg up in crypto. And I don't mean leg up in price, I mean leg up in adoption, right? Um and that leg up in adoption is not retail like everyone thinks. You guys got to stop thinking about what is retail going to do next. Retail's not doing [ __ ] next because they're all broke, right? [ __ ] AI is taking their

jobs. They're not getting uh, you know, wage increases. They're all in debt. They're just trying to buy a home. They're not [ __ ] punting meme coins anymore. And they're definitely not buying like midsized, you know, tokens in crypto because they can't afford it. They don't have anything. Now, maybe when we get that $2,000 stimuli check, if we get that, you might see a short-term pump. But right now, what's going to bring crypto higher is institutions coming and building and allocating. And so, you've got to think of where can you get ahead of that. And to me, that is your Ethereum, that is your Coinbase, that is your Galaxy. So, I remain bullish on those uh and hope that that plays out at some point. I don't know when. It could be January, could be February. Uh you know, I I I don't really know. And then the other

side is like look, AI is obviously changing the world really fast here. And so, I think it's important to try to understand what's going on over there because that affects your crypto bags too, right? Um, a lot of AI is what's going to be using blockchains and stable coins, etc. in the future, AI agents. And so, if you want to understand where the world is going, well, you need to understand AI. And so, that's why we launched this Milk Road AI podcast. We're soon launching the newsletter. Um, because I think both of these should be very, very important parts of your portfolio. You should hold crypto. We're obviously very bullish on that. And there's lots of upside there because it doesn't have regulatory clarity. AI does and so it's a little bit more crowded already. It's a little bit more well understood. The companies that you know

are crushing it in crypto or sorry in AI are like Google, Nvidia. These like trillion dollar companies whereas the ones crushing it in crypto are like Coinbase which like I don't know hundred billion maybe $80 billion company right so the riskreward is probably better in the crypto side but it's also way more volatile because there's so much you know uh they're so small. So you got to understand like it's good to hold AI and be a part of that and understand what's going on there and then good to continue to hold crypto again as long as the macro supports that. right now, even if something bad happens with unemployment, we still got a ways we can go down in rates. We still just ended. We don't even ended QT yet. QT is ending in December 1st. Like, there's still so many more tools in the tool belt for the

central banks and the governments to stimulate the economy and and and drive assets higher. Um, this isn't like we're already at 0% interest rates and we're already at, you know, printing a ton of money and yet unemployment is going through the roof. um like that's not what's happening, right? So, there's still a lot of things that we can do to keep this cycle going further. And so, when you know that that's the backdrop, you just got to say what are the technologies that are getting adopted the most right now? And I think that's going to be crypto and AI going into 2026. So, I remain very bullish. >> It's a hot rant, man.

>> That is a hot rant right there to wrap us out. Uh Kyle, thank you for your thoughts. If you guys honestly want more access to Kyle, he's writing pro reports. He's he's accessible in the Milk Road Pro Discord. um and currently hosting uh our Milk Road AI show. The next one is coming up this Wednesday and Fridays, two episodes per week. So, make sure you guys check that out and obviously follow Kyle. Check him out on uh on Twitter. Kyle Reedhead is the handle. Kyle, good to chat with you again, man. Uh always love doing these shows and I think we our audience really really enjoys it and loves getting clarity from from the head honcho here. >> Thanks, LG. It's fun to come on for listeners and LG. Everyone just relax for a little bit here. We might go deeper down. Things might get even more

red. Let's just let it play out. It's all good. You know, crypto, we're not in a world where crypto is going to zero anymore. That's just not going to happen. I mean, unless you're buying some dumbass memecoin or whatever, like probably that's going to go to zero. But like, if you're in good assets, we don't need to fear that, oh my god, is it going to go to zero? I got to get out. That's just that's not the world we live in anymore. This isn't 2021. This isn't 2017, right? Like the the dynamics are way different. So, we don't need this much fear in markets anymore. We can just accept the volatility because if you want 100% gains in a year, right? Right? Like Bitcoin's up, I think, 500% since 2030, 2023, sorry. But it's gone, you know, as I said, it's had these massive pullbacks each time. Uh, and so,

like, you need to just be okay with these if you want good uh good gains. If you don't want 100% gains and you don't want to be around with this volatility, just go buy the NASDAQ or the S&P 500. You'll only get maybe 5 to 10% a year, but you'll never get a 30% pullback. So, I don't know. Just choose what what are you okay with, you know? >> That's what the Milk Road's here to to help us navigate that. And I and thank you for singling me out as one of the people freaking out. [laughter] Uh >> no, you're good. You got strong hands. No, you you said you said all you know you people and and LG specifically. [laughter] You got me. You got me. Uh cool. Kyle, thanks for coming on the show. Uh we'll be right back here on Milk Road Daily uh

tomorrow with another great guest. Um and we'll I'm sure we'll see Kyle again soon. >> If y'all are making swaps or trades right now, highly recommend you check out Milkroad Swap. This is a DEX that we built in partnership with Cow Protocol. Why do we build it? Not to make money, just honestly so we could have a place to do our swaps for the lowest fees that we could find. This is the fees on Ethereum, Arbitum, and Bass are only.15% fees. Uh this is a huge difference from uh other centralized exchanges that charge half a percent or even up to 1.2% fees on their swaps. Also, you can swap on Salana all at swap.mmillgrow.com.

Check it out today. You won't be upset. And you can join me in my favorite place to make swaps on chain. Want insights on what's moving crypto markets and [music] how we're trading each event? Subscribe to our channel and join the Milk Road Daily and Pro Newsletters and start investing [music] like the top 1%. This show is for educational purposes only. Nothing we say is financial advice. Investing is risky. Never invest more than you can afford to lose.