Unchained - Why Bitcoin’s December Price Target Is Now ‘Above $300,000’ - Ep.228

Starting point is 00:00:00 Hi, everyone. Welcome to Unchained to your no-hype resource for all things crypto. I'm your host, Laura Shin. Follow Unchained on Twitter at Unchained underscore Pod, where you can find all sorts of content ranging from my weekly newsletter, so updates on my upcoming book and a whole lot more. Today's episode is a chat I moderated between Peter Brandt and Willie Wu at last month's Real Vision Crypto Gathering. It's a fascinating look at the original cryptocurrency from two people steeped in analysis in different ways. It was a great discussion and I am sure you will enjoy it. Now, on to the show. Khyper's Dynamic Marketmaker, DMMM, is the first DeFi protocol designed to adapt to market conditions to optimize fees, maximize returns, and enable extremely high capital efficiency for liquidity providers.

Starting point is 00:00:50 The Crypto.com app lets you buy, earn, and spend crypto all in one place. Earn up to 8.5% interest on your Bitcoin and 14% interest. interest on your stable coins paid weekly download the crypto.com app and get $25 with the code Laura. The link is in the description. Indexed finance allows you to buy passively managed indices for crypto and defy's hottest markets, passive portfolios at your fingertips, I-N-D-E-X-D dot finance. Hi everyone. Welcome to our panel. It starts with the charts. My name is Laura and I host the podcast and video series Unchained. I've covered crypto for nearly six years and was previously a senior editor at Forbes,

Starting point is 00:01:36 where I was the first mainstream media reporter to cover cryptocurrency full-time. Our two guests today are Peter L. Brandt, Futures and FX Trader, an author and publisher of The Factor Report, and Willie Wu, on-chain Bitcoin analyst and writer of The Bitcoin Forecast, a market intelligence newsletter. Welcome, Peter and Willie. Hey, it's good to be with you, Laura. Right. Good to see you again, Willie.

Starting point is 00:02:00 Likewise. I'm looking for this. Peter, let's start with you to get the big picture on what is happening with Bitcoin. You recently tweeted, Bitcoin is undergoing its third parabolic advanced in the past decade. And I think you have been recently saying it's even undergoing a fourth now. And you've said to see that number of parabolic advances is extremely rare and even historic. So can you explain why it is so historic? Oh, sure. I'd like to, Laura. Your production folks have a chart that shows the parabolic advances in Bitcoin in an accelerating market that is accelerating the acceleration. And, you know, I've traded for 46 years. I've studied charts over really centuries. I'm kind of a chart nerd. I love charts. And somebody would have told me that there would be a market during my lifetime that would not only experience a parabolic advance, but experience four parabolic advances,

Starting point is 00:03:06 not just on an arithmetic scale, but on a log scale, I would have bet my life against that. This is just unbelievable. I, you know, people get caught up in the daily motion and the daily moment of Bitcoin without realizing we're seeing a market advance, unlike anything we've ever really seen before, to have four parabolic advances on a log scale in the course of a 10-year period is just unheard of. I would challenge anybody to find a price chart of any asset or any commodity item that has gone through this. And so we're really witnessing history.

Starting point is 00:03:49 This is history in the making. This is something that history books will be written on as a trader. It's just unbelievable that I can participate in a market that is going through a situation like this. This is just spectacular, spectacular ride. And everybody that's involved in Bitcoin can know that they're really taking part in history. Willie will better describe really the underpinnings of history and what it really means in terms of real world finance, monetary system and so forth. That's not my specialty.

Starting point is 00:04:25 chartist. I'm a traitor. I'm a chartist. But as a chartist, this is just something so special. I really can't even express it. And just briefly, before we turn to Willie, can you also define a parabolic advance for the members of our audience who aren't familiar with these technical terms? Sure. I mean, we all know what an up trend is. In a parabolic advance, Laura, is an advance that accelerates over a period of time. Not only does it go up steadily, but it goes up in an accelerating manner. And we can find all kinds of stock charts that have had one or maybe two parabolic advances on an arithmetic chart, but to have a parabolic advance on a log chart is just spectacular. And so, Willie, how would you put Bitcoin into a historical

Starting point is 00:05:16 context as an asset? Yeah, it's an interesting one because I see Bitcoin more as a new technology role. out and we never see new technology being traded on a live market before. Bitcoin's the first time we've had that. You know, the internet exploded onto the scene and we had a whole lot of new technologies, but you'll notice that those startups that were forging those technologies, they were not listed on a stock exchange to very much later into their maturity phase. So here in Bitcoin, we've got from X number of months into it from 2009, we had a price of Bitcoin.

Starting point is 00:05:55 And you just can see the crazy volatility in that market. And that is normal for a burgeoning new technology. Anyone who's been in a sea level startup will know how schizophrenic the ups and downs of that ride is. The next, you know, one day you're

Starting point is 00:06:12 on top of the world and you're going to conquer the world and the next day all doom is here and you're not going to survive the next month. And we've had a number of these journeys in Bitcoin, even through the first 10 years, many years into it. So what we're seeing here in my eyes is this new technology finding price discovery in a phase

Starting point is 00:06:34 that we've never seen before. And Peter, just to draw out one more comparison between crypto and traditional markets, much has been made of how crypto trades differently because it trades 24-7, 365, across global markets and also because of how the movements are often affected by memes. And I wondered how you would compare the way Bitcoin trades to the way different types of traditional assets trade. Well, I guess how I'd break that down in two ways, Laura. One way is just from an historical perspective, the magnitude of the advance, the nature of the advance in Bitcoin is really can't be compared. It is in a class by itself. Of course, we have some other crypto coins.

Starting point is 00:07:19 that have had a similar move, but I think in my mind, Bitcoin's the legacy. It is crypto. Crypto is Bitcoin. Bitcoin is crypto. And obviously, we do have some of the other coins and all coins and so forth. And so we can't compare it. But in some sense, we can. You know, it's interesting.

Starting point is 00:07:40 You work for Forbes. The editor of Forbes in the 1920s was a guy by name of Richard W. Schaubacher, Schaubacher in 1934 published a book which lays out the classical charting principles that chart us used today. He was the author. He was the author of classical charting. And so the types of chart construction that he wrote about in 1934, we see on a regular basis in Bitcoin, you know, rectangles, head and shoulders, trend lines, all of those things, not only apply to Bitcoin, but really characterized Bitcoin as a classical chartist, I think Bitcoin is the purest market there is. And so, you know, it complies with what I know to be history in terms of classical charting,

Starting point is 00:08:29 but at the same time from a more broader picture, from an historic picture, it's one unto itself. All right. So now let's turn to discussing this current cycle, which I think in some ways has surprised some Bitcoiners, even at the same time that they knew all along it would happen. And Willie, in one of your recent newsletters, you wrote, quote, Bitcoin is undergoing the largest supply shock in its history. The steepest price rise seen so far in 21 has been supported by strong fundamentals. And then you wrote, my macro top target has now increased to 300K, and previously it was 250K.

Starting point is 00:09:09 Can you elaborate on what you meant there? Going back to the supply shock, we've just never seen in the history of Bitcoin so much of the coins being scooped up and bought and locked away by very strong holders of the coin. And we can see this from tracking the flows of coins out of the exchanges where typically people speculate or buy and sell their coins. and they have a set inventory, some of which is allocated for speculation. And we've just seen an unprecedented amount of depletion of that inventory. If you look back in the 2017 bull market, we saw like a five-month depletion of inventory, and that was enough to propel the bull market of 2017 right up to the 20,000 from what initially was about 1 to 1,000. $5,000 when the inventory depletion ended.

Starting point is 00:10:11 And now we're kind of in this zone of 11 to 12 months of inventory depletion. We've not seen this before. And you can look on chain and look at the holders. And you can see the wallets that the holders, the behavior of the wallets by the holders. And there's a category where we term a liquid. These guys are just accumulating, buying and accumulating without any history of selling. and these guys are just hoovering up the coin. So there's a real supply shock.

Starting point is 00:10:40 There's less and less coins each week that goes by that's available to be bought. And so obviously there's a mismatch between demand and supply and that has launched the price vertical. And for some technical traders that do trade indicators on the price fluctuations, thou were screaming over, overbought, overbought, overheated, whilst if you look into the ledger and see the demand and supply of the coins by fundamental investors, you can see that it's fully supported. And so I run a very simple model. It's a mean reversion model, which is in simple terms as a moving average on the market cap,

Starting point is 00:11:28 all-time moving average. and you can use that to predict DOPS. It has protected every top in Bitcoin history. And so currently that top target is launching upwards. And at the start of this year, January, it was zoning into a area of $200,000 to $300,000 by December. And December of this year is typical to what we would expect for the end of a bull market.

Starting point is 00:11:57 If we get that, not saying that will happen this time around, but if we do top out in December, that target now is lifted to above 300,000 because the trajectory of that upper band of that moving average. Well, that's really exciting. And so earlier when you were talking about all these holders who are buying, moving the Bitcoin off exchanges into wallets that do not really have a history of selling, who do you think those groups or people, people are? It's very unusual because normally what you expect is as more retail comes in, more moms and pops, ordinary people off the streets, they tend to buy their coins and hold them on their exchange wallet because it's just a very easy experience. So we've had this general

Starting point is 00:12:47 trend of more and more coins being stored on exchanges like the coinbases of this world. It's a very easy-to-use experience. But in this particular cycle, we're seeing huge amounts of coins move off exchanges and being locked away under their own custody. And that's the signature of institutional players coming in and high net worth individuals. They tend to store their coins under custody and in cold storage. So those clues and just the sheer size of the purchases, you can see the size of the withdrawals coming out from the exchanges.

Starting point is 00:13:28 They just really point to institutions, scooping up coins. So it's very unlikely it's anything else but the institutions. And by that you mean like Tesla, micro strategy, the corporate treasurers that are buying Bitcoin, or are there any other institutions you would include in that bucket? Yeah, institutions is kind of a manager. really, because in simple terms, it's just coins held by a custodian for a whole lot of people, whether that's, you know, Tesla and their shareholders or fund managers.

Starting point is 00:14:04 So it's looking like we've got hedge funds coming in. We've got the corporate treasury, you know, led by Michael Saylor and Micro Strategy, and now, you know, the latest is being Tesla. But, you know, we've also seen announcements that it's pension funds as well. Gray scale, Sera, they had a lot of strong buying from there. I've just seen that New Zealand has announced that one of their funds for pensions has bought into Bitcoin in October. So, yeah, across the gamut, there's all sorts institutions buying right now. It seems like the word is out that Bitcoin is now a valid investment alternative to gold in these times.

Starting point is 00:14:47 And so then if we were to zoom out and kind of look at Bitcoin in its trajectory, of, let's say, like, historical adoption, you know, like, if we were to look back 50 years from now and, you know, look at this moment in time, then where would you both say Bitcoin kind of, like, is currently in its historical adoption period? Well, I have a question, Laura. I'd like to ask, Willie, because his comments really, I found really super interesting because I don't really dig into what happens to coins as they flow into the blockchain. change and get taken out of exchanges.

Starting point is 00:15:25 That's his expertise, not mine. But what I have noticed looking at the exchanges in terms of the bid offer spread, what happens on the bid, what happens on the offer side is oftentimes when a market blows off. And we hear some people say, this is a big bubble, we're blowing off, the Bitcoin's a bubble. There are characteristics of a bubble. One of them is that markets go up fast with bids. There's aggressive bids that take place in the late stages of a bull market that kind of blow it off. And all those bids come in and chase the market's fomo.

Starting point is 00:16:02 What we know is retail fomo takes place within the whole market. This market is very different. What I've noticed is the market's not necessarily going up on aggressive bids. What's happening is an offer comes in and just immediately gets taken. And so this nature of the bull market is such that what I see, is whenever something is offered, it's just taken immediately by somebody who's willing to take the offer. So rather than going up on bids, it's going up on higher offer prices, higher and higher offer prices. That may sound like there's really no difference to people who I'm familiar with how markets behave.

Starting point is 00:16:43 But for me, as a technical trader, that's really significant because it shows me that there are big names, There are deep top pockets that are saying we're not going to chase the market, but whenever something gets offered, we're willing to take it. And that kind of resonates very well with what Willie described. Yeah, so you're saying that whenever there's a big offer on hand, large enough for a very large purchase to come in, they'll take it because there's not a lot of offers that size that's on the table and they're just waiting for whenever there's an offer, they'll take it.

Starting point is 00:17:20 Yeah, that's interesting. You know, I have another question for that. I'd love to ask Willie. And, you know, Willie refers to Bitcoin as a technology, which it is. Betmoor activated. The ScoreBet app here with trusted stats and real-time sports news. Yeah, hey, who should I take in the Boston game? Well, statistically speaking.

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Starting point is 00:18:03 you have access to over 1,400 airport lounges worldwide. So your experience before takeoff is a taste of what's to come. That's the powerful backing of Amex. Conditions apply. But the interesting thing for me, is in those cases where I have seen an asset or a market or a commodity have the kind of parabolic advances that we're seeing.

Starting point is 00:18:29 What they have been primarily is currency markets. They've represented the destruction of a currency, a monetary system. They have been the currency against the dollar. So in other words, how many of these currencies can one dollar buy? we saw it in the German mark in the 1920s. Your production guys may have a quick chart of that. It's not a very good chart, but it does show it. We've seen it in third world currencies in Africa and third world.

Starting point is 00:19:01 This is marks per U.S. dollar in the 1920s. And what it shows is we went from kind of late 19t teens of five, six marks per dollar. And then we go into really the destruction of the mark at that point, which was obviously connected with a previous political structure. But we saw the mark become worthless. And we've seen that with third world currencies, African countries, Latin American countries. And so when we look at Bitcoin beyond just being a technology, but being a form of money, the only other charts that I can see when I look back in history that have a similar parabolic rule, have really been currency charts, there have been the destruction of that currency.

Starting point is 00:19:50 I'm just curious as to how Willie relates to Bitcoin also as a form of money, as a monetary system, because monetary systems are the only places where I've seen charts that have a similar parabolic move. Well, that's absolutely fascinating, Peter, because like I look at this chart and I go, yeah, that's exactly right. I'll flip those currencies and I'll go US dollars per Bitcoin.

Starting point is 00:20:17 And that's essentially what we're tracking. This destruction of fiat currency as Bitcoin starts to suck in that monetary base. I think what we're witnessing here is the birth of a new monetary base, which is no longer based on fiat. It's based on consensus agreement that this has value. and this thing is a value that can be stored online, digitally moved across borders within seconds. And so it's an internet age technology.

Starting point is 00:20:53 It's a new internet age monetary standard. And it's one that is going to keep up with the world's needs into this digital age. If you think about what happened with the industrial age, we move from essentially commodity money, in gold silver copper. And we moved into trading currency like paper backed by this commodity. And that was really to keep track of an industrial age economy.

Starting point is 00:21:26 Obviously, it's too slow to ship bars of gold around the world. So now we're in a digital age. It's very, very similar in that. Like, Thiet is just so slow and broken. If anyone that thinks Fiat works well, they're only using it in a local stance within their country. Once you start to do cross-border payments, it's very slow, it's very painful. And so we're in this phase, I think, is that we're moving and crossing deeply into a digital age. And to go back to the first point that Laura posed, you know, where do we, we, we're,

Starting point is 00:22:07 where are we now looking, if we're pan into the future and look back, we're currently just barely above 2% of the world having exposure to Bitcoin, even fewer that are actually using it to transmit funds. Most people are holding it to get exposure, but it's growing. This thing has been growing for 11 years nonstop at doubling every 12 months. So that puts us at 4% then 8%. 8% and so forth.

Starting point is 00:22:38 And we're currently on track for 1 billion people having exposure to Bitcoin as an asset class in the next four years. So by 2025, 1 8th of the world population will have exposure to this monetary base. So it's happening very, very quickly. And in terms of internet era, like where we are right now, it's equivalent of 1994 for the rollout of the internet. and I believe from memory, some of might be able to pull it up.

Starting point is 00:23:10 In the next four years, we're going to teleport into 2005 for the internet rollout equivalent, which, you know, if you think about that, like 94 was very slow, dial-up internet, very few people used it, but it was growing quickly.

Starting point is 00:23:28 And then 2005, we had everybody on Facebook. The iPhone was just around the, corner and the internet was available to everybody on the planet if they needed it. So, yeah, the next four years is going to bring a lot of changes to the financial system, that's for sure. And why do you think that timeline is being sped up for crypto? Is it because we already have the internet built now? Is that why, you know, you were saying this leap of 10 years in the internet era

Starting point is 00:24:00 is going to be accomplished in five years in crypto? Yeah, new technology is built on older technologies, and the propagation of information goes faster and faster. So, you know, if Bitcoin could be built on sailing ships and we can transmit transactions on a piece of paper, which you can actually do, obviously it would take months for that piece of paper to transmit to another continent. But now we can transmit that in milliseconds across the internet. And so that's speeding things up. And you'll see if you plot the progress and adoption of new technology, we call this S-curves because that marks how much penetrate, the rate of penetration, they're slow at the start.

Starting point is 00:24:46 At the start, they go exponential. And then they kind of taper off as you reach saturation. Those S-curds are long and flat and slow for, you know, the earlier technologies like radio, Then TV, and then we had, you know, I guess, what do we have mobile phones and internet. And so each curve became faster and faster. And so it's a natural trend that this technology, Bitcoin, expands faster. Yeah, it's probably the biggest thing that's happened to money since the invention of money, I would say.

Starting point is 00:25:23 It's not just a one in a hundred year thing. It's a one in humanity event. Yeah, I would agree. I've also heard you make comparisons to the way Bitcoin trades or the way people invest in Bitcoin to shares of internet startups. Can you talk a little bit about how those are similar and or different? I think I've kind of covered it earlier in that, you know, the trajectory is very, very upward, like a seed investor.

Starting point is 00:25:52 You know, I'll put it this way. when Bitcoin was around even say four years ago and the times before that the first six to seven years, everyone said this thing is not real, it's a bubble, it's going to pop. And no one gets 10,000 X return in such a compressed amount of years. Like that's a tulip bubble. But anyone in technology that has invested in seed level startups with a valuation of maybe typically, typically, a seed level startup is valued at $6 million at the start. And if they go IPO and then become the next, you know, Uber, Amazon or so forth, you are now talking in the tens to $100 billion of valuation.

Starting point is 00:26:40 And that journey takes around six to 10 years. And so right there in new technology, investors at the seed level are very comfortable with the idea of getting 10,000 X on a winning technology. And that's essentially what we're seeing with Bitcoin. Those types of gains are very, very routine in new technology rollouts. The only difference right now is that Bitcoin just so happened to have a publicly tradable price that everybody could see and retail. Anybody in the world had access to buy that asset right at the get-go.

Starting point is 00:27:22 And interestingly, the institutions, the smartest money in the room, they weren't allowed to because regulatory bars prevented them from actually directly buying the asset. So it's kind of flipped the whole thing on its ends where Bitcoin was open to everybody else except the big money. So I find that very interesting. You know, the interesting thing for me, well, is when I first got, involved and you were involved in Bitcoin long before I was. My involvement began in early 2016 when the founder of Real Vision, Raul Paul, sent me a chart of Bitcoin. You know, I get an email from Raul who has a chart of Bitcoin. It's like February, March of 2016. And Raul

Starting point is 00:28:12 says, you're a charterist, Peter. What do you make of this thing? And I looked at it and I heard about Bitcoin kind of in the periphery. I understood it existed. I didn't know much. about it. This thought it was just a currency, currency money that would become another Beanie Baby or Pet Rock. And I look at the chart that he sends, I go, wow, this is crazy. And that's when he introduced me to his exchange, I open an account, I get involved in Bitcoin like March, April 2016. Initially, for me, Bitcoin was a chart. Then Bitcoin became just a trade. You know, as a trader in the U.S., I've always measured wealth based on U.S. dollars, right? I want to collect U.S. dollars.

Starting point is 00:28:56 I want to look and know that my U.S. dollar worth goes up in a steady rate and maybe have some jumps along the way. And so Bitcoin was just a trade. But I think really within the last year, my mindset has really changed is that Bitcoin is where I would have wanted all my wealth. at some point in time. I really look at it very different because if my goal as a trader has been to accumulate more U.S. dollars, what that now tells me is I had a wrong goal because my goal was to accumulate the weakest asset in the world, the most depreciating asset in the world, and that's U.S. dollars. And so my mindset really changed within the last year in terms of moving from Bitcoin as a trade to Bitcoin as a measure of wealth.

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Starting point is 00:32:36 exceeding 30 percent two of them exceeding 40 percent and then you wrote with the exception of the march 2020 smash the december 2018 to present bull trend has been been extraordinarily orderly so far. So what would you say is the significance of that? Oh, I think Willie pointed that out is we have major institutions, major trading operations, investing operations, who are just willing to take offers off the table. And as a result, of course, you know, no market goes straight up day after day, week after week, month after month. So we have volatility. We've had close to a 30 percent, or right around a 30 percent correction at one point, another correction of 26%. That's not the end of the world. Markets have

Starting point is 00:33:20 correction. That's what markets do. They go up, they go down. The important point is, which way are they going on a more sustainable basis? You know, to me, I'm starting to look at Bitcoin as we all talk about the evil central banks. Everyone's talking about the central banks destroying the monetary system. And I'm starting to look at Bitcoin as a POW asset. And that could mean power of the, you know, that could mean the money of the people, the people's money. And so Bitcoin is really the currency of the world, of the world population. Is, you know, it's a POW. We're prisoners of war to the central banks.

Starting point is 00:34:02 And all of a sudden, Bitcoin is our own answer to fiat currencies. And I think that's what's reflected in the fact that there's so much interest to actually own that currency. I love that actually because there's actually a Bitcoin-specific term, P-O-W, which stands for something very particular to Bitcoin. So at first I was like, wait, what is he talking about? But we don't have to get into that. It has to do with the mining. But anyway, Willie, what were you going to say?

Starting point is 00:34:29 I was just saying that, yeah, it's like really going back to the first chart of German Marx against US dollars, we've been trading to stack more German marks in a time of hyperinflation versus stacking more Bitcoin. I think that if you be, anyone who's been in the industry long enough starts to have that sort of mindset shift. And suddenly you realize, wow, this is real. This is the new monetary standard. That's the measuring stick in which we start to measure everything. And I mean, certainly when I get US dollars or any kind of fee, I feel like this thing's a hot potato.

Starting point is 00:35:06 It's not going to be worth much. We had like 25, 30% more US dollar. as being printed in the last year alone. So I think most people are really in that mode of really parking it somewhere, whether it's real estate, stocks, or Bitcoin. And to that point, there's about $500 trillion of assets in the world that people were parking money into is a store of value. And so that is the scale of capital that Bitcoin is going to take.

Starting point is 00:35:43 bites out of. You know, we, we like to call Bitcoin this digital gold. Like it's this really nice to understand thing that traditional asset managers, traditional investors can turn grasp. But really, gold's only $10 trillion. And only $4 trillion is useful financial means. We're like, Bitcoin's already a quarter of the way there and it's not going to stop. You've got like stock markets that are near $100 trillion.

Starting point is 00:36:12 you've got real estate, which is like $220, $250 trillion. Most people that hold these assets aren't looking for a house or two or five to live in. The holding it is store of value. So once you get a glimpse of something is easy to access like Bitcoin without the trouble of holding assets like real estate, it's going to take a big chunk out of that. So there's no way Bitcoin's going to stop. at the market cap of gold, which is 10 trillion, it's going to go a lot higher,

Starting point is 00:36:48 which means that we're going to be going into the millions of dollars per coin, which is kind of hard to believe right now, but if you look at the share fundamentals and stretch it off over the long term, that's how cheap Bitcoin is today, and that's why the institutions are buying it. But buying it because they think it's going to be as good as gold, but it's going to go a lot higher. I have a question on that, Willie.

Starting point is 00:37:13 You know, when I look back at Bitcoin as a student of price, you know, we've seen big runups followed by 80% to corrections. We've seen that in the previous three parabolic advances that were violated. We saw Bitcoin set back between 89%. And I guess my own sense is that we've seen the last 80% correction. And I'm just curious. let's say we go to your $300,400,000 mark by the end of this year. What is a big correction in the future?

Starting point is 00:37:49 As we look forward and might assume that Bitcoin will take a rightful place as a global reserve currency, so to speak, or a global reserve assets, so to speak, what kind of volatility do we see five years from now, 10 years from now? It's a really good question. I'm not sure, in the first step of it is once we top out, I'm not sure how far it will fall back this time under the current situation. We typically see an 80% pullback, $300,000 plus 80% pullback. Kind of brings us down into the $1 trillion range.

Starting point is 00:38:30 And I can see right now the price discovery of Bitcoin is very, very strong in this zone, of $1 trillion. You can look at that in terms of the price in which coins last moved on the network. And it's really clustering strong at this zone of $1 trillion. And you'll look at all the past bull markets. You can see as you roll back the clock, you get this very strong cluster at the base of the bull run, which is what we're forming now. And then we go really high.

Starting point is 00:39:01 And then it's almost like when we top out, we come back to revisit that very strong cluster, bounce off that is a rejection of that low before we move into the next bull market. But that pattern plays out then, yeah, maybe we go to 300, we come back down to the zone here. But I'm not sure. Like I kind of visit the stuff one month at a time, quarter by quarter sometimes, just on what I'm seeing through demand and supply on the ledger. There is a general trend downwards and it is a crazy predictable trend downwards. I think actually, you know, like we're due to start to drop down into the lower volatility range that, well, I don't have the charts right off hands, but I think it will surprise a lot of people how low the volatility can drop. And beyond a certain part of size of capital base, you know, volatility drops to zero because it becomes the new monetary base.

Starting point is 00:40:03 If it does become this unit of account, obviously these different variations on that theme, but it could be part of a basket of assets that becomes the new monetary base. But ultimately, the volatility will drop very, very low because it is the new monetary standard part of it. Peter, I wanted to ask you about something that you wrote on Twitter where you were criticizing the people who have laser eyes on their Twitter profiles, and you call that the single most bearish factor for Bitcoin. Why is that?

Starting point is 00:40:34 Well, and I'm not a barracks in terms of all of a sudden to go into a bare market. What I'm talking about is there are certain things that as somebody who is an owner of Bitcoin, I know people use the word hotline. I just can't go there at mid-70s. I'm not sure I can adopt the vernacular of the new technology or new monetary system. So I still can refer to as holding. I have the L before the D instead of after the D. But, yeah, I mean, over enthusiasm on any market is always kind of warning not to turn from a hole to a bear or to liquidate long holdings or to liquidate an established position.

Starting point is 00:41:15 But it indicates people, it's gotten a little frothy. And, you know, all of a sudden, when I saw people who I respect it on Twitter as seasoned, reasonable investors, all of a sudden, with a new pitch, with laser eyes, I kind of go, well, let's stack back a moment here. I actually even, I even direct tweeted a good friend of mine who is really a fine investor and has been very, very constructed from Bitcoin for a long period of time and just said, hey, redo your picture, will you please? It's scary because, you know, more people put the laser eyes, you know, at least the market is going to get choppy for a while.

Starting point is 00:42:00 I'm going to stop going straight up. So I think, you know, we need to be alert for that type of thing is when people start pounding their chest in public, I own Bitcoin, I own Bitcoin, look at me. I have laser eyes. You know, that's always going to be a sign that the Marxist police going to take a rest. All right. Yeah, I was just so curious because obviously that is something all the Bitcoiners are doing. And I thought it was kind of fun that you took a contrarian.

Starting point is 00:42:30 stance to that. So to wrap up, I wanted to ask you for the aspiring chartists in the audience. What particular metrics or trading patterns it is that you think are worth paying attention to and why? Well, I mean, let me start off by saying, I think Bitcoin charts extremely well, but it charts extremely well for somebody that wants to look at the forest and not the trades. is, you know, somebody who's looking at one minute charts, five minute charts, 10 minute charts, I've noticed those are not really reliable charts. You have to look at Bitcoin in terms of chart construction, at least on daily charts, if not on weekly charts.

Starting point is 00:43:13 You know, you can't look at it every day, every minute. You've got to really step back and look at it in a bigger picture. And that's advice I would give somebody, don't get so involved that you're buying and selling in Bitcoin 10 times a day. Look at Bitcoin from an historical perspective. This is not something to be playing around with. It's something to be owned. And so I think there's danger of people getting too short term in Bitcoin because at some point in time, they're going to get shaken out of their position. And that's when Bitcoin really has a period of strength. And so I think holding L before the D is the thing to do. But for those who really,

Starting point is 00:43:54 are interested in charting. I bring them back to the 1934 book by the senior editor of Forbes magazine, Richard W. Schaubacher, who wrote the book, Technical Analysis and Stock Market Profits. Excellent book, but it's a great primer on the type of chart construction I've seen in Bitcoin, which is triangles, shakeouts, trend lines, head and shoulders, and that sort of thing. By the way, I do have a chart there that you have on the current chart outlook for Bitcoin. I just want to point that up before we end here. But on that chart, what I'm really seen is I think that currently Bitcoin in this current Bitcoin bull market from a charting standpoint were the 2015 to 2017 bull market was in the April May period of 2000.

Starting point is 00:44:53 2017, it's kind of where we're at. And that shows that I think we're at that midpoint pause, where in 2017, Bitcoin swirled around for a month or two before we saw the final move up. And you'll note that the midpoint in 2015 to 17, well, market was at about one half, 60% of the total move. If that's true, you know, really that points to the type of price level that Willie's talking about, and it's that $200,000 plus is really where this market would take it if this chart interpretation is correct. And Willie, what about you? I kind of agree with where we

Starting point is 00:45:35 are in that market. Yeah, that's really interesting. You trade Bitcoin on any time cycle. It's possible. Whatever floats your boat, really, you can trade the small time cycles and get a feel of how the markets work on a micro level. Bitcoin is interesting. Bitcoin is because it's the only asset in the world other than the other cryptos that has a blockchain. But it is actually the only one that has a blockchain that has capital flows that is organic. And so, you know, I have a partnership with Glass Node and they provide about over 300 charts, which those 300 metrics. And they measure different parts of the network and the whole industry.

Starting point is 00:46:19 The capital flows going through it. And so it's almost like a ECG that's hooked up to this animal called Bitcoin. And it's a kind of a detective story of like, oh, what's happening here? Let's check whales buying. As an institution, whatever's happening this week or that week, you can come down to a diagnosis, probable diagnosis. And so that's the new thing with Bitcoin is that we have this open, transparent ledger where we can visibly see what's actually happening.

Starting point is 00:46:52 And then you can kind of translate that and make predictions or explanations of what's actually happening with the price chart, which will then sort of express itself through technical trading patterns because traders are trading around these very specific like patterns. So there's fundamental demand and supply on the blockchain and that will express through these technical trading patterns. And so if you're trading Bitcoin, a full picture would be. the on-chain analysis with the technical in mating the two together. And then that's a new thing within cryptocurrencies, really. Yeah. And what I love about the way Willie, you do your analysis is that you come up with really

Starting point is 00:47:36 creative ways to describe it, like whale spawning season when you saw the whales coming in and buying up a lot of coins. Or recently I noticed you have been tweeting about what you called the Rick Astley score, which I'm sure people can be. figure that out. But yeah, it's very fun following your analysis for that reason. All right. Well, this has been so fun. Thank you both so much for coming on to the crypto, to the Real Vision Crypto Gathering. Thank you for having me, Laura. And it's always a pleasure to participate with Willie. I always learned something I didn't know before. And this has been no different.

Starting point is 00:48:15 Thanks, Laura. And it's been, you know, absolute pleasure being on air with Peter. He's an absolute legend. It's so great to be on here with Peter. Yes, this has been great. All right. Well, thank you, everyone. Thanks so much for joining us today. To learn more about Peter and Willie, check out the show notes. This episode of Unchained is produced by me, Laura Shin, with help from Anthony Yun, Daniel Ness, Mark Murdoch, and Real Vision. Thanks for listening.

Unchained - Why Bitcoin’s December Price Target Is Now ‘Above $300,000’ - Ep.228

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