TFTC: A Bitcoin Podcast - #635: Bitcoin's New Paradigm with James Check

Episode Date: July 2, 2025

Marty sits down with James Check to discuss Bitcoin's current market dynamics, the sustainability of demand from ETFs and treasury companies, on-chain analysis showing strong support levels around $90K, and why the current cycle represents a "new paradigm" of lower volatility and institutional adoption despite ongoing claims of price suppression. James Check on Twitter: https://x.com/\_Checkmatey\_ _checkonchain: https://www.checkonchain.com/ STACK SATS hat: https://tftcmerch.io/ Our newsletter: https://www.tftc.io/bitcoin-brief/ TFTC Elite (Ad-free & Discord): https://www.tftc.io/#/portal/signup/ Discord: https://discord.gg/VJ2dABShBz Opportunity Cost Extension: https://www.opportunitycost.app/ Shoutout to our sponsors: Coinkite https://coinkite.com Unchained https://unchained.com/tftc/ Join the TFTC Movement: Main YT Channel https://www.youtube.com/c/TFTC21/videos Clips YT Channel https://www.youtube.com/channel/UCUQcW3jxfQfEUS8kqR5pJtQ Website https://tftc.io/ Newsletter tftc.io/bitcoin-brief/ Twitter https://twitter.com/tftc21 Instagram https://www.instagram.com/tftc.io/ Nostr https://primal.net/tftc Follow Marty Bent: Twitter https://twitter.com/martybent Nostr https://primal.net/martybent Newsletter https://tftc.io/martys-bent/ Podcast https://www.tftc.io/tag/podcasts/

just gone nuts all all the central banks going nuts so it's all acting like safe haven i believe that in a world where central bankers are tripping over themselves to devalue their currency bitcoin wins in the world of fiat currencies bitcoin is the victor i mean that's part of the bull case for bitcoin if you're not paying attention you probably should be mr check there's there's too much paper bitcoin out there the price is being suppressed How do we get out of this? Doing well. Man, I'm just watching red candles and the market makers,

they keep pushing the price down. Coinbase has got nothing on their balance sheet. The whole thing's a scam. It's a scam. By the end of the year, there's going to be 2,000 Bitcoin treasury companies in public markets. They're going to have 42 million Bitcoin, and the price is going to be at 107K. My favorite, I replied to you on a tweet just before I went to bed last night.

You were talking about Canada's sovereign reserves, and they've got like 350 billion. And you said, you know, imagine having $350 billion of some other country's paper and not buying $3 million Bitcoin. And the first thing that struck me is, guys, we are so big that you can fit a G7 country's sovereign balance sheet into 15% of the circulating supply. And like, just let that sink in for a second. $3 million Bitcoin is Canada's net worth. You know, it's an amazing stat that we're this big. So don't get caught up in all the price suppression.

and we're a stone's throw from all-time high and the market's absorbing billions of dollars a day. It's bullish as anything. It really is. And as somebody who's been in it for a while, I like to see the coiling. I like to see the coiling. I like this whole year.

We ended last year, all-time highs, dipped down, came back up, tariff tantrum, back down. Now we're back to 107. You wrote a great newsletter last night, my time. I believe yesterday morning you were tired. No, last night,

your time last night, this morning, my time, this morning, my time, I read it on at a 6am flight this morning. So right on the flight. And I think you highlighted a lot of good data on chain that,

that really made me extremely bullish and confirmed my bias towards the coiling. It seems like in the mid to high nineties range, we've got a nice sort of strong base of people that scooping up coins there and you're you're saying we we may be at peak huddle or you're referencing the term peak huddle the the metric peak huddle yes i uh i tend to you know there's always this uh supply squeeze narrative that floats around and like you know i'm generally one of those folks like guys supply squeezes uh you know don't get too caught up on it but the truth is there are periods of time where

there is a supply tightness right so i'm not saying same as paper bitcoin paper bitcoin exists in derivatives in fraud there's all sorts of reasons why paper bitcoin exists you don't need it as your core thesis to explain why the price isn't higher so you can easily explain it with sell-side pressure that's sell-side pressure and this is i think what a lot of people miss it's super bullish the fact that we've had billions of dollars tens of billions of dollars a day sometimes of serious sell-side pressure and the price is 107 000 that is the signal so what you're referencing you can look at there's a few different ways we can look at it you look at like short-term all the cost basis but also i've got these um these heat maps that basically

just look at the utxo set give every single price every single coin or utxo a price when it last moved and let's put a density heat map and see where all the coins last transacted and in that 90 to 100k region it's a massive just an absolutely massive band if you take that realized value so all of the coins that have last moved and again some of them change hands some of them are in exchange balance sheet. Some of them are just some dude transacting. Doesn't matter. Don't get too caught up in the details. It actually doesn't matter. When you look at where every coin transacted, 55% of all dollars invested in Bitcoin or held in Bitcoin or saved, however you want to frame it, has a cost basis above 90K. That's insane. That's a super bullish scenario where

the market is saying, there's a flaw here. So the way that I look at that, I don't really want to see the market go below 90K. I don't think that would be a good sign. I think it would take a lot. you'd have to have a pretty major event happen i think um i don't want to see that if it does go below 90k then i'll probably start saying yeah something is wrong um and it's probably going to be a global thing not not a bitcoin thing uh but in lieu of that if we stay above 90k it's just a huge amount of support there there's huge amount of demand we're seeing demand come in and like that's that's where we're at don't worry about price suppression look at the fact that there is so much demand that we've built this very very stable floor at 90k you know 90k

six months ago we're at 70k so you know it's just a whole different animal now yeah there's a few things here i think you mentioned it in the letter and i'm beginning to ask questions like people dming me like do you think there's paper bitcoin price suppression is black rock playing games and if you look at it just looking at hodl waves it looks like long-term hodlers are selling and then if you mention that to people they'll be like oh why are the ogs getting out it's like they're not getting out it's like they've been holding bitcoin for so long their cost basis is so low and they want to treat themselves to say all right i'm going to take some off the top at 105k and you know why this is i think probably the most important thing

because life is more valuable than your bitcoins your family's more valuable than your bitcoins the home that you want to raise your family and is more important than your bitcoins you know bitcoin's not there to die with it's you know just i think letting go of this idea that it's some like saintly spiritual thing that you can never sell and it's a sin like go and live your life not living your life is is far worse go and enjoy your life and there's but you know there's some guys like they want to go and buy a house they want to pay off their debts the fact that they're debt free not everything is about financial returns and actually you can almost go the other way and say by being so fixated on the gains in bitcoin is a very fiat mindset

bitcoin buys you opportunity and you know time it gives you time back with the things that really matter that's what it's worth that's what it's for like if you're not using it to improve your life and your family's life what what is the point of being here right people just can't rock that so you get a huddle forever michael saylor we're going to 21 million if you get past the huddle forever that's actually the bitcoin mentality you don't get caught up in this fiat gains thing you know for example i talk about this all the time i don't own gold to outcompete bitcoin i own gold because i'm going to sell it in order to get into the housing market it's its job is to not be volatile but be the same trade i don't care about the financial gains i'm not

there to make money on it it's there to be it's a tool to give me life chips so it has a very specific purpose i view bitcoin in the same way its job is that in the long arc of time it's going to get my kids through a good education it's going to pay off my debt at some point in time i'll sit there and let it ride for the next decade but you know it has a purpose to make my life my family's life better yeah and so this is talking about og selling and i don't know if you've written about this or been following along but obviously last year post etf launch there's a bunch of 10k filings of institutions head funds others getting into bitcoin like how much of any outflows of etfs can be driven by rebalancing that could be affecting the cell

pressure as well yes so i have actually done a bit of a study on this so there's a few elements i ran through a lot of the it was a couple of um probably a couple of quarters ago but i looked at all of those 13f filings and basically looked at how much of the etf flows were institutions and it more or less aligned with eric dalcunis and um and james safer to talk about similar numbers, about 20%. And again, this is probably half a year ago, but about 20% of the ETFs appeared to be institutions. The rest was mostly retail. In my initial interpretation of the ETFs, I imagine there's a lot of hodlers out there who finally got a vehicle to put their 401ks in there. We call it superannuation in Australia. Whatever their retirement assets, ETFs are a very

good vehicle for that because you've got to do audits and there's all sorts of, every country's got their own system so i thought retail would naturally gravitate towards the etfs with that pool of capital because much the same as what sale is doing going after trapped pools of capital there's retirement funds that for the first time have now got access easily into into bitcoin so i think that's a big component um when we look at the and i actually ran this study um we're talking just before that i was in in seoul for the bitcoin seoul conference and one of my talks at the industry day was all about the how bitcoin's institutionalizing what's actually happening under the surface and one of the charts that i had in there was looking at the weekly inflows

and outflows from the etfs and what's quite interesting is if you look at the outflows an average outflow week is about 160 million dollars which is not small money but the average inflow week is like 780 million so it's like a 5x multiple on the outflows so yeah we get an outflow of 160 million, but then it's followed by an inflow of 500 million, 700 million, a billion. So the inflows are just so much bigger. And then the other thing you can do is you can overlay CME open interest. And what we've generally seen is that CME open interest will increase as the ETFs get inflows and it will decrease on the outflows. So of those outflows that are occurring, almost always it's matched almost one for one with CME open interest declining. Now, not all of that is

going to be cash and carry but a lot of it is and i think just recognizing this is actually not people like there was a big thesis at the start of the etfs i think jim bianco was a big proponent of it the etfs are just an orange poker chip and all these trad fire guys are going to come and just like you know gamble on the market what's actually happening is that when we get outflows most of the time it's like structural it's a hedge fund who's just degrossing and turning off their risk neutral position so you know there's a whole lot of these things like actually it looks like the ETFs are just hodlers. People are just holding onto these things and we are not getting any sustained periods of outflows. One divergence I have seen, and I haven't fully passed it yet,

but it does make sense, is the BlackRock ETF this year. So through most of 2024, BlackRock and Fidelity were always increasing at about the same rate. BlackRock was bigger, but Fidelity was kind of keeping track. Since the start of this year, however, BlackRock is just peeling away. And it has to do with the options, right? I can't think of any other reason why. There's this kind of centralization of liquidity. If you've got the most amount of liquidity in the underlying,

then the options are going to be the most liquid. There's not really much reason to trade the second best option market. Everyone wants to trade the best option market. So it actually makes sense that BlackRock's peeling away. But every single other ETF combined is pretty much flat since December in total flows, and BlackRock is just up and to the right. it's more than double fidelity now it's like 55 billion versus um fidelities uh i think they're like 20 billion in total inflows so what does that bring us to totally in total aum it's 135

billion which is uh for last i checked i asked grok a little while back i think we're 50 of the gold etf so you take all the gold etfs and put it together and we're halfway yeah that's insane yeah 260 or something i mean it's historically the fastest to this aum of any etf launch ever which kicking ass it's incredible is a signal in and of itself sup freaks this rip of tftc was brought to you by our good friends at coin kite they make the cold card queue my favorite hardware wallet the most secure hardware wallet on the market as you can see it's got the blackberry form factor full keyboard it's got two secure enclaves you create your private public keys offline the device never has to go online never does go online so you keep your bitcoin secure

if you have your bitcoin on exchanges and you're looking to get it off secure it in the best way possible pick up a cold card queue go to coin kite.com find the cold card queue use the code tftc for five percent off if you're a power user of bitcoin like i am if you're running a business on a bitcoin standard if you're just a bitcoiner wants to secure your bitcoin get the most secure hardware wallet on the market. Go get the cold card queue. It's a beautiful thing. So freaks, guess what? We launched a browser extension. It's called Opportunity Cost, and it helps you see the true cost of everything in Bitcoin. Convert prices to Bitcoin as you browse the web. Opportunity Cost automatically displays fiat prices in Bitcoin or Sats,

helping you think in a Bitcoin standard. It works on Amazon, Zillow, X, your bank account, QuickBooks. You can convert everything to Bitcoin. It's really cool. It's also 100% open source mit license we don't collect any data all of the conversions happen in your browser on your local device it's a great way to recalibrate your life and begin thinking in sats go check it out at opportunity cost dot app that's opportunity cost dot app and before we get to forward looking one more sort of a past looking indicator to world war three people thought we were going to world war three two weeks ago we had that you had that crash down the high 97s quickly bought up and i think that was incredibly bullish for two reasons one it highlighted the fact that bitcoin

is a liquidity hedge when you need liquidity and nothing else is open if you own bitcoin you have liquidity this is 24 hour seven day week 365 day a year market and i think it proved that use case obviously there was some risk off going on as the united states was bombing iran but bitcoin was open people were flying to cash for whatever reason and went to bolster their balances and we crashed but i wouldn't even call it a crash we dipped and it was quickly bought up and interestingly we haven't seen the bid for treasuries u.s dollar like generally speaking if you were to wind this clock back two years three years and you had the exact same set of headlines the dxy would be through the roof and it's not we're not seeing this like flight to us

safe haven assets which is quite interesting and just as a simple heuristic whenever your timeline is full of tradfire guys looking at the one minute chart for bitcoin saying look how it's not a hedge it's usually a good time to actually step in and buy that dip because it's hilarious how they'll grab the one minute chart to look at literally the longest duration asset that exists which is bitcoin and gold and they'll look at these two and be like see how they're diverging on my charts like pro zoom out yeah and look at yeah look at u.s treasury debt still around like four and a half percent range for the 10 year and you're thinking about if you're an international government or if you're foreign government looking at the united states treasury market as a safe

haven asset it's like it's four and a half percent over 10 years enough for me i think you're gonna need those yields to go up and and then you get some uh i saw trump tweeted yesterday you know in in uh in as many words nothing stops this train right basically saying like we're gonna have to monetize this thing at the short end um we're gonna put someone in in power in uh in the fed's chair when when power goes we're gonna put someone in he's gonna be super dovish he'll lower rates then we'll just finance the short end it's like oh man they're just being really really explicit here that the uh the print the print's coming they have no choice they're gonna grow their way out is a euphemism for a number go up yeah there's uh i didn't dive too deep into this

past the headline uh and the short clip that i watched but it seems like even scott percent has made like a phase shift in in perspective and i think this morning he was on cnbc or an interview was posted that he did yesterday or earlier this week where he was basically yeah well we don't have to tear him out the debt we can we can play on the short end and it was funny because as the Trump administration came into power, they were pointing and laughing and yelling for all the short-term debt that she issued. And now they're like,

eh, we can play in the front end. It just goes to show that they don't have a choice. And I wrote a piece, I think it would have been April. I did a very big, like, I sat down, I really, this is when we were in Bedford, it would have been when we last spoke.

And I really tried to get my head around what was going on. And I built this table and it was like these three different games of chicken. There was the US versus China. um there was uh trump versus the republicans and then there was um besant versus uh jay powell and i was trying to work out all these different games because someone's going to have to blink in in all three of these different games and like at some point in time i was like trump's going to

come up against he may want to do all the most radical changes in the world at some point the republicans have to get re-elected and it looks like we've just hit that point in time where he's like you know you guys have to get re-elected but you know let's all get on the same page and let's go. We still don't have really a trade deal between the US and China, but I'm not convinced that the US has the strongest negotiating position because China is just the world's factory. And I think there's a lot of challenges there as well. And at some point in time, I think J-PAL just has to deal with the fact that his boss, the government, has to be financed. And so he's holding out. And I've got to give it to J-PAL, right? He has a very, very difficult job.

i don't envy him in the least and look you know again we can we can rally all we want against central bankers given the role that he has and the job that he has to do i think like he got rates to five percent no one thought he could do this and he's holding out against a president who's you know tweeting you're a numbskull every every second day he's doing all right right he's got a tough job i wouldn't want to be him that's for sure yeah and i i wrote about this last week and was tweeting about it last week as well but it's crazy the the short-termism that exists these days and the amnesia that people have like trump banging the drum to lower rates like to me it's like wait a second like if the economy's not completely imploding unemployment's not blowing

out inflation is coming down but it's still higher than the historical target and interest rates are are relatively elevated like isn't lowering rates a signal that something's wrong and if you're a president or anybody just a citizen a consumer a business owner in the economy is like higher rates producing a more accurate opportunity cost and cost of capital throughout the economy a good thing that we should want to be able to sustain like why is this i know why but i think it's just hilarious psychologically how Zerp Zerp Zerp was like a meme like this is a bad thing for the better part of the last 20 years and all of a sudden now it's like no we need Zerp we need Zerp again it's a good thing it's being positioned as a good thing yeah I mean at the end of the day

the bond market is bigger than Trump it's bigger than the government it's it's the big thing right it's the big it's the one that calls time and uh and the bond market like they can't they can't finance themselves the reason they need to lower rates is not because the economy is in a good or bad shape it's because the debt's too big and the number just doesn't make sense the math don't math when you've got what is it 37 trillion now now by the time we talk next it'll be 38 39 yeah and i don't think it's a foregone conclusion that if the fed lowers the fed fund rate target that 10 year and 30 year yields are going to go down the last time the 10 year went up yeah yeah yeah totally it's i mean it's a it's a tough position as bitcoin is we've obviously talked

about this for a long time and i mean i know for me i mean again my background civil engineering i knew nothing about the bond market three four or five years ago i had nothing now i like again i'm not going to pretend that i know i understand how it works but i know a hell of a lot more than i used to and i'm just looking at the situation we're like they're kind of stuffed aren't they and this is why lynn's meme is just so effective because no matter which way you want to run this calculus you're like guys it's it's just math it just doesn't work anymore you have to print the money there's just no other way and then once you reach that conclusion you realize it's all jaw-burning they just have to create narratives and the thing i find so fascinating is that the

market kind of has to go along with a lot of the time um it's a it's a great example of shelling points so for example the bond market is supposed to be the smart man in the room they're supposed to be the market that understands what's going on and they're trying to judge it's the big one and yet they still plug in cpi as their bond as their inflation number and we all know cpi is bullshit but they have to plug it in because every bond trader knows that every other bond trader has their own they've got their own inflation metric but every other bond trader's also plugging that in so the shelling point is what other number are we going to reference so they all have to use the same number because they know that everyone else is using the same number and in order to go out

on the risk curve and say well i actually think that number's wrong i'm gonna bet against it you're betting against the mass and eventually the mass will get there but it's not an immediate thing and this is like you know not quite a perfect analogy but this is why in like the big short they knew the housing market was cooked but it took years between when they realized that it was cooked and it actually imploding that period of time that funding cost you you get you get wrecked in that middle period so it's a really interesting thing that like simple things like cpi is bogus and yet everyone has to use it because of a shelling point i find these dynamics in finance so fascinating all right it's a hard quote a hard-coded input into all these calculations

that everybody knows it's a bad one but we got to use i'm having visions of michael berry going to the whiteboard or christian bale playing michael berry going to the the whiteboard and and writing the uh the losses he was stomaching during that period while he was waiting the carry yeah yeah and i'm happy you brought up lynn because i was there in vegas when she gave what i thought was the most succinct and clear and distilled version terrific wasn't it of her nothing stops this train and we'll stay we'll stay on like backward looking stuff for this point my other favorite presentation at that conference was safes safe adina moose's uh presentation on the tether and the u.s treasury market because here in the united states looks like we're going

to pass the genius act which creates regulatory clarity for stablecoin issuers and all the politicians and pundits and macro think fluencers are saying that we need stablecoin regulation we need clarity we need stable coins to proliferate because they're going to create a lot of demand for uh our treasury market which demand is waning right now from traditional buyers and so we need to bolster up this new buyer that'll drive significant demand and i i really loved safe's presentation because it was a real finger in the eye of the sort of uh the the mainstream belief um around stablecoin regulate regulatory clarity and what it will do for the treasury market specifically and just basically just looking at tether the biggest stablecoin

issuer in the on the planet by far and what they're doing and he basically pointed out like the math doesn't math here either like very conservative assumptions too like it was like like 10 x's or something and yeah and and uh the reduction on interest rates is like very very it's a strong correlation like it's just this is not happening guys no they're and they're taking those yields and funneling them into bitcoin and i really when you're thinking about like creative thinking and thinking outside the box like tether becoming like a bitcoin stable coin at some point in the future because they'll be getting like their company reserves and i believe treasures reserves now maybe that will change with the genius act passing which i believe for

u.s issuers specifically they can't have bitcoin as a reserve backing the stable coins that they're issuing but we know tether the company is separate from tethers sort of uh the liquid backing of the tokens themselves yeah there's the backing of the stable coins and then there's tether the business who is generating profits from that product yeah exactly and stacking a ton of bitcoin and gold well they got like 30 tons or something of gold it's crazy yeah all this is just to be said getting back to what we were saying earlier you can't stop this train like it doesn't it seems like the big print has to come mathematically anyway you look and they just have to convince people to uh to you know in some narrative shape or form it's okay that's not what's happening

don't don't believe your lying eyes they just have to convince enough people again that's why i brought up the cpi thing you just have to convince them enough to just go along with it for another three months and then another six months and then just go along just just another three months which we're almost there they just massage these people through the journeys you just debase them through this uh you know and it's going to take a long time to do it but you know there's going to be a suddenly moment everyone just goes all right i'm sick i'm done with it i'm done with it i'm out yeah i think the holy grail narrative sort of framing that they're going with right now is that the productivity gains from ai proliferating are going to be such that we can stomach more

inflation because productivity is going to explode exponentially don't worry it's good for you it'll be easier and it's like somebody who's been playing with the tools and leveraging it myself like i can totally see that like we've done many things here at tftc that would not have been possible uh without going out and hiring somebody which um which we're typically conservative about doing but we've been able to do a lot more with the same team that we've had for the last year and it certainly has made us more productive but um does that you also didn't hire somebody else yes that's the that's the trade-off right so yes you're more productive internally but you also didn't hire other people yeah so that's the big question but that's what

they're going to say it's like this productivity is going to be insane you may not be hiring people but more people are going to start more businesses little little uh little side gigs that they can make some money off of that's it yeah everyone's doing a vibe coded side project yeah hey vibe coding try it you may need it just just to survive moving forward they're going to print money you have these massive productivity tools at your fingertips and you got you just got to shoot your shot and try to make some money out there because ahai is coming for your job if you're uh if you're an excel monkey out there be aware well it's funny actually i mean like the one of the many things that i'd like back in 2019 where i was falling properly falling down the

bitcoin rabbit hole listening to plenty of your pods by the way um walking around regents park listen to you and uh you and matt uh shill self-custody to me um but in that process uh i used to download coin metrics had this csv with all the original on-chain data like the very first time you could get data for this stuff and i used to download it every day plug it into my i'm an engineer right so i use spreadsheets for everything plug it into my uh my excel sheet and i was like eventually i can't i can't keep doing this this process sucks waiting for all your charts to update so that's actually where check on chain originated from is me going okay i've got to get off excel and it was my excuse to go and learn python and and learn how it all works

and it's still building today right still plugging away i think it's 250 000 lines or something of code that prints out every day and uh yeah that was my my job to get off excel and now like aside from the occasional little accounting thing here or there everything is python i don't touch excel anymore it's a beautiful product too anybody listening should go check it out it's check CheckOnChain.com, correct? CheckOnChain.com. Oh, I was talking about Excel. But yes, no, CheckOnChain is beautiful as well.

Yes. Serious about your Bitcoin? Start acting like it. Unchained just launched the Financial Freedom Bundle, a curated pack that includes a premium Bitcoin book, a new hardware wallet guide, and access to a private macro event with Tur Demeester. Legend.

It's time to take control of your generational wealth. Go to Unchained.com slash TFTC to request yours. That's Unchained.com slash TFTC. pretty hot package freaks go pick it up all right moving forward you're pretty bullish if i if i read your newsletter correct this morning on the plane while i was a little groggy you're pretty excited about what what stands before us here i mean i find it hard to look at the price being at 107k 108k a support floor below us at 90k which again can it fail yes do i expect it to no not my base case um if it does then we flip around but we're in a very very

healthy spot and uh you know even just simple things like funding rates funding rates are like neutral to negative and i spent a bunch of time last week trying to work out why that is and there's a few reasons why funding rates could be negative lots of cash and carry trade generally speaking if you cash and carry trade which is where people long spot short the future if the yield you get from that is it's at the moment it's like two and a half percent annualized just buy a t-bill what on earth are you doing a complex um cash and carry trade to earn half the yield and a risk-free rate doesn't make any sense so it can't be i'd be very surprised if it's cash and carry um there's relative value trades where people would like going you know short bitcoin

long shit coin i don't see any of that happening right i don't see that going on the crypto world so really at the end of the day there's just like people just short people just like net short and that appears to be what's going on so there's a bunch of people who just net short bitcoin and i wrote a piece on um uh it's probably two weeks ago a week and a half ago called imagine being short and uh i literally put myself on the shoes of options and futures traders and tried to work out why they were short and in the option space uh it basically looked like i think it was out to the end of july i might have actually been to the end of june uh there was a lot of put options like people were just like very very hedged and someone in my comments actually reminded me

that we've got tariffs that start to roll off or that 90-day pause comes off i was like oh yeah that makes sense so there's a bunch of people and again options are a more sophisticated instrument you're not going to get like your average dgen in there who just wants to like gamble poker chips they're going to be more sophisticated actors so you're telling me that the guys who are in the sophisticated market are hedged for downside for a very rational reason when you're hedged for downside you're not concerned about downside that's the whole point of hedging and then you've got in the more degenerate markets funding rates are basically negative there's a lot of short interest when i look at which exchanges it's happening on yeah there's some on binance there's

some on bybit there's some on cme they're the big three but a lot of it's on these like other i just put them in the bucket of other all these exchanges you've never heard of you don't want to hear of that's where all the people are short so i'm like okay so i've got the most degenerate traders in the world who are net short i've got a bunch of sophisticated guys who are hedged for downside because of a very rational reason which where's the max pain here probably a down and up and i wrote a piece called we got to go down to go up and that feels like how it goes you just go and find this like tap a little bit of liquidity we went down to 98k as you mentioned before super strong bounce off the top of that support floor i was talking about so everything makes sense to me

the next level is just go and tag all time high and grab all those people who are short and gonna to get liquidated up there. Like that to me feels like where it wants to go. There's a whole bunch of other elements, right? I mean, long-term holders, they're still selling, but significantly less than usual. So, you know, at the peak in November, December, there was something like 40,000 Bitcoin per month. So, sorry, per day, not per month, per day. So there's 40,000 Bitcoin that were older than six months coming back to life. And yes, I get this point all the time. Not every coin that transacts is being sold that's true but it's very funny that they all seem to transact when the market's ripping to the upside so it actually doesn't matter where it's 40k or 35k

or whatever it's more than it was yesterday significantly more so look at the trend and the direction there is a lot of old coin that comes back to market when the market rallies we're not seeing anything quite like that so really where i sit at the moment i find it very hard to be bearish the one thing actually that i think is notably bearish is just the on-chain activity the blockchain is dead right empty blocks so so that's the one thing i'm looking at going i don't like that i would much rather it be full uh there's a case to be made that is because people are punting on treasury companies and all that but even that is probably not a great sign that's a speculative signal so that's really the main area of like let's be careful but i just draw a

very simple line in the sand we're above that short-term cost basis which is like 98k you're allowed to be bullish for me until we're below the short-term cost basis you're allowed to be bullish because literally every time we're above it it's generally bullish once you go below it you've got to flip over and there's no reason i can see that we should go below that level we bounced off it earlier if it goes down to 90k it's possible but we need to bounce higher if we go below 90k then i've got to flip around and be like something's very wrong here and i'm wrong i'm now going to say i think we might be in a fairly protracted bear market but we're a long way from that so there's a lot of reason to be bullish and until proven otherwise i think be a

bull be a bull it's always a good advice and as it pertains to on-chain activity i agree it's it's weird going to mempool.space and seeing all these empty blocks it's almost very odd in the meme the guy's holding the stick like do something and then i think my own bitcoin users like i transacting bitcoin almost every day and if i'm uh and obviously i'm more of a hardcore user very well versed in the the different tools and ways of spending bitcoin but i just look at my own usage uh it's probably like 90 to 10 lightning to on-chain in terms of actually spending so you're 90 lightning 10 on-chain yes like you pay because like when i look at my my footprint so both myself personally in the business we're probably like three to you know

three to five transactions a month thereabouts um depends if we're doing um you know if we have any sales or something but like you know something in that ballpark and that's why when i look at the chain i'm like okay if i'm if you know just this one entity we're a small entity and you know an individual in a business um if we're doing five to maybe ten in a month that's like my chunk of the block space that i'm consuming you're telling me that we don't have enough people to kind of fill up at least a couple of blocks here or there so that's the one area i'm like surprising so we're mostly on chain versus lighting yeah because i wonder you think about like steak and shake big meme here in the united states they launched their point of sale lightning only if you think of the

mobile wallets that most people are onboarding to wall to satoshi speed wallets climbing up the ranks after the stake and shake launch which they're running the back end obviously strike is custodial and even yeah like i'm thinking of like if i get a zap right invoice and i have the option to pay on chain or lightning lightning automatically just because so here's the interesting thing right maybe this is a question that we can riff on long term lightning and any kind of system that scales there is the perverse incentive where it actually makes the on-chain security system because if you have a fee market right in a way they work at odds with each other which is a very interesting dynamic it's actually why i'm generally supportive of things like

covenants because i think that as you make the on-chain side more useful um and even actually just as a side note something else thinking about it was on my walk yesterday if you have things like covenants uh thefts are actually harder so if you're an exchange the exchange can set up so it has to transact to a specific way so you actually make this paper bitcoin thing you know if you worry about entities being hacked or stolen or not having the coins or whatever there's actually more clever ways to ensure that they can't be hacked as easily so i think that's actually a very promising side to the equation but as we make the base layer more effective at doing those types of transactions you can actually start to see more stuff getting built on top so

you almost have to combat the scaling side of lightning with more functionality not and i'm not saying go and just you know plug everything into bitcoin but the more you make the bitcoin base layer useful to have those transactions go down to the base layer it actually tries to counteract that idea of people just transacting on lightning because when we're in seoul i think we went to two or three dinners and we settled by lightning um and again there was probably like i know 15 people so say 15 transactions on lightning and i would say probably three or four of those had to do an on-chain to get onto lightning beforehand so you know it it definitely is going to be a factor in that regard yeah i've always been a believer of this is that you can

apply jevin's paradox to yes in terms of you make them more efficient covenants a great example of making a utxo more efficient you can do more with it to get more optionality and therefore it should drive more demand yes no i tend to drive race yeah i'm actually i'm quite keen to see how um ctv plays out because obviously we've gone through this as bitcoin as a couple of times i wasn't around for the 2017 wars i bought the top in that market cycle so i've certainly read about it and understood what happened back then but uh speedy trial was the first time i think first time i saw like a full scale network wide software it's gonna be very interesting to see how ctv plays out because there's obviously a lot of support for it i think rightfully so

um it's a fairly simple upgrade i'm not going to pretend that i understand it fully on the technical side i think a lot of this stuff is quite hard to reason about but there's enough people out there who i certainly value their opinion i've listened to their views on it i'm getting very curious to see how we approach this as a bitcoin network because i think there's been a lot of movement towards the ossification side of the equation which i think is incorrect um you know everyone's allowed their own view but i don't think ossification is the right outcome for now but it's gonna be curious to see how we actually attack this from a soft fork perspective i think that's the biggest boogeyman in the room in terms of i think if you ask most

actually i won't speak for anybody else i'll speak for my i would love covenants and ctv specifically i think it's been out there i mean i remember funding lunches for ctv research back in 2018 like this is an idea that's been around for quite a bit it's like the code base has been pretty rock solid in terms of like it is what it is not much changes to it and there's been a five bitcoin bounty to find bugs in ctv for i think two or three years now maybe even longer and nothing's been found and i think covenants to your point making exchanges unhackable or individual cold storage somewhat unhackable is a massive benefit and then when you compare it i think people have ptsd from taproot and segwit how big of changes they were and not only that but the

unforeseen consequences of what they enabled when combined with urinals and inscriptions and i had james o'burn on who was one of the co-signers of the letter that went out to the core repository that were endorsing the implementation of op ctv and check sig from stack together and when you compare the lines of code i think ctv is like 200 compared to taproot and segwit which were almost like mammoth projects they were massive um and so yeah but it is i think the boogeyman in the room is like how do you actually get it implemented if people want it and when you start that process when you end that process and uh i i think i do agree with you i don't think i think it's pretty it's already certain like ossification is not an option there are things that need to be

changed within bitcoin if we want it to sustain itself for a century multiple centuries potentially millennia um so ossification is already a no-go out the door i think we need to i'm actually quite bullish like again i don't have any reason aside from just my bitcoin or instinct but i'm actually quite bullish that ctv will get activated and i think we'll find out how we activate things and strangely enough i actually was quite encouraged because when they released that letter it was like at the height of the opera turn chaos right so everyone's at each other's throats we're all arguing over stuff and by the way i found that whole experience quite quite interesting intellectually stimulating in a way because again i don't really have a

strong opinion either way like i would i would prefer the scammers would and the spammers would would piss off i'd fully agree with that at the same time i also see where the the tech side comes from is like it's kind of hard to stop them so we can yell and scream at each other all we want but like probably unlikely stuff changes i actually kind of like that they launched this letter at the height of that feud because it was a bit of a we're not going to be deterred it was a this is just a good idea and it's felt very meritocratic there's a bunch of smart people who've done the work they've thought about it they've done the process they're very confident enough to put a signature down to it and they launched it irrespective like if we had a bitcoin community

that was like oh it's too contentious there's too many people yelling let's not do it it's like no fuck that let's go let's let's put this letter out there we think this is a good idea don't care what the environment is and i'm actually quite bullish because of the order of operations in which they uh they issued that letter i thought that was actually quite indicative that bitcoin is going to press on if it's a good idea let's do it that's like i hope you guys are having fun with that op return battle here's another grenade ctv here we go yeah totally let's go but let the let the free market of ideas fight it out and that's it's a very bitcoiner um dynamic so i was actually quite encouraged by the the order ops there yeah it'll be interesting to see how that

plays out i think that that was the i i think i'm very much aligned with how you described your perspective on op return and that was the most disconcerting part of that whole kerfuffle that's still ongoing to a certain degree to me is that like the conversations around covenants particularly ctv were starting to to gain momentum and then that sort of came out of left field and i and when it comes to opera turn like i think there were i think people on both sides of the argument are being a bit uh childish and uh very not pragmatic but it is what it is not ideal i don't like the spammers i don't like inscriptions i'm not a big ordinals fan at all but to your point like they're going to do it anyway they're going to do it anyway and uh i mean my big takeaway and

i had this opinion when they first came out in 2023 i was like it's kind of cool that no one could stop this i'm pretty sure most bitcoin is like this that this is a scam this is a spam i don't like it i'm pretty sure most bitcoin is there but i was also like pretty cool that you can't stop it kind of like that there's no like central authority that can be so like yeah let's turn this off or let's amplify this like you kind of can't do anything about it yeah to anybody out there i can hear you typing in the comments right now saying that i need to overthrow core we need to replace them bitcoin is money okay i don't like it i think i think we all just got to be a little bit more pragmatic to understand the reality and and the way people are using it whether we like

it or not that's it that's it no bitcoin is money for enemies including me and mr reply guy um moving back to what's going to go on uh through the rest of the year what is sort of the demand drivers that you see really falling away picking up staying where they are moving forward as we sort of potentially go higher after consolidating at this level yeah so my general framework here is that and it's just a reality every bull market exhausts itself eventually just the same way that every bear market exhausts itself eventually eventually you just run out of buyers so how this plays out so one thing i have documented quite a bit in recent editions since april so actually very recent since april we've definitely transitioned from what i would

call to be a healthy spot driven market to a less spot driven more derivative is more speculative market as demonstrated by the fact that the on-chain market is quiet the market is 107k stone story from all-time high treasury companies are popping up like mushrooms uh we've got open interest in futures and options just ripping to all-time highs uh i've mentioned this on a few uh few pods um recently i don't know about you but i've received zero phone calls from normies being like hey should i buy bitcoin zero this whole cycle in the last like three months many many big existing bitcoiners have asked me how how would you recommend i lever up so make that what you will uh that's where we're at so we're definitely in a more speculative environment

and the way i often look at these things and you can look at the way these metrics trade we are entering the euphoric phase now this is the period in time where things get really exciting like stuff really starts to move um we're going to get some of those omega candles that everyone's looking for there's gonna be some red ones there's gonna be some green ones um there's gonna be some periods of time where the market really wants to move and the narrative will very quickly switch to there is no ceiling new paradigm going up forever laura and yes it is but there's going to be roundabouts along the way so how this plays out moving forward is likely to be more volatile we've actually seen a fairly low volatility environment i my base case is that we actually

see volatilities pick up because of liquidations leverage is going to start creeping in you know people buying all these treasury companies it's speculation right so um yes i agree with the take that it's probably not fair to lump them in with shit coins and call them the shit coins of this cycle because, you know, I mean, our business, we're a treasury company. We have Bitcoin on the balance sheet, but, you know, we're a serious business

and I'm not saying any of them aren't serious businesses. It makes sense. Why wouldn't you put Bitcoin on the balance sheet? It's the best asset that we have. So that part of it makes sense, but the behavior of people is a bit shit coiny where people want to go and find the next small, you know, you got to get in when they're a small asset

and ride them on the 100x multiplier. So the behavior pattern is shit-coiny speculative. And really, there's nothing wrong with it. It just shows us where we are in the phase of the cycle. And if you think about market cycles and why do bulls eventually exhaust their demand? Because there's only so many people who are going to buy and there's only so much capital that's going to flow in

over a defined period of time. And case in point, every single one of us who has a job and a salary, you've got a month worth of pay. And then you've got to wait for the next month. You literally can't put infinite money in. Every entity has that. Someone only wants to put in a 1% allocation. Someone only wants to put in a 5% allocation. Once they've allocated 5%, they're in. They're in the market. That's it. So there is a limit to how much capital comes in. I'm also of the view that these treasury companies, they're going to be a massive accelerant. It's clear that we've got a very, very large spot bid. The more that the market

rewards these companies, the more are going to show up and the more the existing ones are going to buy more. They're as big as the ETFs now in terms of the demand side. So both of those are very, very significant factors. So we have a massive spot bid. We've got long-term holders who are generally speaking backing off. I call it the lead foot. When I talk about demand and supply just to simplify things, you've got the demand accelerator and you've got the break from sell-side pressure. The break is being backed off and the accelerator is going down. There's probably only one way the price wants to go and you got a bunch of people who were short love it great combo but at some point in time we're going to hit a level where that sell side

is going to ramp back up again um you know 125 is where i expect it to start kicking back in once you get higher than that 150 160 170 you're in very very thin air we can go there but historically speaking the odds get slimmer and slimmer very quickly the higher above 120 you go at the moment what i think is going to be very interesting and what i i have a view but i'm not again i can't predict the future uh my base case is that we actually have a cycle top that looks like every other cycle top no one's going to believe it because they're going to think it's a new paradigm but what i think is going to break people's head is that the bear market's going to be different and there's a lot of evidence to say that like we've already had two bear markets this

cycle in 2024 and then more recently they kind of look like bears at the same time i think the next bear is going to be worse but we're in this kind of very strange environment we're like bitcoin is just not giving back the the sell side we're not getting the depth of these drawdowns that we've seen in the past they take longer they take months not weeks um that's a very big difference and it leads to a lot of people getting bored and that boredom creates price suppression claims and paper bitcoin but like i think that's how this gen that's my current working thesis and we'll see how it plays out yeah i saw you responding to i'd like you to expand on this is some i guess altcoin trader who was likening the treasury companies to like icos and he was

saying hey it seems uh euphoric right now but trust me it's only the beginning and you you respond to him saying there is a difference like the thing they're holding is already about like i can't recall it verbatim off the top of my head but i'm sure you you remember um the conversation you're having in that thread like i think that's one question myself included like i see what's going on with the treasury companies and just pattern recognition alarm bells going off like the scenes rightfully so very familiar but there is a difference with the asset that's underlying the strategy and um it's a different pool of capital so what's your like yeah so it feels very frothy because a hundred i'm a hundred percent aligned with you where like i'm looking

around being like guys this looks this is like topping behavior 101 but the difference is and if you think about strategy when strategy trades at a very big premium i'm actually more bullish bitcoin because strategy's incentive is to sell mstr capture the premium by btc so in theory there sell side on the stock buy side on btc so in theory all of these treasury companies the bigger their premium the more buy side for bitcoin is incoming now the challenge is going to be a lot of people are not going to understand how those premiums work so let's just for example just for simple math let's just say that strategy is trading at a 2x premium mnav of two if someone buys mstr in theory mstr could literally double their treasury and you could make zero dollars

the mnav could go to one and in theory you you bought the stock at 500 bucks and suddenly the bitcoin balance is twice as big but you are flat because the mnav is one so people have to remember that if you're buying a treasury company at a premium you either need that premium to stay the same as a percent or as a component and the Bitcoin balance gets bigger. So it kind of pushes you up or you need the premium to expand. This is no different to people looking at like price to earnings multiples. For companies trading at a 20X price to earnings, you need the earnings to go up, right? In order to push, it's like this kind of underlying force or you need multiples to expand. But if the multiples contract and the market is willing to pay less of a premium for

future growth and this is what's going to happen in the next drawdown the next bit maybe not the next one it could be the one after it could be the next one there is going to come a time so do not cloud your judgment and pretend that this is going to go on forever there will be points in time where people buy the hottest thing as these treasury companies they'll pay a big premium because the market is growing and they're you know they're the only one in their jurisdiction or whatever else and then what's going to happen is the market's just not going to perform the way that people thought it would and the premiums will come down and i think a lot of people will experience 70 to 80 percent corrections in these treasury companies i think that's going to be a normal thing so

the way i have been like mentally thinking about it and just explaining it bitcoin is trading like bitcoin in 2025 it's a different animal it's low volatility low drawdown yes bitcoin you can't you can't lose like over any meaningful time frame because you're gonna kick ass if you're buying something like strategy strategy lives in this like 2015 16 17 type volatility environment it's like 2x what bitcoin is once you go down to these micro caps these like brand new treasury companies welcome to bitcoin in 2011 where an 80 correction happens overnight and you have no idea why there's no reason for it there's just not enough liquidity right there's just people who come in and out big orders can move stuff around um there's going to be games where like if you're not in the telegram

group that says that this company is about to go through a SPAC and turn into this and if you're not aware of that in advance you're not going to catch the initial pump but it's going to be very very exciting because you're going to think oh shit this one's going to be this can be the next meta planet there's going to be some meta planets there's going to be some that like there's going to be a Pareto distribution so just be aware that a lot of these companies Like literally every business venture ever, every startup ever, they're not all run by a Michael Saylor. They're not all going to make it in the same way. And this is very retail money. I can't imagine serious institutions going and buying the 35th or the 52nd treasury company. I just don't think that's happening. They're going to concentrate in the big pools of capital. So I think there's going to be a handful of standouts, strategies just in a whole different world to itself. I think Metaplanet is clearly doing its own thing in Japan. There's a couple of others out there, but generally speaking, my business, we just put Bitcoin on the balance sheet as part of our equity. That's all we do. We keep it really, really simple. a lot of these companies that try to do this growth mechanism it's good for bitcoin

but i can't help but feel a lot of these companies will spit out and puke their coins at the end of the cycle just because they don't have the the skill set the shareholder buy-in the stones that sailor has whatever it is there'll be a bunch of these companies that do it miners have done every single cycle we all thought in 2021 that miners would have access to capital markets therefore they would never have to puke out their coins what happened they all puked out their coins at the bottom of the bear so i suspect this will happen again yeah that's sort of my thinking too i like literally right before we hopped on an hour ago i had somebody dm me asking and i haven't responded yet since you're out there listening here's my response to my text to response later

but they were like i just got a lump sum of cash what do i do it i put it in mstr do i put it in bitcoin and i'm like old school like nothing better than cold hard utxs and cold storage that's it like i'm not i'm not gonna try and stop the way i would frame it if you have to ask that question the answer is bitcoin if you know the answer to that question go and speculate if you like the fact if you don't know because like for me i've only recently i've been in bitcoin for you know as i mentioned finally fell down the rabbit hole properly in 2019 i've seen a couple of cycles my whole job is analyzing market cycles and bitcoin data i'm only in the last like three four months starting to and i'm limiting myself to strategy really i don't really care to go that

far out in the risk curve i actually think what strategy is doing is quite fascinating going after the bond market i understand i can reason about the product the product is bonds and they're tokenizing bonds more or less with a bitcoin backing i think it's a fascinating strategy i did a podcast with preston which will be out soon enough where we just went deep down this rabbit hole i get it i understand what strategy is doing i think it's fascinating so i want to share in that everything else i'm like go have fun enjoy i'm going to watch it i'll analyze it i'll see them pop up i'll see them explode personally i'm not interested i'm very happy with my predominantly btc and then you know i'll punt here or there because i've been around long enough

if you're asking the question how do i split this up the answer is bitcoin yeah keep it simple stupid keep it keep it simple stupid keep your income higher than your expenses save some money in bitcoin yeah it's okay to be squidward in the in that where he's watching spongebob and patrick playing outside you know that meme it's okay to be sitting there watching everyone playing with their treasury companies because i assure you it's going to be fantastic for them in this phase of the bull it's going to suck it's going to suck for a lot of people because they're going to go too much at the top they're not going to understand the premiums and a lot of these companies just frankly don't deserve a premium because most companies don't yeah all right

another factor in this cycle that may be different it's not completely different but i think with the launch of the lending product that strike and particularly jack's messaging around it bringing the cost of capital down through their lending desks i mean that that's another meme that's more predominant this cycle which is we are going to get lending products to make it extremely easy for you not to have to sell your bitcoin obviously historically we've had unchained which is down the hall for me right now led in genesis famously with their blow-ups last cycle but it seems like block fi celsius named the blow-ups but i think the market's in this lesson on rehypothecation i know for sure the shrike is very on top of making sure

they're taking people's bitcoin to lend against it they're not going to rehypothecate it and there are many people that are beginning to look at the depth of liquidity of the market about two trillion and see it as an asset that can be used as collateral to get cash to fund a lifestyle without having to sell spot is this a factor at all in your yeah it will become increasingly so So, I mean, lending against your Bitcoin makes all the sense in the world. Like, it's pristine collateral. Why wouldn't you? So, for me personally, and again, I'm going to speak for myself, I have definitely looked at it.

And right now, as it stands, a lot of them are fairly hefty interest rates, 12%, something of that ballpark, and 12-month terms. Now, there's obviously then another layer. And I think actually, I forget the name of the website, but Hugo from Nunchuck, I think he was involved. they've got a 21 something there's a website shows where they've kind of rated all these different entities i thought that was quite useful i think for me i'm going to allow this to play out for one more cycle i'm in no need to go and tap that liquidity just yet i'm actually okay to just allow the competition to build allow the rates to come down i think what strategy is doing we're seeing in the tradfi world they're normalizing bitcoin as a collateral so i think that once the

market gets more comfortable so this is what i would call the early adopter phase you're right we had like the the cowboy phase with genesis and all that last cycle we're now in the early adopter phase i kind of look at like what am i going to do to you know you borrow 100 grand and you have to pay it back in 12 months like for me i want to if i'm going to borrow money it's to get into the housing market and that's just like you know that's just not really a feasible approach so for me i'm just going to allow the market to find its level um there'll be a lot of people who do it i've had this question actually from a lot of people saying hey you know how do i risk manage these kind of things it's like again if you're asking those questions it's probably a bit

early for you to be thinking about it right so you should be in the market long enough and understand your financial position enough that you shouldn't be questioning what ltv is and you should know you should be able to work this out if you're still again this stuff isn't easy but go through the loops of trying to work it out yourself model it out and never ever assume the bitcoin price cannot go to a certain level and i'll tell my story i learned this lesson trading options back in 2019 2020 i thought i was hot shit i've got i've discovered the realized price i've worked out how on-chain data works i'm you know i'm teaching people about i thought i was a genius and i've learned about options and i was selling puts um below the the realized price of 6k and

my thesis was we're never going to go below 6k again march 2020 comes straight through that level literally liquidated me by like six hours took my whole account straight back up and the next thing you know we go to 60k so i would have made all my money i would have i would have made it all if i just hadn't have thought the price can never go back to this level so you know when you're thinking about ltvs on this stuff never ever believe anyone telling you the price cannot go to a certain level i often say the odds of it going back to 40k and undoing the etfs in my opinion is like slim to none i do not factor in these not even in my cases but i would never ever set a loan on the assumption that it can't happen so just be aware of that i think it's going to

build up over time i think in two three four five years time this industry is going to be booming because it makes all the sense in the world and especially with like saab 121 once the banks get involved. I know this is another, you know, Bitcoin is going to say, oh, don't give your Bitcoin to the bank. It's like, you use Bitcoin to do whatever you need to do to make your life better. Don't listen to anyone else tell you what to do with your savings. You do whatever you want with your savings. Certainly listen to heed the warnings, right? If you're putting your coins in or bank, you are giving up self-custody. But for me, I'm going to sit there with my UTXOs for now, let this market play out, find the level, wait for the rates to come down, wait for the terms to go

out wait for the market to get more accustomed for bitcoin as a collateral asset it will happen i'm just gonna be patient and wait for it yeah i'll add some other pieces of advice there if you're going to take out a loan do not put your whole stack in a loan number two i'm gonna bring this up again i brought it up in rapid recap a few weeks ago but it seems to be a question in people's minds i was at a meetup in philadelphia and somebody asked when's a good time to take out a loan the price is low and the price is high the price is low that's when you want to take out the loan if you're going to do it yes when it's scary yes if it gets above a certain level and you're thinking about it maybe too late that 100 i mentioned before i've had a bunch of

people saying hey what's the best way to lever up i had some questions like what's the best price to like where should we lever up it's like probably at 20k when ftx blew up that's probably the best time to have levered up 110k when like there's speculation coming out everywhere and you know futures open interest is at all-time high and people are levering up not really that like you can do it but be prepared to ride the wave because it's going to be a wave yes it is that said we're talking to checked analysts we have been very level-headed sober says things that not many people want people want the moon juice and to pull that out of you what would have to change from like a market structure

sentiment psychology sort of demand drivers in the market for this to get weird in your mind very good question um so this is more from check the hodlers perspective right when when the things get a bit uh a bit loony tunes i mean i just look at the price pattern like look at look at the monthly chart it's just it's an incredible stair-stepping pattern where the hell are the drawdowns i like i i can't for the life of me put myself in the mindset of someone who's saying this cycle sucks i look at this cycle i'm like it is unbelievable how much capital is coming in how little the drawdowns are and i've been using this this analogy or this kind of anecdote from my old man my old man bought in 2020 which means he went through the up of 2021 and he went through

the down of 2022 and let me assure you i heard all about it all the time when number go up mate when is my number going to go back up now he closes every sentence with number go up love it that's where he's at so like think about the pools of capital who are now going to look at this price chart and be like yeah i'll allocate why not i should actually take five percent it looks like it's no longer volatile it looks like it doesn't do those you know crazy things and i don't see it going down anymore it seems to go up hey i'm waiting for a dip and i'd love to buy in all of these things you just got to think about the pools of money who the lower vol that we're seeing at the moment is going to be much more tempting for so and i've heard this from many people

people are getting calls from investment managers and retirement funds and family officers who are like all right it's time i want to put a five percent you mentioned i think i can't remember if it was on the on the air or not um there was like an ira a bloke who come out and said like 20 to 40 percent like guys the amount of money that is about to start allocating to risk-free bitcoin is is astronomical like we can't actually think about how big the numbers are massive and actually i ran a study a little while back i was trying to just put things in perspective of you know for how big bitcoin is if you look at the um capital inflows into btc whether it's via etfs or treasury companies or whatever over the last 30 days it's about 36 billion dollars

a month that's the rate of change 36 billion the bitcoin market cap in may 2017 was 36 billion so everything up until may 2017 we absorbed in one month if you take the etfs and strategy and put them together the market cap combined of those two is like two days before the 2017 all-time high so literally everything up to 20k is in the etfs and strategies balance sheet which really both of those have grown up over the last like you know really let's say 18 months the etfs are 18 months strategy bought the most um over the last like six seven months so guys like old history doesn't matter anymore like all those previous cycles they're irrelevant they're like a footnote of behavior they don't count we are in a new paradigm they we are in a new paradigm and what it looks

like is stair-stepping right this slow boring ass grind i think joe calasari said this we're it's a slow boring ass grind to a million dollars and we're going to be price suppressed the whole way up stop being bored guys be bullish it's it's fucking bullish get excited you're gonna be 200k and be like there's paper bitcoin out there i know there's so much there's so much why aren't we at 2 million we should be at 2 million we should be higher yeah and if the other thing we can focus on what's happening in terms of demand drivers internally with within the bitcoin market whether it's etfs treasury companies structured credit products coming to market then like going back to what we're talking about earlier like is there a big print and if so how

big how fast and what does that mean for inflows i mean exactly and sorry just something that clicked to me before um i wrote a piece that i called paper bitcoin trying to address this this topic i mentioned before that blackrock is tearing away from the other etfs that is real bitcoin going into those those etfs why they're doing it because of the options market in order to take advantage of the derivatives people can now allocate to the asset in the first place so the growing up of derivatives allows bigger money to come in this is why blackrock's peeling away so it's just great evidence that like just because you have paper bitcoin in the system being derivatives that actually enables a lot of these big entities to allocate when they previously

couldn't because they can hedge risk so i think that's just a really really important uh thing to pay attention to i missed your question before actually um what would you say before that no sorry um it wasn't even a question it was a statement i'm just how big is the big print if it comes oh yeah how long does it last and what is it i mean in terms of market structure changing moving forward like how much effect does that went from 36 to 37 trillion like i remember people talking about 36 trillion then like next thing it's like 37 it's probably like halfway to 38 by this point like i mean they don't have a choice so just like grit your teeth and sit tight i really don't send it on turbo as elon said before he left doge

that's his hands and that's that's another great example right where they go in saying they're going to cut 1 trillion 2 trillion they got 150 and then you go kicked out it's like a beast is too big i kicked out saying that trump's on the epstein list as he's walking out the door it's chaos it's beautiful chaos though i think despite whatever happens whether it's within bitcoin treasury companies going crazy etfs going crazy rias aping in externally elon saying that trump's on the epstein last world war three fears ufo fears who knows what's going to pop just blinders on stay focused keep stacking bitcoin don't get over levered don't get crazy just focus stay humble stacks yes it's just not that difficult

that is is that is that is the best advice it has to go i mean it's it's going to compete forever with nothing stops these trainers the two like quintessential bitcoin memes if you just listen to those two little phrases you're going to be just fine it's funny it's not that hard but it's very hard for for a lot of people well it's it's simple but it's not easy i think that's a really important element and i actually wrote about this um in the piece you were talking about before p coddle i opened by saying like why do i actually write any of this stuff it's to just help people not feel like a deer in the headlights because hodling is simple it is a very very simple strategy but it is really really difficult because the world keeps telling you that you're wrong we

keep getting crazy headlines um every influence of the world wants to shill you why their thesis as to why the market's up or down is better like at the end of the day you just have to stay humble stack sats and just trust the process this is just trust the process yeah it's funny because you have the the tradfi incumbents who hate bitcoin saying uh it's going to zero and then on the other side you have those far out on the risk curve within bitcoin like aping into all these treasury companies and levering up whatever it may be saying oh you're you're going to miss out you're not you're not levered up enough and then you're in the middle like wait a second it's like smash buying moving to cold storage that's not good enough and because every treasury

company still has to buy the bitcoin as well we're all in the same trade there and uh i'm just guys like at the end of the day you're selling the stock and buying the coin i'm just buying the coin i'm just gonna skip the middleman of buying the stock who's gonna buy the coin just buy the coin just buy the coin james it's always a pleasure sir thank you for doing what you do good to be back on we'll uh we'll have to do this again uh maybe uh we'll catch like peak euphoria at the end of the summer beginning of fall uh we'll be catching up then yes yes we when uh when we enter the topping cloud things start to get really exciting um we can definitely do a an ad hoc episode now the uh uh i have a feeling we're gonna do an episode people are gonna be

like oh james is too bearish it's a super cycle and then something's gonna happen either it'll be a super cycle no no i'll have a very rational sound view you're gonna be on here just to why it's over and it's just going to keep going forever that's how this plays out that's the best way it could play out yeah totally and that's the other thing right in a way by being very rational if it keeps going i win if it doesn't then at least i'm like aware and prepared for it if it doesn't go the way that the moon boys think so you know it again it's all about managing your psychology because at the end of the day you're the only one that can manage your bitcoin and or how you deal with market cycles.

It's actually a mental game. Don't worry about it as a financial game. It's a mental game. And that's what getting a reasonable take on things, that's what I do. That's why I write and why I do the analysis. It helps me stay grounded so that when stuff doesn't play out

the way the Moon Boys said or the Doomers said, it kind of goes down the middle. I'm like, oh yeah, makes sense actually. Yeah, check the rational analysts. You actually win bigger because you're prepared to buy the dip when it materializes.

You're not over-levered. and and the rip you're not surprised when it happens no all right you go enjoy your tuesday thank you for hopping on and uh keep keep writing the newsletter i love it um if you guys haven't checked the sub stack dot check on newsletters yeah i just go check on channel.com you can't you can't miss it all right it's there go check it out peace and love freaks okay freaks thank you for listening to the show i hope you liked it if you did like it please make sure you subscribe rate review the show it helps us out a lot and also if you like these conversations i've come to realize that many people listen to the podcast they don't know we have another sort of layer of

this media company we have the newsletter the bitcoin brief go to tftc.io make sure you subscribe there a lot of the topics that are discussed on this podcast i write about five days a week in the newsletter we also have the tftc elite tier if you sign up for that become a member we have a private discord server for the elite freaks out there where we're dropping ad free versions of this show and having discussions about everything we talk about a day early logan wanted me to make sure if you want to get the show a day early become a tftc elite member you will get that we have our discord server right now it's conversation between myself and tftc elite tier members but we're going to expand that we'll probably do closed

q and a's with people in the industry i may be doing macro mondays so join us go to tftc.io subscribe find the button in the top right corner of the website become a tftc elite member thank you for joining us Thank you.