Bankless - Bull or Bear? What the Charts Are Saying | Ledger from Up Only

Episode Date: March 16, 2022

Co-Founder, CMO of Flip, and Co-Host of Up Only, Brian Krogsgard—aka—Ledger joins David and Ryan to discuss WTF is happening. Are we in a Bull or Bear market? What are the charts telling us? With the Ukraine & Russian War—ripple effects from said war—inflation at an all-time high, stocks down, commodities, and crypto being all over the place...there's a lot to unpack. Where do experts go to find answers? The charts. ------ 📣 OPOLIS | Sign Up to Get 1000 $WORK and 1000 $BANK https://bankless.cc/Opolis  ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/  🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/  ------ BANKLESS SPONSOR TOOLS: ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum  🍵 MATCHA | SMART ORDER ROUTING https://bankless.cc/Matcha  🚀 SLINGSHOT | LAYER 2 SOCIAL TRADING https://bankless.cc/Slingshot  🏦 GEMINI | TURN FIAT INTO CRYPTO https://bankless.cc/Gemini  🦁 BRAVE | THE BROWSER NATIVE WALLET https://bankless.cc/Brave  🦄 UNISWAP | DECENTRALIZED FUNDING https://bankless.cc/UniGrants  ------ Timestamps: 0:00 Intro 7:15 Exciting Times? 17:50 Charty Charts 24:00 200-Week Moving Average 32:20 Will the ETH Merge Change Anything? 39:15 200-Week Moving Average Cont. 43:40 ETH/BTC Indicator 46:24 Alt L1 Ecosystem 51:03 How Bad Could it Get? 54:30 Potential Supercycle? 1:01:40 Macro 1:17:27 What’s in Ledger’s Portfolio 1:21:44 Advice From Ledger ------ Resources: Ledger's Twitter: https://twitter.com/ledgerstatus  Up Only: https://twitter.com/UpOnlyTV  ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures 

Hey, Bankless Nation, welcome to another episode of State of the Nation. This is the episode where we talk about something topical, something top of mind. I think this week, the topical, top of mind thing is the market. Specifically, are we in? Yeah, bear or bull market. That's what people want to know. And in order to figure that out, of course, like fundamentally, look, crypto is in a 10, 20, multi-decade long secular bull cycle. So if you ask someone like David or myself, Bear Mark, Bull market, bull market. We'll be like, ah, I mean, crypto's always in a bull market, right? Kind of. And yet, there are some, you know, local bear and bull types of seasons as well that we have to talk through it. So, David, who do we bring on? And what are we going to cover in this episode? Yeah, we are bringing on returning guest ledger. The real name's Brian, but everyone calls him, calls him Ledger, co-hosts of the Up Only podcast, as well as the Ledger cast podcast. So a fellow podcaster, and it's always a treat to bring on fellow content producers

because they know how to make good content. But Ryan, a skill that you and I both completely lack is the ability to look at a chart and actually interpret it. Like I can draw lines. It's like, oh, well, there's a line here and there's a line here, but that's about as far as I can go. And so when it comes time to actually zoom out and look at the state of the charts,

because charts do matter, we need some extra help. So we're bringing on Ledger from LedgerCast slash Up Only to help us walk through both the crypto charts. We'll start with Bitcoin, Ether, ETHBTC, some Alt-Layer ones. But then we'll also talk about macro, because macro markets and commodity markets are also interesting right now. So, looking at the state of the charts today on the state of the nation. And we're hopeful by the end of this episode, you'll have a good sense of what kind of market we're in right now. Is this a bear market?

Is this a bull market? And what are the charts telling us the future is going to look like? So that's the goal for this episode. Stay tuned for that. David, before we get in, we got to talk about our first. friends at Opolis. So Opolis is a Dow that provides health care benefits for the self-sovereign employee. The self-sovereign employee is someone who is kind of a contractor. They're in the Web3 space. They're not tied down to their existing employer, but they're working for crypto projects.

And we think that this is going to be a new way the workforce is shaped into the future. A lot of people, before they dive into Web 3, are faced with this issue. I mean, they're in their corporate job, at least in the U.S., how do you get health insurance if you're working for a group of Dow's or crypto projects? Like, how does that work if you're trying to be a self-sovereign employee? And that's what Opelus provides. They provide you health insurance, payroll, benefits, dental, vision. They can even pay you in crypto. They can help take care of your taxes as well.

It's like you get all of those corporate benefits, except. you get the freedom. You're no longer a wage slave and you can engage in the crypto economy as a self-sovereign employee. So Opolis is a fantastic service for all of these things. David, there's also a special deal going on, a bonus for members of the bankless nation if you are a, you know, if you sign up before some certain day. Is it May 1st? May 1st. Yeah, May 1st to get a thousand work tokens, which is the Opelis Dow token and a thousand bank tokens, which is the bankless Dow token, because OPLUS, it actually service is a lot of the bankless Dow members, and they are using this service themselves to work at Bankless Dow and all the other Dow's that they work at. And so OPLIS is basically a collective.

The larger it grows, the more leverage it has to get better rates with healthcare and other services. So when you join the OPLUS Dow, the OPLISDAO get stronger. So there's a link in the show notes where you can sign up with OPLIS to get your payroll, your taxes, your health care and all the other services that they offer so you can continue to be a self-soven worker. All right, David, we're going to get into the episode in just a minute, but before we do, I got to ask you the question I start these episodes with every time, which is what is the state of the nation today? Ryan, we are charting a path because the fog of war right now is thick.

Not only is there actually a war going on, which is making the markets confused, but just the crypto markets seem to be coming to an inflection point. the three to four month bearish trend is seemingly colliding with the two to three year long bullish trend. One of these things is going to have to win. And we need to chart a path into this chaotic future because the markets are chaotic right now. And I am looking forward to talking with Ledger, the chartographer, if you will, to help us navigate through these market times. That's awesome. And so when we get back, we're going to hand Ledger the reins. Literally, he's going to be driving some of the charts that we're back to explore while we look at Bitcoin

price, where we look at ETH charts and price, and alternative layer ones as well as the larger global macro markets. Some of these commodity prices have been going crazy recently. And we want to know what that means for the future as well. So guys, we will be right back with Ledger. But before we do, we want to thank the sponsors that made this episode possible. Slingshot is a decentralized trading platform that combines the performance and ease of a centralized Exchange with the openness and transparency of Defi. SlingShall aggregates liquidity from all of defy in order to find the best price on thousands of crypto assets. Every token on Slinghot comes with a price chart and trade logs to give you insights into the market's activity in real time.

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I wanted to introduce you to Ledger. You know him. He's been on the show before. where he also is a co-host of Up Only and Ledger podcast, both fantastic podcasts in and of themselves. He's also a chartographer, as David said, and he's a friend of the bankless show. Ledger, it's great to have you on. How are you doing? I'm doing great. Thanks for having me. I don't actually know what a chartographer is, but I do stare at charts most of the day. That's what you are.

It's a word that I made up. It's a combination of charter and cartographer as somebody who writes a house. It's just brilliant, David. I think so. I think it's brilliant. Okay, so like I want to ask you Ledger, so like you stare at charts a lot. Just a high level. Is this like an exciting time for you like secretly or is this, it's this not very exciting to see this kind of action in the charts? No, this is not very exciting in terms of from a crypto sense.

Like it's just like a liquidity drain is what it looks like mostly. Some of the legacy stuff is exciting just because there's volatility. Most traders want volatility in order to find profitable setups because they really need a trend one direction or the other. And what we've been doing in crypto markets is just compressing. So volatility has reduced, even though at the same time, interestingly, we've been, you know, like options markets and stuff have been pricing for expected increased volatility. So you feel like you're pushing this spring together that you know is going to rebound back out. but it hadn't done it yet. So it's just this constant state of tension that's quite frustrating, honestly,

whether you're an investor with some uncertainty about whether you're going to make it or not, or if you're a trader just looking for a setup. And every time you think, hey, this is the move, then it ends up not being the move. So it can be very frustrating as a crypto trader when those markets are compressing like that. You mentioned the liquidity drain. and I've heard from a couple other people just how there seems to be less and less active traders at the moment and more and more just a percentage of like Algo bots may kind of indicating that there's like just less life in the charts and just let less action to trade on and things are just kind of settling out rather than actually having like actionable things that the charts can you know

been into giving a trader's options to make trades so like how would you describe the trading environment over the last like three months or so Yeah, I mean, reduced volatility is going to be a pretty natural, or I'm sorry, reduced volume is going to be a pretty natural outcome with compression in the market. So I know y'all were both around as we compressed through 2018, it was lower and lower volume. So naturally more and more people just get kind of fed up with it or stop participating. And you end up with, you know, your market makers, people, institutional people that are always going to be there on both sides of the. the market waiting for the move to participate. And they're trying to eke out a little bit of profit here or there. And it eventually sets up for this high volatility moment.

And back then we broke down from 6K and went to 3K and volume exploded. And that can same thing happens to the to the upside too. It was I think the big moment that at least in my mind when we got true confirmation of the bull market that we. spent over a year in in October of 2020, we broke up from 9 and 10K. And that 10K to whatever on Bitcoin, you know, most people were like, yeah, there's no way we're stopping at 20K. Not after this many years like in pain, you know, like none of the people that would sell would sell there. They're all, everybody knows what's next. What's next is price expiration. So then you had,

you know, months of increasing volume as the price marked up. And then as you, as you, you start compressing again, the interest in the market gets less and less, and then you wait for that next high volatility moment. So that's a cyclical nature of pretty much any market. There are times, especially in more mature markets, where you can have longer periods where volume continues to decline and the price continues to go up. It doesn't have to have like more and more retail people or more and more, you know, velocity to keep the market going. There's more of a passive, strong bid. Like if you think of the S&P 500, you've got the top most profitable companies in the world, you've got passive investments every month by everyone with a retirement account. That's just kind of a perpetual,

not high volume, not high emotion activity that's putting dollars into that market. So those types of markets sometimes can be lower volume and progressively maintain that trend. Emerging markets, which all of crypto is basically an emerging market or smaller markets, they're not going to be that way as much. Like, there are going to be kind of nothing going on and then everything going on. So that's just what you tend to run into. And what we've run into in crypto is we had kind of two peaks, right? You know, like everybody got excited. Bitcoin and Eath got pretty high in spring of 2021 or so. And then again, late summer, early fall of 2021. And those were the highs. And it was a little different depending on what coin you were looking at. And then you could find a bull market.

somewhere and whatever altcoin or layer one trade was moving. But if you look at Bitcoin and Ethereum, pretty much you had these two big moments in 2021. And other than that, like a lot of people just didn't make very much money in 2021 if that's all they did. You know, like you had to really get down into the weeds to make a bunch of money. Most of the money was made really before they heard about it. So the latest participants are the last, you know, the last ones in. And it's harder for them to be profitable. We've all been there. Most of us buy crypto for the first time, like pretty close to the top and have to earn our stripes for a few years before we make any money. And that's kind of the season we're in again is, you know, people are earning their stripes

right now. And, you know, some of us who have now been in it a while too, like we're trying to, you know, remind ourselves, like, it's not necessarily up only all the time, even if it's a fun name for a podcast and mantra. So you got to be in it for the tech every now and then, you know. So, so, so, leisure, in it for the tech, these words like compression, these words like liquidity drain, you know, last time we had you on, I think we're talking about charts was where there was kind of a dip in, in like, beginning of summer last year. And we're kind of talking about, hey, you know, divine the future for us. We talked about charts a little bit. But I feel like you didn't use words like liquidity drain then. And you didn't use words like compression then. You're using those words now. And you actually. brought up another season that I think maybe many people listening remember, but certainly David and myself listen, which is 2018. And that definitely felt like a liquidity drain to me. It was just like the market would drop 50%.

And then before you could catch your breath and it's like, it's over, okay, the pain has got to be, it drops another 50%. And this happened again and again and again and again. Are you thinking this setup? right now, does this feel similar to March or, you know, 2018 in general? Or are you a bit where you were like in the beginning of summer last year where you're like, yeah, it's uncertain. Could go one direction or another. I mean, you weren't using these terms, though. Is this more like 2018 to you? Or is this something else? Can I depress you a little bit?

Yeah. For the record, I'm the bearish one. Ryan still. bullish, but I'm the bear. I think it's fine to always be bullish with a long enough lens. And especially if you're taking stuff off at some points, you know, like taking profit, pay yourself a little bit, put a gigantic punk in your living room, you know, like whatever fits for you. You know, I think those are important concepts that are going to enable you to sustain the times where you're not just constantly getting this dopamine drip of new profits, It's, you know, and I think most of us want to maintain some degree of exposure to crypto markets. It just doesn't necessarily mean you have to have 100% of your net worth in.

Like maybe it's 10% or maybe it's 50% or whatever, like whatever you're comfortable with. I think the same mantra should exist most of the time that like not, you know, once you've been in a long time, not necessarily don't put in what you can't lose. I think it maybe turns into more of don't, don't forget to take out what you're unwilling. willing to lose, right? Like if you make your first million or your first 10,000 or 100,000, whatever that number is, you want to pay off a credit card debt or your student loans or your house or, you know, enough for retirement. And if you can secure those dreams and those goals, you should secure those goals to the best of your ability and then maintain exposure so that you have continuous upside beyond that or at least maintain an attention span beyond that.

And I think after you have a period where you went through. the full upswing of the market, right? Where you get to watch Ethereum go from $100 to $4,800. Like, that's a big move, you know? And maybe your price cost average was $400, but still like $400 to over $4,000 is a nice move. It's a life-changing move if you have any skin in the game. The reality now is, and I can share it, can I share screen yet? Yeah, yeah, yeah.

this is the part that's depressing, okay? The reality is that relative to 2018, if you go to the absolute pico top in 2017 and you go out to the very bottom, we spent almost exactly a year, if you go 52 weeks to the literal bottom. If you do the same. But from the top at 2017, 2018, the top took 52 weeks to go to the bottom.

Yes, it took exactly a year to go to the bottom. And from a time perspective, we've actually basically passed that from Bitcoin. I know we made a higher high here. I don't think that's quite fair in Bitcoin terms. To me, it really felt like the top of the cycle for Bitcoin because even here, it was underperforming a lot of altcoins, you know, and your primary exposure, if it's in majors or whatever. It's been 52 weeks since that high in April 2021. or it's been, or we're almost, we're almost up to it next month, roughly tax week. That's fun.

So we're actually really close to that same period of time, which felt, for me, this felt like a very long time, you know. This time around, I've actually been a little more entertained, so I don't know if it's the same thing. I don't know if that means we're going to have a longer cycle of sideways. But what I do know is that after that euphoric blow off top, it took a long time to repair. You know, Bitcoin moved up quite a bit, but overall, this move wasn't as impressive as you would have seen in other markets. Like if you look at like a Solana or, you know, the Layer 1 trade or even Ethereum, if we go over to that chart, the if we take it out of log, the higher high after that first top, we went from 3,900. It was a little bit better of a high after that, right? 4,800.

100. And then the first move out in terms of multiples was better than Bitcoins as well. Like Ethereum, this gets a little messy. Ethereum gained quite a lot of strength relative to Bitcoin throughout the cycle. But there's no questioning that this is now perilous. You know, like this is not, this is not what you want to see. Like you have a breakout, but then you only spend three weeks or whatever in price expiration. And then you just bleed out. And then when you do consolidate, you do it kind of below all the same important levels. So it leads you to this position where you could have a move up, but like where do you actually say now I'm bullish for more price expiration?

And basically you have to go quite a ways up to have that confidence, you know? And when you start to see like, okay, well, where do I think this can move down? And putting into the linear puts this in perspective sometimes because that's the percentage, right? that you lose you know unfortunately a lot of us know what our net worth is at the all time high or whatever so if you go peak to trough it's 55% a 55% correction in Ethereum from that high to the to the low and this has to repair itself quite a bit I think it's just going to take time I guess is my point there and so to get back to that that timing angle the 52 weeks that I had highlighted of the prior chart to where we're almost at now.

Yet it feels like we're more in this range. You know what I mean? It doesn't feel like we've had this like truly painful type of consolidation that could take even longer. And I think what no one wants to hear, and my friend Cryptodon Alt, if you'll know him, he's an excellent kind of patient trader is what I'd call him. He legitimately thinks this could take a really long time.

like two years of that. And as crypto matures and takes longer to kind of work its way through things, it would be very painful, I think, for many participants in the market if we spent multiple years essentially letting everything catch up and letting it breathe. And I don't think it's that surprising because despite the price having corrected, this is going to bring some fundamental components to my personal, not fundamental, It's going to bring some personal experience components to it. People that are doing contracting work with me or people that are like, you know,

they're Uber driver or, you know, they work at a restaurant. I was walking past the coffee shop the other day and like I just heard the word Bitcoin like five feet away from me. Everybody's talking about crypto. And honestly, I feel like there's a little bit too much attention on the market at the moment, despite price not being there alongside it. And that worries me from that perspective. And I think when you have those scenarios,

it just sometimes it takes a long time to repair itself and get back to a place where there's like a value trade, if you will. And it's not, if a trade is really, really crowded, it's probably not going to work very well. Because as people start jumping off the bus, they're going to be jumping off the bus too soon. you need people to be jumping on the bus while it's already moving. And I don't think we're in that place.

I think too many people are essentially bagholding crypto because they got involved. That's great from an adoption perspective, but it's not necessarily great from a price acceleration perspective. Because who's your marginal buyer, right? Like who's the person that's bringing money in? The institutions are here. The retail folks are here. Really, the only thing we're missing is like nation states,

buying in size or people automatically being able to buy in their retirement accounts, for certain, those are big changes that would change this a lot. But in the meantime, I think it's got to get a lot more boring first before you can get enough people kind of out of the market or under exposed or whatever to kind of catch that next wave of big upside. There's a couple of dynamics that I want to ask about. And so I'll kind of start from the beginning. You mentioned how in 2018 it took 52 weeks to go from the,

the top of 2018 to the bottom, like basically at the end of that year. And you said that we're almost there. We're almost at 52 weeks from the first high that Bitcoin set. But I'm very cognizant that like a significant amount of the downside happened in the last four weeks of 2018. And like that's kind of how many weeks that we have ahead of us. Now, of course, history never repeats itself, but it does rhyme. But if it did repeat itself, it would be bad starting like almost this or next week. and the other thing I'm cognizant about is how far away we are from what I believe that is the 200 week moving average in the green line. Yeah. Yeah.

And so like there's a lot of distance between where we are right now and the 200 week moving average. And in the last four weeks of 2018 is when crypto prices went from meaningfully above the 200 week moving average to touching the 200 week moving average. This is where Bitcoin, I think, went from like $6,000 to $6,000. and then it got cut in half to like $3,000 inside of four weeks. How fearful are you that we rapidly approach the 200-week moving average? That's the first question. And then the second question about like retail and people talking about Bitcoin on the street and just like all of that excitement around crypto,

how do you square that with just like general mainstream adoption? Because that is the goal of crypto. Like we want everyone to be talking about crypto, regardless of what the price. prices are. So two questions for you. Like, how relevant is the 200 week moving average right now? And also how relevant is just the fact that some of the conversations that people are having about crypto, just a symptom of adoption. Yeah. So let's start with the 200 week moving average. I love it because it's basically been the only thing that has perfectly on a weekly closing candle basis predicted the end of bare markets. So you ask if I would be fearful that we go there,

I'd be freaking excited. Like if I manage to like maintain buying power and we're at the 200 week, like that's the one place on the chart where if I bought if I go all in at that point and then I'm wrong and I lose, then oh well. You know what? You know like I that's that was the most high conviction bet that I could possibly make in crypto. And there's zero chance. I'm the only person looking at that, which is the benefit of most TA in the first place. Right. Like you want to look at the other things that other people.

we're looking at because those are the metrics that we've decided. That's this kind of memetic element of any market. We look at price to earnings or price to sales and legacy markets. We look at these fundamental things. Well, why do we look at those things? Well, in TA, you look at the 200 week moving average. That's your, that's your like true 200 day, 200 week. That's the biggest kind of trend following component that everybody is just going to look at. Just accept it. You don't have to know exactly why everybody cares. It only matters that everybody cares. So if we went to $20,000 on Bitcoin next week, I'd be ecstatic, right? Because hopefully I will have managed my risk well enough, have buying power, and I buy the crap out of that level. The more painful area is hovering

where a 50% drop is what it takes to actually hit it. And you're just like waiting for it to catch up, you know? And I think that's, that's where this like pain trade of this constant chop. And, you know, I like to just, you know, draw on charts sometimes. So if you're just like drawing, would it surprise you if you did something like that, you know? And I don't think most people would be too surprised, but that's what gets you into your two year kind of reacumulation. But the, the beautiful thing about something like that is these 200 week moving averages are going to just work their way up, right? Because the price is still above them. Therefore, as you knock off these old weeks and add these new weeks, that 200 week moving average keeps going up, even though the price

stays flat. And it's essentially giving you a time weighted value that it's okay to buy Bitcoin with some support. This is your like launch pad into multi-six-figure Bitcoin, right? Is you have a two or three-year accumulation, like where you're tapping into that ceiling price, you know, you're making some kind of higher low and then you're tapping 50 to 60K on the top side until the people that are just like, who, I got out at break even, or I got out and made my life-changing money. I didn't lose it all.

I didn't bail at 30K. I'm good. Like, you re-accumulate to newer people, newer stakeholders who are willing to, you know, absorb Bitcoin in the 30Ks and then later in the 40Ks and then it's pressing the 50Ks and then you boom you look for that that breakout to the top side and that's what we did here right this was kind of the opposite or this was kind of the same thing with a COVID panic in the middle right but like this was the you know over exaggerated short squeeze but you know then it was kind of this synthetic 9 to 10k resistance that when we broke above it no way I'm selling it 20K

And we could do the same thing from highs and have this compression into 50 or 60K. Who's selling? Who's selling above 60K after a two or three year consolidation in crypto markets? It will still be an area of investment and technology that's exciting. And then you get price expiration in it. No way, man. Everybody's going to want a double or a triple or whatever out of that. And that's when you get your 100K, 150K,000K, 200K Bitcoin move.

But, you know, it's unfortunate that it might take until 20, 20, 23 or longer to actually realize that. So, Ledger, for people who can't see that the 200 week for Bitcoin is around 20K, what is the 200 week for ETH right now? Let's see. I don't know off the top of my head, lower. It's about a thousand. Oh, God. Not a thousand. And then that's where you'd be excited for Eith, too.

You'd be like, I don't think. By the century. Yeah, that'd be the buy of the century. So I think, you know, in markets that are newer, now back here, I was very excited, right? Because this was any new market. March 2020 was when the, at least on in terms of being listed on Coinbase, that was the 200-week anniversary for Ethereum being on Coinbase. So the number did not even exist then. Like in reality, it existed on some market back here.

But it was on Coinbase pretty early as a token. So when it broke above that, I was very excited. And yeah, any of these faster moving markets, it's going to show the potential downside. Just to freak you out, you know, if you imagined where might it be? I don't know what's the closest moving average on a weekly basis for Solana. But here's the 100 week because there is no 200 week yet, at least from Solana on FTX point of view. and it's at $56. So your lifetime moving average on Salana is probably somewhere down like $30 or $40.

And it went to $250. So that's a long way down as a mean reversion trade. That's all any of this means is it's a mean reversion trade that you're trying to figure out like how much time has it taken to kind of normalize this price. And in a trending market, all you're doing is bouncing kind of off of your faster moving averages, the price that you've normalized more quickly. So that's kind of what this 20 week, we talked about this last time, whereas the 20 week is always a great support, but it's not like necessarily something you're going to put like a line in the sand and say go in with my net worth. That's what this is. In these faster moving markets, that's more of maybe this isn't what I expected it to be and I need to risk off a little bit. And looking back at it, even though 3,600 was not the top, it's $1,000 off the top.

it's still pretty darn good in terms of a place to have wrist off versus where we are today. When you're looking at the charts like this, and I know I want to get back to David's second question, one second, but as long as we have the ETH chart up, when you're looking at the charts like this, do any of the fundamentals like catalyst matter, right? So like we have the merge happening, right? Reduction of ETH issuance by like 90%. Let's say that happens in the summer. Let's say that happens in June, something like that.

Does that, let's say we are in the sideways kind of more secular, bearish, 2018 time period, does that actually have any effect on the markets? Or is that sort of a, you know, a non, does that not matter when you're in a bear season? It may not matter in the price for the short term. But when the move actually happens, it's going to matter a lot, right? people will pick up on the narrative as soon as the price starts to support it. Now, for those of us who kind of understand what happens in the supply and demand side of tokens, Bitcoin and Ethereum, Ethereums are truly incredible because even we've had deflationary,

you know, parts of pieces of time, like a whole day that's deflationary or something like that, even with the kind of double issuance between proof of work and proof of stake. So once proof of work goes offline, the merge happens, we're fully proof of stake. The chances that Ethereum is actually net deflationary consistently, I think the probability of that's quite high. And when you add something that has significant utility with the compute network of Ethereum and you add this, you know, credit to y'all, the ultrasound money meme, you put that together and it absolutely matters because forever, what did people love to troll Ethereum about? They're like, well, what's the supply? You tell me. And, and, you know, they use that as their justification for why it does not have this

inherent value because it does not have this known emission schedule or whatever like Bitcoin does. And, you know, Bitcoiners are going to have to question themselves if they have less utility and it's mildly inflationary instead of deflationary regularly. and they're going to have to lean on, okay, well, what do we have? And what they have is this deterministic nature of the emission schedule, whereas the Ethereum emission schedule is more variable, right? But is that really a big thing to hold on to? Otherwise, you're just sending and receiving bitcoins very, very slowly.

So, yeah, I think it'll very much matter. And if I shoot to the future, I said, you know, maybe that that's your ideal scenario, right? That that multi-year consolidation with higher lows, equal highs, end up with some kind of chart pattern that everybody will talk about the ascending triangle on Bitcoin. It's going to 150, 200K. Ethereum's going to like 20K when that happens. Like I will for sure be pumped about like the potential, you know, 10x or so in Ethereum

off whatever the lows are because I think Ethereum's potential to go to a five-figure asset, my conviction in that trade is very high. My conviction in Bitcoin being worth half a million dollars is not as high. And that's the kind of equivalent move that's required, right? But you also think when this happens, as much of a fundamental catalyst as this will be at some point in the future, you know, people shouldn't expect if we're in a bare market, an immediate market reaction to this. So the merge is deployed. And, you know, you're not expecting 20K like the following month or the month before. Is that something you would trade into?

Or are you more focused on kind of the TA in the charts rather than the fundamentals at this point? I love to focus. I think you're just, you're for some reason skipping valuable information if you forget the fundamentals and only use technicals or vice versa. I think they're very valuable when used in concert. And you can certainly look at the fun. There are great traders that all they look at is the fundamentals. Like what are the supply and demand concepts in the market? You know, like if you're, I know we'll get on macro later, but like if you're drilling for oil,

it's like, do we have enough people drilling for enough oil to meet the demand in the market? If not, number go up. If we do, then number stays the same or maybe it goes down if demand lessens, et cetera, et cetera. The same thing's going to happen in crypto as we create these. metrics for what's happening with tokens. Are there fewer tokens coming on the market? Are there more people that are using these networks? And in Ethereum's case, by using them also burning the underlying token as the gas, the fee to use the network to maintain, you know, the efficiency of those blocks, like you have to pay to use it.

Do layer one transactions go down because of layer two? I've expressed before that I don't think that's going to occur. I think layer two will create just as much or more demand on layer one itself, even though it'll make crypto much more accessible to more people. So what you create there is potentially an extreme onboarding event where you make crypto more accessible on chain to more people via native layer two to specific applications or specific applications. or specific application layers. And at the same time, it's built on the security model of layer one. And everything settles back to layer one and certain whales or whatnot are going to always use

layer one. So layer one is not going to be less used, but your person that can't afford a $20 or a $50 or $100 transaction on layer one, they can afford a 20 cent transaction on layer two. Or I don't remember which layer two is a sponsor of the bankless podcast. Many of them. I'm sure at least one. Arbitrum optimism, pick your poison. You know, like that's going to be a huge deal.

And I think some people think that layer one will somehow have less usage because layer two takes off. I don't think that could be any more wrong. You add that fundamentally to all these technical things, add it to the fact that the supply emissions are going to go down, add it to the fact that so much Ethereum is getting locked away to be staked for that extra yield. this is all very, very good for the long-term prospects of Ethereum. So to your point earlier, right,

I think you just continue to be bullish in the long, long-term. Just don't have those regrets in the short term, you know. Well, Ledger, you're definitely speaking our language with the bullishness of Ethereum in the long-term. But I actually want to ask you the same question I already asked you earlier, but from a different perspective of how fearful should we be that we're so far away from the 200-week moving average? and you said, well, you'd be excited if we saw the 200-week moving average,

could you buy, you'd back up the truck. But what it takes the perspective of somebody that came into the crypto market in the crypto industry in the last like six to eight months, and they did what everyone does when they get into the crypto markets the first, you know, few moments of their lives, and they get irrationally bullish, and they just dump their net worth in at the top, and now they're in pain because we're almost 50% down off the top.

Like, I guess I'm trying to ask you, what's the probability of us actually touching the 200 week moving average? Going back into my question of just like, is the general adoption of crypto in 2022 going to help us stay away from the 200 week moving average? Or is the 200 week moving average like an inevitability? It's always an inevitability at some point because it's an average of the prior 200 weeks of trading. So at some point, you know, things that mean revert do mean revert. like they are an average of price over time.

The higher time frame, the longer the moving average, the less often that it'll actually hit. But if you go look at the S&P 500 over decades and eventually they do mean revert back to whatever those averages are. So we'll get there. I don't necessarily think if we have us a long term sideways, it's not a certainty that Ethereum has to hit it or that. or that that signals the exact end of the market, bull market or whatever. It's just a, it is a guidepost. It is not like an exact formula for what to do. But I do know for me, it would give me confidence that at a bare minimum at that point,

I'd be happy telling my family, just dollar cost average and quit looking at it. You know, just DC. And I already tell them this, honestly, when people ask me, I'm like, look, if it's more than 50% down, DCA, don't put in more than you can lose, don't look at it for 10 years. And like, if I fail at that, then, oh, well, they can blame me in 10 years. But I'm pretty sure my conviction in the market, if they're doing it with Ethereum and Bitcoin, they'll be pretty happy. And I have confidence in the overall technology on that long of a time frame. And with that level of dollar cost average, for the more tactical trader, the person maybe, like, I hope you're out there,

the person that said, hey, I saw enough stuff in the market that made me nervous. I pieced out with half my portfolio at 4K. I'm like licking my chops to get back in. So like, when do I get back in? That tactical person, if they see this kind of capitulation went down, they need to be a buyer if they want that long-term exposure. And that would be a fantastic place to do it from. If we do this kind of forever sideways, that 200 week will move up to like 1800 or something.

That would be ideal, in my opinion. You remember that one in 2017, it was moving up to 3100, and then it broke down. Here, we'll just go to it. So in that scenario, when the market topped, the 200-week moving average was at 1281. When it actually hit the 200 week, the 200 week was at 3150. So it more than doubled where the price, where the 200-week moving average was between when it topped and when it actually hit it. So if you were to say in Ethereum terms, you know, 4,800, it was down here at 850 or 875, what if it's here when it actually hits it, you know? And let's do some squiggles because why not?

Like you do this long term type of thing and then, you know, if something happens, some exogenous event and it's like, oh, crap, Ethereum's dead, you know, minus 50% in two weeks or something like that. that similar scenario, and it goes back down to this, this prior level, your 16, 1800, and that's where your 200-week moving average has moved to. This is not me trying to predict this. This is what will happen. But, you know, like, eventually it'll hit it. And, and yeah, like, if it does, I'm buying it. That's really all there is to it. Can we take a look at the ETH-BTC ratio? Because Ryan and I use this on the weekly roll-up, kind of just to gauge, we use this as like our bull market indicator as in when ether is going down versus Bitcoin is indication of a bear market. If it's going up versus Bitcoin as indication of a bull market, do you agree with that

indicator from the ratio? And what are you seeing in the ratio chart? Yeah, I think depending on kind of your lens, you should be very happy if you're an Ethereum person with the performance of Ethereum relative to Bitcoin essentially since the market bottomed. Right. So this is the prior bare market bottom. And then it slowly went up on a relative basis and then it quickly went up on a relative basis. And now it's back to kind of this difficult to trade range. Now, I've tried to trade it. Trust me. I definitely have. Most of this time, it's not been worth it. I truly do think this kind of 0.1, ETH to BTC, maybe even the 0.14, that's when you get into flippinging territory. Like, these seem like potential magnets to me from

those prior levels. Back when we were in the bear market, I was much more like, okay, this 0.055 is my line in the sand. We blew straight through it and then used it as support. And again, if we've lost levels, I would look at 0.055 as a support again. This is a very hard pattern to trade or chart level to trade. When we kind of went into this 0.08 territory on the third time, you expect that to break. and then it did, but then it failed the breakout, that's always brutal. So when you do something like that, it just needs time. So I have no problem holding Ethereum relative to Bitcoin. Honestly, I kind of in active trading accounts, I tend to just kind of bounce back and forth,

depending on what I like the individual setup of better or like maybe kind of the macro landscape, right? Like I don't think, even though we may think Ethereum is a good store value, I don't know that the market as a whole, especially maybe hedge funds or people that are looking at much more than just crypto, if they're going to see Ethereum as the same level of kind of a safe store of value, you say, hey, I think cash is trash, but I want to hold something that's kind of safe. They might hold Bitcoin instead of Ethereum during that time. Certainly Bitcoin instead of like, I don't know, Solana or Avax or Luna or like the, you know, the layer one trade or or certainly defy.

My God, defy has gotten absolutely crushed. So, yeah, I think in periods, you can maybe think of it like the S&P 500 for Bitcoin and the NASDAQ for Ethereum, kind of in a relational sense. So yeah. And then one last question before we turn to some macro-related topics, some altcoins. We talked about Solana, there's Avalanche, there's Sol, there's Luna. How is the Alt-L-1 ecosystem doing as a whole? poorly. Can you gauge that for us?

Yeah. So I think from a pure price perspective, it's we priced in perfection, basically, right? Like we priced in all of these are going to do things way better than Ethereum. And today, Polygons like down, like just completely down. Solana's gone down. You know, every single one of these has had their issues, whether it's a layer one or a layer two or like a side chain version of a layer two. And they're priced in a manner to where that's not really acceptable. I think some of these have truly innovative technology that's really interesting.

I think in particular, Solana, I think has the capacity to build that and they have some interesting ideas. I think Adam actually has really interesting technology. The whole kind of multi-chain cosmos ecosystem, whatever, you know, however that structured would make sense. But that doesn't necessarily mean it's going to reflect perfectly in the price. I had this line drawn, like just because it was like I said, I like to squiggle. And I think that these just, when something was at 50 cents on public markets

in mid-2020. That does not necessarily mean that like $250 is the right price when it, or that $83 is a value because it's 60 or 70% down off of the highs. There is nothing to say if the market continues to have downside on Bitcoin and Ethereum to say Solana won't go to $50 or $30. Now, Solana in that scenario may vary. very well have its Ethereum at $85 setup, right? Like a generational buy opportunity.

I don't know which of these is going to become like the big builder and do what Ethereum did, right? And have this massive explosion of developer activity that just forces things to improve because of the number of brains participating in the ecosystem versus the ones that are going to do like what Eos did, where it was. like kind of a house of cards, but had a $4 billion in it. But it didn't really matter because nobody wanted to build on it. And yeah, I'm not, I'm not sure. I just know when you're looking at a truly unique time, we have not had many times in the last several decades like this in the rest of the market. It makes speculating on this stuff really, really hard, really hard. and hedge funds and whatnot, people that have a cost basis of under a dollar, under $2 or under $5, they're at many, many multiples in profit.

And so they can continue to sell Solana and make tens of millions or hundreds of millions or billions of dollars. Meanwhile, you're down 50%. They don't care. They just keep selling as they keep unlocking, but if that's what they intend to do, right? if they're locking in their win. Whereas the distribution amongst Ethereum holders and whatnot, sure, there are many people that are in great profit on Ethereum still,

but it's reaching more and more kind of new hands, new participants, and I feel like can sustain its current pricing a little better than a lot of these layer one trades, which went 100 X or like a thousand X. I mean, Luna, I can't even comprehend how much it went up. The percentage on it was absolutely insane. Yeah, it was 30 cents at the end of 2020.

So this is post-D-Fi summer, whatever. So say you went all in Luna and it's at 30 cents and now you've ridden it to $90, $100. Wow. Even if this is done what it's done, I'm not buying this. There's no chance I'm buying this. I do not care. I do not care what it does from here. I will not buy it.

I will not buy someone else's. Hmm. 32,000 percent win. It's not happening. So, Ledger, if I'm hearing you correct, you're kind of teeing us up for some difficult weeks, difficult months ahead, you know, potentially. So potentially a repeat of, you know, 2018, 2019, maybe a little bit longer of sideways and, you know, downward type action. And of course, people who were there remember that time where Eath lost 95%. Other like alternative layer ones, the EOSs of the world, for example, lost 99%. Some even higher than 99%.

Some rebound and some didn't. Bitcoin, I don't know how much that went down. It's like 85%, something like that, between 85 and 90%. Do you think if we get a repeat of 2018, 2019, are we talking about those types of peak to troths from all-time highs, like 85% to 95% to, you know, for some coins upwards of 99%. Yes. I was looking at comp the other day. I think we can all agree compound is a fantastic product.

You know, compound and Ave, I think, really led the way in terms of on-chain lending. That did not prevent them during a bull market or mostly bull market. from going down 90% off the top. I mean, that's just absolutely brutal. And it's because as the price goes up, everybody only cares that the price goes up. As the price goes down, people start asking questions about the fundamentals

or like, what's the purpose of the token or how's value accrual occur and all this stuff? And what we've seen is literally a complete retrace from DFI Summer. And we all know how fun and exciting DFI summer stuff was, most of these DeFi charts have fully retraced it on a dollar basis. So on an on an ETH relative basis because DFI summer, ETH was four to six hundred bucks, right?

Like in that 2020 summer, that is brutal. So an ETH relative basis, you just got crushed being in these things. Can you pull up the comp ETH chart? Yeah, I think I have it right here. Oh.

Oh. Stop. Yeah. Look. So, you know, for every, every precious Ethereum that you had, you lost 95% since August 2020, which was the, like, this got listed at the, at the peak of Defi summer. So. But you're saying this pain is just getting started, though.

No, no, no. I think these things, you know, how there's always a, there's always a bull market somewhere, maybe a relative bull market. I don't know when you start hitting a fair price, right, on some of these defy tokens where if we kind of know exactly. what makes Ethereum fundamentally valuable. When do we figure out what makes the tokens built on top of Ethereum fundamentally more valuable than Ethereum? Right. Like that's a really difficult thing. Now, I think many of them are valuable relative to the dollar, but that's not saying much if you think the denominator is worthless in the long run, right?

So this is the downside of a deflationary economy, right? Like, why do you want to put money to work if you can just hold the money? And that prevents productivity in the market if you're like, man, if I would have just held Ethereum in my cold storage, I would have done way better than going and deploying. It's so funny. It's so funny because the narrative was literally the opposite 18 months ago, which is like, why do we need ETH as an asset when we have DFI? I can own Bitcoin and DFI and be okay, why do I need exposure to ETH?

Exactly. Okay, so we do want to ask about macro things in just a minute, but just to tie this conversation, this part of the conversation off on crypto. Okay, so what about the super cycle, man? Like, what's the potential that you might be calling this wrong, do you think, Ledger? That rather than a repeat of 18, 2018, 2019, actually, this is kind of like a dip and maybe we go sideways for a while, but we're, still in kind of a we're not going to repeat the absolute cliff of 2018, 2019 that we, you know, see some rocky months. And if COVID stuff, Ukraine war, you know, then the merge happens, let's say. And then price starts to repair. And like, we're back, baby. It's,

it's full on super cycle again. Do you think that is a possibility? And how do you wait that as a possibility. If we if we consolidate without like significant lows, we don't go back into the mid 20Ks or something that to me this type of chart is the super cycle occurring. Yes. You need this is what I would call reaccumulation, right? Like you didn't really break down so badly that everything, everybody stopped caring about it. No companies have any layoffs, et cetera. Yeah, Bitcoin mining is profitable today. And it's very, very profitable. You know, obviously operating in Ethereum node is quite profitable.

Like participating in the ecosystem is very profitable. What you would consider not a super cycle, if you all recall, the last time uranium went crazy was, I think, 2011 or something. It took, there was a 10-year bear market and people just shut stuff down. And the reason was because the price of uranium was so cheap, they couldn't actually afford to operate uranium production. that's not a super cycle, right? That's like full bear market. Last time Bitcoin miners had to shut down because Bitcoin mining was more expensive than the Bitcoin that they got as a reward. That is not a super cycle. If you go through a supposed bare market and all of the activity within the market maintains profitability and maintains this component of productive work, then that that is kind of the super cycle. to me. And if your max drawdown is like 60% and not 83%, which is what it was, Ryan, to your point with Bitcoin, while Ethereum's was 95%, you have smaller and smaller kind of overall drawdowns. This is supportive of a super cycle. I think, like, honestly, if we made new all-time highs

before like the end of summer, 2022 in Bitcoin and Ethereum, that would be stunning, like, stunning. That would make you a believer in the in the super cycle? I think I'm a believer now. I think it's very possible that this sideways outcome is the outcome. Okay. So how do you wait these possibilities? One is the sideways super cycle. The other is like 2018, 2019. What kind of probability do you do you assign to both right now? Well, because in that scenario, the market dropped a whole lot really, really quick. In this scenario, it was two weeks of down. This whole move right here, basically to the first trip to 30K, was in two weeks.

And then we fully repaired it. And it's just been different. And the move up was different as well, like from all time high to top was like a 3X, whereas the time before that it was a 20x. All that is signs of greater maturity in the market. in this scenario, Bitcoin went from 5K to 20K in four or five weeks. Those are the things that you don't expect in the super cycle. So we're already showing those signs of the super cycle. A lot of people think we need this capitulation that it means we lose 50% in two weeks.

Now, can it happen? Yes. But even when COVID hit, like the degree which we repaired that quickly was truly incredible. and maybe that was the start of the super cycle, right? That Bitcoin recover. There was $20 million of bid on Bitmex at the very, very bottom. And that was the beginning of the super cycle, and now it is just a much more mature market.

I can't predict a future. We will be impacted by the macro, and maybe we can transition into that. But if the economy hits a recessionary period, then we will go down a lot more. If the economy does not, and the economy maintains some degree of workability, doesn't have to be perfect, but workability,

then I think that the likelihood is we go sideways, work a lot of people out of the market, and then eventually have a breakup. All right, guys, well, that's where I think that macro comes into play, and we're going to talk about the macro, global markets, gold, various commodities, what they're doing, equities, that sort of thing, oil with ledger when we get back. But before we do, we want to thank the sponsors that made this episode possible.

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Why is this chart significant? What does the Dixie tell us about how it relates to crypto? Yeah. So my favorite thing about the dollar index is that basically the two biggest runs we had of bull markets in crypto occurred while the Dixie was melting down. So it's kind of eerie in terms of when you look at it. December 2016, as Bitcoin started price exploration, out of 1,200 after that really nascent first bubble that it had in 2013, 2014.

And look where the Dixie bottomed, January 2018. All of us from that generation are going to know exactly how that correlates. And then, you know, with COVID, it had this crazy, you know, dump. And then Palm in March 2020. And then it had this double bottom, January 2021. and May 2021, which coincides pretty nicely with where Bitcoin especially struggled. And Bitcoin is still kind of king in my mind in terms of what's going on in crypto strength, right? There's cycles of relative strength, Bitcoin, all coins, whatever.

You can't ignore this trend and this trend and the fact that crypto went nuts as the Dixie went down. So now we've had however many months this is, a lot, almost a year. of the dollar recovering really well. So what I want to be on the lookout for is when does this start ranging back down? Because I will have a high confidence trade and hopefully it'll co-align with some of those things we discuss, those things earlier that's a probability nature of, if, you know, hopefully this happens or maybe this happens. But if we can start to align these things with some other concepts, then that would be indicative that crypto is ready to move positively. And we see an up move in Bitcoin Ethereum.

Whether that happens here or here or here or here, I don't really know. I'm not a wizard. I just get to watch the chart and then try to make smart decisions off of that. But I'm certainly going to keep an eye on the strength of the dollar index, which is a basket of currencies. So as those weakened crypto strengthens, that shouldn't be too complicated for us to understand. Can you, I'm confused as to why the, this is just me just being naive, but why the U.S. dollar currency index is going up at the same time that we're having inflation conversations, like isn't the value of the dollar going down?

There's a preference for liquidity in general when you have massive uncertainty in markets. So I think that's partly like Russian trade stuff and the war and people trying to get, you know, foreign reserves back into the dollar assets that have been in other risk uh risk type of assets back into the dollar i don't i don't think it affects the underlying fact that we're seeing seven to eight percent sustained inflation um and keep in mind this is a relative index so um you know just because you're the the best shit coin doesn't make you not a shit coin it's relative to other fiat currencies right Yeah, and if you go look at this is a basket of fiat currency. The dollar index is a very complicated thing, the Dixie itself.

But you can go look at like, you know, the USD relative to the euro or relative to the Russian ruble. You know, everybody was posting those charts when Russian rouble went down 40% a day or whatever as the war started. I would love to see now I'm going next level on you here in terms of the 200 whatever. Like this is a 200 month thing. So, you know, if we ranged back down to that, that would be nice. And if we think the denominator is worthless and that fiat currencies in general are weak,

then, you know, send it down, get it down back to 80 something. And that would certainly coincide with bullish price action for crypto. I think the other thing that we're definitely tied to. And we tend to be tied to, I think during sideways slash bear markets is just the general equities markets, the S&PQQQ. and the S&P has had a pretty significant retracement. And so my mind is mixed between two things where, uh-oh, the S&P's in a bare market. Well, if they're in a bare market, we're definitely in a bare market.

But also, that's like three big red candles, three big monthly candles out of the S&P. How much more can it go down? Ledger, where do you find yourselves on this side of the equation? What side of the equation? Yeah, I hate having to provide this kind of probabilistic comparison. Sure. You know, you're saying, well, it's going to either go up or down, definitely go on to the right. But if you look historically, typically for a regular run-of-the-mill dip, you're kind of getting into end-of-dip territory, right?

So if the world's not ending, if this is not World War III, let's say inflation does back off just a little bit. Who knows what that thing could be? You could see an area where the S&P says, all right, we. We've had three months and a 10, 15, whatever percent drawdown. I think the NASDAX's gone down 20 something percent. It's okay for stuff to bounce now for a little while. Maybe go sideways itself, kind of like what we talked about with crypto. But we're not going to have like new paradigm recessionary model, right?

This is 2001. This is 2008. And this is one of my favorites, right? when Ryan, we were talking about those fast moving averages, this, I mean, just look how cleanly this, all this uncertainty, all this uncertainty. And then we live in these recessions well below those fast moving averages. COVID, we spent one month, like in total panic. I call this kind of like the rebound or the rubber band recession because of how fast we like operated out of it in terms of what the central banks did and printed money and supported all these assets. Maybe all that's going to come home to roost and we go down. and now it'll go to those magic 200 week moving averages. You've got a long way you can go there on the S&P. Treating this the same as crypto, though, is a little bit dangerous. Like, there's real value here.

The in a different way, you know, like these are companies that have key financials that you can look at. And you can look at things like, you know, price to earnings, Coinbase, even Coinbase, right? like a supposed growth stock, their price to earnings is 11 right now, which is like pretty much value territory. When you start looking at their expected yields and stuff, and that's a gross stock, you go look at some of the other stuff in the market. It gets even more severe in terms of what the value looks like, unless it's a value trap. And you say these ideas of the sustained earning potential is not what we think it is. And we got a lot more pain in front of us. And if that's the case, then it's going to be a dark world.

And that's your scenario where we go a lot lower in crypto. That said, I think that these markets are really due for some kind of upwards rebound, especially when you get into like the NASDAQ, which, yeah, it had a 22% correction so far. Wow. Yeah, it's a 22% correction after it went up 147% from COVID lows. You know, COVID lows to the highs, 147%. you go to some of these individual equities names, and it's kind of insane what happened on the high end.

One of the ones that I've always enjoyed looking at is Shopify, which went to like 1,700. It went to 500, 700 to 500. 1,700 to 500. You think your crypto bags are painful. This is supposed to be like something that's relatively safe, a long-term, you know, equities play that you think is like, yeah, this is going to be great.

or you go look at ARC, and ARC went from $157 to $51. So a two-thirds correction. Which is an ETF, not even. Which is an ETF. This is, you know, all of Kathy's best ideas. Very heavy tech-weighted ETA. Yeah, it's very tech-weighted, you know, EVs and crypto. But it went up 391% off COVID lows.

So what's crazy is that these have completely retraced their COVID moves, right? This is pre-COVID, COVID low, and then this is now. So it is actually, ARC is cheaper than pre-COVID, which is kind of stunning. So these, to me, start to become, again, this scenario of like, well, maybe you just dollar cost average and freaking wait. If you want to have some exposure to equities that's not, you know, not crypto, this is a little bit more of an indirect play and maybe you can do some stuff to try to head your way out of that. Like we seem to be having these kind of new, what you would call like a secular bull market and some of the commodities trades.

Energy. So like oil and stuff was basically at record lows in terms of its composure within the S&P 500, like 8% after peaking at something like, I don't remember, 25, 28, 30%. So in terms of the number of companies from the energy sector that were in the S&P 500, that number went down by like two thirds over the years. And classic meme is you go from negative oil prices to infinity oil prices, which we just are living in the meme constantly, right? Almost made it to all-time highs. Honestly, it wouldn't surprise me if obviously this chills out. This is actually quite a bearish reversal candle for oil, which for the world is probably,

a good thing. But it wouldn't surprise me if we're kind of in a new era of expensive oil as producers just are not producing enough. And we're assuming, oh, there's going to be so much less demand because of all these EVs. But meanwhile, you have developing countries that are increasing their oil appetites. And the increase in EVs and stuff and developed countries is just not enough to make up for that underlying appetite. But meanwhile, there's also not an appetite for, you know, new wells and things. So you can create something where, yes, a hundred years from now, our dependence on oil should be significantly less. But over the coming 20 years, we're probably going to need as much oil as we need today, but we're investing in it much less because it's not

something that people look upon very nicely. So I think you could have an era of higher commodities prices and maybe value, or these growth stocks come back in line a bit and people start looking for what are value producing, you know, equities. And there's a rotation of some sort from the things that don't have revenue, don't have profits, don't have dividends. And investors banked on the number going up. And it moves into, hey, we want a four or five or six percent annual dividend yield. And sideways or slightly up is okay.

What you hit when you do this where prices really don't go up that much in terms of the stock market or whatever. But inflation is this sustained higher period. is you hit stagnation. And I actually think in this probabilistic outcome scenario, that would be a painful, but in my mind, probably the most high probability outcome where we do. I just think it's going to be so hard for us to actually get inflation under control. We don't have a lot of capacity to raise rates. So you don't have these levers from a central bank perspective to pull to have much control so you you can't lower rates very much. The alternative is to provide direct stimulus to the economy. There's less and less appetite for doing that after we just printed money and gave it to people

for years and you know, you fracture decision-making capacities within governments. Then you have to have a crisis to print money or whatever. At that point, I think we could create a scenario where we have high inflation and low asset prices and we hit a stagflationary period, which again coincides with this multi-year sideways potential both in stock markets and crypto. But do you think, Ledger, this is why I'm curious how your macro mental model sort of feeds the crypto prices we were talking about, either sort of the sideways super cycle or a bear market. So you would give higher weight to the probability of like stagflation, which is

inflationary dollar plus recession, basically. And you think that could be persistent. and we might get something close to like the 1970s or something like this. And if that's the case, then you think that a bear market is more likely in crypto than the sideways super cycle play. Is that the case? Yeah, kind of. I can't remember the ticker for the Japanese market right now, or how to spell it.

but the i guess the nike or whatever it didn't make an all-time high for like 22 years so japan had actual uh stagflation and you know can you imagine the outrage of passive investors if they're putting money into a market for 20 years and still can't make new all-time highs uh in the market they would be pretty upset so it would be very interesting um not necessarily great but certainly interesting. Maybe it's a stock pickers dream or like individual asset class NDX. Thank you, chat. You know, and that's an asset 100.

Sorry, I tried. I certainly think that it's a potential outcome. I don't know exactly what that plays out, how it looks in terms of what's bullish. A bunch of random stuff had bull markets in those days. you know, like I think that's when silver went absolutely nuts. It went to, it did like a 20x in value during, during those years. And there's like all these, there's always a bull market somewhere. We'll find something to look at and something to invest in.

I hope crypto is one of those things, is an emerging technology that it kind of shows up, even in a stagflationary environment that people see like, here's potential in this emerging technology that's going to take over the world. Yeah. I don't know. It's going to be a tricky one. I'm curious about you, yourself. So we were just talking about equities.

We talked a little bit about commodities, you know, tech stocks, this sort of thing. Do you hold these in your portfolio? Do you trade these? Or are you like just like crypto is enough for me? And I'm not like crypto. Yeah, I definitely. I will say it was a higher, not to flex, but it was a higher percentage of my portfolio. Like, you know, my wife's retirement account and like my IRA, I call it my Digen IRA.

So it started pretty small. And then I was just kind of aggressive with it over the years. So then it became reasonable. But it all paled kind of in comparison to what crypto did. So I do invest in gold or stocks and other things in those. So like in my wise 401K as an example, I think it's like in 30% gold miners. And then kind of a mix of value stocks and cash and maybe a little bit of S&P 500 or something. I mean, I'm curious.

So why do you do that? Is it just to kind of keep life interesting? Or do you think that this provides more diversification? It keeps me on my toes. Okay. It's like myself personally, I'm just like more of the barbell strategy where I'm like, I don't really want to hold equities at all stocks, much if any. I want my risk on asset class to be crypto.

And then if we're in a risk off mode, I'd rather just have dollars. like right and then like keep my powder dry for a time where I can buy back in crypto so it's just like I want ultra safe type assets and then I want like the ultra risky crypto type assets and like for me there's no real room for for equities in between but that's also because I don't really pay attention to like equities in the stock market what's your balance like with I think it I think it gives me some ability to have interest in those markets and I do think so those are long-term things that I don't plan to touch for another 30 or 40 years or whatever whenever you start liquidating retirement accounts. So I think even though they're real money, but they're not

like super duper life-changing money. Over 30 years, if I'm active with them, they can actually, I think, become life-changing money in those later years and in a much more passive way. It's not like trading every day. It's maybe trading every week or every quarter or something, except for my IRA. I'm kind of crazy on that one. But in terms of active investments, I mostly agree with you. What I've done a lot more of lately is primary is crypto exposure. And then a big secondary where I have tried to diversify is being more interested in real estate because I actually think that it fits potentially in this safer investment, not going to go down, you know, 85%, like Bitcoin did in 2017. If it goes down 20% though and I still earn yield on it,

if I'm not like highly levered in commercial real estate or something, then it might be an extra few thousand dollars of rent for my family as kind of a backdrop. And in the 20 or 30 year term, I'm pretty confident and in that market still existing if I'm investing in my town and whatnot. And I also get to make a difference. So most of my like active investment would be a little bit of private placement, mostly crypto liquid markets and then like real estate type stuff outside of dabbling in retirement accounts with these kind of what I call boring assets.

Now sometimes even in those, and especially like in the IRA, thankfully every now and then, if I'm really, really, really bullish on crypto, I can throw it into subpar products like GDXJ or why not, right? And just let it let it yolo for a little while. But, you know, I think it keeps me on my toes to look at all markets and makes me hungry for more information. I'm obviously, I'm larping on most of this macro stuff. Like I'm 30 something years old. I'm just, I'm a guy like everybody else trying to learn over time.

Investing my own book. I guess that I'd have that going for me. It's not somebody else's money. But I'm trying to learn. And all I'm doing today is sharing the things that I've tried to learn over the years. Well, Ledger, that is why we call or I call. you the chartographer because you are guiding our way through many, many, many different charts and trying to draw connections between all of them. And that's what we enjoy doing here at bankless.

So since we can't know the future and since we don't know if it's a super cycle or a 2018 capitulation, what advice do you have for people just to keep their head on their shoulders? How do they not get chopped up over the next three weeks to six months until like some conviction comes back into the market. Like how do we maintain sanity here? I think you, there's a couple of places you can make a lot of money. One is if you have this massive kind of capitulation style wick and then you make 40, 50% in a day.

That's one way is if you like manage to catch that just right. But honestly, you make even more money in the follow on when things are truly confirmed. So to your point, Ryan, like you could be dollars, you know, you could be based in dollars, but then when you have confirmation of the trend, you go a little further out on the risk curve and you make up for whatever of the early trend that you missed heavily by the later trend. You know, the Luna's 30,000 percent or your Maddox, which to this day, David, like your DM gives me physical pain of when you told me I should buy it. And I did.

And then I sold it like a penny later. For context, I DM'd Ledger to just, I only DM'd the word Maddick at 15. sense or something like that. I think it was 11. And I sold it basically at break even as it went to like 12 and back to 11. And I was like, no, I'm out. And then it went to $2. So yeah, like you get further out on the risk curve where it's like we're not having this conversation of are we in a bull market or not. You're saying it's a bull market, maybe let's go. Like what are we what are we aping today? Like in those markets, you keep your head in terms of like maintain liquidity, don't buy outright scams,

be satisfied with a 100% move or 500% move. You're not trying to buy Shiba Inu. Like you can still find ways to lose money in those environments by buying the top of a Shiba Inu instead of buying the middle of amatic move. But you can make a lot of money down the risk curve once the trend is known. Like you know where things are going. So I think you can just be patient and wait for it. And I got to give a shout out to CryptoCred on that to keep me stable sometimes.

You do not have to buy the absolute bottom. You do not have to be fully exposed at the perfect time. You can take your time, be in what CRED says often as a position of control so that you have options. If you leave yourself into a place where you're leveraged and it's going against you and you do not have options, you're facing liquidation or ruin rather than being in a place where you can. sell for a slight loss or you can buy it with confidence. That's the place you want to be in. You don't want to be in a place where you're forced out of the market because that's the only way you're not going to make it in the long term. A lot of good advice toward the end there,

ledger. We appreciate it, especially people who are for cyclers, I think are looking at some of these moves and panicking a little bit. And they're also hearing what you said and maybe, you know, panicking a little bit. But having options, keeping it a cool, head on your shoulders, realizing that time in the market beats timing the market is the way to go. So we appreciate you reminding us of that. So thanks for joining bankless. Thanks for having me. And just as a side note, like, I was exposed to the market. I was very, very bullish when Bitcoin was 4K. I don't know what my net worth was between Bitcoin being 4K and Bitcoin being 10K. I just know it didn't go up near as much in that time frame as when it went up in

this time frame. So just as proof of buying that bottom. And I know for a fact, like David and I have talked about this and it was similar for you and for most people. Like you do not have to buy the bottom. Take your time, have fun. Don't lose it all. That's it. Take your time, have fun. Don't lose it all. Guys, of course, none of this has been financial advice. All crypto is risky. Bitcoin, eth, they're all risky. We always tell you at the end of the show. So is Defi. You could lose what you put in. But we are headed west. This is the frontier. it's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.