What Bitcoin Did - The Bull Market, Institutional Adoption & 2026 Recession? | Willy Woo

Episode Date: August 26, 2025

Willy Woo gets into Bitcoin’s evolving market structure, breaking down how institutional flows, ETFs, and treasury companies are reshaping the bull market. He explains why Bitcoin has never faced a true business cycle downturn, why 2026 could be the first real test, and how liquidity waves set the rhythm for both blow-off tops and brutal bear markets. He unpacks the mechanics of Strategy's debt model versus MetaPlanet’s synthetic leverage, how ETFs are smoothing inflows and dampening volatility, and why premiums to NAV create both opportunity and risk. Willy also zooms out to the thousand-year arc of money, showing why fiat is a short-lived social consensus ledger and Bitcoin is destined to be the next energy-secured system of value. In this episode: - How ETFs are changing Bitcoin’s price dynamics - Premiums to NAV, synthetic leverage, and liquidation risk - Why treasury companies could amplify the next bear market - Liquidity cycles and business downturns - ESG, BlackRock, and the shift in institutional adoption - The transition from gold and fiat to Bitcoin THANKS TO OUR SPONSORS: IREN RIVER ANCHORWATCH BLOCKWARE LEDN BITKEY Follow: Danny Knowles: https://x.com/\\\\\\\_DannyKnowles or https://primal.net/danny Willy Woo: https://x.com/woonomic

Bitcoin going from $1 trillion to, you know, that 100 or more. That's the turning point. Bitcoin needs capital. If it's going to flip gold and it's going to flip fiat, actually that's what we're really talking about is ending fiat. Every cycle we're roughly 10x higher. You know, 10 to 100x more capital needs to move the price. We're at this precipice where money is going to be redefined by going from gold to energy-secured ledger.

Gold was an atoms secured ledger. It's a paparization of a liquidity crisis. It's a very, very recent thing since 1971. It doesn't go back 6,000 years. It's not going to go forward in next few thousand years either. And that'll collapse soon. And that the social consensus is, trust me, bro, I'm good for it by the Fed.

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Well, Leder makes that possible. Leden are the global leader in Bitcoin-back lending and since 2018 they've issued over $9 billion in loans with a perfect record of protecting client assets. With Lennon, you get full custody loans with no credit checks, no monthly repayments, just easy access to dollars without selling a single sat. As of July 1st, Linden is Bitcoin only, meaning they exclusively offer Bitcoin-backed loans with all collateral held by Lennon directly or their funding partners. Your Bitcoin is never lent out to generate interest.

I recently took out a loan with Leden and the whole process, couldn't have been easier. It took me less than 15 minutes to go through the application, and in just a few hours I had the dollars in my account. It was super smooth. So if you need cash but you don't want to sell Bitcoin, head over to ledden.io forward slash WBD and you'll get 25% off your first loan. That's LEDN.com.com. Wallyw, good to see you back, man. You were a regular on what Bitcoin did a few years ago. And I think the last time I saw you, Yeah. I think the last time I saw you was in Sydney, which I think that was like 20, 23. Two years ago, I think. Yeah. How have you been? Good. Yeah. You kind of stepped away from doing the podcast thing.

Yep. Why did you do that? Well, first we had our firstborn, right? And also it was a beer market. There was also, you know, probably off the back of Pete McCormack's show, like people started to recognize. me everywhere, like in, you know, random places. And, you know, I started to think about Opsic and having children and having the children there. We've got a second now. So I took some time out. And yeah, I mean, it was part of Opset.

It was also, I thought that the profile got a bit too high. And I did want to take a break, you know, newborn, do a bit of concentration on family life. Yeah. And also we did this big, because we're a travelers in our family and we took the opportunity when COVID sort of opened up again. We did this big world trip. And it's really hard to jump on podcasts and do content and so forth when all that's

happening. So just for family time. Well, were you keeping tabs on Bitcoin during that? Yes. I was and oh yeah I forgot how could I forget we I was I founded a hedge fund right I found a fund of funds and that took a lot of time so that was like February 22 so it took a while to get that up and running and it was a deep sort of learning process for myself because you know I didn't know too much about the trade fire world and how do you build hedge funds and so forth so

So, yeah, so I was really busy as well. That was the other thing. And how's the hedge fund done? That's great. It's great now. You know, there was a few lessons to learn, a lot of lessons. You know, the hedge fund is around amalgam capital to the best managers in the space that are trading digital assets.

And so, you know, we drew down initially. Yeah, that was a rough year to the launch in. Yeah, or the idea was to be more market neutral. And we thought, you know, we could put some direction. allocation in there, meaning not actually have long exposure spot. It meant these guys should presumably be shorting the market, but it turns out directional hedge funds don't really work very well. And now we're three and a half years experience and we've got 700 managers tracked in

their performances. Yeah, it's very few of these guys that can actually trade the market in directionalality. like 99% in my opinion are not investable. But yeah, it's a, yeah, it's a big learning. So if 99% of the best traders are not profitable, how are people meant to do, have a single shot? Well, I mean, these guys were quantitative, right?

So that are meant to be like computer, that are meant to be analysts, building trading models, you know, and the computers make the decision. And you're hooking onto a feature, like a little alpha feature when this happens, then we should be able to trade in, whatever the formula is. And it just turns out, in my opinion, that our markets are so nascent, right? And every three months, the structure of the market keeps changing. So you can't actually build a system that's changing so quickly.

And I think only a very few people in the industry that can actually do something that's robust, meaning everything you look at before you put your money in is making money, making money until generally you put your money in. And they start to carry some real IUM and then the market changes and certainly they're losing a lot of money very quickly. So I mean our funds are market neutral now, almost 98% market neutral. We try to get the directionality out of it. And so that's big learning for us.

When it comes to those like trading algorithms, will all that just be AI or is it already all AI? Well, I think it really, you know, if you think about a RENTEC, you know, they are the famous people that, you know, the mathematicians that sort of broke the whole industry and the maths guys started to build the most successful hedge fund in the world. They were very early in machine learning. And so I would say like it's already in, you know, it's already in the space. It's packing recognition over. a lot of them are using the machine learning layer to adjust the core basic algorithm. And then there's this new movement of black boxes, which we can't really run due diligence on.

Is that black box because of their neural networks and you can't actually tell what's happening in there? Yeah, it's something like that, right? That's saying by sale, we don't know exactly what it's doing. And often we get these managers. using it. And we look at the performance and we just can't allocate because it's too perform it. We like we can't tell if it's a scam. We can't tell if it's a conservative fund, right? We're meant to be delivering, you know, a very nice, safe return in yields. You know, yields had a really bad name in industry. Yeah, but you can do it right. We run three funds.

One of them is done with a private bank in Switzerland. And so it's all institutional grade in bringing those trade-fired practices in. And, you know, for me, looking at how, you know, yield was done in 2020 through to 2022. It's just crazy what happened. Oh, totally. It's just like when we do yield here, you're looking at the manager, you send a independent person in. to overview the operations to look at any way through incompetence, malice, they can lose money and lose your coins.

And then it's independently audited, independently accounted for each month. All of these processes have been around since the 90s and the 80s in traditional finance. And the bank we work with, they were getting pressure from their clients to get access to Madoff's fund back in the day. And they sent a team over and to do this whole process. And they walked out in the first day saying this is not investable. And, you know, they were one of the very few institutions that protected their clients from the biggest Ponzi at its time. And so these are the process you bring in. So, and that's quite a mature process.

But in crypto, it's like a joke. Yeah. And presumably, there's still an amount of risk with that, but you just know, it's like a calculated risk that you can understand. Oh, yeah, there's still risk, but we can see all the risks, right? And the risks are the exchange counter parties, right? It's not going to be people giving billions of dollars to some shady hedge fund. Yeah.

Or, you know, back in the earn products of 2020, I will go through and put it on, was it Gemini? and they, you know, and they re-hypothicated to Genesis trading. And then all the hops go. And the next thing you know, it's Welfaldameda, who is just buying DGN shit coins, big bags of it. Yeah. And no one knew what was happening, really.

It's funny because at that time, like, I certainly didn't see it coming. There were a few people that did. Like, I still remember Pierre Eschard called it out and said that FTC would fail. And that was the first time I ever heard anyone say that. and six months later, or whatever it was, he was right. Oh, he's at six months beforehand. Yeah. Yeah. Because it was really shady.

I think it was around three to six months beforehand. There was a big amount of bitcoins that left FTX. And SBF said, oh, we're just reshuffling cold storage. And that was those transactions that went to Elamator. And FTX was, you know, I worked with GlassNode, and they were a new onboarding to the datasets. And I looked at that and I thought, oh, we'll probably still, you know, GlassNone is still working through the bugs and stuff.

But it was real, you know, and no one, no on chain person picked up on it, even though it was in the chat. And I was, I was trading on it, right? I was trading on it at the time. On FTAX? Yeah, I had, I was my, that was my main exchange that I traded on. And I noticed that there was a run on the bank, you know, the balance of Bitcoin started dropping, but not in a big data era kind of way, but a granular, like, all these guys know

something. And so I got off. Our first thing was I sent the data, the chart to a hedge fund manager that had SBF on the cat table. And they were the closest people I knew to FTCS. And they said, oh, don't worry about it. They got billions of the bank, nothing to worry about. So they should have known, right?

turned out like even the, you know, only the inner circle knew. So, but I pulled my money out thinking even in the, you know, one percent chance that these guys are wrong, it's not worth it. And so I got off 48 hours before. Oh, damn. It was close. Yeah, yeah. Because that run of the bank started like maybe, you know, four days beforehand.

So, you know, with what we do now, we wrap it. We wrap. We monitor all of these. changes. Because, you know, though it's a lot of them aren't properly regulated, we have a blockchain that's like a 10 minute live audit. Yeah. The funniest thing about FTCs at that time is everyone was saying how good their op-sec was because no one knew where their coins were and it just turned out they had. Oh, my God. That was crazy. That was the wildest time I think I've had in Bitcoin in terms of just the unexpected consequences of what was happening. It was pretty fun.

God, it was so everyone's, you know, he adopted all the, you know, he adopted all the, you know, the celebs. Yeah. The press was just puffing him up. And I think of this as like one in 10 year event. I don't, hopefully that's the last one because it's getting quite robust now. Yeah. Very quickly.

The last one was Mount Gox, you know, but all the other stuff in between just pales compared to Ft X and Mount Gox. Yeah, I wasn't there for Mount Gox. But watching that as someone who. just has Bitcoin and cold storage, I mean, it was entertaining for sure. Yeah, right. Yeah, except like the market was crashing. Yeah. Well, I was near the bottom anyway. So yeah. So maybe let's take a kind of fast forward from there. Like what do you think of how the Bitcoin market's matured since 2023? I mean, so much, right? I think the biggest, the biggest, you know, the biggest thing has been

Black Rock's ETF. I think before that, if you were to look at, you know, in the bigger picture of $900 trillion of wealth assets

and Bitcoin at the time was only $1 trillion. Most wealth managers would be potentially risking their jobs, their client base if they recommended Bitcoin. And then when Larry

opened that up, they made it, you know, he moved Overton window in a way kind of. Like he, a wealth manage could now recommend Bitcoin. And I was talking to, you know, we work with the Swiss private bank and the banker there who's been there all his life,

you know, managing wealth said that I had visited him a year beforehand. And he said, you know, I'm not a believer in this Bitcoin star. year later after the ETF he said, oh, I just bought some. And the reason why he bought it was because I know exactly what happens with this. Once it's on that ETF, once BlackRock's on it, they're going to push this product out to the world. And everyone will market Bitcoin. And so I think in terms of Bitcoin going from $1 trillion to, you know, that 100 or more that we all think about, that's the turning point. point. So, you know, the industry's matured. The infrastructure's matured after FTCs. You know,

like exchanges always wanted to hold the coins. Now it's even Binance is now offering custody solutions where the coins are held in a tri-party manner. It's not on the exchange and it's mirrored in. And so that's much more institutional. So that's rolling through. You've got people like Fidelity offering custody and that's mirroring to the exchanges. So trade fires coming in and hardening up the exchange rails a lot. And obviously, you know, it's not my warehouse, but you just see how the new administration has just unlocked everything. Yeah.

Everything can move forward. You know, Bitcoin can be considered when taking out a real estate loan. There's, you know, there's a lot more coming, I think. just recently, you can hold it in your 401K, I think, in the US. Can you? I mean, I know you obviously can through the other instruments. I didn't know you could hold it directly in your 401k. You can't in Australia.

You can self-custody Bitcoin in your retirement fund in Australia. It just came out, I think, a couple of days ago. So that was, it's not implemented yet. But, yeah, I don't know the details exactly what it is, whether or not it's a, you know, I imagine. That's a massive thing. Can you hold a black rock ETF of Bitcoin in the past? In a 401K? Yeah.

I think so, yeah. Okay. Then it must be like self-casty. Hey, I'm not, I haven't looked at that. I could be wrong on that too. I don't know. I've not seen that. But like all these things are just Bitcoin maturing.

With the ETFs, obviously you kind of made your name with on-chain data. How much do they impact what you can do and what you can actually see on-chain? Is it still a useful tool? Oh, yeah. It's great. You know, you know, when I did the, when I was on the show every, every month here. with Pete. I think on chain was four years old.

The early signals were 2016. So it's another five years, nine years into it now. And it turns out that most of the stuff that we were doing, a lot of it's, you know, it's good for narrative. You can say the whales are coming in and this sort of stuff. But in terms of pricing signal, it's only a small subset that really works. But it works great. You know, because like I see even today, a lot of people tracking the flows into the ETS.

Yeah. Right. Well, it's only a subset of the flows. Turns out it's a minority. Why is that? I don't know why. It's just, you know, it's small. It's probably one-fifth to, you know, that's significant, but one-fifth to one-tenth of

the daily flows, majority of Bitcoin that's flowing is naked on the network. you know, it's not wrapped up in, you know, equity wrappers. But even so, you can think of the ETS in aggregate, are just a closed sort of box. And if people are buying and selling inside that, it's neutral. If they want more, then more is coming across that membrane. That's a demand. And you can look at that.

But we have something better. You know, we have a UTXO set. And you can look at every single coin that's moving across the network. you're not limited to looking at the small black box that's run on Wall Street. You're looking at an entire network. Just because someone's buying or the family offices are buying inside these ETFs instruments, we could have Asian whales dumping by the tens of thousands and doesn't tell you much, right? Usually Asia's more sophisticated than the trade historically.

Asia has more capital. I think it's a roughly, as an estimate, Asia equals Europe plus America combined in terms of liquidity. Really? And you'll see that that's starting to be recognized because post-COVID token 2049, started blowing up and I started seeing Americans, Europeans turning up to this Asia conference because there's so much that's happening there. But yeah, you know, back to the point is that we have a UTXA set.

So we can look at the flows across the entire network and know, you know, the capital coming in any any day of the year. Are you surprised that like this bull market, I think one of the things that make it different to previous ones is that price is ripping, but memples are empty? Yeah, I haven't looked at men pool for a long time.

And the thing is like we have, look, I haven't looked into the men pool. We go, why? But you must be seeing less activity on chain, though. I'm seeing,

I'm not tracking the stuff that's irrelevant to me. Okay. The relevant things to me are wallets, right? Or the activity of the wallet. So I'm only now tracking liquidity flows. So I don't care if it's like 500 wallets instead of, you know, 50,000 it used to be. I'm looking at how much capital. The capital is what moves it.

And that's getting bigger and bigger and bigger. So that gives you an idea of what's happening. Maybe we're moving to layer two, as you might call an ETF layer two. But ultimately, most people are finding use in not using the main chain, apart from a clearing chain, I guess, between all of these other layers, ETS being one, I would say. So you're seeing less transactions, but much larger transactions, which is obviously, I mean, that makes total sense with the kind of institutionalization of Bitcoin. Are you surprised that this cycle we've not really seen retail come in in the same way yet? Or do you think that will still happen?

Yeah, I think there's been a few surprising things, right? I think retail will come in. I think that I've always been there. It's just they're not really moving the needle. And, you know, every cycle were roughly 10x higher or some in the early days, 100x higher in price, which also means, you know, 10 to 100x more capital needs to move the price. And like the reality of the wealth distribution, when you talk about what does retail have, what does the concentrated capital pools, which still might be, you know, run, owned by retail, but going through, you know,

or a pension fund or, you know, it's retail money, but it's managed by a manager who's like deciding, yeah, there's put a 3% allocation. into Bitcoin and then boom, you've got, you know, billion-sized tickets. So I think those are the things that are mattering now. And like even if, you know, talking to Daniel Bass and the work he's done with pension funds, sovereign funds, looking at the capital pools they have, I think the numbers around $30 trillion that they manage out of that $900 trillion. and for a lot of them, they can't allocate to Bitcoin because they believe that it's bad for the environment. It's against the ESG agenda.

So dismantling that, these are the things we have to dismantle in the industry, is all the barriers stopping the big capital pools, which are still owned by retail ultimately, but managed by professionals for that to really come in. But, I mean, that makes sense. And Daniel's doing an amazing job at combating that. narrative. I also think maybe with like Larry thinks change of positioning, maybe ESG is going to become a less relevant thing that people have to consider before allocating capital. Like he's kind of backed away from the SG narrative and moved towards the Bitcoin narrative.

And I think also with AI and high power compute and everything that's happening there, the kind of mining fud seems to be going away. I don't know if you're seeing the same thing. Yeah, the mining fed on energy use. Yeah. Yeah. Yeah. I actually think it's, it's going away with Larry. Larry would have a big impact, I would say. You see the media switched and I think that might just be around Larry and who owns all of these. I think what is it?

BlackRock has 15% voting power of the entire equity markets in the US. Is that true? That's insane. Yeah, because they manage what, what is it? What's the number? $10, $14 trillion? Trillion dollars. I find out.

Like, yeah, it's, there's only a hundred trillion, 110, something like that, trillion dollars of, of equities, public equities in the world. And, like, I talked to someone from Black Rock who actually did the voting, right? Black Rock make, you know, they manage other people's capital. But who gets the vote? Black Rock gets to vote. even though shareholding is by their investors. And that's very powerful. And I think they're pretty high on all the cap tables,

including the media companies. I mean, that's one side and the other side is the pure research site. People like Daniel and his cohort are doing. I mean, I just looked at $10 trillion under management. And whenever you look at the major shareholders in any company, it's always them at the top of them. And people like to put that down as like conspiracy, but it just to do with size.

Yeah. And I think we always think, oh, like, you know, BlackRock is buying. It's not that they're buying their clients are buying. They're just the conduit. And I don't know, it's like when all of us buy, say, through BlackRock and we get no vote, I think that something should be addressed there. It shouldn't be BlackRock deciding on the vote. This is why people should just buy and hold self-custy Bitcoin.

Well, I mean, it's got nothing to do with ownership in, you know, know, a media company or something. True. Yeah. Bitcoin is absolutely ripping and in every ball market, there's always a new wave of investors and with it a flood of new companies, new products and new promises. But if you've been around long enough, you've seen how this story ends for a lot of them. Some cut corners, take risk with your money or just disappear. That's why when it comes to buying Bitcoin, the only exchange I recommend is River. They deeply care about doing things right for their clients and

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So whether you're interested in mining Bitcoin or harnessing AI compute power, Iron is setting the standard. Visit iran.com to learn more, which is iriareen.com. So in terms of, like, the market maturing, this time looking different, what are the key things you're seeing like with the on-chain data that make it look different? I mean, there's much less FOMO right now. It's very staged buying. The capital inflows are very smooth. I've never seen so smooth before. I put that down to these Bitcoin treasury companies. Because they just buy as regardless of price. Yeah, this is like dollar costing average. And like whenever the capital comes, they buy in a staged. And it produces a very small. smooth inflow.

So whereas in the past, you'd get sort of a little bit of choppiness and then are like a real run-up as the phomo comes in, if one's chasing price and so forth. So, I mean, you still get those oscillations, but even as it's coming in, it's very smooth. It's like someone's got sandpaper and rounded out the chart. So I haven't seen that before. So that's dampening volatility both on the upside and the downside? Yeah, you could say that. I mean, it should do.

Like, there's a lot of impacts on price. This is what I call liquidity flows is really the tailwinds that are either supportive or bearish on price. But how price moves relative to each hour, each day is much more tactical. And that's a different overlay. when you're looking at liquidity flows, these are the fundamentals. So it's very hard for the price to go against increasing flows coming in. But it can happen because you might want to like as you, I say, if say you're a very high net worth trading whale,

you could bring the price down by selling and then liquidating a whole bunch of people and it will work down. So there's this sort of tactical game and there's, you know, I get a whole heads-up display, right? Of like, what's the profit situation here? What's the liquidation situation here? Are we overheated anyway through normal mean-reverted? Well, you know, price is overextended in one way, the other meaning I can't push it this way any further.

And it has got to rub a ban back down. And so there's all this sort of tactical positioning between all the participants. and then you can get a probabilistic answer of where the price might go in the next, say, three or four days. But then you've got the fundamental money coming in by the buyers. And that gives you the long term. It gives you a read over the next one, two, four, even six weeks out. And then there's this random walk game that's happening.

So it's a bit complex, but it's a proper full picture of what's going on. on. And so in terms of them being just dollar cost averaging every week or whenever Sailor's buying, which seems to be every week, and what is that doing in terms of like the amount of leverage in the market? Because Sailor's taking a little bit of leverage, but he's very low. And like and without things like FTX, is the market in a way healthier spot for that? It's a different type of leverage, right? We have like, you know, in these treasury companies, you have multipliers on your actual Bitcoin. So it's MNab. and it's traded around that.

So you've got, if you're holding the equity, it looks like deleveraging when it goes against you, but you're not being liquidated. But then the question is, will these treasury companies be actually liquidated? If they are being, if they can be liquidated, then it's leverage. And if you look at the debt structuring and the micro strategy, it's very robust.

Yeah. Their debt is eight to 12 years. out, meaning if they're in a exchange, they would be liquidated. But they can't be liquidated to eight to 12 years out as long as they're paying their interest bills. I think that's zero anyway. So that's quite robust, very little kind of standard debt in there. And then you have things like Metaplanet. And MetaPlanet do this kind of synthetic ATM where there's one,

party here and there's Metaplanet here that's stacking Bitcoins and this party here is doing market operations and they're taking a big trench alone out and then they do this sort of, they sell out of this position using their warrants and they re-send money into Metaplan to buy Bitcoin. So what you actually have is this big debt load inside Metaplanet and then it gets paid back as the money comes back in. And in my opinion, that's in danger of being liquidated because if they get caught off guard at the very top of the market, the ATM system stops working. They can't get, they can't sell it into the market because it relies on the price going

up a little bit and they can sell. I see. And then send money in. So if you get that wrong foot and you've taken another like 300 million, you know, it's getting bigger each tranche. And you can't sell it through, then you've got to pay that back by selling your Bitcoin and there would be a partial liquidation of Metaplanet. If they don't time the market, right.

So with Metaplanet, you're really banking on them timing the market. And they're very sophisticated. I noticed that their last buy, their last significant buy, they unloaded almost 300 million at the very bottom wick of Bitcoin when it dipped in the last. consolidation. And it was actually at a price lower than what was printed on the exchanges. Is that them putting in that bottom, though, because they're buying and sporting the market. Yeah, they absolutely put in their bottom. Yeah. And so, like, obviously, sailors, like out on his own. He's gotten 600,000, whatever Bitcoin, maybe more, I don't know. The rest of these, like,

there's a very long tail of treasury companies after that. I don't assume after you get to, like, below the top 10 treasury companies, they really have a huge impact on the market because cumulatively the coins is like i don't know 100 000 coins or something yeah um i mean 100 000 coins significant amount of coins in a soft market and we just saw 80 000 get dumped though yeah we did and it was in an upward outward you know part of the bull market with flows coming in and um the liquidity was there to hold it up um the question is if the stuff starts liquidating, it's usually in the middle of the bear market, when the market's really soft. And so that's going to have massive impact. That's why it's a really important

measure of liquidity. Like in the bull market, you're so wheat, right? You're great. Like, it's all coming in. Beer market's actually leaving. And then you're dumping like 100,000 coins. That's pretty damaging to the market on price. So are you quite skeptical about the Treasury companies And do you think they will be the reason for the next bear market? I think they'll accentuate it. I really like them because they provide relatively cheap funding for shorting on equity markets. Because if you're on MNAV of, say, five and you short that, well, it's, MNAV's going to compress to one or below. So you get a five-x leverage about needing to pay for it.

I mean, I say that bit tongue-in-cheek, you know. Most people don't like the bear market. I think that that'll add to it. But I think that most Bitcoiners think that this infrastructure and development on the market and the way in which the capital is coming in, we're not going to have these 80% drawdowns. I think also we need to look at where Bitcoin is now a $2 trillion asset.

It's the newest global macro asset that's trading at scale to hit the world in 150 years. a global macro asset. It's not a separate thing on its own. And the global liquidity needs to be accounted for. And everyone's bullish because global liquidity, by the way, means money printing. Everyone's bullish because people are money printing. But we've never really seen a business cycle downturn. We have liquidity cycles, which every four years generally, that seems to be the cycle that nation states print at. But we have business. cycle downturns every maybe decade or so.

And we kind of had one in COVID, but it was a flash in the pan and there was so much injection of liquidity and it came in early. The last one before that was a world financial crisis, you know, which is what was etched into the Genesis block really. So Bitcoin's never experienced a business cycle downturn in the time when the US Fed is is a holdout on injecting liquidity. And so it's going to come in late. So we don't know.

Do you think that we're close to that, to a business downturn? I would say pretty high confidence that that's going to happen by 26. Are we not already in one in a sense? In that like of the S&P 500, really only the top seven companies actually matter. I've heard people say this is like an everything bubble.

I'm not an expert in equities. I track liquidity. I think that I think the leading signs for a recession have already hit. And a lot of this work is with Swiss block, which I work with today, they're the kind of the OG secret trading firm

behind GlassNode. And GlassNode was actually spun out for the world to use, even though they were using those, the early work in that data in 2015, 2016. So they are a global macro firm now. And, you know, some people might know Henry Zerberg, who is the economist inside there. And so he's tracking all of the macro signals.

And, you know, in his words, the economy's hit the Titanic, hasn't sunk yet. there's more like leading indicators you could say than that one the one that we've hit the Titanic that's already fired. There's no going back. There will be a business cycle downturn. But we're not there yet. It's not sinking.

And that's the best part of the bull market. Everything goes apeshit crazy and we have blow off top. Right. And we're expecting that in Bitcoin too. everyone's expecting that because we're not there yet. But it will be coming, you know. And even the four-year cycle guys will say it's coming in 26 because of standard four-year liquidity flows. Superimpose on top of that, a business cycle downturn,

which Bitcoin's never experienced. Then we've got to see what happens. So do you know what he's looking at that is the leading indicator for a session? Because like in 2008, obviously the housing bubble was like the thing that killed the market. Does he know what he's looking for in 2026? Yeah, they're based on economic, you know, economic data. I think housing is in there. It's global economy type stuff. Like, you best talk to him. But yeah, it's, it's more, we can get him on. Yeah, he's pretty knowledgeable about it. And he's, he's done some exceptional

calls. Yeah, like, and when zoomed out picture, they're exceptional. When everyone is bearish, he says, now it's going, you see, the S&P's going to recover back to here and go way higher. And it's so far played out when everyone was saying, no, this economy's broken. So, yeah. So, yeah, there's this set up, right, liquidity cycle coming back down. business cycle downturn. We've got our treasury companies on top that are exhibiting high-end navs. So if you're holding those equities, you're going to have that compression. And then we have the potential for these Bitcoin treasury companies,

the weakest ones to be liquidated if they're overextended. Because these guys are doing, you know, like four-year bonds, convertible bonds, or some of them not at all. meta planet, it's like real time, really. So yeah, so you need to look at the details of the structuring, but I think some of it will be liquidated. So the interesting thing there is that it feels like on one hand you're saying the structure of the Bitcoin market's changed, like maybe like people talk about super cycle or elongated cycle, whatever that is, but the structure has changed and maybe that's just reduced downside and upside volatility. But then

you're also saying potentially we'll have like a 2026 blow off top like do you what do you see bitcoin doing in the next say 12 months yeah so i'm saying um the it's like a superposition of all these impacts right and i think structurally bitcoin's solid whereas in the past we had these big downswings the attribution to um more robust um a more more robust market let's say is there's that and then we've got a standard liquidity downturn, but then we've got a business cycle downturn on top. And some of that all, maybe some people say, I will only get a 50% bear market. Yeah, sure, if that was every other normal cycle that Bitcoin's exists in 16 years.

But we don't know this thing called a business cycle downturn and its impact on Bitcoin. And Bitcoin happens to be the most sensitive of all the global macro assets to liquidity changes. And so if we've got that, then we don't know how that, you know, add more drawdown to the 50% you think, whatever number you come to. So that's how I'd approach it. And when you're looking at kind of Bitcoin price, how high do you think it can go before this drawdown? It depends how long we've got to run, you know. If it's soon, like if it's fourth quarter of this year. And if it's early first quarter, then 140 to 160. If it goes into 2026, then, you know, it could go way higher. So one thing I've been thinking, which may be too simplistic,

is like if you look at the incentives of someone like Trump, who's got the midterms, I think October next year, or like third quarter next year, he's going to want to run the economy really hot going into that. So I assume he's going to pull out all the stops to make sure markets are flying. And so in my head, I've kind of had late 26 is the top of this cycle. Right. Yeah. You can see this already is that Trump wants lower interest rates, but Powell's like, nope, nope, nope. And the thing is, never mind how much power Trump has, he doesn't have the power to influence Fed policy. And for that to happen, the Republicans would have needed to be in power. for 12 years and outvoted the Democrats on who gets to be on the Fed board and have that qualified

by Congress. So it's a pretty full-on thing to get full power of the Fed. And it's designed that way. So he could try talking it up, but unless, you know, the Fed actually changes rates. And in our opinion, it's too slow anyway. it's probably too late. The liquidity injection should have happened a long time ago. And it's late.

And the rest of the world is injecting liquidity, not fed. So we'll see. So other central banks around the world are printing money right now. Yeah, yeah. Global liquidity is going up, but it's not coming from the US as such. So do you think Powell's been wrong on this call to not lower rates? Yeah, we think so. We think so.

Henry's very outspoken saying this is a really bad set up right now that he should be printing. And we don't know why he's not. The inflation's not so high. Yeah, inflation's not. But we know that money printing does lead to inflation. And obviously, Powell knows that better than anyone because he's been at the helm while that happened. Why do you think he should be printing money? Because it was great for us as asset holders.

But is it good for the population? Oh, well, obviously printing money is bad, right? If like, I mean, on fundamental level, printing money is really bad. We know that as Bitcoiners. But in terms of an economy and how far it's going to wreck people in the short term, right now, like the role here, you know, with the changing of the interest rates is really to buffer these really harsh drawdowns. That's the whole point of a central bank is to try and take the pain out of the market. And that's probably not the best move for the role of the Fed.

We can debate whether or not the Fed should be able to dictate this. Obviously, as a Bitcoin, I don't think this is a good setup. Yeah. But, yeah. So looking out, you're quite bearish. I'm bullish over the next few months, yeah. Short-term, bullish, long-term, bearish. Look, you know, the audience shouldn't do what I do.

You know, I participate in the markets. So if it's bearish, I'd love to have a really bearish market. And if it's bullish, I'd love to have a really bullish market. Because I don't huddle that much, right? The thing is, I've been in these markets for a while over 10 years now. And I think the number came out from Arthur Hazon BitMex. Only 1% of traders actually make any money on that exchange. And those are your odds.

And so even if, like, for myself, I have some amount of capability where the market is at and where it might likely be to go, that didn't make me profitable until I figured out how to manage risk. These are so many things you have to learn. And so that's why we huddle, right? But yeah, for myself, I'm bullish right now. And I'm expecting to be bearish by next year, if not sooner. But I have no crystal ball off the top.

The thing about these markets is the bottoms are very, very stable because that's when liquidity comes in. At the top, liquidity dries up. and when liquidity dries up, the tops become quite unstable. You'll see the volatility and it's whipsawing around and it's highly emotional. That's very hard to predict. So it's good to be, you know, bearish late until it's really riding on the wall. So I don't know.

Everyone likes to pick a top price and it's almost impossible. If you get it right, you're lucky. And, you know, even like Peter Swift has it, like, is it Philip Swift? There's the cycle top, you know, and it's a crossover of two magic moving averages, and it uses Fibonacci numbers, and that's called every top in the past. Even that, it doesn't call the price. It's like a timing signature. So it's, yeah, tops are hard if you want a number.

to go by and no one should be trading to a imaginary number. So if you don't really hold Bitcoin, I know you've been trading for 10 plus years or whatever. Do you, have you outperformed if you'd have just bought and held Bitcoin? I've outperformed, yeah. But when you say I don't hold, I'm always going to come. I don't hold for a year when it's in a beer market, usually a year, six months to a year, right? But I'm always coming back.

I see. Right. Like, I call myself a bitcoins because I'm a maxi. I think this is the biggest change in the world and it's going to take over. And I'm going to be pissed off if I'm going to have less bitcoins each year. Yeah. All right. And the biggest opportunity for me to get more bitcoins is the bear market.

Sit there in cash and do nothing. And so you might be in a long bear market then coming up. Yeah, it might be. It might be 12, 16, 18 months. Is there anything that either the Fed or like just central banks around the world can do to stop this happening? Or is it too late? Henrik would probably think it's too late. It's his wheelhouse. I think it's too late. Yeah, I'd say from data he showed me, I'm pretty convinced of his thesis.

Yeah. So without them injecting crazy liquidity right now, which it doesn't seem like they're going to do, maybe this thing's already gone. Yeah, well, the indicator shows that it's too late. The economy is, and it's natural, right? every 10 years, you do get a business downturn, and it is fired. The question is how deep will it go? And you can do something about that. And if the Fed does their job by lowering rates to soften this a header time, then it'll be okay. Like COVID, they did that, but they did it too much, right? They printed too much money, and now, you know, we've had to.

But presumably, if this market does start rolling over, they will step in and inject liquidity at that point. But you think that just takes time to get into the market and it means you have a 12-month bear market or whatever. Yeah, yeah. If it's like, I mean, it's a super tanker. It's going to turn around real slightly. Yeah. And like people, like myself included, think of Bitcoin as kind of a risk off asset as well as a risk on asset. Like it performs as a risk on asset.

But to me, this is like long-term savings that is almost like risk off. Absolutely. Do you think the market will see it that way and Bitcoin might actually perform well in that kind of macro bare market? Not in the short term. I think I called it the world's first risk on safe haven. You know, it'll run just as well as a tech stock, but it's a safe haven asset. Yeah. But you'll see even gold crash, you know, world financial crisis, gold crash.

Everyone sells everything to get to cash. How long did it crash for in 2008? I don't know. I can't remember. Was it a month, two months? So it recovered before everything else? Yeah, it recovered and went on for a three-year bull run, I think three or four-year bull run to 2012, right, to four years, yeah. So, yeah, because the confidence was knocked in the banking system.

Yeah. And right now we're seeing gold run, right? And the confidence is being, I think, shaken in the US dollar. Definitely. And so, yeah, and this, Bitcoin's still quite new. It's not trusted by people who hold the $900 trillion. They need to see that play out in decades. I think it'll be great, right?

If you look at it in sheer performance against gold, it just tears it apart. If you look at fundamentally what it is, gold's had its time. We've had 6,000 years of gold, gold and silver. There's a reason for it. Like gold was our money. It was our de facto money.

And what is money? Money is a ledger. Right. People think money was this thing to assist barter, but it was a ledger. It was always a ledger. It was, I do you a favor, you do me a favor of social debt and it got formalized. That's the latest research on money. This whole idea that we used gold to assist barter is this philosophical thing not backed by evidence. So you've got this 6,000-year-old use of gold being the fear ledger. That meant the accountant couldn't diddle the books and give more money to himself. So if you're at this situation, They will have 6,000 years of gold being the de facto fear ledger. And now we've got, we're moving to the space age, digital age, space age, and you've got rockets every other day launching, and the price per launch is dropping off a cliff and at robotic technology is going through experiential claims. I think it's around 2040-ish that we will be able to start to showcase.

mining of asteroids. And they found an asteroid that was something like a thousand times world GDP with a gold on it. And so if you think you're going to secure a ledger with atoms, you're going to be mistaken because there's a lot of atoms around.

There's no meteorites with Bitcoin on him. That's right. Right. And so Bitcoin's secured by energy. Right. And so for the scientists in the room, they know this because it's called the Cardishiev scale.

That's how you measure a technology of a civilization. And you see this in world GDP as we, GDP goes up, that energy use goes up because fundamentally the economy eats energy and raw material to spit out goods and services. And they get more and more sophisticated. And we know that the latest stuff, AI, just eats this energy. So energy is always going to be scarce relative to demand. So you have to secure it with that.

And we know that works. a thousand years into the future. And so we're at this precipice where money is going to be redefined by going from gold to energy secured ledger. Gold was an atoms secured ledger. And right now we have this thing called a social consensus ledger. It's a paparization of a liquidity crisis that it's a very, very recent thing since 1971. It doesn't go back 6,000 years. It's not going to go forward in next few thousand years either. And that'll collapse soon. And that the social consensus is, trust me, bro, I'm good for it by the Fed, right?

That's how we manage our ledger right now. But it's always been a ledger. It's going from Adams currently. It's the social consensus. Trust me, bro. And it's going to go to energy. And that's what Bitcoin is. And that's what we're buying.

We're buying money for the next thousands of years. And that money's got to expand from one to two trillion, two trillion today. to whatever money needs to get to, and that'll be the usually equivalent of world GDP. World GDP is, I think, $110 trillion. So if world GDP turns to $500 trillion, it needs to get to $500 trillion. So when you go through that kind of history of money, you have 6,000 years of gold, this sort of Fiat blip that we live in now, how do you see us transitioning from that Fiat era into Bitcoin? Do you think there'll be a period where Fiat is backed by Bitcoin before full sort of hyper-Bitcoin?

organization or how do you see that playing out? Yeah, it's really hard to say. It's really hard to say we don't need backing with Bitcoin. I can say that. The reason we needed paper notes to trade around gold is because it wasn't portable. You couldn't ship it around at the speed of light. We can do that with Bitcoin. So fundamentally, we can be, you know, using Bitcoin as the money. people think it's volatile, but it's not volatile when you're paying for it in Bitcoin. That becomes the unit of account. Given enough time, you know, we're not there yet. We're still in the store of value phase.

Probably will be for another 10 years at least. Maybe it will take, maybe it will take another generation. But hey, we're talking about 10,000 years of money here. So 25 years is, yeah, it's okay. But we're lucky because we're at the, the forefront of this effect happening. And the guys that came in in 2011, 2012, they got to buy the stuff when the market cap was, you know,

in the millions instead of the trillions. So, yeah, the Bitcoin's price is going to inflate. The market cap's going to inflate because it's being adopted. It's being adopted by corporate treasuries, adopted by nation states now. So I'm no doubt on the long. run of this. And I don't have any fears over quantum computers or that this technology will break because everything that can break can be fixed. Yeah. See, I can totally see give it long

enough time period, 10 years, whatever, quantum being a threat, but like we will just change things. Like we can, we, there's already people doing work on the address signatures. Like that, I don't see that being a big existential threat for Bitcoin at all. And when you look at the kind of maturation of the market, like we've started this conversation being like the Bitcoin market is maturing. But then at the same time, you're saying we're in the incredibly, incredibly early days. Like, what does this market look like in 10 years' time? I think it would look much more like how maybe gold is perceived, but with all the bells of wittles of a digital commodity, that's moves at the speed of light. That's the bit that's hard to predict, right? Because we've not had that

before. But in 10 years time, it'll be accepted like gold. It's probably market cap will have exceeded or matched gold. It'll be taken seriously by everyone. It'll be the size of the size of the US dollar. I think because gold is the size of the US dollar in terms of M2 money supply. So I think the, let's call it the trade fire acceptance will be there. Then the question is, what does it look like when Bitcoin becomes, it does it think because it's a beast. It's a, it's a digital asset that moves the speed of light and it's got layers on it, layer two, layer three. and they're not, you know, they're somewhat self-custodial as well and even faster. We've got AI, right?

I've said the problem with real estate is there's less people, you know, the population's going to peak and it's going to drop, whereas the population of people that need Bitcoin is going to increase because AI agents will be using this. So there's all this future-facing stuff that's almost impossible, I think, to, to figure out. Like, we couldn't figure out today's, like, the future we live in today back in when the internet first came about. And I think, yeah, it'll take, it'll take some time. Maybe you call it, like, you know, I used to say it takes a generation to figure out what

the medium, what the medium is for, like when we did TV shows. The first ones with radio with pictures and it took another generation to invent the com and maybe we start that clock in 10 years when you have general acceptance and then you wait another generation and see what the population does with what it really is. And we don't know what it really is. We think of it as digital gold but I've just said it's not digital gold. It's a ledger secured by energy which will work for the next thousand years. So what can this thing do?

Well we can start looking at it 10 years from now maybe and see what happens. I love it. Yeah. So you're at short-term, bullish, intermediate term, bearish, that long-term, ultra-bullish. Oh, yeah, long-term. I'm maxy, right? I think it's going to eat up a big chunk of wealth assets for sure.

I've actually done this thing where I've actually not, I'm not self-custody anymore. Is that because of personal, like, security risk? Yeah, that I think you'll see a lot more people that have been in the space a long time. and no and they'll we're just an institutional day here at Honey Badger Conference and like the banks are saying oh the lot of these whales are coming in

and they don't want to hold their coins anymore because of the personal obsec. That does not apply to everyone else right everyone else should self-custody because we want the custody to be decentralized. That's fundamental. But what I'm doing is I'm selling a lot of this liquidity

to go back into the ecosystem the startup ecosystem, the picks and shovels, the things that will support Bitcoin's infrastructure moving forward. So it can have this future, it will have this future. I like to be part of it. Also, like, you know, the work with Swiss Block now is starting to ramp up. So as this whole institutional adoption is coming in, we think that the Bloombergs of this world will come in as well.

and they want to come in and represent the data from Bitcoin and represent that to Tradify. And we think that it's, you know, we've been doing this for 10 years and we'd like to have a shot at actually doing this very well native to the industry with the Bitcoin ethos. So we've launched a whole bunch of institutional grade publications. They predict price.

It's using 10-year-old frameworks that have been very robust. And I always spun up, you know, because my heart's with retail. So I've done Bitcoin Vector, like the institutional product is Bitcoin Vector, the light versions for retail to assist stacking assets and just giving a read on the market so you don't freak out when the market's pulling back, you know, okay, it's cool, it's doing its thing. And that was expected. And these are good prices to buy it.

So is this a rebirth of the substack? That channel's a rebirth thing, but it's a different thing. It's for, it's not for traders. You can try and trade with it. It's pretty good. But if you're a trader, you should use an institutional product, which is life signals. But the whole premise of this is to provide a data product that's going to represent our industry. And so right now we're wanting to get the reach out there so that, you know, the data within Bitcoin and these digital assets ecosystems is represented by within the industry.

I think that would be pretty cool. So when you say you sold your Bitcoin to put into some of these startups, do you think we're at the point where Bitcoin businesses will be able to outperform Bitcoin? Oh, yeah. Like, you know, those that got in on the seed, the seed, like the earliest investment rounds of Coinbase, which was a huge success, outperformed Bitcoin by a factor of 0.5,

meaning they got half their bitcoins back. Yeah. My first investment in the space was Exodus Wallet in 20, 16, 15, 16 around that time, that outperform Bitcoin by, it's public now, 2 to 3x. So I got two to three times my Bitcoin value back. And back then, Bitcoin was growing by 100% annualized growth rate. So it was really hard. And back in the Coinbase day, it was growing sometimes 1,000%.

So it was really hard to outperform Bitcoin. Now, if you know what you're doing, it's still very high risk because a lot of these companies go belly up. But I think it's relatively safe bet that these companies would significantly do more than the two to three X if you get onto a winner. And if you get a loser, hey, that was a good well-spent experiment to show this thing doesn't work. Or you've got to have a lot of failures for successes. And what are the kind of businesses that you're looking at? Mostly stuff that I am, I can have a hand in with my existing knowledge.

with knowing markets, knowing how hedge funds work, a bit of cross over with the banking system and TradeFi. So, for example, I invested in Debbie Fi, which is the,

you know, they provide a platform where you can get a private key, lock your Bitcoin into an escrow and get a USD loan off or a Fiat loan, so you can borrow against your Bitcoin.

But you can do it for private key. So invested in that, I'm probably going to do something in the space by providing some Tradfai liquidity into that as well. That's like a perfect thing for me. Because you can get the lenders to come into the platform. Yeah, I'm in Tradfai, sort of, like with the overlap of hedge funds. And yeah, so like let's go get some, get some USD and send it to the Bitcoin as well. And that should be profitable. And, you know, I really like the idea of having a profitable business that incentivizes self-custody. The more self-custody people that are out there, the more I'm going to better lend to. So that's what I like about that one. It's a weird world,

isn't it? I'm not self-custody, but I'm not even encouraging it. But you're trying to push it. Yeah. Yeah. Well, if you put in all your money into Bitcoin businesses, you've got nothing to self-custody. It's decentralized custody. It's just being spread out amongst a bunch of other people. They're holding a Bitcoin for you. Yeah, a lot of them hold Bitcoin treasuries. And even that de-risks it. Even the startup goes barely up,

you probably get the Bitcoin value back of what's in the treasury. Yeah. Are you investing in any of the Bitcoin, like the pure play Bitcoin treasury plays? Yeah. I hold micro strategy. I've invested in Adam Beck's BSTR because it's a bull market. It's a bull market.

MNAVs will expand. I don't want to hold that in the beer market because I expect that compress. But we've had that conversation around. I'm not a hoddler through the entire cycle. I think these ones will work really well as well, long term. They will just have higher expansion

and higher compression along the way. I do not like that it centralizes the supply. And I think that's a risk on the system. Yeah, I agree. I've been, I've struggled to get my head properly around the Bitcoin treasury companies, not in terms of whether they are sustainable as a business model, but whether it's good for Bitcoin. And the truth is, it doesn't matter what I say. Bitcoin's money for enemies. People can do with it what they want. But it's not the future

that I maybe saw. Yeah, well, the thing with it is Bitcoin needs capital. If it's going to flip gold and it's going to flip Fiat, actually that's what we're really talking about is ending for it. It needs to get bigger and it's got to swallow up big chunks of capital. And so the ETS and these equity-based treasury companies allow easy access. And they suck in from traditional bond markets. They're eating huge amounts of capital. So that's the good side. The bad side is that it makes Bitcoin more brittle.

Because, hey, what if the US government decides this Bitcoin thing looks like gold? We could back it. we could back our US dollar with Bitcoin. We've done that before. Why don't we just nationalize all the gold back into our digital Fort Knox, you know, and the low-hanging fruit would be all these public listed companies. They probably do it through an offering. But they can nationalize the gold in the Bitcoin.

And I've done it before. So that's a risk. That's a risk. That's not a 0% risk. I could see that future. It's happened before, right? Yeah. It's happened before.

And then what happens when the big bags, they didn't nationalize all the gold. India had gold. You know, everyone had gold. But they managed to put the money back onto one location, which means that you can then close that redeemability, which happened in 1921. You're back to Fiat.

And so I think that that's a decent risk. The idea of going from Fiat to Bitcoin and Buckech, to Fiat is one of the scariest propositions. I know, right? We don't need that to happen. People will say, oh, we tried that before it didn't work, you know.

And so. True Fiat has never been tried. Oh, you know. True Fiat is actually probably what holds the whole world up right now because when we cite all the cases of Fiat dying in the past, they were localized countries

that went to Fiat because they mismanaged themselves so bad and they debased themselves and became Fiat. And they blew up immediately. and what happened was we had the entire world, you know, after World War II, we had all the worlds agree that the US was going to be good to be, to use the US dollar, the new deal was that.

And then the US said, well, it's still gold-backed, but all the gold's going to be in Fort Knox. And so that whole process, when, the redeemability got snipped meant that we managed to rug the entire world to fear it all at the same time. And that's what's holding it up because we're in the same boat. We're all debasing together, whereas in the past, only one country with debase to oblivion. And so let's see how long it lasts for. But it's probably not going to be pretty. No, I think it's a, I mean, who knows if even that gold is still in Fort Knox as well.

Right. No audit. Yeah. We were promised a live stream audit by Elon Musk, and I wonder why that never happened. Yeah, well, yeah, that would have been good. Yeah, they're falling out now, so. True. But thank you so much for this, Willie. This has been good.

We better get to the conference. Oh, yeah, Danny. Let's go. But thank you, man. That was great. All right.