What Bitcoin Did - Is The Bitcoin Bottom In? | Checkmate

Episode Date: February 11, 2026

Checkmate is a Bitcoin analyst known for his on-chain & macro research. In this episode, he breaks down the Bitcoin crash to $60k and why it may have marked a critical inflection point. We get into on-chain data, mean reversion models, and if the bottom is in for this bear market, or we go lower. THANKS TO OUR SPONSORS: ANCHORWATCH BLOCKWARE LEDN BITKEY SWAN CAPE CLUB ORANGE FOLLOW: Danny Knowles: https://x.com/\_DannyKnowles or https://primal.net/danny Checkmate: https://x.com/\_Checkmatey\_

If Bitcoin is going to zero, a nice playing, it's been fun, like, you know, we all had a good time, you know, have fun playing with your bitcoins. If not, then you start looking at the statistics and the odds and go, well, if Bitcoin recovers, this is kind of a nice place to be,

don't lose attention now. This is the time to pay attention. At some point, we set a bottom. Once we've set a bottom, and it starts moving higher, all these narratives about Bitcoin being shit and dead, we'll just go out the window. We're going to start moving higher.

Momentary traders come back. back. The debasement trade will come. Stay the course. The storm is mostly behind us. Push through to the other side. What's the price of Bitcoin right now? 71? Has the financial times upgraded from 69K? 70K? We might be at 71 by the time of the finish. I saw that. That's embarrassing. It's good. It's just the state of mainstream. So I was on, was it Friday and everything properly crashed? It wasn't like 60. Yeah, I think it was Friday.

That would be Friday our time at least. It was Friday morning because we did an emergency. Press release through our subs. I'm just talking about what's going on. I loved it. I know. I just got the dopamine back. Things are excited again.

Twitter was on fire. Do you remember when we did the pub with Alec November, I think? And we were saying like there's this like gray zone of Bitcoin prices where it's down 15, 20%? Everyone's like, this just sucks. And then it goes down like 50. Everyone goes, okay, now I'm interested again. Yeah. We hit that threshold where it's like, okay, we're significantly down from the high.

Like, what do you do? If you're selling now thinking it's going, I would luck with that one. Like, it probably will. But you're in the back half of this thing now. So now you're really playing with fire. We're a nice person. Yeah, I got very excited.

I did a pretty decent stack on Friday. I don't know where in the bottom is, but all I know is when I see Bitcoin at like $62,000, whatever it was at the time, that's value. Got to $6. Yeah, yeah. Totally. So what do you think, let's start with like what cause the sell off.

And I know that's like a bit of a funny question because there's always multiple things. but why do you think this happened so steeply? Because it was a really dramatic seller. Yes, because we're in there. Let's just start here. So a lot of my, like when I do my analysis, you will very rarely see me go hunting and say, oh, there's this hedge fund blowing up.

It was this whale doing whatever. One sold Bitcoin is one sold Bitcoin. Let's just kind of map this thing out, really since the October high. In October, we set a second all-time high-126, and we failed to push higher. Two significant all-time high pushes that fail. first warning sign. Then we had the 10th of October crash. There's no question. There's bodies out there. There's firms that have blown up. And we've got to remember like the pretext to all of this, tons and tons of oddless selling with cover of this. We had the crypto market did terribly.

Treasury companies went down 90%. There was just a lot of damage in the background that's going to affect center. So then you get 1010. No doubt there's bodies. There's four sellers. As we started breaking down, I was describing as the Hoddle's wall. Many people heard me talk about this, we had about 70% of all the invested wealth above 95K. I called the 95K level the bull's last stand, but below 110 was the short-term cost basis. Got to be cautious. Once we got down 105, we crossed the midpoint of that hoveless wall when more than half of it was underwater. At 100, we got to the long-term average of everyone's portfolio value. So you may have heard NV-R-V ratio. It's basically the average cost basis for all the coins in the supply. The average for

is plus 80%. So of all of Bitcoin's history, the average portfolio return, third Bitcoin is plus 80. That's at 100k. And my logic was if you get to 100, 95 is like, it's there. And by the time we get to the bull's last stand, you've got to say how we get here, right? So the exponential risk of is it a bare market from 110 to at 95 went up very quickly. And my rationale was if you get to 95, you're probably going 80. The reason for 80s as a model called the true market mean, that is the long-term average of Bitcoin. Herfamine reversion model, we just oscillate around. It is the center of gravity.

It's the average cost basis for active investors. It is also where the ETF cost basis was. So that 80K level was actually very important. And we started forming between November and January and February what is to bear flag. It looks like a bear flag. Now, what do do bear flags generally do? They break lower. They're usually a halfway point in the trend.

We got up to 98, sorry, 98 on a relief rally, start of a year, short-term cost basis, we hit that. And again, these levels aren't supposed to be pinpoint precision. Why do we find a resistance to that level? Because everyone who bought recent short-term holders goes, I think it's a bear, I'm going to de-risk here. So we saw people move. The investor mindset shifted from, buy the dip, to sell the room. So now you've got people who are willing to sell as it goes up, wanting to get their capital back. Market breaks down. We get to 80K. We lost the true market means. So the average person who's

active in the cycle is now underwater. ETS are underwater. And I would say most people felt when we lost that November low, everyone went to all the stages of grief about it being a bare market. Losing 80K was the acceptance phase. Now everyone believes that it's a bare market. And what a bare markets do, they trend law. So there's no doubt. We're going to find out that a head fund blew up. An options contract exploded. Somebody, somebody blew up somewhere, no doubt. But that's because they thought we're in a more market. We're in a bear. People sell into rips. And that cascade down as 60K, it's important to talk about that level. So down in that 2024 chop consolidation zone between, must say, 50 and 70,

but 55 to 70 really, in 24, every time we went below 50k, that's a trillion-dollar market cat, it was bid. Every single time we went down below that level, it was bit. The largest amount of trading volume, if you look at like this cycle, has occurred in that 2024 zone. There's about 10%. There's more than now. It's about 15%. But at the time, before we sold up as about 10% of the supply down there, it's now up over 15%. So about 5% of coins of over the last three, four days of transition down to that level, that zone by any mean reversion model. If you want to look at the power law, if you want to look at the true market mean, if you look at MVRV, we'll look at 200, a moving average. No matter which mean reversion bottle do you look

at that 60Ks are only 20%, and for the 200 day, 5%, we're in the bottom fifth of all mean reversion models. So if you believe that markets are mean reverting, which they are, that's the value user. And that's why the report I released was at six, I think it was 64. And by the time I'd recorded the video and then shipped the post, it was a 60. The post was called Welcome to Deep Value. And that doesn't mean that the bottom is in. it's a decent chance it is.

What it actually means is that if you are now looking to go, oh, it's a bare market, I should start like selling to buyback low. I should start going short. You kind of should have done that months ago. You're at the point where it's like, if you're really looking to sell into this, you're kind of doing it wrong. So, you know, you've got to just flip your bias because you are really betting that this time is different and that it's going to zero.

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My general framework is, okay, but is that really solid analysis? Basically, I'm going to look at the calendar and trade this asset, okay? My view is, show me when investors put the bottom in. me when investors sell the top because once I can see the conditions that manifest into a top or a bottom, then I'll look at the calendar, right? I actually think that people anchoring to this four-year cycle, it's a very simple narrative, and this is very common, by the way, in markets, the financial media, this is literally what they do, after the fact they go looking for a reason to justify why something happened.

If you anchor your analysis to it's a four-year cycle, therefore it has to be a four-year cycle, There will come a time, whether it's now, whether it's later, whether it's next year, whether it's 10 years from now. There will come a time when you will be clouded by that bias. It's an unnecessary bias. You're anchoring to it has to happen in October, which means you're going to, you're mentally going to go and find reasons why the evidence that we just had a significant sell-off event.

And by the way, we may very well go low. We can talk about that dynamic. But if we just put in a meaningful low, you're going to be anchoring to that bias and you will find evidence to disprove why it has to be October. Like you'll be looking for it to be October. So maybe, but am I going to use the calendar as my basis for making a decision? No, we have so much data to actually make a decision of what people are doing. I'm going to look at that instead because then I'll check the date, right?

I'll check the date and the price when I see the behavior that signifies some inflection point. So you said then we may go lower. What percentage chance would you put on 60 being the bottom? because it's bounced pretty significantly from there, but maybe it always does. Yeah, yeah, no, and generally speaking, the market will want to come back and retest those lows, the pace and speed of that sell-off.

And I look at my own self. I look at the evidence of like my subscriber base, because generally I'm going to got communication channels, we get comments, you know, we've got our orange members. You know, we're always talking about this stuff. So I get my own read, my own instinct. I've got the data. I then see what people in, you know,

I would consider to be right. the smart money are then talking about, then you go on Twitter and you see what the not-so-smart money you're doing. And that gives me a nice spread that the odds that we've put in a, the bottom have increased significantly. So if your base case was it, we were going to have a, you know, a grinding bear that would just consistently push lower and lower and lower, the pace and how rapid that sell-off was, I know internally for me, I was like, I have to buy this. Yeah. And then I went, I have to actually buy this again. So I'd I bought a big slug.

My view is that the odds that we've put a bottom end have gone up significantly. In terms of capitulation pressure, and this is something that I actually am going to be writing about today, the capitulation pressure that we saw at $1.5 billion, and I actually just got some new data. Shout out to Bitcoin Research Kit and ResearchBitcoin.net, two data sources for on-chain data. Couldn't recommend them highly enough. I've just got access to looking at it by year.

And you can see which class, like 2009, 2010, 2015, which year group were the sellers or the spenders on any one day? Back of the 2022 bottom, we had $1.5 billion a day in capitulation losses, mostly driven by 2022 buyers, the people who bought in the bear and 2021 top buyers. We just had exactly the same amount, $1.5 billion. You can argue Bitcoin's bigger, so the number could be bigger, potentially, but class of 2025, class of 2026. We saw a massive capitulation by top buyers and people who bought that 80K bare flag, $1.5 billion in a single day, and that's been going on for about three days now. So we've got a massive capitulation type wick. There's a metric we look at called SOPA, spend output profit ratio. It basically is like a normalize, what's the

average loss or profit that people locked in by spent coins? It hit minus one, to deviations, which we only see that in two events. Historically, there's only two times we see that. What I call the shot across the bow sell-off, the first sell-off that everyone goes, oh, that wasn't a div. That was November. That was the shot across the bow where people who understand markets go, that wasn't, that wasn't a dip.

That was something else. And then just then, at the bottom, at the bottom. Now, we may go lower. Markets, and this is such an important idea, markets are a process, not a result, off. And I think a lot of people get caught in this mind frame where they're going to sell the perfect top and they're going to wait and they're going to buy everything at the perfect bottom. And no one ever does it. No one ever does it. And what I can tell you now as a fact is there is no committee or industry or entity that sends you a trophy or a medallion or some kind of prize

for buying the absolute bottom. I'm of the view that the best way to do this is just to buy the bottom. Too many people want to buy the bottom on the day. It's going to happen at like 4 a.m. your time. You're not going to have your limit. The amount of people I've already seen be like, I got within $200 on my limit order. I just turn on DCA heavily. I just want to buy the bottom. And if you really think about like 2018, 2019, do I care that I bought it 6K, 3K, 4K, 5K, 8K? Do I care in 22 that I bought at 20K, 22, 23, 15, 17, 18? I don't care. I want to to buy them all. I buy all of it. So just buy all of it. There's a very good case to be made that we've put in enough of a bottoming capitulation wick. Now, by the way, we always tend to see two.

2015, we have one at the start of the year, one at the end of the year. 2018, we had one in December. And then you could argue COVID was kind of another capitulation low, high volume event. 22, we had when three arrows blew up. And in June, 22, I'm very much of the view that that's when bottom formation started. From every metric I look at, bottom formation started in June. FTEX was like a hyper extension, which went straight down, sideways, straight back up again. That's the second capitulation wicks. So we do tend to see two capitulation wicks.

Bottoms are a process. It takes time to hammer out. There'll be lots of lower highs and bear market rallies are the most powerful. They get the bulls hopped up. And it just beats them and beats them until eventually. I'm of the view that we've done most of the price pain. We've probably got time pain ahead. Generally, time pain is a painful thing because everyone just gets bored.

Everyone's poor again. We're poor again and you're poor for a long time. How long that goes for? Anyone knows. But I think the odds that we've done a lot of the, we've done a lot of the hard work is, I think that's where we're at. It's funny, though, this time there really hasn't been a strong narrative behind why the selling has occurred.

So, like last time in 2022, I ever the, there was Luna, 3AC, FTC, all that stuff. And so if you're watching that as a bitcoiner who's got conviction about Bitcoin, it's like, okay, we've got to wash all this stuff out, get the fraud out of the market, things are going to be back. Whereas this time you're looking at it being like, why is it selling off? Yep. You said that it's the class of 25 that are selling now.

25, 26. Who are they? Because like we've spoke about this. Like retail didn't really come back this cycle in the same way it has previous. So is this institutions that are sort of selling and panics selling out. I guess I would ask, why does it matter? I think it matters because it's interesting. to know like who is who's moving the market at this point.

Like is it just the, the you and I of the world or is it like BlackRock? Well, I mean, if we can look at this from different avenues, right? So let's start with the on-change side of the equation. Through all of 25 and certainly from April onwards, we've talked about this, the sell side, I just don't think people really still appreciate the magnitude of rotation that happened. This is like the 80,000 coins guy.

The 80,000 coins guy. And it was across all age bands. Again, when you looked at it per year, You had the widest distribution of ages, of what years they came from. I really do like Jordy Viss's approach of it being the ITO moment. It is a really good mental model. It is what happened. Now, who bought those coins?

In the on-chain world, some of it's, you know, it's going to be ETS, but a lot of it is just people buying it in spot market. Some of those are institutions, you know, all sorts of people can buy spot. Who bought those coins doesn't mean they're the ones who still hold them. So that massive amount of sell side, didn't sell to a hoddler. Some of them did. I've got coins up at the, you know, 80K, 90K plus zone, 100K zone. I'm not selling them. There's a lot of long-term holders come current. I think the long-term holder cutoff. We use five months. It's coming up to that October all-time high.

We're in that zone, certainly passed the first one in August. So the people who bought those coins aren't going to be the ones that carry them over the finish line. So those coins are going to be sold to a trader. They're going to realize they're wrong. They're going to sell to someone else. They thought they bought the dip. The dip kept tipping, they're going to sell to someone else, those coins have to rotate until they find a cold card. So that will happen. And I think this is where at 60K, 70K prices, they're going to increasingly find that cold card. So who the sellers are, honestly, I actually don't spend that much time trying to work out at that kind of granular level because I just don't think, I think there is an

angle to doing that, but we generally find out who they were after the fact. So my view is, well, why don't I just look at what's going on now? We'll know. we'll find out who they were later on. Someone blew up. There's no question. Someone out there blew up. But do I want to find out after we've like hammered out some kind of a floor, hit some kind of capitulation week, I just want to say, look, the odds are, we break

80K, we're probably going straight down to that chop solid Asian range. Just act accordingly. It's fun to speculate though. Because again, this time, I didn't really think there was anyone out there that was going to be in trouble if we had to put a market drawdown like this. Who do you think

may have blown up? Is it going to be like a winter mute type person after the October eventing the crypto crash? Or is it, like, who do you think that could be? Is it treasury companies? Well, it's a good question. I don't think it's treasury companies. I mean, it may be, but again, once you get below the top 10, they're just very small. Yeah.

And also, I don't, I mean, again, you've got to go into each of these treasury companies individually. Did anything from really take that much leverage, like actual leverage? A lot of just sold equity in pipe deals. So there's a bunch of insiders who got smoked and retail, but that's kind of it. So I don't know if they're going to be the big driver of the sell side, honestly. they can kind of just wait. So that's one component.

The ETS, we saw about 7.5 billion in outflows. That's going to be a little bit more because I'm sure those outflows. There'll be this week, no doubt. 60 at 80K, 62% of all the inflows are underwater. So that's going to be significantly higher now. Actually, it might be not dissimilar because most of the inflows that were in profit with 2024. But anyway, all of the outflows that we saw before, so in the back end of 25,

when you overlay the CME open interest, The outflows from the ETF is almost perfectly matching the outflows from CME open interest. Looks to me like a lot of window dressing, hedge funds who had a basis trade on, closing out their books and saying, look at this nice green number at the end of the year. We've seen more just like outright spot selling in the ETS, but it's, again, the AUM of the ETS is down like 4%. Yeah, well, I spoke to Joe Consortia on the show that's going out today, actually. He said it's quite impressive to see how well the ETF has held on. Oh, totally.

No, AOM is down like 6% last I looked. If you do it on a cumulative inflow basis, again, it'll be slightly outdated, but about 12, 13% has flowed out of the total inflows. You know, we've actually, if you look at it from like, what did we undo? We undid the flows of people who bought from October, you know, or like late September. So we kind of undid the top buyers. That's it. And a lot of it is basis trade unwind. So I'm not that phase about the ETS, honestly.

They're kind of better hoddlers than a lot. So in many ways, I mean, I think actually a good angle for this, and we'll probably find this out. You spoke to David Dredge. I've spoken to David Dredge. I'll never forget when he, the first time he said to me, he goes, how do you make a market risky? You get the banks involved. What have we seen? We've seen the banks get involved.

You know, like tradfive blowups make us as hodlers taking out a Bitcoin back loan or putting some perpetual swaps. These 100x perps swaps on your $10,000 account. is nothing like it makes it look like we're gambling with bottle tops you know like tradfly when they get involved that's where you get real risk so you know there there'll be bodies out there someone blew up and there's no question there's going to be 10 10 October you know there's entities out there who've been four sellers we'll find out who it is but you know once the smoke's all cleared and you know i kind of live in more in the now than trying to speculate on who they who they might be yeah it's funny of the last i would say real the last ball market the

The two cells that have got the most attention on Twitter and probably been mocked the most were the 80K coin guy and Luke, they're both look like geniuses now. Totally. Well, and Luke, to Luke's credit, he was trading the Bitcoin Gold Cross. That's his benchmark. He's not using dollars. He's using the Bitcoin Gold Cross. And good for him. There's no, I mean, you have to get, I saw his news that recently.

He's still waiting for much, much lower prices. And here's another thing I've noticed recently, which I'd kind of like to see. Everyone was saying 50K, 56K, 200 week moving average, realized prices of 55. The base case bear market at 80K was 55. Now that we got to 59 and change, I'm seeing people 25, 30, 40. Everyone's now lowering their bare. The acceptance phase has come in and they're now deciding it's going to go much, much lower. It might.

It absolutely might. But that's also kind of you're in the bottom fifth. If to get down to those levels, you are pushing every mean reversion model into sub 5%, sub 1% odds of occurring. Can it happen? Yes. There's no zero for anything. It's just really, really unlikely. Yeah, see, I'm the opposite of that.

Whereas, like, if you, last time we recorded a show in November, I don't, I don't exactly remember what I said. But I'm sure I would have said we're not going to go to 60. I think we use the anecdote. If you go down a 50k, the average Hodl can buy 0.1 corn with a 5K slug. Yeah, that's too good. too damn cheap. So I was very happy with a six case slug. I'm going to step in on that. That was my general base case. Like, yes, I can find six grand lying around. You can even 50. I'll find more slugs. Yeah. But like, I could be totally wrong again. I would say there's

no chance to go to 40. I could be proven completely wrong. But like I always, to trend the other way there where I'm just like perma bullish. But one of the things that you always say that I really like is that the bull market authors the bear that follows. But I don't know if that's happened. because this is a super volatile down swing that we've just had. Like, we're over 50% down, or we got to over 50% down. We didn't really have moves like that up. We had the Omega candle. Let's not kid ourselves here.

Every other bit, I think people forget what a 75% down is or an 80% down is. That's another 50% from here. So, you know, it's the classic thing. What is 95%? What is it down 95? It's getting cut 90% and then getting halved again. That last 5% is really, really painful. So I think a lot of people miss that convexity of downside.

55%, again, if we were to bottom out here, will be by just about every metric, significantly less than every previous bear market. The damage just isn't anywhere close. So I think that's something you've got to keep in mind. It's not just the percentage move, though, is how it moved. It was basically across a few weeks just down only, very violently. we didn't have anything like that on the upside that I remember.

Yeah, yeah. But generally speaking, bare markets, once people just recognize, like, bear markets are more volatile. They are more volatile because people lose hope, you know, and choose your weapon for why people are losing hope. There's people, like, even the people who are bearish because of quantum, I saw over the last week being like, okay, 60K is a bit too bearish. Like, you know, it's getting a bit too low.

It's like, even folks who have been bearish are like, ah, it's kind of low. But yes, look, there's dynamics there. But, you know, once, bear markets kick into gear, downtrends, same as uptreens. Once people believe it's an uptrend, they buy the dip. They buy every dip. Once people believe it's a downtrend, they sell every rip. And, you know, bear markets tend to move much faster. Bull markets go for, a lot of people like to say the bull market starts when you crack all-time high, when you've already put like five-x of

the six-x behind you. Like, for me, the last day of the bear is the first day of the bull. So, bulls go for a lot longer because human beings are naturally geared to be bullish. We're naturally full of hope. The upside is, takes a lot longer. It's a grinding process and then, you know, you get euphoric or rounded tops. Bottoms tend to be an event. And no one believes the recovery. No one believes, that's what I call it a disbelief rally, because it's just another lower high. If you look at the on-chain side, 2023, 23, was a massive year of losses, realized losses. That like middle period, I think we rallied until about, May or March, I think, and then we grinded sideways. In August, we went from like 29K,

it was like a vertical, Bart Simpson down at 26K. The amount of losses that kicked in that like August, September, October period before we ran up for the ETFs was like, you could see that people were afraid that we were going just another lower high and we're heading back to the lows. A lot of people sold in that August, 2023 period. And we just kept grinding high. So there's like disbelief fades. We got the Omega candle finally. In both directions. Down Adder.

So who's manipulating the market? Yeah, I know. Manipulate. It's amazing. Your favorite topic. Well, it's always manipulation to the downside. If I can just bring up something that I found very intriguing, how annoying are the silver bugs?

How annoying are they? I've not even seen it. Why are they being annoying? No, no. Market goes down 15% an hour. Manipulation. Market goes parabolic to the upside. It's all they want to talk about why why.

your coin is worse. The silver bug episode of watching how painfully irritating they were, it's a mirror for what we look like in the bull market. Do you want to know why the critics don't like us? It's because we look like that. So, you know, the silver bugs, immediately we go literally parabolic. Every sign under the sun was, guys, this is the frothiest thing. This is just froth, froth, froth, froth. And yet it goes down from a parabolic vertical move and everyone goes, manipulation. No, no, you've got a bunch of old hands who've been stacking silver since they were, you know, 14 years old, and now they're 70, they've decided to sell because they've waited their whole life for this move. So all these silver bugs are selling,

and who's buying? The people I saw at the silver shop when I was selling, didn't know what a trance was. So, you know, you've just got the speculative new money coming in. Short-term holders bought the top, long-term holders, sold the top. It's exactly the same dynamic. So, So even the silver bugs like to claim manipulation when a parabolic move pulls back 15, 20% in a couple of hours. It's like, no, it's a blow off top. It's a blow off top. So you sold, have you sold all of your gold and silver now? No, no, no, no.

I've still got all my gold, all my platinum. My silver, so silver and platinum are always in my speculative positions. You know, we're talking precious metals is 10% of my holdings. Platinum silver are 5% of that 10%. So they're a small chunk. silver and both of my view is a speculative trade. But basically when the market went absolutely parabolic, I was like, I mean, I just see froth everywhere.

Every group on Twitter is talking about silver. One of my mates who's very competent markets goes, my uranium channel is all silver. And by the way, uranium is doing well too. So like that's another big signal. It was the day before Australia Day on the Friday. It's gone parabolic. They had, I think on Australia Day, so all the bulls, deals are closed.

$36 billion in the SLV ETF. It traded more than the stock market did. The ETS. Again, signal, signal, went up, I don't know what the actual number is, but it was like a five sigma move to the upside. And I was just like, I just have to sell some here.

So I'm up 3x. So I went and lined up, sold a third of my silver. Basically, I'm flat on my total holdings now. So I can just let the market do its thing. The people in the crowd, like lining up behind me, the bullying deal, I was first in line. Like, I'm up 10 grand for my buy yesterday.

Oh, silver was the greatest. You know, I've been telling my friend and no one wanted to buy. I was like, God, just... Get the fuck out of this thing. This guy is just speculative like anything. Again, the lady next to me, I was selling mine at 150 Aussie. I think I got like 2% below spot. She was selling it, buying at 220, right?

50 bucks above my cost, more than 50. bucks above my cost basis. I paid $50, like my cost base was 55, so she's paying above my cost basis in premium to buy silver that I'm selling right next to her. And I'm just like, the next lady was trying to buy some gold, didn't know what a three ounce was, didn't understand the difference between different mince. I was like, I just. Isn't it so interesting though, that that's where like the FOMO retail investors went this time? Again, people, retail lining up out the door to buy silver coins, it's probably steamy at a minimum if I didn't sell third, get my money back. Now I've got play money, which I can now stack sets with.

Where do my slug come from? I traded my silver for gold, for Bitcoin, sorry, on the way down. So I'm like, you know, gold silver ratio got to 45. It hasn't been really below 45 for more than a couple of days in my life, in my whole lifetime, right? The last time I did this was 1979 where it was better than that. And really, it's like if you look at the gold silver ratio long term, it's just trending higher, which means silver is losing premium versus gold. Yeah, it goes on speculative runs. What happens after every speculative run? It goes down for another 50 years.

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So why? Do you think that trade has still got legs? Oh, for sure. Yeah, yeah, yeah. So Silver was always a speculative play for me. Gold, I really do view it as savings. It's ballast in my portfolio. you know, again, I use the analogy of like, what am I actually chasing the housing market

here in Australia? If I found a house that I wanted to buy right now, and, you know, people, people mock me for a long time for holding gold. I did. You did. If I wanted to go and get money for a housing deposit right now, I would kick myself for selling my Bitcoin at 70K, right? And people can say, oh, but borrow against it, blah, yeah, sure, that's all well and good. I don't want to take more leverage on top of more leverage. It's kind of want to own the house, right? I just want to get in the market. My gold has done exactly what I needed to do by not being down when I might need it. Same trade, just not going to go through that volatile process.

But, you know, gold hit 1979 just about levels of overstretched. It's probably like RSI of 95 on the monthly. It's probably got several months. Right. Chop consolidation, gold bugs coming for you. So do you think, obviously the debasement trade was like, was it J.P. Morgan that came out of the generation? trade. And that was gold, silver, Bitcoin, but Bitcoin's obviously not really been a part of that

trade. I don't think the debasement trade's been what's driving the market, though. I think this is people, again, like, is there really significant QE and monetary debasement going on anything close 2020s, 2021, even post-GFC right now, not really? So, you know, this idea of the debasement trade, and it's really important to recognize gold and silver and Bitcoin, they all have different supply and demand profiles. I think, honestly, honestly, of the one thing that killed sentiment treasury companies were bad um crypto has been bad but like watching gold go up i think has been the the nuclear bomb for bitcoin a sentiment but i think they just got the the story wrong there was zero chance that all the sovereign nations were going to go yes let's buy

bitcoin at a two trillion dollar mark cap over gold which we've already got tons of and i don't have to convince my old man what gold is i don't have to explain a thesis for gold they get it right it's a cultural thing in many places in the world. So from my view, gold just has that sovereign beard. It's always going to have that sovereign beard. It just, you don't have to explain it to anyone. Silver's had a supply and demand deficit as an industrial metal for a long, long time. Throw in there some folks who are willing to pay a $70-50 premium for silver coins and you've got a speculative bubble. Platinum, it's, you know, are we getting rid of the internal combustion engine anytime soon? No, what's died off recently that everything's going to be EV-fied.

So, you know, catalytic converters, platinum, number go up, plus some speculative demand. Bitcoin's its own thing. It's going to take a long time for people to come around to it as a savings asset. You and I see it as a savings asset, but it still has that, you know, it's a levered tech stock, blah, blah, blah, over time. And just think about this for a second. We're going to bottom. Again, if your decision tree is a Bitcoin's dead, then ignore everything I'm about to say.

If Bitcoin doesn't die, at some point we set a bottom. once we've set a bottom and it starts moving higher all these narratives about bitcoin being shit and dead we'll just go out the window momentum traders will come back it will have its silver moment and if you look at like if silver can do what it did if gold can do what it did you're telling me that bitcoin can't do what it's going to do so from my perspective price often solves all narratives time generally solves price you give it a long enough time podler's going to put a floor in this thing will start moving and then suddenly all these narrate like if you go through another all-time high Suddenly, people just go, oh, now I can't blame it on stimulus.

I can't blame it on the ICO boom. I can't blame it on the ETS going live. I can't blame it on the president. Suddenly, it's like, I'm just actually wrong, aren't I? It's going to get to the point where the crisis realized I just actually am wrong. This thing just keeps coming back. So from my perspective, right, once we put that floor in, we're going to start moving higher. Memental traders come back.

The debasement trade will come. This is that. It's a longer term view. And I think it's so easy for people take long-term, guaranteed, mathematically guaranteed, macro things, and expect them in the next daily price candle. It's going to happen. It's just not going to happen in the next daily price candle. Macro moves at a glacial pace and then all at once. One of the other things I've seen a lot since people have kind of come around to the idea that we are in a bear market now is that Treasury companies is that Treasury companies?

Is that the Treasury companies? I believe that. Yes. So why do you think that happen? Is that because people are buying Treasury companies and then sort of hedging them? that on where no where where where where did the marginal buy go to the treasury company the treasury company the treasury company the treasury company then buys bitcoin no did they buy bitcoin a lot of these were pipe deals like did they actually buy and this is the thing that i i wrote a piece

really about strategy um and how i'm like i'm a shareholder i've reboard about 158 bucks i'm waiting for that capitulation signal a bit of more evidence to put my second half in because i do want to have some exposure again small exposure but um i was thinking about this when they diluted a 1xMNAV. And again, I'm going to put strategy, as we all know, it's in a separate bucket here. When strategy is diluting it at a 1xMNAV, my general big picture view, if Bitcoin dies, everything I'm about to say goes to zero. If not, strategy is more or less trading like an ETF, right? It's going to more or less track the Bitcoin price because what is MNF going to go to 0.4? At some point, it's going to come back to 1XMNAV. It's going to have some,

it deserves a premium for some form. So if I'm buying MSTHA, just as a case study. If I buy MSTR at a 1XMNAV and they're diluting in a 1XM nav, what am I buying? I'm buying $100 worth, $100 for the $100 I put in of Bitcoin exposure plus the company's infrastructure. I'm buying the full history of the business from then until now with that $100. So I'm buying not only the Bitcoin, but all the infrastructure as well, management team, the whole lot. If I buy strategy at a 3xM nav, then I'm buying $0.30 worth of Bitcoin and paying a whole lot for that extra premium. it, right, all the business and all the rest of it, and hoping that it goes higher.

So I'm actually very okay to buy it at a 1XM nav because I'm kind of getting my money worth. And by the way, I don't mind if they dilute at 1XM nav because I'm kind of buying the Bitcoin, they're buying the Bitcoin with it too. I'm buying the system with all the history. With a lot of these treasury companies, if you invest at the peak, if you invest and you get six cents, 10 cents, 15 cents worth of Bitcoin, and then the stock price goes down, were they really able to buy Bitcoin with the dollars you gave them? Or did the premium get

slaughtered so quickly that your capital just got destroyed. You kind of just destroyed your money, right? You kind of lost your money. That's basically, and it's never going to come back. A lot of these companies will never get their premium back. So that is a lose position forever. You might get some of it back, but like a lot of these things are never going to go up to 6x, 20x, 50xm Navs again. So that ride down, just straight to destroy capital, if you had to bought the Bitcoin, at least you'd have put $100 worth into Bitcoin. Yeah, that makes sense. It's that marginal bid. And we kind of lost that at the same time that we had the biggest

sell side that we've really ever seen in the whole market history. So you kind of had massive supply side pressure and treasury companies that didn't really buy any Bitcoin with your dollars, right? They gave to kind of the insiders kind of made a lot of money. So that's how I said anyway. Yeah, I almost feel bad kicking them when they're down, but NACA have become the sort of poster child of this exact thing you're talking about. I think they're down 99.2%, or they were for a time at least. Well, what's that? That's down 90, down another 50 and probably down another 50 from there.

I think that's right. And I did see someone put on Twitter that that's the same as HECS, which is pretty brutal. Do you think they've got zero chance of ever coming back? I don't know, because and truthfully, like, I just don't care to look into the balance sheets, and this is the thing. Everything I've said here is very generalized. I think there's a handful of treasury gummers that makes sense. I saw your interview with Sailor. I think my interpretation of that, like I get what he's coming from. Like what he said, I probably could have approached it a bit better, but what he said makes sense. However,

there's just a lot of capital destruction. That's probably never going to come back. And by the way, that's capital markets. Welcome to markets. It's full of risk. That's part of the game. But there's a handful that have the potential, what, if you have 2,000 Bitcoin, 500 Bitcoin, if Bitcoin goes to a million dollars, you're not changing the insurance market. You've got 5,000 coins, you're a 5 billion dollar company.

Okay. What are you doing? Changing the bond market? You know, you should not big enough. We can't do anything. A lot of $5 billion companies. A lot of $5 billion companies. So it's kind of near the hinkle there.

Yeah. So how long do you think this bear market will last? Because, again, going back to the bull market authoring the bear that follows, do you think we have sort of V-shaped recovery here? or we another period of chop consolidation? What do you think is going to happen? So historically, V-shaped COVID is the only time we had a V-shaped event. We haven't really seen many of those. Bottoms tend to be a bit of a process.

Now, there's a few interesting stats. I think it's 55, 45, I'll get one of it. It doesn't matter. We had a crossover of there was more supply in loss than in profit. We cross that 50% threshold at 60K. So generally speaking, when you hit that level, you've, got, you know, 2015 was a year-long bare market floor. 2018 was December through the start of April. So that's, what, four or five months? We had COVID, which was two days, one day. We had 2022, which was you could argue from June all the way through to January.

Really, it's probably the right way to think about it. When was the second top in that? So the 22 base started in June when three arrows blew up. Yeah. We chopped around until November. Then FTX came. blew up. And then we had that basing form, that kind of second leg of the base. So, you know, we've got anything from five months through 12 months. I don't think we're going to be at the top

end of that. I think we'll be on the shorter end of that. It will all depend on what the next couple of weeks and months looks like. How does this kind of, you know, do we actually have put in a serious wick? And it kind of looks like big weekly hammer candle at the moment. It's good to see. We will see what kind of strength comes in. I'll be watching things like the ETFs and whether we want to see fear. Actually just, I know this sucks. But the reality. But the reality. is people who bought the top, they may not know it yet, they're going to capitulate eventually. They're going to run out of steam. They're not going to be able to handle the process that comes after this. They're going to just continue to see FUD confirmation bias, reasons why it's

all over. And they will eventually just go, I'm done. Where's that? What's that classic Bitcoin meme? Bitcoin is finally stabilized at $35 a coin or whatever it was. And it's obviously I may as well get my money back as much as I can. And that was like $36 or whatever it was. Brutal. It happens no matter what the price is. That's the human condition. So we are just waiting for that it's so over, I can't do it anymore. Usually time pain is what's ahead of us.

I know you like watching the macro side of things. How much do you think that played into both this sell-off and how much thing it'll play into the sort of coming rally whenever that happens? Yeah. So the macro setup is really interesting. I mean, it's clearly a pretty volatile, challenging time. You know, we've had its start of February, and we've had, presidents getting arrested, who have had threats of bombs.

Like, you know, countries are at each other's throats. It just feels like no one, there's so much uncertainty in the macro world. No one knows what's going on, where to place their bets, like what to do next. Totally. I mean, the economy is not in good shape. You know, like, it very much is that K-shaped economy. Some parts are doing terrifically. Yeah.

There's trillions of dollars of cap-exp spend coming from the AI boom. You know, in Australia, most countries, where the government is spending the money is where the economy is doing very, very well. elsewhere, it's just doing really not that great. And there's a lot of evidence to show that there is, in fact, a correlation between just like the real economy and actual people and Bitcoin's performance. Real economy is doing poorly.

Bitcoin hasn't been doing that great. All this stuff kind of lines up. But at some point in time, whether via stimulus or by actual recovery, we're going to like the world isn't going to be a doomish place. This is where I like Joe Carlosari's perspective? Yeah, I like Joe. What are you going to do? Assume there's going to be a recession for the rest of our lives?

It's improbable. And once it gets to a sticky point, the powers a B come back in. So, you know, we're seeing a lot of weakness in the, not a lot's probably the wrong word, but to me, when I look at the S&P, it looks like it's curling over. It looks like it's just right out of gas. Sometimes markets just need to puke, get some of that excess risk out. It's a richly valued stock market. Bitcoin does tend to front run this stuff, bottom earlier, start to move higher again.

So I'm actually very optimistic. I think Bitcoin's actually in a really good place. And you're going to give me these prices. I'm going to take them all day. And, you know, at some point this thing comes back, unless your decision tree is Bitcoin is dead, in which case you're probably not watching this. So what percentage chance?

I'm going to put you on the spot here. Do you think we get an all-time high in 26? That's a good question. Look, I'd probably, I'd have to give it like 15, 20%, I think. Right. However, it does depend because if we get, I mean, the odds of that, I think really, requires a real pivot, a crack in the sovereign debt market. It actually requires a big print type

event for that to happen, I think. The odds would put a bottom in already. I would probably put it more than 50-50. I would say probably 60%. Damn. Yeah, yeah. Well, I mean, at a minimum, we are in the bottom fifth, unless all your models are broken and Bitcoin is going to zero, right? In which case, all your models are broken anyway. So we're in the bottom fifth. And at 60K, we're in the bottom like the bottom 10th of where we're likely to go. So it's favorable. See, I just, the most entertaining outcome I think is always the most likely. And I think we hit 58K just for 58K gang.

We got down when we got damn close. We got close. We got very close. I think we're going to try it again. Yeah. Well, generally speaking, Bitcoin does tend to retest those loads. Why don't you put a capitulation event in, which there's no question that what we saw on what Friday was a capitulation event. Just like A top, distinguishing between A top and the top,

a capitulation and the capitulation, that's really where markets are made. We had a capitulation event. The question is, do we have the capitulation event in play? And truth is, we just don't know until we see the market play out from here. I think we should zoom out. This is a thousandth episode of what Bitcoin did, which is like insane. Which is none, by the way. Well, no one I'd rather do it with.

Maybe Pete. But we are on the other side of the world from each other right now. But when you think about it. So what Bitcoin did start at the end of 2017, like the place that Bitcoin was in then and the place Bitcoin is in now is, yeah, worlds apart. Like price, 10x difference or whatever it is. But that's not even like the start of it.

Like one of the, I was looking up things that have changed since then. With 80 times the hash rate, which is insanity. We've got, we didn't have the lightning network. We didn't have El Salvador. We didn't have like Black. ROC ETFs, Wall Street, we didn't have, there's so many, like, fundamental things that have changed. Like, if you take a step back and you look at where Bitcoin is today as, like, a very relevant geopolitical asset that's becoming more and more relevant, like, how do you take that in?

How do you try and give people a more long-term perspective and not panic about what's happening right now? Totally. I mean, let's go back to what I was saying about strategy. There's a line that Peter Dunworth said at the Bitcoin Alive conference in Sydney, probably two years ago. I think we would have probably been the 2021. It was in March, so it might have been like 50K or something like that.

Anyway, it doesn't matter. His line was, whatever the price was, 30K, 50K, yes, it's not the cheapest price of Bitcoin's ever been. But the amount of risk that has been removed, you are buying a de-risk asset. That is why the price is higher. When you're buying Bitcoin at 70K, 60K, 50K, 50K,000, 100K, whatever, you are buying, like strategy. all the history. You're buying the history of where we've come from to now. It is worlds apart.

And again, let's think about Twitter as a case study here. How many analysts who are tradfai and wouldn't have even cared or known what Bitcoin was when the first what Bitcoin did episode came out. Something happens on a Sunday, Bitcoin does something. What are they posting? Bitcoin price charts. What do they have on their Bloomberg terminal? Bitcoin price chart. Why? Because it's information. Skeptics. You know, even skeptics. I saw Andy Constant, who's been skeptical. of micro strategy, be like, even I'm looking at this and going like, these are good prices, you know, come on. Even he's starting to buy Bitcoin, right?

You just, you just see all these different characters who they understand that a lot of the risk is gone. There's going to be people who are going to hate this thing forever simply because it's digital. Yeah. They're going to hate it because they can't hold it. But, you know, I got a five-month-old son. Is he really going to be buying physical coins? No, he's going to be very familiar with digital wallets, you know, phones, all the rest of it.

That's going to be second nature to him. Right. I've seen Marty and Matt playing around with these bots where they're just like, they just move Bitcoin around. And why do they go to Bitcoin? Because they know they can have a private key. And even their owner can't shut them down and take it away from kind of cool, kind of interesting. So from my perspective, when you look at just all the infrastructures been built behind us, again, ETSs, you know, there's going to be challenges, David Dredge style challenges with, you know, leverage and structured products and all this stuff. But also that allows bigger capital to come in who wouldn't have come in before that. You know, we're at the stage where pension funds are interested. And a lot of people say, well, it has to be the next bull market. It's going to be shit unless we get sovereign buyers. And I just look at the amount that these institutions have allocated, 0.01%, 0.01%, and that's millions, tens of millions, hundreds of millions of dollars. No, they just have to go from 0.01 to 0.02, or maybe get to one.

You know, then we're talking about just tremendous amounts of capital. So over time, Bitcoin punch it. Just allow yourself to believe that Bitcoin will eventually hit. a new all-time high. How many institutions are going to ignore everything that they're going to realize that I'm also buying a de-risk asset with all the infrastructure. I can now buy this thing and I'll put it into my balance sheet. I'll put it as part of my portfolio. Hey, look, yes, it has drawdowns, but the sharp ratio keeps kicking ass. The metrics just continue to show that it does really, really well over long periods of time. And as we've seen, unfortunately, in the wrong direction,

is an uncorrelated asset. So, you know, there's all these factors that price solves all these things. Time solves that price. And that's just because hodlers keep buying this thing. And they will continue to buy this thing. One of the things that I've liked to see is the critics of Bitcoin have changed significantly. Yes. So, like, it's not the Peter Schiff arguments that are just nonsense anymore.

I think Andy Constance is a good example. Like, he's a smart guy. He's a nice guy. He was right. Yes. But also, like, even when he was being super critical of strategy, he kind of is like, Yeah, Bitcoin might be interesting. Just buy the corn.

Yeah, exactly. Even the critics are like a Bitcoiners now, which is like, I don't know exactly why that happened. I don't know if it is almost, you know, Larry thinks saying this thing's okay now. And so people, like moves the over to the window and people can talk about it in a more favorable way. But I feel like we've moved past the nonsense fud. Maybe take the last few days out of it because everyone starts coming out of the woodwork.

No, no. The last few days is a perfect example. We were talking to this before we record. The fud has turned into people who can't do arithmetic. telling how, you know, DCA for five years, you're not down, you're up hundreds of thousands of dollars, you know, but they're saying, oh, look, you've got a DCA for five days. You know, people who can't do arithmetic are coming out of the woodwork as critics. The FT, it's 70,000.

Oh, hang on, 71,000. It's, it's, you know, Peter Zihon level of it's going to die, but goes, how could you put that slop out? How would you as an editor? Could you possibly allow it to go out? I think the FT piece was written by Jamimau. Is that right? Yes.

She is unbearable. Her criticism of Bitcoin is the most brain-dead criticisms I've ever read. This is where we're at. You know, like if you really, if you really peel back the onion, what are the true fud pieces left? Right? The true fud pieces are left, quantum, which we're going through at the moment, and the other one is security budget.

They're the two last bastions. Talk about a de-risk asset. Now, potentially a problem with quantum, potentially a problem with security budget. Are they solvable? Time will tell, right? We will go through the motions of dealing with these things, but that's where we're at. Environmental FUD's gone. You know, it's only used for criminals, fuds gone.

We're just waiting for that IMF paper to come out saying it's the last stand again, and then it's off to the races. It's funny, the FT. So Isabella Kaminsky used to be at the FT as well, and she wrote some way more thoughtful, critical pieces of Bitcoin. She's really smart. I like her a lot. It was her and Jemima, and then since Isabella left,

now it's just absolute nonsense. And this is like the biggest financial media outlet in the world, probably. It's embarrassing. It's totally embarrassing. They should be ashamed of themselves. And it's not as if mainstream media is doing any favors from themselves, but this is just, like, I actually can't, as a profession, I can't imagine how you could allow someone to issue such absolute drivel, such absolute drivel. It takes five minutes to the bunker, especially saying.

It's crazy. Okay, so for anyone who's watching, panicking a little bit, prices down, maybe it's the first time I've been through this. Maybe it's not. It still kind of hits the air, the same. emotional part of your brain every time. Like, how do you think people should be approaching this bear market? Because this is where really you can change the next ball market for yourself in a significant way.

100%. Again, I'll come back to the original concept here. If we're in the bottom, like, again, your decision tree is, is Bitcoin dead? You're not watching if the answer is yes, right? No, there is a world where Bitcoin dies, but it's, in my view, it's improbable. I always come back to what I think is the most bullish thing about Bitcoin, which is the Bitcoin that are involved in it. Just think about your thousand,

episodes of people who've been on this show. That back catalog, you're telling me that all those people have, by the way, they all came to that conclusion while the media, the government, their weird uncle, their family, everyone was telling him that Bitcoin was a scam and was dead, all these engineer types, and they all came to the same conclusion and go, yeah, no, I think you're wrong. I think you're wrong, actually. And they pressed on. They all came to that same conclusion, irrespective of their profession, irrespective of where they lived, whether they're in finance, whether they're a doctor, whether they're an engineer, they all came to the same conclusion that just have no idea what they're talking about. I think that's improbable. I'm not

betting against that pool of people. So from my view, the people involved is just tremendously bullish. That's one of the things that first made me go Bitcoin only. Yes. Is the people that were interested in talking about Bitcoin. It was like when, because I was into like shit and then 2018, when everything kind of went to shit, I remember looking around and being like, where are the smart people in the room? Yep. And that was one of the big, it was, I've said this before on the show, but it was Pierre Oshard's articles that ended up, like, really pushing me over the edge. But it was like, everyone who was interested in Bitcoin are like serious people with good principles, good morals, and like talking about Bitcoin in a way that there was no one in

Ethereum talking like that. It is where the grown-ups in the room were at the time, and I think it still is today. And still is today. Yeah. So I think that the people is it tremendously bullish. Now, how do you deal with this process, this bottoming process? First things first, if you, again, look at mean reversion, that whole side of the equation. Statistically speaking, if you're formulating a bare case right,

now, you're not a very good bear. The bear case was months ago. Sure, we may go lower and yes, we may have a process ahead of us. But if you are formulating a bear case right now, you are doing it wrong. We're in the exciting, interesting phase of this process. So many people think that they fantasize about buying the bottom. Expand to the bottom to be that whole process. There's a thousand and one DCA tools out. there. Go and run a model of just DCAing, go into 2018, start buying in the middle of 2018, where it's 6K and still went down to 3.5. Just DCA for 12 months, see how it does. It's like lump summing over a period of time. Why do you do this? Because you actually don't know where the bottom's

going to be or when it's going to be. And I like to use the 2018 bottom. I was also shit coins. I bought Bitcoin at the top, first bound sold it for Ethereum, second bound sold Ethereum for a spreadsheet full of stuff, you know, 10, 20 grand in, and then I got 50% it on Bitcoin. It was like 90% down for everything I held. And I got 10 cents left. I thought, I got to read the white paper and start again, oh, makes sense. Now, back then, I've discovered the realized price was trading about 6K. And I looked at 2015. And I said, oh, cool. I'm on my shitty London engineering salary. And I'm like, okay, we've got 12 months below the realized price. I've got my engineering spreadsheet. How much am I going to accumulate? How much disposable income do I have? Get through to

April, straight to 14K, right, in two months. First time I felt pain to the upside. Now, we then had a second bear market that followed. That was the plus token Ponzi. But I kept buying through that 2019, listening to what Bitcoin did, just like building my conviction. Do I regret a single one of those buyers? No.

So think about the bottom as a process and a probability distribution. If we go to 40K, are you going to be sitting there with your limit order perfectly there to take it? If we've already bottomed at 60K, are you? Are you going to kick yourself if we start rallying higher again? Turn on a daily DCA and just buy the bottom. Don't worry about the event by the bottom. And people ask me, is it better to do monthly, weekly daily DCA?

I've run a bunch of models. Like, basically, if you do monthly when you get paid, and I did that for many years, you get paid, into your bank account. The challenge with that is if you had to have bought at 80, you kind of miss a lot of the move here. So if you do it weekly, one of your bonds, is at 80, the next one's at 75, and then the other ones are at 60 something. So the more your grand, more granular it is, the more you get an average price. And like, do I want to buy the

average of that bottom? Yes, I do. It's just the right way to do it, get a nice granular DCA and just buy all of it. Chug away. And my general framework, I started my DCA again. Really, I haven't, I've been like buying occasionally up around 100K, but like above 100 wasn't really buying that much. In fact, I was buying Gold instead. Right. I've been buying more pressure. metal since 24. Once we got down to 95, I turned back on the DCA. Once we broke 80, the true market mean, DCA went up to double. And then what my plan was, once we go below 70, I'm now in slug mode as well. And that's more or less what I'm currently executing. Double daily DCA, which keep chugging away. Every time we go below 70, I'm just going to put slugs in. That's the way I'm approaching it.

When do I turn that off when we get back above the true market main at 80K? Because then we are in this second half of the bull. You turn what off? You turn the DCA? DCA off. Why? Because there's a few reasons. One, when you got the DC, I've been in Bitcoin since 2019, I've reached a point as, I think a lot of hodlers, this is probably another good lesson. A lot of hodlers are us, millennials.

Where are we in life's journey? I got a five-month-old son. I got a 50% down primary asset in my portfolio, but I've got gold, which is doing fantastically, right? That's the other 10%. Do I want to build up assets in like, I'd love to buy more Bhp. I'd love to buy more ExxonMobil. I just love to have a bit more stuff. I'm in that phase of diversification in my just general portfolio because I'm really,

really, really, really long Bitcoin. My business is Bitcoin. I'm just very long this asset. Am I buying it now? Yes, because I think it's really, really attractive prices. But once you get above ADK, and this goes back to like my deal I made with myself in 20, I think we're in 2020, listen to a Michael Salaup. He's early on the scene.

I had like, I don't know, 20 grand worth of gold. I sold it. As soon as I got home, I was like, I'm just going to sell my gold and buy the Bitcoin instead. Great trade. But then I said, I have to buy back the precious metals at some point. So, 2024, you know, Haudel calls it the BitLife crisis where suddenly it's just like your dollars just don't go that far.

You've got a memory of what you could have bought back in the day. It's changing the last few months a bit. Hence why it's back on. Just make a deal. I just need to have other stuff in the portfolio. I don't really want to sell the Bitcoin for it, but I do want to have other things. And I'm just in that phase where it makes sense for me to put my marginal capital

elsewhere because it helps me live my life. I don't need to be fully geared towards Bitcoin. And by the way, do I care about selling BHP at up peak? No, not at all. Do I care about selling my gold? It's a bit harder, but not really. Do I care about selling my silver? No, off the table.

Bitcoin, cold dead fingers, right? The boy gets more of that. So it's very much that long. The Bitcoin is my longest duration asset. What do I use it for? Eventually, I'd like to not buy the house. I'd like to clear the house. Pay the mortgage off.

Eventually, I'd want to put the kid through a good school. That's what I's there for. I'd like to give them a good nesting. That's what it's there for. Bitcoin is my longest duration asset. B.HP is a decent asset, but I'm very happy to sell a letter. So you can give me some financial advice here because we're similar-ish age, both got young kids.

Yep. I am literally all in Bitcoin. Do you think I should be doing what you're doing? Once we get above the true market, mean? Because I don't want to sell Bitcoin for anything. No, exactly. So, and this is... And like last ball market, I just have a DCA all the time.

I never turn it off. Which, by the way, there's nothing wrong with that. It's very, very hard to beat a daily DCA. It doesn't matter how good of a quant you are. It's actually very, very difficult. And it's because there's like 10 days in every cycle that is responsible for all the gains. You can go back and run this across all cycles.

I need to do it for this one, actually. If you run the 10 best days, if you miss those 10 best days. Now, no one's going to miss perfectly, unless you're a terribly trader. If you miss the 10 best days, you're flat or down on the whole cycle. So basically the 10 best days offset every day of chop,

every day of down, all the pain, but you've got to be there for it. If you miss the 10 worst days, which is what people who are trying to trade in and out, I try to do, you go from like a, you know,

we had a 6x this cycle. You might have got like an 8x or a 9x, but you give up the upside. of the whole 6x. So you risk it all to get slightly more return, right? It's not slightly, but you get the point. Be in the market, but from my view, you know, you should have something as ballast in your portfolio.

And I think a lot of Bitcoiners are getting to the point where it makes sense for them to do that. It does make sense for them to do that because life changes. It goes back to the same, like, for up the top, my view was, I just don't want to, I don't want to sell my Bitcoin at the top. I'm just not going to buy because what does that give me? Like, if I think about my overall setup, if I don't buy the top, what do I have left over? Cash.

If I sold the top, what would I have at the end of the bear? Cash, right? I could also just not buy the top, and that's equivalent to me just selling it without a tax bill. And in my case, I decided to allocate it to gold instead, which my top buying was fantastic. It's done very well. So, you know, I just thinking, and now what I will say is it's actually very hard to find assets to buy. There's always a bull market out there somewhere. But my general thesis is just like hard real assets.

I like commodity businesses. It just makes sense. You know, stuff that we need, stuff that has higher replacement cost. But it is just really hard to find something. I don't want to buy the AI trend. Look at it. It's like it's ballistic. Yeah.

And then the company is now taking on debt. They don't have the cash flow anymore. You know, most people use AI. Do you pay much for it? Really? Not enough to justify it. I mean, I do. Yeah, anyway.

I don't know if the revenue model is there. I think it's very hard to justify trillions in Kappex, maybe one day. But it's hard to find stuff to buy, which is why I know Bitcoin. I understand Bitcoin in the back of my hand. Gold, it's kind of like analog Bitcoin, same principles apply. And commodities are just real stuff. I just keep it really simple. Fair.

All right, bear with me for this last thing, because I want to set this up. If you had to explain the difference between the 2021 bull market and this one, What's the one we've just been through? What was the difference? There's a lot of differences. So 2021, let me just try and think about the key points here. First thing we need to flag is GBTC. GBT soothe it up like 600 and something thousand Bitcoin in, it was like four or five months,

arbitraising that premium. Now, you can argue it's a little bit like a treasury company thing there, but it's, I think, very different because those treasury companies just purely destroyed capital. GBC actually bought the Bitcoin. So GBC, what I think a lot of people didn't understand at the time, myself included, trapped a lot of funds that believed that premium was guaranteed. That caused a whole lot of havoc. That mid-2020 sell-off, in my opinion, broke the bull that May, June, July period.

Every metric from on-chain activity to profitability was bare market territory. That second peaked in November, a lot of people think that the first peak was curtailed. No, the second peak was fake. So we hit a top pretty much. It was like February and then we started curling over because that premium just disappeared and that was the buyer. In 2022, there's another thing I talk about a lot called supply air pockets. Imagine a heat map. I've got these on my website, by the way, but imagine a heat map showing you where ever, like dense zones where people bought their coins, on chain, what's the cost base wherever and accumulated their coins? Between 10K in 2020 and 30K, K.

there was no supply bought by long-term holders. No one bought there and held. There was just a big gap. When we shot straight through, we came down to that 30K zone, which is kind of the base of the supply. I'm pretty sure a lot of the move back to the all-time high November was FTX playing silly bugs.

If you look at the on-chain volume, it was through the roof. There was also this very weird thing. It's a bit isoteric, but I think it was called RenBTC. FTX bought RenBTC. That was some Ethereum pegs. Bitcoin thing, they were churning, like, I think it was like 80,000 or some huge chunk of Bitcoin every like five, six, seven blocks. The whole 80,000 Bitcoin is being spent. Every deposit withdrawal, FGX were playing some kind of weird games with that thing, tons of flows between

them and Binance. We ran a study where Binance was the central hub. You could see that like every other exchange, it was like an inflow, outflow reliance ratio. How much of the flows, for tiny little exchange you've never heard of A was dependent on Binance. And it was just market makers moving funds back and forth. FTX was a huge, huge flow of funds between the two. So there was a ton of that stuff going on. Then we had in a complete total evisceration of the industry. There was no lending market left. Genesis was involved. Celsius went the whole, just a complete forest fly. In our current market structure, we had, I guess you could say the spot bid, ETFs, strategy, some treasury companies.

was also just like just straight buying in the spot market like the ETFs and strategy account for like 25, 30% of the demand. The other 70, 60% was just spot. Tons and tons of spot buying through that process. The pattern of the bear market looks very similar actually just because you have 80% of the supply of the invested wealth underwater. A lot of things behaving very, very similarly from that perspective, but that's just how bare markets play out. Why? Top heavy markets. Too many people buy too many coins too high for price. You get the unwind. But what I don't think we have is, we might have some transfire leverage out there. We've got a couple of firms blowing up.

There's not the hour out for it, though. Yeah, I don't think we have a complete evisceration of the industry. 2022 was the end of the Wild West era. I've kind of been thinking about this period. You know, if you drop a rock in a pond, the first waves, right, same for four-year cycle. Think about the four-year cycle like this. The first waves in the pond come from the halving and the four-year, and then the second half, four-year, blah, blah.

by the time you're 10 ripples away from the centroid, suddenly those waves start to change. They hit interference. Some hit the shoreline. Get some kind of interference in those waves. I'm of the view that, and this is why I think, like, people who are like,

it's going to be October, man. It's going to be October. I think we're getting more and more interference in this stuff. And over time, eventually you're not going to, because you're waiting for that ripple to be the perfect sign wave, as it always has been. It's going to change to tier. rate evolve, be different structure.

The macro world. Is it the same world now as 2017? No, it's the same world as 2020. Fastest rate hikes in history. Now they're ending QT and we're just like there's geopolitical stress and there's just a whole lot of things. The world isn't the same. Why would anything be the same?

The world doesn't operate in these four years cycles. So yeah, I think just be really flexible in your thinking moving forward. Allow the market to tell you what it's doing. Look at what investors are doing. don't anchor to a date or it has to be the halving. Folks who share the halving cycle chart, right, the show's performance, you forgetting that we hit it all time high because of the ETFs prior to the harbing. So of course it's going to look like a shit cycle because you missed most of the good bit.

You've got to, like, the first day of the bull is the last day of the bear. It doesn't feel like it at the time. That's how markets work. So if from the last bull market's this one, I guess the big difference there is the market just matured, it became a kind of real asset. What do you think the next one looks like? Very good question. I still believe, like, whatever this bear market is, there's no question.

It's called a lot of people off guard. Like, once you accept it, it was a bear market, you just kind of accept it. Assume it looks like previous bears until proven otherwise. And that's not because of four-year cycles. That's because investors behave the same way. The psychology of bears is the same. But if we're buying all the history of Bitcoin, knowing what we know, one thing that I think is very different this cycle in the bull.

We had people from the IPO moment, people from all years. Most of 20, in fact, the stats are, I will be off by a few percentage points here, but the 2017 top, if you look at how much of the profit taking was like what we would call, like for folks who don't like the five-month long-term holder status, hodler, hodlers, multi-year hoddlers. It was less than 10%. In the 2022 cycle was about 25-30%. In 22, sorry, in 22, 21.

In 25, 75 to 80% of the sell side was coming from long-term holders, oh, geez, big multi-year holders. We had a rotation of capital we've never seen before. From that perspective, like, I like the IPO moment. I think that's a very valid and sensible way to think about this. A hundred Ks, it's a big number. It's a big number. It couldn't have been hit in 2017. Couldn't imagine it.

No. Finally it was hit and the regulatory environment allowed these big entities to cash out. What have we seen since November? Profit taking, which was the number one headwind through 25, number one, has collapsed. Absolutely collapsed. So what I like about long-term holder metrics in general, they're signaling what they are doing by them taking profit. There's also signaling what they're not doing.

They're no longer taking profit. Ask yourself, as a Bitcoiner. Imagine you sold a ton of coin at the top and you got a bunch of cash. And now you're looking at the world around you and the current Bitcoin prices. You're telling me that your convictions has gone to zero. What are you going to do? If you're not safe in profit, you're either waiting or you're probably starting to accumulate again. Now, pro tip, because you are guaranteed to see this in Twitter for the next couple of weeks, long-term holder supply is currently climbing. That is not long-term holders buying right now. It's really important.

to get your head around. That's just aging out coins. So long-term hold supply is an interesting metric because spending is immediate. A coin that was one year, two-year-old that spent is immediately not one year-two-year-old. Immediately goes from long-to-short. Yeah. A coin going into long-term holder takes that five-month window. Why do we use five-months, statistically speaking, probabilities? It's where behavior changes. So that five-month period, there's opportunity costs. You're not in gold. You're not in video. You're not in something else. You are in Bitcoin, and you're not holding something else. It's a long enough time where the behavior has a signal involved in. I don't care if someone would be bought yesterday, sells tomorrow. Who cares?

Daily noise. Somebody bought six months ago and holds it and then sells, they're not happy with the momentum. They want to rotate into something else. They're scared of something. So long-term supply is climbing now, but that's because of top buyers. That's the people who bought the top and have huddled and they're still huddling. Now, something in, if you are one of these folks, even if it's with a party or stack,

there are tons of people who are becoming long-term holders right now who bought the top. They generally get to the end of the bear, whether the capitulation event or the time pain, and they flush all of it out at the exact wrong time. They're going to buy the top and sell the bottom. Stay the course. The storm is mostly behind us. Push through to the other side. And I've been using this analogy where things are really good.

Bison turn into the storm because the fastest way to get to the other side of the storm is to go through it. you're already 80% of the way. The other story is like, you know, your dumb friend who swims 80% from the desert island back to shore, gets tired, turns around and swims back. You're already 80% of the way there. Push the last 20%. It's not going to suck. Just buy the whole bottom.

Stack sats and make your kids start out. There is never, I mean, the age old wisdom. Stay humble and stack sats. This is what it's there for. Why do you stay humble? Because that red candle we just went through. That's the humbling bit. Now you go to do the second part.

This is the time. Checkmate. you're the best man. Thank you for being the thousandth guest. Thank you, ma'am. It's been a real pleasure. Where can anyone go to find out your work? Check your newsletter, all that stuff. Yes, you find us over at check on chain com. We do two reports every week, written and video. Again, we write for hoddlers, not for traders. We're just trying to

help people navigate. And the way I see it, what I love about on-chain data and ETF data and futures data and options data, we can visualize what people are doing. And when you can visualize what people are doing, doing and you can reason about it, it just makes it easier. So like, you know, the air pocket from 80K down to 70K, the thesis was, it's probably going to be straight down. It's probably going to be straight down.

And then that 60 to 70K zone is going to be an exciting place to be. I don't know if that's going to happen. But, you know, as long as you can visualize it ahead of time when it happens. You know what you're doing. A success metric for me is when something really bad happens, like last week, or something really good happens, the shock value of it happening goes away like that because you've thought about it, you've trained your mind to at least have envisioned what it might look like. Shock value goes away and then you go, okay, now I'm going to execute because the only thing

you can do is make a decision. That's the only thing you have control over. You can't control the tide of markets. Just visualize what might happen and what you will do if that happens and then make that decision at the time. Love it, man. And we should chill cheat code. Yes, we should. You're coming back to Bedford. Yes, we will. So the whole Check on Chain team will be over in Bedford for the week before, and we're actually planning to do a, we'll do a meetup of some form for Check on Change subs, somewhere in London. So stay tuned for that.

And yeah, come to Cheat Code because it's a bloody great conference. This is the best conference of Bitcoin. It is. March 27th and 28th, I think. Yeah. Go to cheatcode.com.com.com.com. Buy tickets. Checkmate's going to be there.

It's going to be awesome. Why do you come to cheat code rather than any other conferences? I love the football side of the equation. I think the, I actually quite like Bedford, you know, going for a walk along the river. It's really nice. There's nice parts. It was just, I mean, I think you and Pete do a really good job, first and foremost. I think the operators are good.

But I also think it's like a 400 odd, four, 500, those small compact groups. And also, I think it's London is close enough for Americans to come across and for Europeans come across. It's hard to do that in Australia. Totally. So if I'm going to do an international trip, it's one that I'm willing to do the jet lag for. So yeah, no, we'll be in Chico. I think it's a great tight-knit group. It's great.

Let's go. All right, man. I will see you in Bedford. Thank you for this. Thank you, mate. Cheers.