Why this crypto cycle may not repeat the past, with MANDO

Transcript

GM good morning welcome to the milk Road show The Daily crypto show where we break down crypto with the care of your mom cutting the crust off your sandwich I'm your host Jay Hamilton and today we're joined by the legendary crypto investor Mando to talk about his thoughts in the current market why stocks have been outperforming crypto and what he's looking at towards the future before we jump into Today's show I want to ask you all a quick favor 56 % of you who are watching this do not subscribe to our Channel and we want to celebrate our community so right now if you subscribe before the end of the month you could win some free prizes we're giving away milro Pro our crypto

investing masterclass and many more prizes check the details in the show notes deep out sincerely appreciate all of you guys showing up for us every day before we hear from Mando we just need to take a quick minute to hear from our SP sponsor over at kelp gain get ready because your reward farming game is about to level up introducing gain powered by kelp your dgen concierge gain is an automated Vault launched by kelp that maximizes rewards for eth users it offers oneclick access to airdrops and points from leading l2s like Linea scroll car and more here's how it works head over to milk.com

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conditions it's uh it's a bit scary out there is a lot of chop a lot of good signals and a lot of bad signals which is super confusing where you think everything it sits right now yeah I think the the main error that's been made is people assum that this cycle would be like the the previous Cycles or we're told it would be like the previous cycle and that hasn't really happened we haven't really had a classic altcoin cycle in fact Bitcoin dominance has gone up from about 52% s years are now 58 it's up about 20% in the last two years and that's generally you would see this sort of rally in Bitcoin and then we be going right we need to move into alts um we did have a meme coin cycle let's say but I think it's been very very painful

for if you've been outside of being a a Bitcoin Buy and Hold sort of investor and very frustrating as well you know I was looking at the chart yesterday and Bitcoin was at 61k on the 28th of February right was it we we have not moved in six months uh and in that period of time I think a lot of people have been been chopped up um there's been a lot of depression that's kind of seeped in you've seen East go lower salana kind of retreated from a high and then most other altcoins are are lower as well so it's just it's been a bit of a brutal six months and it hasn't really felt like previous Cycles by any by any means that being said you know back in February on the 28th of

sorry back in the 28th of February Bitcoin was at 61k how euphoric was the timeline at that at that stage it really felt like we could go so much higher RSI was kind of overbought uh things were looking a little bit Toppy and then we did kind of top out let's say 15% higher than that now you look at it funding for futures is an all-time low back then you'd have these horrific Wicks every single day we should wipe out all this leverage now funding's really really low the stable coin Market uh tvl is up about 30 billion in that time zone I think even higher actually and uh things like the fear and greed index the RSI are are much much

healthier so if I look at this market objectively and you take away all the emotion out of it this is a market that could run you know if you start getting momentum into Bitcoin here that could very easily start pushing on to you know 80 100K and it wouldn't feel stretched so despite the the pain out there that it feels it does feel like Bitcoin could keep going here but it's interesting to know that I'm only really talking about Bitcoin there I think a lot of other things have been tested this cycle and I think it they've been a little bit painful I think that's understandable and I want to get into your thoughts on where you think this cycle could go from here will we have the more typical end to this cycle or another uh bull in the

coming months but before then I just want to bring up a chart that I was looking at this morning love your thoughts on this this is a chart showing Bitcoin and the Magnificent 7 over the last 18 months uh and showing percentage gain of each let me just zoom in so you can see here but we've got Nvidia up here at the top of me which has just done incredible up 700% 763 over the last 18 months meta up 300% Bitcoin up 254 4% and then Amazon Tesla Google Microsoft and Apple all in ranging in the 75 to 100% up over those 18 months so okay great interesting to look at bitcoin's done well in

comparison but here's where it gets really interesting if I change the time Horizon on this and I just look at the last five months basically since we peaked uh in Bitcoin peaked in in March then what we see is Bitcoin is the worst performing it's down 12% down 12% over the last five months whereas Nvidia continues to rip up 46% Apple up 33% Tesla up 32 Google up 8 meta Microsoft and Amazon all ranging around zero uh what are your thoughts about the fact that Bitcoin has been underperforming the magnif 7 and tech stocks over this time period look this this is why it's been even more painful because obviously

there's an opportunity cost to be involved in crypto and I think some of the drivers behind crypto particularly more recently have felt as though Bitcoin has been more a digital gold sort of asset rather than than tech stocks um although there is obviously an L2 infrastructure and some hope for Bitcoin as a as a payments uh infrastructure going forward the bulk of the people who seemingly buy Bitcoin or more they they view it more as a digital gold they don't want to touch it it's a protection against inflation or debasement of currency and some of the payment stuff has actually kind of been overtaken by some of the L1 so in terms of like direct correlation to the to the the increase let's say in financial Tech I would say that Bitcoin has become less

correlated to those things regardless I do think it's been pretty painful to see all these other tech stocks go higher and people have been wondering like why do I own Bitcoin if nvidia's up this much and you can un feel that bitcoin's actually done the best out of all the other cryptos as well so it's kind of it's kind of been even more painful if if you've been in the other things that being said like we did have this left translat cycle so you had some money come come in from the ETFs and then since then we've actually seen quite a lot of distributions whether from the German government the US government from Mount gaau from uh some of the other liquidations of of protocols from the last two years which seemingly came out of bankruptcy around that time as well so we actually had quite a lot of Supply

over that period but we're now kind of com coming towards the end of that mount g is starting get towards the end of its distributions M obviously uh Germany sold the US Bitcoin is still unclear if that's going to be sold or not maybe that depends on the election as well there's some talk about you know that being kept for some sort of strategic Reserve but we're getting towards the end of let's say the known pockets of Supply that we all knew were coming bount GA has been you know that's been a headline for the last 10 years basically it's been ages that people have been talking about this thing so to get through the other side of that again and bitcoin's at 61k it's where we were at 6 months ago you you have to appreciate that Bitcoin is is much smaller than the

stock market and most other asset classes you know it's a just over1 trillion dollar asset in a in a world where you get into the hundreds of trillions if you start carrying all assets so these sort of small Supply technical things are relevant and we did have a decent amount that came through um seemingly that's also why we rallied when we had those inflows that came in around the around the ETF I think as we get towards the second half of this year some of the broader macro Trends around money supply around liquidity being pumped globally into the system will become relevant and some of more of the micro stuff as well so FTX is obviously going to be paying back just over 10 billion probably uh to customers all crypto investors and that's in that's

going to be in in Fiat so you would expect that or a lot of that to come back into the crypto Market you could hopefully start to see the EF start ramp up as as the marketing around that becomes a Little Bit Stronger same with Bitcoin we started to see that there was due diligence around a number of different uh investment firms that needed to look at the Bitcoin ETF and we're starting to see that kind of come to an end Morgan Stanley came out with their wealth division you'll probably see UBS goldber Sachs will come out with similar recommendations for their clients too so the slow moving world of wealth management Insurance pensions they will probably start to to become more aware of Bitcoin ETFs and I think flows could really start accelerating actually toward second half this year and then who knows after the election

you know you could have a very very positive scenario here where that opens up regulation it opens up more ETS for different asset classes so for me don't lose faith I do think that the they call it the banana Zone really in crypto but where things start to go you said it first not me seem to par my guess is around the election so like a week beforehand or a couple weeks beforeand we'll probably start to see some strength because some of the other longer term Trends in crypto are very very bullish yeah that's the funny thing about right now is even the tone of your voice in this conversation is everybody's a bit hesitant everybody's got this tone that's a little bit unknown right now a little bit of what is going to happen over the next few months but then at the same time the

number of things that you can stack up that are positive and make it actually seem much more bullish than it is it's a it's a bit of a funny time do you think that we will assuming we see the banana Zone and as you said indicators are looking great we've talked a ton about uh liquidity ramping up money money printers coming on that likely the FED will increase the rates very likely in September and then hopefully continue to do that so every the US dollar declining we were talking about the Dixie on yesterday's show and that seems to immediately already having a bit of impact uh and as you said there's been so much movement into stable coins

recently and when stable coins get to these points often people start to think okay now is it time to go back risk on so it's like everything's teeing up but nobody's really like is it just a sentiment thing like why is everybody so hesitant right now well I think it hasn't felt like the previous two cycles I don't think the on boarding has really happened this cycle the on boarding has really come through the Bitcoin ETF and that's where the M majority of the flows are but to a large part away from being a store of value and for payments which has been a slower cook crypto hasn't found that product Market fit that's just brought on millions of different people for some of that which I think is tokenization and potentially more broader Avenues into payments you will probably need some regulation in the US

which it really unlock that sort of potential but for now we've kind of been trading meme coins between ourselves and it's all felt like it's become more of a Bitcoin trade it's become more of a right you own this because it's a fixed Supply it protects you against debasement which we keep on seeing it protects you against the issues with fat monetary systems that's like a slower cook and people haven't come back in like some of the other things that we've hoped that would really take off AI probably needs a little bit more time for like AI agents to be to be relevant gaming just has not really worked this cycle at least not to the extent that people hope that it would and some of the other applications just haven't really uh taken off in this in the way they would if I'm honest why would you

need a decentralized public Ledger it's probably for things like payments number one and the other ones just NE tokenization I say would be the other like big big Grail but I think that could also just be enough we're just going to have to accept that it's going to be a slower a slower burn for those you don't often need like public leg for everything basically but I do think there's a there's huge huge potential in getting to the tokenization of actual assets you know like I said there's hundreds of trillions that trade basically a day and that would also be the same for for just generic payments as we can already see with like the growth of stable coins so I think there's huge potential in crypto it perhaps hasn't been in the parabolic feels that we kind of hoped at the start which me onboarding hasn't happened I do

think we can get like those parabolic use cases with more regulation particularly inroads into trafi and that's kind of a later a later cook but for now I do think a lot of hopes are pinned on bitcoin Bitcoin being digital gold and that going higher and dragging everything else higher the only issue is it hasn't really translated and everything else going higher there's been a few things that have gone higher but Bitcoin dominance has really just gone up bitcoin's been the real win of this cycle a lot of the top 100 lower and there's still that uneasy hope that do we get an altcoin cycle I wouldn't be betting on it just what I look at in terms of why I'm bullish about crypto a lot of it are the macro things that drive Bitcoin and so far this cycle they haven't necessarily led to other coins

going high what have you done with your positioning and your portfolio at this time when it is so unknown are we going to have a similar cycle are we not yeah so this time last year we myself I invest I don't know if you've had OSF on this podcast but yeah a few times me and him invest together um we we went pretty big into memes around this time last cycle and then we slowly started exiting um at the start of this year we're now primarily just in majes so just in Bitcoin e salana and we dabble in in very small pockets of of memecoins and Dabble in small pockets of other l1s but generally our our portfolio is defensive

but we still see a lot of upside in it so that's kind of where where we're at we've gone with a more defensive lean I think that was one of the also the main errors this cycle is that I personally think that even if Bitcoin goes to 100K I think Bitcoin dominance probably stays around the same sort of level which means most things are kind of a 2X is like I think we probably could go to 150k over the next 18 months but I also think the Bitcoin dominance could stay around the same level so you've really got to think about the risk reward in some of those trades some of those you know outperform but for large part if you think that Bitcoin dominance stays around the same you got have a pretty high hurdle rate for a risk reward sort of trade I think a lot of people just

focus on the upside and they don't look at the downside of their trades I think that's what what people have been hurt on just looking at the upside of right I'll own this Al because if Bitcoin does a a 2X this might do a 3X but then you you could also drop 50% the moment Bitcoin gets a cold so we've been really more defensive this summer starting from around April or May and that has helped that's really helped we obviously we moved into e which hasn't done as well but salana and and Bitcoin have have really helped our p folios and I think that's what we're probably going to continue until after the election or around the election and then I think we might dial back into some more risky stuff is there any anything that you're watching that would lead you to go more

risk on before the election for me I I'm of the view that Trump wins so but anything that would indicate that his chances become stronger I think you get a more parabolic outcome there for crypto and that's kind of that's not a political statement it just feels as though he's being being very more direct with his positive stance on crypto and potentially the people that he would put in power in key positions there if I start to see his odds go up materially again I think that would be a bullish period here for for crypto what about there seems to be a narrative which I feel like you have been tapped into and we talk about a little bit on the show as well which is around Defi and these tokens starting to figure out value

transfer and fee transfer back to token holders it's something we've all dreamed about for so long and we're sort of starting to see it is that what are your thoughts around that narrative and any tokens that are catching your eye in that space yeah that's actually really interesting because it's something that we are looking at so it's the one sector which we think that if we were to go back into the more risky stuff before the election it would probably be in defi because for us if you can push through crypto regulation quicker you already have this this move towards fee sharing rather than just govern tokens and you have these protocols that could maybe start being used for real world assets at scale you can start to get pretty bullish on some of these D5 protocols so even you can just kind of

go go with the tier one protocols but then you could go into salana for example like they've obviously seen huge amount of defi versus TBL you can go for a lot of different like classic classic sort of coins on Solana but the same on E defi is the one sector like I said 12 months ago we were looking we looked at memes because we felt like those things would go most parabolic as it comes towards November I'll be looking I'll be looking at Defi and thinking right if if Trump wins this then you can have a pretty positive scenario or at least the risk reward on some of those coins can look very very good I know you talked a bunch recently and made a trade uh around jlp which is one of those defi tokens Can you tell us a little bit about jlp yeah jlp is slightly different

to to all the other ones so how the majority of per protocols in this space which is basically how you trade levered crypto in the space there is a move towards DEC centralized per platforms there's a number of these you may have may not have heard of hyper liquid dydx GMX and Jupiter has its own Jupiter most of the others are on eth and how they have all worked is instead of like a Unis swap pair where you have two-sided liquidity you basically give liquidity to a pool and that pool is made up of various different assets in Jupiter's case it's made up of 45% salana 10% eth 10% Bitcoin and 35% Staples so you basically have pool there which is 60 5% made up of risky crypto and 35% made up

of stables and people who use the prol basically trade using that pool so they'll be trading on a a so usdc PP or a so BTC usdc p and that's how the liquidity pool is is used and you can either be using it for trading or you can be a supplier of that liquidity and I've Been A supplier of that liquidity you own a token which basically owns the whole pool or owns a partial share of the pool so jlp is the token which basically has a a risk profile which is the equivalent of of 65% of these R risky coins 45% Soul 10% Bitcoin 10% Ethan 35% stables and moves up accordingly so if if for example those coins are all up let's say soul Bitcoin eth would all be up 10% one day this would be up 6 6.5% let's say assuming

the Sables haven't moved that being said you also get on top of that all the protocol fees from Trading of that pool it's been roughly like an apy of around 50 to 60% average over the last 6 months you can bring it up um as a chart it has one of the best sharp ratios in crypto because the other the other thing is generally on the down days in crypto you get a lot of liquidations this is one of the main things you will ever see in crypto people will talk about oh this how this is how much got liquidated this week and you tend to find that those liquidation fees all go back to the pool as well so it doesn't really have down days you'd be amazed that it look literally just looks like a straight to the right chart and the down days even

for Bitcoin Ethan salana like they don't doesn't really happen for FID LP so it's a good thing to own in terms of volatility I don't really focus that much on it but it has become a very very large bit of my portfolio so this is look at that chart it's it's up more than Bitcoin ether and salana this year start of the year at 1.7 it's now at 3.15 so it's up probably about 70% despite only being 65% risky things it's beating them all in terms of overall performance and how these fees are given back to you just just to be clear it's not like your classic LP where you would get like a separate stream of payments it's just added to the cool so you actually only face capital gains you don't face income tax uh which can be relevant for people if you're looking at

from a tax perspective like this is this would be the gains are basically reinvested essentially so you it's all capital gains what did you do on your JP trade did you trade a bunch of like did you evenly trade soul eth and uh and B Bitcoin to get into this or did you make a now it was mainly I moved Ethan salana around April time that's and I've held it since then and in that time period I think Sal and E are both down and you can bring bring back up that chart and this this thing's up so it's a good thing to hold over long term there's obviously some defi risk around all those things but at the same time it's a easy long-term hold for me just before we wrap here M when we look at this cycle the possibility is that we do hit

the banana Zone towards the end of this year and then when you zoom out this actually kind of does look like a normal cycle again do you do you think that's the likely case and that we're actually just in this point where this happens in every cycle when we you know have all the fear that comes in uh or do you think that we'll look at this cycle at the end of it and will truly be different it's a little bit wary to be like oh you know your altcoins are going to Rally next year like I said I'm bullish about select different things like I do think defi under that exact scenario of a trump Victory I think could be could be a nice little sector I still feel feel the most safe right now in the more defensive stuff so it's Bitcoin salana eth I feel as though out

of those Bitcoin still feels like it has the strongest narrative out of all three of those so I'd be unsurprised if Bitcoin dominance even goes up to 60% before before the election and then maybe maybe it kind of comes down after that who who knows I guess what I'm what I'm saying there is I can't guarantee it's going to look like the other Cycles I'm G to guarantee that bitcoin's going to be higher in the next few years like but I guess that's what people are feeling in crypto right now it's it's become a question of we need to find the killer app that makes all these l1s which are more based around the use cases of crypto they need to start getting real scale real applications that people come come and use them on and that may require a little bit more time or we just haven't found it yet

Mando thanks so much for your thoughts everybody listening in if you do not subscribe to Mando's minutes I highly recommend that you do a great way to get uh the the news download very quickly on a daily basis it literally only does take minutes so love from the best from you guys yeah the name is accurate uh we'll put a link to that in our show notes as I mention at the top of the show uh if you're not subscribed to our Channel Please Subscribe now because you could win some great prizes this month if you subscribe by the end of August remember none of this is financial advice investing in crypto is risky and you should only invest where you can afford to lose thanks so much for joining us have a wicked awesome day he