The Pomp Podcast - #1045 Dylan LeClair On How Bitcoin Humbled Everyone

Episode Date: July 13, 2022

Dylan LeClair is the Senior Market Analyst at UTXO Management, a digital asset fund investing in the analog to digital transformation of money and the emergent financial system.    In this conversation, we discuss how everyone was reminded about Bitcoin's decentralized market, why Bitcoin's price could continue to drop, and why Bitcoin is historically undervalued right now. Dylan joins us every Tuesday on "The Best Business Show." To see the video with the corresponding charts that Dylan references throughout the interview, go to "The Best Business Show: LIVE" YouTube Channel ======================= FTX.US is the safe, regulated way to buy and sell Bitcoin and other digital assets. Trade crypto with up to 85% lower fees than top competitors. There are no fixed minimum fees, no ACH transaction fees, and no withdrawal fees.   FTX.US is also the only leading exchange that supports both Ethereum and Solana NFTs.   Download the FTX App today and use referral code “Pomp” to earn free crypto on every trade over $10. The more you trade, the more you earn. ======================== BCB Group is the leading payment services partner for the digital assets industry. BCB Group provides payment services in 30+ currencies, FX, cryptocurrency liquidity, digital asset custody and BLINC, which is BCB’s free, instant settlements network for the BCB client ecosystem. Find out more by visiting bcbgroup.com/pomp ======================= Coinchange is an automated wealth management platform that earns daily compounded yield for you. Earn up to 10% APY on a risk-mitigated basis – your payout doesn’t depend on the volatility of the market and there are no lockups or minimums. Register now at coinchange.io/pomp and get a welcome bonus of 40 USDC when you fund your account.

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Dylan LeClaire is the Senior Market Analyst at UTXO Management. He also writes a newsletter with Bitcoin Magazine. In this conversation, we talk about Bitcoin, on-chain metrics. We talk about Bitcoin's price, the market structure, and what to expect in the coming weeks. I really enjoyed this conversation with Dylan, and I hope you do as well. Before we get into this episode, though, I want to quickly talk about our sponsors. This episode is brought to you by FTX US. FTX.US is the safe, regulated way to buy and sell Bitcoin and other digital assets. You can

trade crypto with up to 85% lower fees than top competitors. There are no fixed minimum fees, no ACH transaction fees, and no withdrawal fees either. FTX.US is also the only leading exchange that supports both Ethereum and Solana NFTs. Download the FTX app today and use referral code POMP to earn these free crypto on every trade over $10. The more you trade, the more you earn. Go download the FTX app today and use referral code POMP. This episode is brought to you by BCB Group.

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and get a welcome bonus of 40 USDC when you fund your account. Again, CoinChange.io slash Pomp. Don't just hold your crypto assets, but earn smart DeFi yield with CoinChange. purposes only. Next up, we have Dylan LeClaire. Dylan, how are you? Hey, Bob. How's it going, man? I'm doing fantastic. I have seen your Twitter skills drastically improve over the last few weeks. And I have a starting question. I don't think I've ever asked you before. When you wake up, what is the first thing you go check? Is there a data point? Is there a platform? Do you go to Twitter? What do you do first thing in the morning when you wake up and you're like, I got to figure

out what the hell's going on uh admittedly it's not the best habit i probably open my phone and scroll twitter for a bit but i've uh i've been trying to get a better morning routine going but yeah probably twitter check uh check some macro data uh i usually wake up before the market's open but uh yeah just check futures uh that's that's my life nowadays i uh uh i think a lot of people like to uh maybe virtue signal that uh they keep their phone in a different room they don't check it when they wake up every person i know they check it when they wake up and it's probably not healthy as you mentioned but uh it is interesting that you go to twitter first before you go look at any other data points is there a data point that you look at once you start looking

at data outside of twitter like that you're like this is the thing i think is most important right now to give me a sense of what's happening yeah i mean i'm checking the futures markets obviously bitcoin trade 24 7 um i mean in particular watching watching currency markets uh nowadays and rates um what's happening i think you talked about a little bit earlier in the show uh with the Euro, with the dollar strength against really every major currency in a lot of emerging markets, it's quite amazing to watch. So that's what I'm watching a lot nowadays in regards to the macro. And obviously, the Bitcoin market's chugging along 24-7, 365. So no shortage of volatility and fund market moves there. Absolutely. We got a couple of charts that you want to talk through.

The first is the Bitcoin supply that is in profit, the percent of Bitcoin supply in profit. it's a seven day moving average. It's down. Shocking. What is this showing us? Yeah. So today's show, I thought I would, you know, we've talked a ton about macro in recent months. We've also talked a little bit about on-chain, on derivatives, about the counterparty risk and the contagion. I think we're just going to strip a lot of the narrative back, a lot of like the, you know, the macro environment back and just look at previous Bitcoin cycles. I think it's because it's so much fascinating that, you know, there is this big narrative, the price action is ugly. There's certainly been a whole lot of forced selling and forced liquidations.

But if we just go back and look at previous Bitcoin cycles, obviously, this current crypto Bitcoin cycle was an order of magnitude or a lot larger than the previous cycles. But in relative terms, it's actually not really anything new in terms of what we've seen previously. So today's kind of show is going to be focused around some of the on-chain data and just looking at, you know, if this Bitcoin cycle, this bear cycle is pretty, you know, compares to that of previous ones, which obviously a limited sample size, only about three or four in Bitcoin's history. You know, what can we derive from that? And what may the future hold? Obviously, you know, past, you know, kind of what happened in the past doesn't translate directly to future outcomes,

but it can, you know, it can give us a guide to what's happening. So, you know, current supply and profit nearing that 50% level, right? We're starting to see the vast majority, actually the average Bitcoin holder is underwater. So we're going to cover realized price in a second, but that realized price is essentially the average cost basis of every coin on chain. That's like $22,000 today. So at $20,000 Bitcoin, at $19,000 Bitcoin, your average holder is underwater. And we've seen that in basically capitulation periods or the depths of bear markets. And so this is just kind of one of those gauges. I mean, you could have no idea what's happening in the macro environment and say, hey, you know, this is a pretty typical boom-bust cycle for Bitcoin. So

it's kind of fascinating to see it all play out in a macro downturn. And so when we start to look at those past cycles on this specifically, obviously, we're close to that green area. We are not in it yet. In the past, we have gone into it. Is your expectation that we have to revisit kind of the depths of those drawdowns? Or do you think that, you know, quote, unquote, this time could be different. And we may get close, but not actually have to get that level of kind of sell down on on this metric? Yeah, I don't necessarily think technical analysis on a lot of these indicators is like, you know, the most important factor is just really just kind of contextualizing that, hey, Bitcoin's down 70%, or whatever it is from

the all time highs. No, it's not going to die. Yes, there are a lot of coins and a lot of and a lot of purchases that are underwater. No, this is not, you know, atypical from what we've seen in previous boom bust cycles. And this kind of steady bleed, well, I mean, a lot of it was for selling, but I kind of believe that we're going to see more consolidation, maybe even further downside and more pain in the market. But it's completely natural. It's a purge from weak to strong, from impatient to convicted. And this is what kind of sows the seeds for the next bull run. This is exactly what we did in 2020 or the years post-2017 bull market. And Bitcoin died at $3,000 and people forgot about it and, you know, kind of kicked it out. And what happened

next? Right. It rallied and it didn't die somewhat surprisingly to all the skeptics. So we're in kind of the, we're kind of in the later stages of this, of this kind of cleansing. I wouldn't call it, maybe I wouldn't, I'm not trying to call a bottom here. And certainly the macro, the macro environment is, you know, I'm expecting to deteriorate further, but this is just, you know, the whole point of this exercise is just to kind of highlight that in Bitcoin's history, This is nothing new, regardless of the kind of dynamic macro backdrop we see. Got it. And so when we go and we take a look at the drawdown from the all-time high, we can go

all the way back to, you know, maybe it's like late 2011, early 2012, there was a 93% drawdown. We've gotten 2015, 84, 85% drawdown. 2019, kind of end of 2018, there was that 84% drawdown. And then since then, it looked like there'd been less severe drawdowns, right? so we're kind of like, let's call it 85 to 95% in previous bear markets. We got a 75% drawdown for COVID. We got a 50% drawdown last summer after the China ban of miners. But the current one has been 70%. How do you contextualize kind of what looked like maybe less volatility to the

downside in some of these market downturns with the longer term trend of, you know, 85, 95% drawdowns in Bitcoin's price? Yeah, it's pretty fascinating because kind of, you know, after 2020, We saw, you know, the money printer go bird narrative. Bitcoin breaks 20,000 absolutely flies. And a lot of market participants, myself included, were debating whether, hey, is this time different? Is Bitcoin at a, you know, just surpassed a trillion dollar market cap at 50,000 or so? Is this time different? Are we going to see less volatility to the downside instead of 80 percent drawdowns? Are we going to see 30 percent, 50 percent? uh like what does what does bitcoin hold as it continues to kind of mature as this global macro asset uh and and funny enough that just that thinking and that kind of uh reinforcement to the upside let led a lot a lot of market participants from miners to funds uh to to really even like the retail participants to these lending platforms to kind of lever up in a way that actually presented some asymmetric downside risk and so you know this kind of seemingly like

black swan event where bitcoin goes straight down for the last six months with really no bounces just kind of consolidation periods in between i think it was almost reinforced or a little bit caused by a lot of these market participants uh who have even even like experienced bitcoiners uh who have been who have seen cycle after cycle thinking that hey maybe this time's different maybe bitcoin is is mature it's not going to draw down 70 80 percent so they lever up and all of a sudden you know price response to the downside in it and it causes this kind of forced liquidation and forced selling that's somewhat relentless. So it's going to be really interesting to see just how far it takes or how low Bitcoin goes before it

bottoms. Is 75%, 80%, 85%, 90% possible? 100%. I mean, Bitcoin can always go down 50% from its current level. And I think not just having that probabilistic thinking will do you a big disservice because you never want to become a forced seller. That's the number one rule here. So, you know, I would say now is not the time to add to leverage. Don't try to catch knives. It'll be, in my opinion, it'll be clear when the time is to, you know, go out a little bit out on the risk curve in Bitcoin terms, if you want to do that. But for the meantime, you're seeing miners with a lot of pressure.

You're seeing a lot of fun redemptions. Really, any bounce is just kind of shorts closing and, you know, and some scalp longs. No one really wants to take any risk here, especially kind of the TradFi world. So I think just, you know, I don't know exactly how far we go from the all time high, whether it's 80, 85, etc. But it's just interesting that a lot of market participants thought this time was different. And Bitcoin humbled everybody, it seems. Bitcoin humbles everyone over and over and over again, which is I think what makes people so intellectually interested in as well. You've got the Bitcoin market value to realize value ratio here. What is this showing us? Yeah, so we talked about this one a lot. It's kind of a simple framework of the average cost basis. But really, what we're trying to do here is map out what previous bears look like. So we have this average cost basis, it's actually way less volatile to the upside and downside than Bitcoin itself. It's kind of like, it's like if you have a moving average, but it's like the best moving average you can have, because it accounts for every single coin, right? So it's like a very kind of natural or very organic valuation framework for Bitcoin. And if we want to just go to the next slide, slide number four, it's actually showing the drawdowns of realized price or realized market cap. Realized market cap is just the aggregate price of every Bitcoin when it was last moved.

The realized price is just the average price, right? It's market cap versus price, same as a standard market cap and price. But what you can see here is that realized cap or the realized price draws down a lot less than actually the market cap does, right? So instead of these 70, 80, 85% drawdowns, what you're seeing is really only like 25, 20%, 15% drawdowns. Currently, we're at, I think, a 10% drawdown from its all-time high in kind of this average cost basis or aggregate market cap, on-chain market cap, right? So this is, I think, a much better way. And it would be a lot healthier if market participants and people buying Bitcoin, you know, had the realized price displayed on their ticker or on their chart or on their phone, right? It would lead to a lot less panicky investing and decision making. But this is, I think, you know, the kind of the best way to look at Bitcoin and evaluate its cycles. So if we go back to three, what we're seeing here is that Bitcoin bear markets, right? How long does Bitcoin trade under that realized price, that realized cap, if you want to call

it fair value? And so previous bear markets, we saw 215 days, 384 days, 134 days in 2018, 2019. And right now, we've been under that kind of valuation for about 30 days. So obviously, the macro environment is different than all of those previous cycles. We know that. Obviously, Bitcoin is a lot bigger than it was in previous cycles. We know that as well. But just if we're looking at the history of Bitcoin and we strip away all that noise like you're talking about, you know, we can expect to see, you know, a few months, maybe up to six months, even a year of just kind of chop below this cost basis, below this kind of average price as these coins are transferred from weak to strong. And so it's a very natural process and it takes time. And so I think we've seen, for the most part, we've seen a lot of that price-based capitulation, Bitcoin's down 75%. I think really now we're starting, we're kind of in the beginning innings of the time-based capitulation where market participants are bored, the speculators are leaving or have already left and Bitcoin's out for dead again. And so this is just the time for builders, it's time for stackers and hodlers. And in the long run, it's very healthy and a big opportunity.

The builders, the stackers, and the hodlers. I love that. When you mention fair value and this idea of kind of like the realized price, is that probably the best comparison of, you know, you get all these like value investors and say, I want to buy assets for less than their worth. And they are super patient. They acquire as much capital as they can in the good times. They wait for kind of blood in the streets and then they strike and they try to buy these assets for less than their worth. Is that kind of how to think about like realized price and what we're talking about here of, uh, in some ways, Bitcoin, when it trades underneath this historically, again, can't promise the future, but historically it has been trading for less than it's worth, uh, based on the market.

And therefore it's been a good time, uh, to start to acquire it. Yeah. I mean, that's how I think about it. When I talked to, uh, kind of like, um, talk to some funds, talk to some like, you know, traditional investors and they're saying like, how do I think of this? There's no intrinsic value. You know, I, I understand that just based on the asymmetry, based on the understanding in recent years that this thing isn't going away like i i want some in my portfolio when do i buy when do i start adding to a position like i'm not a i'm not a zealot i'm i'm old i i don't want a huge part of my portfolio in this thing but i want some right so how do i think about it and i would always love to realize price and this market value to realize value ratio and say okay you know

there's there's no promise of of you know up only from here future returns but like a pretty good time to buy is when the average holder, the average Bitcoin investor is underwater, right? That's when you see the capitulation. That's when you see this asset, this network is left for dead by the mainstream media. This industry is now once again, a laughing stock, right? So I think Bitcoin can obviously go lower. And if we go to slide seven, I show the price drawdown below the realized price. So just in terms of like kind of contextualizing how much lower it could go than this kind of fair value, it can go a lot lower, right? In 2012, we saw it go, I think like close to 50%. And so it can still draw down a lot. It was 60%, 40%, 30%. It can still go a good amount

below that level. But really that's like the ultimate, ultimate buying opportunities is below these kind of this realized price, this fair value. And the long-term investors, the value investors should really kind of understand this framework as something that, hey, Bitcoin is not going away we want to buy when again yeah there's blood in the streets do you anticipate that the realized price could make a massive downturn like pretty much it's you know usually kind of flat to up just given the way that it's calculated uh as kind of like a a type of moving average if you will um is there a world where we could see it materially go down like could we see realized price go down 20 percent uh of the actual realized price not where the price of bitcoin is trading

below the realized price, but like realized price actually go down like that? Or is that less likely just given the dynamics of the market and kind of how that's calculated? It's definitely, it's definitely possible. And, you know, currently around 10% below, below it's all time high, it goes down or trends up based on whether, whether coins are being spent, right. If they're like spent, I mean, being moved from the, from the last time they were there moved on chain at a profit or a loss. And so obviously there's a little bit of noise in the metric, right? If I transfer coins to cold storage, and then I just reshuffle them to a different cold storage or a multi-sig wallet. And I'm not actually spending them, but it's moving. The realized price says,

hey, that's an economic spend at a profit or a loss. But in aggregate, on average, it's a pretty useful tool. So obviously, not every spend is economic. But realized price could, in theory, go down 20%, 25% like it has in previous times if we see a lot of still higher buys, right? People that have bought at 60,000, 50,000, 40,000. A lot of these coins have already capitulated. It's why we've seen the realized price go from say 25K, which it was hovering around for a while to now like 22, but it could still go lower if more kind of previous top buyers capitulate, right? So I think for the most part, anybody that's here and hasn't kind of capitulated or hasn't been a for-seller is kind of just in it for the long haul. That's usually why we see

bitcoin bottom it's kind of a sunk cost fallacy to say hey like my average buys is underwater i'm just gonna you know i'm just gonna hold on to this thing and ride it out um funny enough not funny enough but uh for the first time ever actually bitcoin's below its 200 week moving average so what does that mean uh the average four-year dca or for like the first time in bitcoin's history is underwater so like just in terms of in terms of sentiment in terms of just like historic levels of of down only uh we're there we see it uh certainly doesn't mean that more downside can't happen. And everybody needs to be prepared for it mentally. But in terms of long-term asymmetry, nevermind the short to the immediate term, this is going to be looked back

on as one of the best times to buy Bitcoin, I think over the next three to six months. Yeah. And so when you start to look at maybe the on-chain metrics, things around the Bitcoin market, there's been a number of commentators and analysts who have said, look, we can do all this analysis but the macro environment is this like hangover uh on it how do you think about balancing those two right so the on-chain metrics and hey look we're trading below realized price there's been this significant drawdown historically some of the drawdowns have been more some of them have been around this level uh and i think most people if they just were evaluating that data set would be pretty excited right now if your goal was to acquire uh more bitcoin but the macro seems

to be like this huge question mark and so like how do you think about balancing those two Yeah. So I've always kind of thought of the on-chain as like this long-term, maybe not even quarter to quarter, like year over year cycle by cycle to cycle type framework, right? You can kind of get a general sense of when things are overvalued or undervalued. But yeah, the macro is definitely the driver. I am of the opinion that we're we're headed for kind of some some point of singularity where you're seeing all this craziness, all this upheaval, all of this unrest, you know, politically and socially around the world and economically. Right. The eurozone is a total mess. The Japanese yen is melting down. The dollar is soaring higher. Credit markets are melting down. I think in terms of the equity markets, the first leg of the drawdown was all about duration. right so yields went from basically zero to you know two three uh three and a half percent and so what did that do it crushed the kind of the multiple side of the stock uh now equity markets

the next big concern is the consumer's been getting killed because of inflation right so now the earnings are that kind of uh are the the next leg down i think it was first it was about duration now it's about earnings um so i i still believe and and why i still have some cash on the side is I believe that we're going to reach kind of this correlation to one moment, right? Obviously, Bitcoin's correlated to the NASDAQ, to the S&P 500, to equity indices. And when those are down, Bitcoin's down more. And recently, when those are up, Bitcoin's been kind of just sitting flat, which is a little worrisome.

But I still think we're going to see this huge, whether it's a limit down day in equities or some credit market breaking or something breaking in the currency markets, we're going to see something in the financial system break. and that's going to be the cause for a Fed pivot, I think a soft landing is somewhat laughable. And so that's why I still have some kind of buying power on the sidelines, because it's completely exogenous to Bitcoin itself. The Bitcoin network is at 100% uptime. Nothing has changed about the underlying thesis, but it's not insulated against these broader markets.

Bitcoin is still just a drop in the bucket in terms of the global financial assets. And when the bond market's gurgling and something breaks, then the liquidity effects of that are obviously going to make its way into the Bitcoin market. So the on-chain is a useful framework for six months, a year, four years, right? It's this kind of cycle by cycle. Is it undervalued? Is it a little bit overvalued? Should I wait? But the macro right now is obviously the driver. I think really every asset on the planet is a kind of a function of the liquidity tide being pulled out or being pushed, you know, kind of pushed onto land. Right before we started recording, there's a video that started to surface uh on twitter of vladimir putin i don't know where he is but he's

giving a a speech and we'll trust that the translations are correct a big if but it appears to be correct based on the people who are are tweeting it um and he's talking about the end or the crack in like this liberal world order he's talking about the american uh kind of pursuit of dominance globally and really a transition into this like multi-polar uh world and his point was like, hey, once we invaded Ukraine, that basically said the U.S. was going to sanction us. And when they did that, that was going to be really kind of a milestone moment in the global order, because now you have multiple countries that are trying to almost play, you know, whose ally am I going to be? What currency am I going to use? He didn't mention Bitcoin at all. I don't think he's really

talked that much at all about Bitcoin, cryptocurrencies, any of that stuff. What's your take on like his theory? And then is it just like, oh, the natural conclusion is that Bitcoin ends up being really important in that world? Or do you think there's another way to kind of look at Bitcoin with the backdrop of maybe the world is changing on a geopolitical stage? Yeah, I think Bitcoin is definitely kind of in the backdrop, right? It's maturing. It's still very, very nascent. And geopolitically, it's still kind of this thought experiment, right? I mean, we're seeing like small countries like El Salvador be like, hey, you know, this is good money, but you know, it's not, it's not significant whatsoever in terms of, it's also just not

big enough, right? It's $500 billion. Like it's not big enough for global oil trade or global commodities trade at this moment. I think it does get there, but what Poon's saying, and I will preface this with saying, I'm not some, you know, decades long geopolitical expert. I just like to listen to really smart people. Peter Zaihan, who's been on your podcast, Luke Groman, these guys are really, really smart thinkers and it's been their job for the last decade to kind of map out and deciphered these huge shifts that we're seeing and basically i think what putin did was he he basically called check he called checkmate on the on the western uh bond market and financial system right he saw inflation was that you know decade highs five six percent and said all right

you know we're going to invade ukraine but it wasn't really about the the kind of uh you know the physical land um even though that played an effect what what it was was the western country sanctioned him and he said all right europe uh do you want to play games we'll play games um You have to buy oil and your gas in rubles. And we're going to start demanding payment in rubles. And we're not going to use the dollar. We're going to de-dollarize and we're going to buy a bunch of gold. And we're going to basically, because we have all these commodities, we have all these natural resources, we're going to send inflation higher.

And we're basically going to checkmate the Western world into playing by our rules, not your rules. And so you've seen trillions upon trillions, tens of trillions of dollars wiped out from Western capital markets. And Russia is also feeling a little bit of pain, but they're among the best situations or kind of geopolitically to kind of just man this one out. So it's a really fascinating game of chess. Obviously, you know, Western hegemony has favored a lot of people and it's also kind of been, it's disadvantaged a lot of people in the US and globally, right? We've exported our inflation and hollowed out our domestic manufacturing for the last 40 years or so. So these are really big shifts. The dollar hegemony, the dollar as a kind of a world reserve currency, there's a lot of pros, there's a lot of cons. And I think, although it's, you know, while the Dixie's at 108, it's foolish to say, hey, the dollar's, you know, dollar hegemony is done, the dollar is going away. But, you know, these are the kind of moves that, you know, looking back a decade or so, say, hey, like, you know, March of 2022 or whatever it was when Putin invaded Ukraine and kind of gave these speeches. Yeah, that was that was a moment like that was a big moment in time. And I think, you know, it kind of it just shows that that trust is a is eroding or has already eroded around the world. Right. The kind of the the thesis for Bitcoin is that it's a decentralized, trustless currency.

right? You don't have to trust your counterparty. Sovereign debt completely requires trust, right? So the West froze Putin's reserves. They said, hey, your surplus is not yours. It's actually ours. And it's an IOU that we're not paying. And so something like Bitcoin, a bearer asset, right? Putin has a lot of gold, right? It's a physical bearer asset. It's a tangible asset. Well, Bitcoin is a digital bearer asset. It's a commodity with a production cost similar to gold. So while I don't think Putin in Russia is going to ape into some Bitcoin tomorrow, So the thesis of Bitcoin, you know, a digital asset with no counterparty risk and a rising production cost is very, very powerful.

And I think over the long term, a lot of nations are going to wake up to the game theory. But I think we're still very early. And when you see that happening, like I think of maybe the population in three buckets. There's like, I don't know, over 50, 55, kind of the baby boomer generation. Then you get like the millennial generation. And then you get, I don't know, maybe people under the age of 18, right? is there a thought process of the psychology uh we see it with bitcoin right just younger people uh although it's a generalization they tend to be more open-minded about uh new technology and

things like bitcoin but they also almost haven't seen the world get shaped into the geopolitical stage that it is today and so they're like naive to it to some degree or maybe just don't have the historical context like how do you see that playing out and maybe even like with some of your friends uh who are you know your age older a little younger whatever like what is that conversation like or are they literally just like dude i don't even know what's going on like i'm you know trying to go find the party on friday night and could care less yeah there's i think there's a little bit of both uh you know some people are completely naive to it and honestly ignorance is bliss um i think also you know there's this kind of big shift especially like in the in the western world

in the united states where we've had you know this this pretty big privilege uh you know the the triplet dilemma and kind of this uh this strong dollar uh is is is you know helped kind of the the coastal elites and the college educated but it's it's it's hurt a lot of the like again like i said the domestic manufacturing and so for like you know uh the the college scene right like obviously um that's that's kind of this this western financialized bubble of just pulling spending forward and and you know we'll we'll we'll pay it off later and and it's kind of this this privilege that a lot of the world doesn't really have um and so i i think that you know like also like the climate protests right a lot of people don't even understand how critical uh

fossil fuels and oil is to literally every single thing they use in their daily lives uh so there there is a little bit of like i think uh naivete to that um and and so i guess i don't really have a great answer for you there but i just you know in terms of like the geopolitical landscape i think nobody really has an appreciation for just like how big of an inflection point in history we might be in in terms of like you know this long-term debt cycle that you know the kind of the changing world order that's been in place since 1940 right these are like huge geopolitical shifts that occur once every century or so maybe like you know occur occur once you know every 500 years like you know empires rise and fall I'm not calling for the the fall of the U.S. empire but

there's so many things that are like flashing red saying hey you know these are these are big big signs that we can't ignore any longer. Yeah. What are you looking forward to over the next couple of weeks? Is there like a milestone? Is there a data point? Is there some event, maybe just even like a CPI reading? What are you looking forward to given the Bitcoin market? Yeah. I mean, CPI is important, but I think for the most part, we're kind of expecting a hot print, but commodities have fallen off, inflation expectations have fallen off. So I think it's probably going to be for the time being the last of the very, very scalding hot inflation prints. Really, I think what's bigger in terms of equities, in terms of Bitcoin in the markets

and liquidity in general is the corporate earnings coming up. So earnings season, that'll be very important. We'll see what happens there. But I think more so just kind of understanding that the trend and a lot of the don't fight the Fed trend, the Fed is telling you what they want to do they want to destroy demand uh they want to send asset prices lower and they want to they want to you know clamp down on the inflation expectations so i'm expecting a strong dollar i'm expecting kind of weakness and risk assets uh and for really any bounces to be kind of sold off very quickly um you know would be happy to to be proven wrong there as a as a holder of bitcoin but i i think that you know it's it's just it's good to kind of you know have some some

expectations for what's going to happen in the future and and to not be you know disappointed if they don't you know turn out so you know expecting some more downside ready to buy blood and and you know i think it's going to be another six months or so of kind of ugliness in markets but really actually it might happen further just at the pace that everything's happening right you're seeing just things accelerate um very very quickly so it's it's completely possible and probable that something just breaks earlier than that and causes a pivot but uh you know Until we see some really kind of some calamity in financial markets, I think the trend is lower and more pain in the domestic and global economy. Where can we send people to find you on the internet or sign up for the letter you guys put out?

Yeah, you can find me on Twitter at Dylan McClare underscore. I post about Bitcoin, shit post a little bit, post about geopolitics and economics. And I'm really just learning on there. Like I obviously don't have the answers to everything and I love to just kind of hash it out with really smart people. And that's kind of how I've done the bulk of my learning is just in public. So it's kind of a fun, fun place to be. I write for Bitcoin Magazine Pro, kind of have a have a newsletter there where we talk about a lot of the kind of the more like in the weeds and that stuff about the Bitcoin

market. And so we cover the macro stuff. We cover what's happening in global markets, but really kind of a specific focus on Bitcoin with some of these more like in-depth analytics like we talked about today. So that's what I do. Appreciate you having me on as always, Pomp. uh it was good to kind of go back and forth with you and uh hope you're staying stay uh staying safe out there man uh somebody said that uh you look like you had to sell all the paintings on

your wall because you're trying to buy more cheap bitcoin and then somebody else also said uh they appreciate really smart people so i appreciate you coming on and anyone who doesn't already highly suggest you follow dylan on twitter uh closing in on 200k so uh just keeps growing and growing and growing so congratulations my friend and we will we'll talk again in a few weeks Cheers, man. Thanks. All right. Later. Thanks so much for listening to today's episode. I really hope you guys enjoyed this one.

Make sure you're subscribed on Apple, Spotify, or your favorite podcast player. And if you're looking to try to transition to get a new job in the Bitcoin or crypto industry, we've got you covered. Head over to pompscryptocourse.com. We've developed a curriculum with the top teams across the industry.

It's a three-week intensive training program with over 50 events packed into that three-week time period. Go to pompscryptocourse.com to learn more. and I'll meet you guys for the next episode.