The Pomp Podcast - #610 The On-Chain Metrics OG w/ David Puell & Will Clemente

Episode Date: July 21, 2021

Will Clemente is a Finance Major at East Carolina University. He has quickly become one of my favorite writers on all things bitcoin, including deep dives on various onchain analytics. We are joined this week by David Puell, the OG on-chain analyst. Subscribe to Will’s new email newsletter here: https://btcbywc3.substack.com/ Read Daivd’s work here: https://medium.com/@kenoshaking In this conversation, we discuss the history of on-chain analytics, what happened over the last few months, current market structure outlook, and what to look for moving future.  ======================= Revolut is a finance app in the US and UK, that say they're the simplest way to access crypto. Sign up today at Revolut.com/pomp and make 3 card transactions to get $15, which you can exchange for any tokens Revolut supports. As usual, when you move your money from fiat to crypto your capital is at risk. See T&C's for details. Revolut is a financial technology company. Banking services provided by Metropolitan Commercial Bank, Member FDIC. Cryptocurrency services provided directly by Paxos Trust Company, LLC. ======================= Whether you're an experienced crypto trader or just starting out, Kraken has the tools to help you achieve financial freedom. With the new Kraken app, you can easily buy and sell over 60 of the most popular cryptocurrencies in just a few minutes. Featuring a sleek new design and an easy-to-use interface, you can now take your crypto portfolio with you on the go, 24/7. Visit kraken.com/pomp to learn more or search "kraken" in the app store. ======================= With over $1B AUM, Amber Group is a world-leading crypto finance platform helping institutions and individual investors to buy and sell cryptocurrency, earn yield, manage risk and access liquidity. Amber App new users only - earn 16% APR on BTC, ETH and USD stablecoins! Click on the link to sign up now: https://www.ambergroup.io/?utm_source=10508 =======================

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. Will Clemente is a finance major at East Carolina University. He has quickly become one of my favorite writers on all things Bitcoin, including deep dives on various on-chain analytics. We're joined this week by David Puel, the OG on-chain analyst. You can subscribe to Will and David's work both by clicking on the links in the description. In this conversation, we discussed the history of on-chain analytics, what happened over the last few months, the current market structure outlook, and what to look for moving forward. I really enjoyed this

conversation with both these guys, and I hope you do as well. Before we get into this episode, though, I want to quickly talk about our sponsors. First up are my friends over at Revolut. Let's go back to the basics for a second. I've partnered with Revolut, a finance app in the US and the UK that say they're the simplest way to access crypto. They're putting their money where their mouth is too. You can sign up, make three card transactions and get $15. That's right, $15.

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reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. All right, guys. Bang, bang. Got a very special episode for you today. I've got both Will and David here. David, maybe let's start with an introduction from you. The audience knows Will, likes Will, keeps coming back listening to Will, but maybe you can give us kind of a quick overview of your background and then what you spend your time doing day to day. Hey, Pam. Thanks for having me. Yeah, so I've been involved in Bitcoin pretty much full-time

since 2017, I guess. Dabbled in since 2015, but pretty much very minimal amount. My original background is actually literature. I have a major in Spanish literature, but I turned to finance mostly because of bitcoin um i wanted to finance a little bit in 2016 and then mostly in 2017 when i pretty much went down the rabbit hole and bitcoin and all that stuff first from a technical analysis perspective and then from on-chain analytics which is what i'm the area data out of which I'm most known for in the space. I've created several industry-wide use metrics in terms of indicators based on on-chain data. And I was a co-founder of Adapted capital which closed last year and since then i've been um pretty much you know independent

researcher and trader on my own uh recently published um a three-part series with arc invest on you know as a as a manifesto of on-chain analytics for the regular institutional and retail audiences that ARK Invest has and have a few other research pieces coming up. And that's about it. Awesome. Will, maybe I'll let you kind of take the lead with some of the questions around the on-chain data and what David's seeing. Yeah, sure. So David, I guess we could just start with, you know, what do you think about, you know, kind of the evolution of on-chain? I know you kind of really dove into it heavily in, you know, around 2018. You know, kind of talk about the evolution of on-chain you know the early metrics and kind of where it's

where it is now and then kind of where you see the space moving in the next perhaps you know five ten years well i think um if we go back to history it's been very interesting um you know as a research field in general you can actually track the history of it um i think it started 2016 and 17 mostly out of willie woo and and the coin metrics team led by nick carter they pretty much are the first wave pioneers and the whole thing i think i'm more from the second wave um so the first iteration of it most people know it by now is nbt which is a metric it's pretty much inverse velocity it's a way to track velocity on the network which you know is not that useful in terms of signal anymore but after that i think with nick carter's uh publication on

realized capitalization i think that that metric specifically pretty much brought on a huge golden age you could say or at least first wave of you know massive very brilliant minds from all you know uh backgrounds getting into the space trying to analyze bitcoin and the data science behind it to try to get a sense of the inner economics of the thing right from a data science perspective um so i guess i i was one of the second wave pioneers in that golden age um created the and few others. Now I think we're in a third in the data service provider wave, you could say, where you have the Glassnode, CryptoKwan, Coinmetrics, Wellmap, a bunch of very smart people trying to get an edge on the best metrics and the best insights into how to transform

the data into reliable signals. That generates observer effects in and of itself. So that gets, you know, it's a kind of a race to the bottom sort of thing. So you have to now we're at a stage where you had the pioneers and now you have to figure out the way to remove the noise from the signal and stick to a better strategy if you're an an active manager, especially. And also if you're just an observant, capturing data from the blockchain. So David, I want to ask you, what kind of metrics do you look at? And just in general, what things aside from on-chain do you look at to kind of gauge your outlook on market structure,

whether you're talking about specifically in a bear bull cycle, but just in a broader sense, You know, what are those kind of, you know, infrastructural things that you look like, I mean, that you look at to kind of build your base, you know, and then you kind of look at more, you know, zoomed in things to create a shorter term, you know, bias on the market. But what do you look at in a broader sense, I guess? um okay on chain in terms of on chain stuff um i try to focus on on metrics that somewhat determine the primary trend which is quite difficult because in bitcoin history you don't have as many samples as you'd like you know i suppose you know compared to the dow jones or the s&p or whatever um it's just a 12-year history so i think for the most part you know several oscillators like the mvrv ratio are quite quite useful in terms of getting a sense of

in a very wide range if you're under or overvalued um you just explain for listeners what mvrv is i think there's a lot of people that aren't even sure what that is and then also touch on the disease school version as well yeah so mvrv is it stands for market value to realize value ratio It divides market gap by realized gap, you know, and what it means is it compares the current market capitalization, it compares it to the cost basis of the whole market in realized gap. So realized gap is, as opposed to market gap, where you multiply supply times price, right? So you give the current price to each coin in the total circulating supply. You give the price where that coin last moved. So that in aggregate creates the cost basis of the market.

It means the point where on average, every buyer bought their Bitcoin. So it creates like a sort of mean reversion mechanism where you can compare current market gap with that mean. and it's usually very reliable in terms of detecting overextension or some exuberance in the market. And when it goes below that, when market cap goes below realized cap,

the cost basis, it's usually the time where it's a great, great spot to accumulate. When most people are at a loss, when most holders in the market are at a loss, that's when you should be buying. as in any market um so i usually track of that in terms of on chain in terms of swing movements i like sopr which is spent output profit ratio which compares um the price

uh of the aggregate of coins when there were um you know last moved or the price where they were spent right so it's very hard to to explain this on on a chart um but without a chart uh but it's basically trying to track um how many people in the market are in profit or in losses at any given time and whenever you're in a bull market as a primary trend whenever you go back to breakeven, the ratio goes back to 1 and resets at breakeven, that's usually a very good signal that we bottom. And in bear markets, most people are at loss, right? So whenever that ratio goes back to breakeven from below, it's a very good signal that we top. So that metric gives you a very good sense of bottoms in bull markets and tops in bear markets. But apart from on-chain,

i always track uh funding rates uh specifically their derivative premiums or discounts on the perpetuals perpetual contracts i think that's um with a couple of on-chain metrics that's the most reliable signal in in the whole market uh and it's very well known if i could just punch in real quick um you know what what are your thoughts about funding here because it looks similar to march um i don't think it's been as deeply negative as it was after march um but we have had you know overall a general cluster of of negative funding so do you do you think that we've we've reached um you know a long enough period of that negative funding or do you think we need to see you know a big drawdown in that well i've always said there's like three main

rules when analyzing funding rate or perpetual premium or discount. First rule is the longer the deviation, the wider the deviation, the better the signal. We got that huge deviation. I mean, the widest one was in the COVID collapse, right? It was like a thousand dollar deviation in terms of price delta between the perpetual and spot price. Right now, we have a very healthy deviation. The second rule would be the longer the signal, the longer the regime, meaning negative regime or positive. What I mean by negative regime is when the relative price is well below spot price in those perpetual contracts. That's very good because it signals that one or two things or both that, you know, there's one, there's more demand for spot than for contracts, which is very

good. That's why the price of spot is above the price of derivatives. And the other one is that if there's an overabundance of open interest in the market in those contracts, most likely those contracts are short. So in terms of liquidity, it's very bullish as well. So either or, whatever the case may be, whether the circumstances are setting up in the spot market or in the perpetual contracts, it's bullish either way, right? And if you add that open interest or open value in terms of BTC, you can track whenever there's going to be an explosion. Most likely that explosion in volatility is going to follow whatever regime we had the month before that, or the couple of weeks before that, right? So if that funding regime was negative, such as

right now. Most likely we're going to go up and vice versa. And the third rule of funding rates or premium specifically is that I think it tells more a story about spot than a story about perpetual contracts. Most people think that, oh, most people are short, therefore we're going up, but it's just because people are short because the market is so levered. I disagree with that. I think whenever you have very long, like right now, we've had a month and a half at the very least period of negative funding and negative premium across the board in Binance and BitMEX and Bybit and, you know, in aggregate metrics I use. You know, it pretty much denotes an over the man for spot about anything else. Right. Do you see the same thing with expirational contracts when you go into backwardation?

But backwardation in Bitcoin is much more scarce than negative funding in the perpetuals. So for the most part, I think it's more useful as a signal because it gives you a direction one way or the other most of the time. and um and i i don't know so far despite any you know possibilities of an observer effect in the market on that particular metric i haven't seen it fail since pretty much 28 middle of 2018 so let's see what happens david how much of this is um kind of the metrics when they meet macro environment, the metrics prevail versus the macro environment. So obviously COVID is kind of a perfect example where you get a bunch of folks who are watching on-chain metrics or starting to learn about it. And then out of nowhere, COVID happens, there's all this monetary stimulus. Do you have

thoughts in terms of the relationship between maybe like macro or external factors versus on-chain metrics and how you kind of balance those two things? Or do you feel like the macro macro ends up being worth understanding, but really the on-chain metrics continue to survive regardless of what the tailwinds of the macro environment are? Well, it depends on what type of mindset you have. If you're a day trader, just look at order books, right? If you're a swing trader, I think funding and a couple of on-chain metrics are very useful, despite whatever macro thing may be setting up. If you're an active manager, you know, on a Wall Street type mindset,

I think macro and on-chain are pretty much your giveaway with a little bit of funding rate. I do think funding rate works in all timeframes and all mindsets. I think it's a very important descriptor of market activity. in a very synthesized, visually synthesized way. So to give you an example, previous to the COVID collapse last March, in hindsight, obviously,

you could see a severe increase in funding rates going to positive, right? And you can actually see a lot of the price deltas coming out of China, Chinese exchanges, going through the roof. in the sense that most of the West was buying. So the prices in Coinbase tended to be higher than the price in Huobi or OKEx.

And on top of that, there was more, because the Chinese were the first ones to start pricing in COVID and going into cash from risky assets in general. And on the other hand, also, So you saw a very prolonged, almost a month, it was almost a month of sustained negative, sorry, sustained positive premium on BitMEX and most derivative exchanges, meaning, you know, that perpetuals were more expensive than spot, usually a very bearish signal.

And, you know, after that, you know, the market collapsed 50 something percent. So I think that both on-chain and funding rate in general, I think they help you, one, confirm a lot of the macro theses you may be diagnosing in the market as an active manager, because most active managers are the thing that they use. And day traders and crypto speculators, they don't care about macro that much. um so if you're in that mentality i think macro your your your usual set of tools for macro analysis macroeconomic analysis that's one and then you know analyzing the liquidity of the market and on-chain as an inner economics lets you confirm your macro thesis and even more important that it also gives you, it synthesizes a lot of information

that you as an active manager, sometimes it's very hard to grasp because you're trying to synthesize a lot of sources and interpret them in your mind. And I mean, some active managers are extremely, extremely good for that. But what they do, just looking at derivatives premium,

just looking at a few metrics that SOPR or NBRB or a few exchange inflows and outflows or minor outflows, stuff like that. It gives you a sense to, it synthesizes the inner economics of Bitcoin quite well and lets you take action in a more educated way, you could say. David, I want to ask you,

so just kind of walk the audience through your perspective on, you know, the bull run and then kind of where we've got to the point where we are now, you know, kind of the key drivers that pushed us up, you know, the cash and carry trade, grayscale, and then, you know, some of the things that kind of accelerated the move down, such as, you know, the liquidation. So, you know, do you, do you see, for example, like, you know, the Chinese miners,

do you think that played a huge role in the push down, you know, things like that? Just, so just kind of walk us through from the early bull run to now. I think the Chinese, yeah, it played some. It was, it played a part, but I think the most important factors were, you know, pretty much just institutionals taking profits. they saw you know 2x 3x whatever in returns on a you know in less than six eight months so and they they're not fooled they just take profits that the way they think about everything so that's one and the other one is you know the gptc trade arbitrage trade unfolding pretty much um you know as as long as that premium persisted that that trade was profitable

on the you know unlocking periods depending on the unlocking periods um the clients had and as soon as as premium started you know going negative that pretty much uh collapsed the you know first it suggested some spot selling for sure but more than that it you know uh collapsed the incentives to go into that trade and start you know um adding new money and new capital into the market um so i think that that that was the major role in the collapse um after that um i i don't think the elon tweet i mean the elon tweet was the was the trigger right But at that point, I think most institutionals had taken profit at that point. It was a three-month, they had a three-month window to do it.

So I think they were pretty comfortable about it. I do expect a lot of movements like that where, you know, a lot of the liquidity modeling that goes into forming tops and bottoms in the market is going to be much more tampered. You already saw that in 2019 and 2020, but I think it's going to be even more substantial now where the incentives to suppress in liquidity or volatility for the longest period of time in order to getting in and out of positions, major positions. I think that's going to make the incentives for wider consolidation periods in tops and bottoms. Let's see what happens. Yeah, that's pretty much my take. So how do you see exactly, I mean, you kind of touched on there, but how do you see institutionals kind of changing the shape of the market where Bitcoin has been majority retail driven for the longest time? you just talked about you know the suppression but aside from that is there anything else that

you think is affected by institutionals being involved in terms of market structure and then I also want to talk about the the volatility that you just touched on you know we're kind of in this really tight volatility band here I think that the previous two that were this tight were a when we were when we originally broke down from 65k and then before that and like late July of last year that kind of propelled us into the bull market so um you know if you have any comments there um in terms of whether i think your question in summary was are we in a bull market or a bear market something like that um i think um um so far i i've seen a lot of uh friends that have gone extremely bearish very bearish

I think I mean the most reliable signal in the market is bullish and has been bullish for a month and a half now on chain if you see

a few metrics if you track you know stuff like volatility adjusted NBRV ratio a bunch of metrics that give you oscillation we never we technically never were at such levels of exuberance as 2013, 2017, those stops,

a few months ago when we were back in 60K or so. We didn't see that. We did see some overextension in the market, but not at late 2017 levels. So that's one. The other one, a lot of mid-term signals in on-chain, like SOPR, for instance, are signaling right now that we are very neutral. The market, the primary trend hasn't been defined, but funding rate is quite bullish and has been for a while. So even if we go to, let's say, 27, there's still a very high, a very decent possibility, let's just say, of regaining some momentum to the upside.

Now, if we get rejected at whatever, 48 to 55K, whatever point of resistance at those levels, and then collapse from there, that would be a lower high and that's a very high likelihood that the trend is down for the rest of the year at least. In terms of cyclicality and timing, if you start to count time after the market bottom in late 2018, and then after the halving day, in terms of cyclicality, we haven't technically topped. that should come at the end of the year, November or something, but, you know, that we don't have as many samples in the history of Bitcoin to argue that with high conviction, right? So, as of now, I'm just taking it step by step. I'm personally bullish in the short to mid-term, even if we go to 27 at the very least i expect a decent dead cat bounce and then i'm going to take it day by day at 48 55 and all that stuff um look at you know the the usual metrics and then if we get rejected that's pretty much bare until 20k if we don't

we go to open high that's pretty much it i'm just taking it day by day do you see um you know at at least at least my personal view has been that we're kind of in this reaccumulation phase. I know Willie pretty much agrees. And then Checkmate also has recently been talking about getting some kind of supply squeeze. Do you, do you see anything that suggests that as well as curious to see your opinion on that? You know, looking at like a liquid supply ratio you know, exchanges trending down you know, looking at like liveliness trending down,

showing you know, more coin dates being created than destroyed, like some things like that um do you see that similarly or do you have a different opinion yeah i mean liquid liquid supply has been net illiquid right we've been net illiquid for like a month now which is uh as opposed to the you know at the top and the collapse when we're net liquid uh i've seen your charts the recent chart you send me dividing illiquid supply by total circulating supply, which is, it shows consistent, um, reaccumulation in the market since COVID nonstop, pretty much, you know, coins are just getting moved to, to illiquidity, um, since then, uh, in a, in a, in a, in

a way that hasn't been registered before historically, that's very healthy. um so all things point towards the same you know signals we we saw below 20k last year um price action however has been horrible absolutely horrible so but i guess that's part of the fun right you you want to make things look as awful as possible before you know leaving everyone behind that's just the way markets work um but you know there's this divergence where you have this kind of underlying accumulation especially over the past couple weeks but then price keeps trending down and like i don't know when i go back and look at some of these things in like september or even like in you know january on a smaller scale

you had the same divergence but not nearly on the same magnitude that we have now so i don't know maybe you think differently but the way i see this is like the larger the divergences once that information gets priced in the larger the squeeze will be if you will oh yeah that's for sure um the the only point is you know being correct about the diagnostic right the divergence uh yeah but i do agree the divergence is quite large at this point you know meaning the divergence between price behavior specifically and on-chain fee on-chain activity and funding rate right for the last month and a half or more yeah that's been i think that's been the the craziest divergence i've seen since i don't know but not even covid because in the covid collapse you still had a huge

capitulation right and a huge mark of okay this this this there's a light a a great likelihood that this is going to be a b bottom right this is going to bounce because it's a the the the drop was just massive and quick and violent uh premiums when haywire on-chain was haywire um apart from covid there wasn't a fundamental reason and then once you had the stimulus and the inflationary hedge narrative um that was pretty much you know an easy ride from And then that was just a year of nonstop uptrend, right? Some consolidation, some chop here and there, but it was nonstop uptrend from 5,000 to 60,000. It was insane.

So, of course, you're going to have broadens like this. That's one of the reasons why I wouldn't be surprised that we may go to 48, 50, 55, something like that, and then collapse back to 20K and retest the all-time high, the multi-year all-time high level. But who knows? So, David, in that scenario, I think that's a really interesting thing. And this is probably the number one question that I see people in the comments whenever Will and I talk about on-chain metrics is they're trying to figure out,

should they be trading via on-chain metrics? Should they just be dollar cost averaging? how do you think about the on-chain metrics themselves and what you see there versus the applicability to trying to pick up more Bitcoin? And I think that you just brought up a great point where if you said to somebody, hey, we're sitting around $30,000 today. Bitcoin is going to ride up to $45,000, $50,000, $55,000. Then it's going to collapse to $20,000. Then it's going to go back to an all-time high. That is immense volatility compared to traditional assets. And so if somebody knew with perfect foresight and certainty that that's going to happen. Obviously, what you would

do is you'd buy at 30, you'd sell at 55, you'd buy back at 20, and then play around with that volatility. But obviously, nobody knows. And so how do you think about potential scenarios versus what you actually do with capital? Well, it depends on one, your timeframe, and two, the role in the market you want to take. Do you want to be a permanent holder? That's fine. Just sell your coins 10 years from now. That's fine, right?

I'm sure there's going to be some adoption in the next 10 years, right? If you're an active manager, meaning setting up spot or even some margin trading, some leverage trading with very low leverage, meaning less than one x leverage um and and you want to play around without as an active manager or in that mentality and maybe take positions that last at the very least a few weeks a few weeks to months and you have the temperament to to hold that and just you know devote yourself to

to your day job and your children or something you can do that and that would be very useful right maybe you can take some accumulate some here and maybe assess some on-chain metrics and funding and a few technicals or whatever at 55 and if it doesn't look good you sell right or some portion of it whatever and then go back to 20 keep some dry powder and all that stuff it depends on your time frame and it depends on your if you're a day trader just look at the order books and just play around and do 40 operations per day it just depends on the role you want to take on the market as a whole and i think every every role is fine and the market needs every single role um uh to retail investors um i recommend i don't know it's hard to recommend i don't want to make

financial recommendations um all i can say is if you want to be in bitcoin you do have you know exposing yourself to the asset and the risks and volatility they're in or lack thereof uh i think it's a crucial part of your bitcoin experience because that's the only way when you have skin in the game that's the only way when you can engage your own psychology against the asset. And you can manage your exposure better. You can manage your time devoted to analyzing Bitcoin in general better. And you can keep track of when did you make the best and the worst decisions and iterate upon that. And I think it's very different for every single person. I think some people just don't care and just want to hold. So I think just going

discreetly with a wise position into the asset, if you want to go and start experiencing yourself, even if you lose money, it's a win in terms of getting your psychology used to how Bitcoin works and behaves. Got it. And I guess one other question in kind of the same thought process here When you talk about something where at $30,000, you wouldn't be surprised if it went to $45,000, $50,000, and then back down to $20,000. Is that all within volatility of a bull market? At what point do you say, hey, maybe we're not in this bull market where people were thinking we were going to see $100,000, $200,000, $250,000, $500,000 price points? How do you think about that volatility with the backdrop of the repricing after halving and that bull market thesis? well if it would stick to the bull market thesis ideally this would be the bottom

this or 27 or something like that and then we go to all-time high and then top at you know 100 whatever and then we have the the real collapse and maybe go back down to 20 or 40 or whatever uh in the time span the time span of a year or something right um that's that that can happen, for sure. That's the way Bitcoin has behaved in the past. You can also have localized primary trends, as we saw in 2019, where you have the plus token era, right? That's a good way to put it, where price went from $3,000 to $14,000 in the span of about six months, and then it collapsed from 14 to 6 and 6 to 10 and 10 to 5 with COVID, right? So in that whole period, you had a Ponzi scheme in China

restricting the supply of the market, creating an apparent artificial appearance for the demand, which wasn't going on. like the the truth is there wasn't that much new money coming into the asset as opposed to just a bunch of chinese getting scammed in china getting into the asset and so that drove a mini mini bubble you could say into 14k in the span of a few months and then you had a mini a mini bear market cycle uh where you had you know the unfolding on the the plus token scheme where the CCP confiscated all those funds

and was pretty much selling it into the open market via HuoVNOKX. That's verified via on-chain analytics. And after that, huge amount of supply, which was at the time up to 200,000 Bitcoins. It's 1%, 1-2% of the supply. um we the market was liberated from that oversupply and then after after that you have the whole the whole you know covet getting priced in to pretty much all assets in the world

um so i think unless there's huge um gray swans like that like plus token or covet whether known or unknown because I mean the plus token was we should have known when it was happening it was mostly worth of mouth when the top was already in so it was just about tracking

those coins and seeing how much were sold already to get a sense of okay that's done we can like continue with the uptrend now and with COVID it was just like suffering a period of two or three days of absolute collapse

and then recovery. Unless we have that, we should be on a fundamental way in a primary bullish trend. I haven't seen even institutions FOMO that much. In fact, I do think they took profits quite diligently at, you know, between 50 and 60K. So, there's no, what, the same, you know, the same intuition that makes me think that they took profits at those levels gives me the intuition that they would be accumulating here and at 20k, because that's how they think. um so i so far i don't see the evidence of the primary trend being um you know being a more than

six months of downtrend you could say but who knows i'm taking it as i've said uh one thing i've learned over my years in bitcoin and analyzing and you know keeping my eye in the in the chart for several days at a time is that you need to take it day by day and make your decisions accordingly. It's very hard to predict a year in advance, even if you're very, very sure of certain factors. Sometimes you have black swans, gray swans, and they pretty much make your whole feces disappear

and you know quickly so take it day by day i want to ask you so you know how can people get involved in understanding on chain um you know some of the stuff might sound really interesting to people that we talk about every week but now i want to kind of give you an opportunity to give some resources because you're actually the first person that i hit up when i started trying to you know get into this stuff um it was originally i watched a video of willie on mccormick's podcast but then uh that that same night i dm'd you and then you told me to like check out glassnode academy and play around in excel and stuff um so you know do you have any anything else that aside from those two things you know how can people kind of get involved in the space well i think um fortunately

for most people uh you have very good people to follow you know such as willy checkmate uh nick And even though the guy said Glassnode or CryptoQuant, I think most of the information has been neatly packaged in all the data service providers. The most widely used are Coinmetrics, CryptoQuant, Glassnode, and a few up-and-comers like Wellmap. And I don't remember which other, but I think those are the main ones. some of those services are a bit expensive so you know once you have skin in the game i guess you you adjust your the value for that information a lot of them have free metrics that you can explore to see you know if they are useful to you and i'm not i'm not sure if CryptoQuant and CoinMetrics.

Glassstone has an on-chain academy of sorts where you can actually track every metric with a very deep explanation on what it's actually tracking, how it's calculated, and how you can actually use to extract some signal out of it. So yeah, it's pretty much just going

to the main service providers data service providers and explore their websites. Most of them have very good descriptions of each metric. And in the case of Glassnode, at least from what I know, you have a full academy on the whole thing. And David, where can people find you on the internet if they want to learn more? Yeah, you can follow me on Twitter and Medium

at KenoshaKing. it's not kino shaking it's kenosha like the city uh king like the you know like a king kenosha king that's my handle uh i pretty much keep updates on what i do there so it's a easy way to follow me what is the significance of kenosha so that's a very good question because nobody ever asked um it's actually uh the play on words on a thomas pinchon um phrase the kenosha kid uh from gravity's rainbow i'm a big fan of thomas pension so it's just taking the kenosha kid and put the king in there king is better than the kid i love it well where uh where can we send people to uh follow you on twitter or subscribe to your

newsletter yeah sure i just wanted to you know first say thanks david for coming on and uh you you know, putting up with me, like bombarding you with charts all day long. You guys saw our conversation. You just see it's like pretty much me sending him like five or 10 charts in a row. And then he'll just comment back on what he thinks of them. But anyway, on a serious note, you know, I appreciate you and you know, thanks for kind of communicating back and forth with me. And yeah,

so I'm on Twitter at W Clementi III. And then I also do the weekly newsletter with pop and then as well on, on my sub stack um you can find that in the link in my bio uh it's btc uh by w by wc3 dot sub stack but i want to ask you david are you guys doing are you doing anything else with the arc or are you guys done with that kind of series you were putting we're publishing part three in the next few days to weeks i'm not sure the date but it's coming up in the next uh soon and is it like each each one you're like progressively going deeper and deeper into the different metrics or because i remember like the first one you did was just like really broader

like model waves and stuff like that yeah so the the way we we wanted to set up that that whole piece is uh it's a non-chain manifesto but it's pretty much just trying to divide the different uses the the the different uh mindsets and roles of market participants as mentioned uh by pomp and yourself it's trying to bring you know if you're just a stakeholder or an observant right if you're a mike green of the world that maybe tracks on bitcoin data but it's not exposed into the asset those are the metrics for you describe on part one right if you're a holder part two and now it's it's going to be more for active managers uh just as you know arc and kathy wood uh they are active managers and they have a um a different mindset uh on how to think about bitcoin

so the part three it's mostly for active managers um which is different from traders actually traders think very different from active managers um so it's trying to going from the broader to the narrower and part three is going to be mostly devoted to it's going to have a few new metrics brand new metrics that Arik and I have devised and shows them as example of how active managers can use some of this very transformed or very specific metrics to get some signal off the market. All right, David.

Listen, we really, really appreciate you coming on. Will and I have really enjoyed these conversations with the various folks, but you're no G-man. You have been at the forefront of this for a long time, so we appreciate it. We'll definitely have to bring you back in the future and queue up the great work. Highly suggest people go follow you, and we'll talk soon. Thanks for the invite, Matt.