What Bitcoin Did - The Data Says Bitcoin’s Bottom Is Already In | Mitchell Askew & John Haar

Episode Date: August 7, 2026

“I would give myself 95% confidence that the bottom is in.” Mitchell Askew and John Haar are on the show to get into whether Bitcoin’s price bottom is already in, and why this drawdown looks different. In this episode we discuss the disconnect between record global liquidity and a Bitcoin price that has fallen 50%, the selling by OG holders, miners pivoting toward AI, and the potentially self-fulfilling nature of the four-year cycle. Selling pressure is becoming exhausted and we're now facing time pain, not price pain. We also get into AI stealing Bitcoin’s bull run, what could force capital rotation, the future of Strategy and MetaPlanet, why blow-off tops and 75% drawdowns may be disappearing, and how Bitcoin mining is changing as major operators move into AI. *Note, this was recorded before the recent Coldcard vulnerability. For more info watch this… https://youtu.be/rf-9rf93OpE THANKS TO OUR SPONSORS: LEDN SWAN ANCHORWATCH BLOCKWARE BITKEY CAPE FOLLOW: Danny Knowles: https://x.com/_DannyKnowles Mitchell Askew: https://x.com/MitchellAskew John Haar: https://x.com/jhaarblockware

I don't think we'll have these blow-off tops anymore, but that goes hand in hand with I don't think we're going to get a 75% drawdown. Like I'm, I would give myself like 95% confidence that the bottom is in in terms of price. I do think we could stay at this range for another three to six months potentially, but I seriously doubt we get a 75% drop. I track 55 high-flying AI-related stocks. When I look at that in the last month, most of them are in the red. Year to date, though, they're still in the black big time. So, like, they're still up a lot. So if more start to pull back in Q4, and then at the same time, Bitcoin chart looks favorable

for calendar reasons. And then Bitcoin's starting to go from 65 to 70 to 80. I think that could cause the capital rotation back. That's kind of my base case. Does it have to happen in Q4? It doesn't have to. Maybe it takes till Q1 or something, but that's what I think is going to happen. Mitchell and John. How you doing, guys?

Doing good, man. Happy to be here. Excellent. Good stuff. First time you've been on the show. First time. First time, long time, as they say. I'm excited. I think three things have happened in the last few days that made me think the bottom might be in. Satuma, do you see what happened with them? They've sold all their Bitcoin. Yeah. See SmartWeather started selling Bitcoin. Bitmex has closed down. Like these all feel like bottom signals. What do you reckon? Yeah, I think in terms of like their impact on the Bitcoin price,

it's going to be probably pretty negligible, right? They've got like 600 Bitcoin. Yeah. But these are, like you said, are the things you would expect to see at a bottom. And it makes sense because they're trading at, I don't know the exact number, but pretty big discount to the actual value of their Bitcoin holdings. Yeah. And I don't think they have any other business.

So it's like, why not just sell the Bitcoin and give that capital to the shareholders? Yeah. I think it's a good thing for Bitcoin. Yeah. We need this capitulation. Then we can move forward. Like, we need to kind of weed out the companies that aren't really strong enough to be here. Yeah.

I think it's good. So by not strong enough, would you say that, like, any public Bitcoin company, they need to have a core business. They need to have cash flow. I don't know if it's, I don't know if I'd go that far. Like, I'm yet to yet to see on that one. It depends. Like, do you think strategy has a core business?

I don't think selling STRC and, like, giving yourself liabilities as a core business. they still have the legacy software business. So I would say yes. Because people frame STRCL, this is a product. It's just taking on incremental liability. And I also think people overstate the actual potential of it. They frame it as this vehicle that's going to be the plumbing that brings capital from the bond market to Bitcoin. Do you guys know the actual market cap of all the preferred equities in the world?

No idea. Not big. It's smaller than Bitcoin. It's like $1.3 trillion. And so you can call STRC digital credit, but it is in this very narrow niche of preferred stock. So I think even if STRC gets back to $100 a share and like it makes sense for them to sell more, there's a finite amount of capital they could actually pull into Bitcoin through that vehicle. And so I think the true rendition of like digital credit or Bitcoin backed bonds is going to look

a lot different than what we see with STRC. So I don't really think it's like a core business or product per se. The reason I ask that question, do you think they have a core business is, obviously they have the software company. But it seems irrelevant to me, at least. I'm going to left curve it and say it seems irrelevant, and they don't have necessarily the core business.

And I think they're going to be totally fine. I think Bitcoin will get them out of this holder in. I'm sure Stretch will go back to par. I think maybe it's been a good wake-up for the market to see what can happen. But I don't think strategy are in any kind of danger. No, no, I don't think so. But I do think the common shareholders, there's some red flags that have been raised. 100%.

Basically, they're trying to serve two masters at once. When they created STRC a year ago, it's like, oh, this will give us a vehicle to raise capital when the MNAV is low and when we're in a bare market. But now you're seeing the opposite. You're seeing them issue common stock to support STRC. They're trying to kind of serve two different agendas. Yeah, they're Fiat maxing right now. Yeah. I think they're figuring out things as time goes on. I'm also in the left curve camp on this one. Like, they'll be fine in the long term. I think when times are good, people are like bowing down to Sailor, like he's a mega genius.

And then when times are bad, some people are like, he's a scammer, he should be in prison. And it's like both of those takes are too extreme. I also believe that they're playing the long game. I agreed that preferred stop. You can't really make the case of like, we're going to have preferred stock, even if they get it investment grade rated. You can't be like, oh, that's tapping into like trillions and trillions. You can't make that case of capital. But I think they're playing the long game. I think they're trying to check the boxes for S&P, which is one of the biggest rating agencies. Then they can potentially get an investment grade rating.

Then I think years down the road, they might try to issue not preferred stock, but just regular investment grade unsecure. debt. And then that market is actually massive. That may seem like a pipe dream right now for just a Bitcoin treasury company to issue unsecured debt. Like the biggest companies you can think of, they issue unsecured debt. But micro strategy might try to get there at some point. And then that would actually be a huge pool of capital. But yeah, I think the take is like, things are not going to get back to 2xMNAV, 3xMNAV. Like I think those days are over. Totally agree. Could they have a 1.1, 1.2 MNAV maybe gets like approaches 1.5 if like Bitcoin is just going ridiculously

higher in a raging bull market. I could see that happening. But sustained super high MNAVs probably over the days of like we're going to have 50 treasury companies over. I know you've had guests on your show who pointed that out. And they were correct early on. They were like, look, I just don't think anyone cares about the 18th biggest treasury company. And I think that's been proven correct.

So I get a load of people shouting at me in the comments, who obviously are still big fans of the Treasury Company stuff, who think that MNAVs can go above, like, two again. I can't see that happening. Like, it doesn't seem like it's on the cards. But what is the exact reason you don't think it'll go really above 1.5, even in a ball market? I feel like people, it was a novelty a couple years ago.

And it was like, it's almost like two novelties combined. It's like Bitcoin's kind of a novelty, even though obviously it's been around 17 years, but like in the grand scheme of things, it's still a novelty. And then to have a Bitcoin treasury company rapper was a novelty. And people didn't really know like what's the right comp. Yeah. And people also thought that Bitcoin was just like going way higher. And I think markets can be irrational in a short period of time measured in like three to 12 months. So maybe, I mean, just like imagine some.

Imagine the most bullish Bitcoin announcement possible. It's like the government says Bitcoin is on par with the dollar and the government owns 500,000 Bitcoin and they're going to stack another 500,000 Bitcoin. They announced that all at once, right? Could MNAV go to some ridiculous number? Sure. Why not? But like I still wouldn't think that would be sustained

over like a multi-year time frame. Yeah, I think one of the things that was completely wrecked people the last cycle is I know quite a few people that were taking out Bitcoin back loans to go and buy Treasury companies because they thought they were going to be a leverage play on Bitcoin. And like Bitcoin back loans are great, but you have to be really careful what you do with them. I think that's going to have hit a lot of people. Yeah.

Yeah. I think there's more effective ways to get that leverage Bitcoin exposure now without taking on like the corporate treasury counterparty risk. Because if you wanted to amplify your Bitcoin returns now, like probably, you know, no financial advice, but this would be a good. time to take out a Bitcoin backed loan, buy some more Bitcoin or buy, like, Ibit options, and then you don't have the risk of excessive dilution just to try to outperform Bitcoin on a short term.

Yeah. So, I mean, I agree. Like, taking out a Bitcoin back loan at 65K or whatever we're at is much better than 125K. Do you think we're at the bottom? Yeah. I think it's highly likely. I think 60K was a double bottom. We got a bunch of charts we put together.

We can look at that kind of show if this isn't the bottom, we're close. And we had two rounds of major fud and sentiment isn't like a, you know, perfect indicator. But in February when we hit 60K was like Epstein petto coin. And then in June, July, when we hit 60K again, it was like Michael Saylor's going to capitulate and sell all his Bitcoin. Neither of which are true, but just off of those vibes, they give strong bottom vibes to me. If you hold Bitcoin long enough, there's going to come a time when you need some dollars. It might be a tax bill, a business expense, life getting in the way, but whatever it is, it might come at a time when you don't want to sell your Bitcoin. That's where Lennon comes in.

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But there is extreme disconnect over the past 12 months. And I think it's important context that explains a lot of why Bitcoin actually went down. Because historically it was like Lynn Alden calls it kind of the sponge of global liquidity. It was that for a long time. The correlation was tit for tat. And then over the past 12 months, there's been this extreme disconnect. Global M2 is making all-time highs. Bitcoin's down 50%.

And, you know, we can elaborate in these next few charts. But the simple matter of the fact is AI stuck all the risk on liquidity out of the market. So there's an abundance of evidence that shows all that liquidity just went into AI. But I think at some point that liquidity is going to have to find something to rotate back into. I think Bitcoin's kind of sitting in a prime position to absorb all that. I totally agree. The interesting thing here is, so before 2013, like we were way below. But I think you can discount that because Bitcoin wasn't, we didn't really know what Bitcoin was then.

And since then, the only times it's really deviated from that trend is the peak in 2017, which again makes sense. I was like pure euphoria. And it's been very close apart from that. And this is the first time it's really deviated to the downside. I think you're so right, though. I think when this AI trade rolls over to some degree, I think if you have a lot of money in that AI trade, where else are you looking?

Like the rest of the equity market is not exactly doing great outside of the AI stocks. Bond's not going to be the spot. Like where else do you go? like gold and Bitcoin, I think are going to really benefit from that. Yeah, and gold already kind of had a frothy run earlier this year. So even more so pointing towards Bitcoin. So you think the tie's about to turn here? I think before the end of the year, we'll start to see a shift.

And I think Bitcoin will be potentially back over 100K this time next year. Because that's just so much liquidity. I mean, it's over, I think Global M2 is over like $110 trillion. Something ridiculous. I mean, that's a lot of capital in the market. John, for anyone who doesn't even know what M2 is, You want to explain it a little bit? Yeah, M2, you could think of it as like a broad measure of money supply.

I don't recall exactly what's in it offhand, but it's like it's going to look at many different measures of money. As the name implies, there's M1, M2, there's like different levels. But M2, and this is global M2, so this is meant to look at like liquidity, really like, and this affects all different types of assets. This typically affects inflation. There's some linkage between. M2 and inflation, what the Fed is doing affects M2, what banks are doing affects M2, banks meaning

commercial banks, central banks, commercial banks, and treasuries, meaning like governments, fiscal authorities, that's all going to feed into M2. Agreed that it's kind of shocking to see that it's the first time it disconnect to the downside. And what I find is interesting is that even in prior bear markets for Bitcoin, there wasn't, like, let's just look at 2022. And this underscores the point that I think 2022 was way more explainable. When we're looking at each other and Bitcoin's down 75%, peaked at trough, we're like, okay, M2 is down, which is very rare for M2 to actually be nominally down.

You know, it's like basically goes up and to the right. 2022 was M2 coming nominally down. The treasury was like pulling back all the COVID-era stimulus. was being reversed. They're still deficit spending, but they had a massive deficit during COVID. They pulled that back. Equities were down like 20%

at the index level. The high-flying tech stocks were down like 50. Like, InVIDIA was down 50% in 2022. Inflation was a 40-year high. The Fed is hiking rates at like the fastest pace ever. F-T-X collapses. FTC. Oh, yeah.

All the crypto-contagion. The Fed switched from QE to QT. Like, you just looked at that. If someone told you in 2021, hey, that list of things we just went through is going to happen in 2022, we all would have said, oh, Bitcoin's going to get clobbered. Yeah. And I think this time around, we could come up with a list. I have like four main things that I think cause this 50% price decline. But if you would have told me ahead of time that those four things are going to happen, I would have been like, I'm not sure how Bitcoin is going to do.

So I think this, and granted, it's only a 50% price decline. so maybe we should be happy about that. But I think big picture, we're still kind of scratching our heads because it doesn't feel as explainable. 100%. I've said this on the show before, that I think this is why sentiment's so bad because there's nothing to point to blame it on.

What are those four things? So I would say the first one is OG Wales, long-term holders selling Bitcoin. That definitely did happen the most clear example of it. And I'll ask, I know I asked you this, so I'll ask Danny,

Do you remember the Galaxy announcement, the Galaxy press release? Yeah. What month do you think that was offhand? I genuinely can't remember. I guess around a year ago. Okay, very good guess. It was almost exactly a year ago to the day. I was like testing myself on that, and I looked back,

and I thought it would have been like September, closer to the peak. But I looked back and it was July 25th, so like almost to the day that we're recording. Because I think we dropped after that and then pumped again a little bit to 126. We did. drop was only like a few percent in price. I remember we was talking about how bullish that was. Exactly. Exactly.

We were all like, look, this guy sold 80,000 Bitcoin, did a press release on it, and Bitcoin dropped like 3% or something around there. And we were all like, the liquidity is there, you know, the buyers are there. And on-chain metrics were showing that other large holders were selling. So that obviously happened. And you can explain it. It's like they held for many years, 100K was a milestone. In the Galaxy case, they just said it was for estate planning purposes.

Maybe some guy died. And it was like, the estate's going to sell it. You know, maybe it wasn't even his own decision. I'm just speculating there. So that would be number one. Kind of number two, but it's related, is the miners pivoting. Yeah. Which, this is a trend.

Mitch has been obviously following for a long time. But they're large holders. They've sold a bunch of Bitcoin to pivot into AI. And I don't think they're coming back because they're getting paid more for AI, HPC. then I think you have to say the four-year cycle, whether it's real, I put that in quotes, or if it's just self-fulfilling. I think people started to look at the calendar and said,

this is when Bitcoin is supposed to go down in October. I don't like that that's the case. Yeah, it breaks my brain. I can't have it. It doesn't make sense to me. Yeah. It depends how you define it, right? Because Bitcoin made an all-time high prior to the last halving.

To me, that defeats this idea that the having sparked some major catalyst followed by a pullback. And then to me, another indicator of the four-year cycle or like defining feature is the 75% pullback. But I think all these treasury companies kind of ate that on the chin, kind of absorbed a lot of that volatility. And I don't think Bitcoin's going down 75%. But I do think definitely some kind of self-fulfilling nature to that. And when you look on chain, you can see basically, all the Bitcoin that were held for many years sold off in Q3, Q4 last year. So maybe they're anticipating the cycle or maybe that cell pressure causes the cycle. But the end result is the same.

Yeah. The bullish shelling that we had last year. That's what we kept calling it. So what was number four? What was on this list? So then you have to point to AI. It's like just taking so much investor attention and flows. So I think we're going to look back and we're going to say it's actually kind of crazy that the four-year cycle believers, and I think there's an interesting thing. There's the people who always believed in the four-year cycle, and they were going to position for that accordingly. And then there's people like myself who I actually did believe that the four-year cycle would be no more.

Mitch has interesting points. I think you have to say that it's not like every cycle is exactly the same. We should point and say, yes, this one was a little different in this way. but in terms of just calendar timing like it's it's kind of uncanny how ridiculous it was time between havings when we peaked in October so there's people who always believe that again I was not in that camp

but having seen the price action since October even I'm like kind of throwing my hands up and being like okay this is a thing to some extent and then that becomes a little self-fulfilling because the people who didn't believe in it are like oh wait it is a thing now we and then they're going to kind of sit on their hands because they're like, oh, if it's a thing, that means I have to wait until Q4 of this year,

and that's when the chart starts to look good, and that's when things turn around. So I think we're going to look back in Bitcoin history and be like, those were actually two very negative catalysts. It was at the same time that the calendar turned negative for Bitcoin, AI was like everyone started to love AI and pick your favorite AI stock. But some of these are up like 3x, 5x, 10x. even more.

Yeah. So it's like that. And I do think there's, that's not just all hype. There's like a real trend there. So those two things combined have just put Bitcoin on the sidelines. And then you get a war thrown in the middle of all that too. True. I mean, I'm going to be one of the first ones to say this time's different again

because I just don't believe that the four-year cycle is going to exist forever. Like every cycle, I've got more chance of being right. I think there's, you know, investors are forward-looking, right? So you had this run-up prior to the having, investors kind of anticipating that as a catalyst. And then we peaked in October instead of November. So kind of leads me to believe that, all right, maybe this summer was the bottom instead of making the Pico bottom in Q4. Yeah. Well, I did have Michael Howell on the show recently. I don't know if you know him. He tracks the global liquidity. And he was talking about the cycles in liquidity being

probably the bigger driver of the Bitcoin cycles. And that's more believable to me. Like the date, Bitcoin having to sell off on a certain quarter of a certain year, like makes no sense to me. But if it is global liquidity rolling over, that one I can kind of believe. Right. But I don't know, I don't know, I feel like at some point Bitcoin is just going to break out of all trends. Right. And miners right now, all the miners in the world make like a combined 20 to 30 million a day. And Bitcoin's doing tens of billions of volume.

So that getting cut in half is pretty negligible on daily volume. Yeah. Yeah, I've been a believer in that for a while. That if, like you said, how you define four-year cycle matters, if people are telling me that it's a mechanical process based on the having, I don't really believe that. And I would argue that even the past cycles were not a result of the halving. I think it's more like, is there a four-year cycle due to various factors? I've even seen people point out that a four-year cycle is just common in like other assets, like stocks. So, yeah, even though I now believe that

there is a four-year cycle, or I think you just have to admit it, I still don't believe it's like a mechanical halving-driven thing. Yeah, I agree with that. All right, can we go on to the next one? What have we got next? Yeah, that's just the correlation between Bitcoin and Global M2. So it's not like a temporary disconnect. I mean, this is a statistical anomaly. It's almost always been at one except for like in the very bottom of the 2022 bear market, COVID and the bottom of the 2018 market, but now this is a prolonged disconnect. At some point, this, you have to expect it to revert to the mean. Yeah, this is almost like the peaks and troughs of Bitcoin are where it disconnects, like 2017 top, 2018, 2019 bottom. Like, it's the most volatile times is when it's next,

but this one's different for sure. Interesting. All right. Yeah, we can hop to the next one, I think. Yeah, so this is just again on USM2. It, I think that's either April or May there, the fastest, growth rate since COVID. Interesting. Yeah. The growth of the money supplies is accelerating. It is picking up. What's causing that? I would have to point at the fiscal spending. I mean, the deficits are ridiculous. Elon and Doge did what they could. Didn't work, like Len Alden says, the train just does not stop.

Did they even get a chance to do what they could? I don't think they did anything, really. I mean, the first like six months of the Trump administration seemed like they were trying to throw the kitchen sink at everything. You had percent. Like the first thing he said was like first order business, we got to get the 10-year rate down, get more mortgages, stimulate the economy. You had Doge. You had the tariffs to try to bring in revenue. You had Trump jawboning at Powell. Literally everything they could to try to get interest rates down and just none of it works. And now all the debts rolling over at higher rates, they're financing a war. They spend. over a trillion dollars a year on interest.

Like, that is definitely the driver. So, though, like, we've had two big peaks in 2026, they'll be war-driven, right? Yeah. Yeah, almost certainly. By missiles. But this is just an up-only chart, isn't it? Yeah.

So from 2022, that's when they were raising rates and dropping the, like, cutting the balance sheet. Yeah. Interesting. It's quite an anomaly. I wish I had the zoomed out 60-year view of this, because that was literally the only time USM-2 has, like, ever contracted as far as the Fred dataset goes back.

Wow. Cool. Let's go on to the next one. Yeah, so here you can really quantify how much of that capital is just going into AI, which is the alternative risk on position. It's almost double in 2026 what it was in 2025, at least the projections by the end of the year. And I listened to Jack Mahler's live stream on Monday. He made a fantastic point. It's like all of these AI companies, they're getting tech SaaS multiples, but they're really a real estate development business. It's extreme like upfront capital expenditure. And then they make like a small spread on the power. It's just like almost like being a landlord and making rent. It's not like a SaaS company

where you can scale 100x and 12 months. It's a very very cap-x intensive business. But you're getting these SaaS like multiples on it. And it's all being financed by debt for the most part. So I don't think AI is a bubble in the sense that the, I think the impact on our economy and how we do business is very real and tangible, but at the current moment in time, some of the equities are probably overpriced. Yeah. So I had Alex Thorne on yesterday, and I was talking to him about this. And I made a point that he disagreed with, but I'd be interesting in your take. I wondered if, like, the hyperscalers are getting such crazy valuations in the same way that Bitcoin miners used to, when there was no real vehicle to

have to own Bitcoin in like the equity market, so people just use the miners as a proxy. I wondered if people are doing that with the hyperscalers because Anthropic and Open AI aren't public right now. Yeah, I actually agree. We were talking about this at dinner last night with some of our blackware colleagues. It is effectively the same business model, like 90% of it's fungible. You just need land and power and physical infrastructure. And what they, you know, kind of what happened with Bitcoin miners a few years ago

is effectively what we're seeing now on the AI side. Yeah. So do you think that that's going to roll over at some point? Or do you think it will keep going until we have these companies go public and then they'll just take the liquidity? I think they would like for it to extend until they go public. If I had to put a bet on, I would say it'll last until we get anthropic and open AI in the markets. The thing that I don't know about is obviously like really AI companies are driving the entire market. Like they're the only things that are absolutely pumping. Yeah, I think if you flip to the next chart, yeah, it's all, that's the S&P 500. returns year-to-date by sector. And so can they actually let the bubble pop, as it were? Too big to fail.

I think it's been proven that you can have short-term retracements. And 2022 was a pretty good example of this. It's not like the Fed's going to rush in if equities go down 20% or something. Like, that could happen. But it can't go in reverse for too long. And it's, this is something that Luke Groman talks about. It's like tax receipts are correlated to asset prices. And it's just like spending across the economy is correlated to asset prices.

And once that system starts going in reverse, it's just like everything gets worse from like a fiscal perspective at the government level, like an individual level. And it's just not a pop deal. Even if you could make the argument that like it's the right thing to do for whatever reasons. What politician wants to be like, we're going to go through this long, painful period where you, the individual, things are going to feel worse for you. Your small business or medium-sized business, everything's going to feel worse for you. Your 401K is going to go down. Like, Bitcoiners obviously get this.

The savings vehicles for all these people are 401Ks, IRAs, pension plans. If those get cut by 20% or 30%, people are pissed. And like, you could try to give them an intellectual argument for like why that's good for them because, you know, you only own this much in assets. And when assets pump, it actually helps the wealthy people. But I don't, I think that falls on deaf ears. I think people just don't want to see their wealth. And we should throw real estate in there too. Like, you could kind of deflate the real estate market. That might be good for certain reasons. But most people are just going to be like, no, my net worth went down by 30, 40 percent. This politician sucks. And no politician wants to

to explain that. You just kind of want to keep this whole system going. Yeah. And I would definitely be one of the people that would argue it probably is the right thing to do. Like, you have to let markets do what markets do. But if you intervene and they print a load of money, if everything starts rolling over, like, it shows the most insidious side of inflation in that it's probably what most people would even choose over like a deflationary bust in the like the markets is you just take the inflation, which is, I mean, it sucks, but it's probably the easiest one to take. Yeah. If we were starting from scratch, I would say, allow these bubbles to pop, there's going to be a natural market cycle. And it's good. If you're

running an unprofitable enterprise, prices are your signal, you're destroying capital. You should go out of business. But at this point, the knock on effects of allowing that to happen would, you know, trickle down to Main Street and the every every man person. So it's like probably do you just have to kind of gradually inflate your way out of this. Yeah. Do we miss one then? Yeah, go back to that. So this is fascinating. This is obviously Anthropic and Open AI are still private, so those are estimated market cap valuations. But those three companies, SpaceX, Open AI, Anthropic,

about $3.7 trillion in market cap, 13 times greater than every company that IPOed in 2021. That's insane. COVID stimulus, euphoria markets, you know, Chamath, SPACs, all of them combined, 13 times smaller than just these three companies. totally, it's wild. One of the crazy things is, I don't remember the year,

but I remember when, was it Google, was it Google? Was it Apple? To IPO? No, no, just. Oh, to reach it? Yeah, to reach trillion. It had to be either them or, yeah, had to be them, Microsoft.

There was a time maybe like three or four or five years ago where I think one of the companies hit a trillion, and then a couple of others followed. And now we're having companies IPO at $1.75 trillion dollars. Like, it's absolutely insane. I think there's like a dozen trillion dollar plus market cap company. And it was not that long ago where we were the first one.

It's like the growth in these is absolutely wild. A trillion dollars ain't what it used to be. That's for sure. Crazy. And they're saying private longer too. Like, you know, this is like, I feel like it was more normal that SpaceX would have went public much earlier in their own like maturity, path to maturity. But yeah, these are eye-popping numbers.

That's definitely true with SpaceX. But Anthropics not been around very long. But yeah. But their own like series jay. or something ridiculous. Is that right? Yeah. Okay.

Like, I'm losing count how many times they've been. You're going to run out of Alphabet. What happens when you get to Z? Series A,A, I guess. You just restart. Yeah, that's absolutely wild. I thought it was cool that SpaceX had 20,000 Bitcoin on their balance sheet. Yeah.

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That's C-A-P-E.com forward slash WBD. I think Elon talks about stacking Bitcoin for SpaceX when he bought the Tesla Bitcoin as well, right? And I mean, Tesla still own Bitcoin. Yeah. He knows. The guy knows. Yeah, he definitely does. He tested liquidity, but he knows what to hold.

All right, let's go on to the next one. Yeah. And so this is how much they're financing it with debt. So meta, you know, $57 billion. Google, $56 billion, Amazon, $40 billion. It's not like these are unprofitable companies. These are the MAG7 that are basically cash cows. But the cash they do have, they want more debt.

They want to finance it. incredibly fast and aggressively. Do you see that as being an issue? Potentially. Debt always seems to find a way to kind of unwind itself at some point. I don't hold any of these stocks, so I'm not worried about it. But I mean, if I was a meta, I would be doing it with debt. Yeah, yeah.

Like, use the short the inflation. Yeah. I don't know if that's maybe their hypothesis, but I agree directionally. I would probably do the same thing. Everybody is speculatively attacking the dollar in some way. Yeah, yeah. I take a big, like, big picture takeaway for me here is, I think a lot of us have, like, the old school mentality,

either consciously or unconsciously of, like, you get out of debt. When you have, like, a good quarter for yourself or your business or whatever, pay down your debt. And, like, maybe there are cases where you should do that. I'm not saying it's a bad idea all the time. But clearly these companies are not, Amazon's not like, we had a good quarter. Let's get rid of that debt.

this is a permanent part of their capital structure. I have to tell this quick story because it's about Amazon debt. In a prior life, I was a portfolio manager at Goldman Sachs here in New York, and Amazon issued debt for the first time in their company history in 2014. And the reason I remember it so well is I had just started as a portfolio manager, and they're in our universe. So they bring the deal in the morning, and you have to decide. as a portfolio manager if you're going to buy it or not for your client accounts. I was like 20.

I must have been like mid-20s in age. I just started. So I was not a lead portfolio manager. I was like an assistant portfolio manager. But the guy who I reported to went on vacation. And when he goes on vacation, it kind of comes down to the next guy in line. So I had to do a call with a large client who gave us billions of dollars to manage. And I had to explain to them that we bought, this is what we did in your portfolio. The management of the client's portfolio is like, you're the manager, but it's kind of hand in hand. You give them weekly updates on what you do, and they can tell you if they like it or don't like it. And when Amazon first issued debt in 2014, their balance sheet and their income statement didn't look so great. You guys probably

weren't following this at the time, but they were like in grow, grow, grow mode. And they weren't really optimizing for like an attractive bottom line earnings. So, and they had weird ratings. One of the rating agencies rated them like AA. Another agency rated them triple B, which is a huge spread. So like the market clearly didn't know how to value Amazon. And I'll never forget it. You can imagine why this stuck with me because I was like a young kid.

Mitch, Mitch has a lot more confidence in his 20s than I. I was like, you know, crapping my pants on this call. It's like, I have to explain to this client why we bought like, 40 million of Amazon bonds for them. And the client rips me a new one and is like, we don't like this company. Their balance sheet is like junk. This is like you guys bought a junk bond. You bought too much. Don't buy anymore. So number one, I had to tell that because this is a slide about Amazon debt, but also just amazing because the guy on the other side of that phone call was a professional investor. He was probably in his 40s. So I've been doing the job for like 20 years. And he thought

Amazon was like a bad company to hold the debt of in 2014. And like obviously that was one of the best debt holdings you could have on planet earth. Yeah. But just I give that story because people like the narrative at the time was this company doesn't make money. And it wasn't clear that they had a path to make money. Now they're...

Look at them now. Yeah, look at them now. And that wasn't some guy I just put a microphone to on the street. That was like the CIO of an insurance company. Wow. Have you spoken to him since? Not about that specific situation. I don't want to poke him too hard. No, you need to rub that in his face. You're clearly very right.

It was 2004, right? It's 2014. You already had Instagram. The whole world was on the internet by then anyways. Exactly. And that makes the point even stronger, I think, is that in 2014, people were still like, Amazon, how successful are they going to be? Yeah, and people are saying similar things about Bitcoin now, even though the government has given it their stamp of approval, black. BlackRock, Fidelity, even Vanguard. Now it's like we're definitely in a similar situation. Yeah. What more evidence do you need? Probably even more so with strategy than any of those.

Yeah. Do you think this is a complete tangent, but do you think strategy will outperform Bitcoin? I think it can can on an interim timeframe. During a bull market. Yeah, during a bull market, I wouldn't bet against it. Yeah. A bit more of a tangent.

I'm more interested in Metaplanet right now. Okay. I think if there's any Bitcoin treasury company that actually justifies an MNAF premium, it's them. Why? Well, for one, the market they're in. So they, the interest rates are obviously much lower in Japan. Their currency inflates at a faster rate. So they're preferred, which I don't believe you can buy publicly. They're only sold privately. They're in the 4 to 6% range. So they have much cheaper borrowing cost. I actually didn't know they did prefer. Yeah, it's called Mars. But it's like you can, you can, can only buy it in private, like over-the-counter tranches, you know, $40 million clips, like what John was slinging back in the day when I was, you know, a 14-year-old middle schooler.

So they've got that. They're in like a better market for it. They don't really have much competition. There's still a 50% long-term capital gains tax on Bitcoin in Japan. So it actually makes sense to hold a securitized version. But then this is the biggest reason, in my opinion. They just acquired a securities broker called like Cybo Securities. basically kind of like a penny stock, you know, whatever. It was very small market cap. But it has a

license that now it's meta planet securities. They have this license to issue real bonds, like real financial products beyond preferred stock. So Bitcoin-backed bonds and like actual instruments that are credit by legal definition, not digital credit and name only, but it's preferred equity. So that can actually tap into that, you know, $300 trillion fixed income market. So I think think they've got a much wider pool to tap into in a market that's more desperate for any kind of yield. Wow, that's interesting. And what are they trading at right now? They're trading below 1xMNAF. And at their peak, they were like 10. Yeah, that was crazy. Yeah. Because, I mean, that is interesting. I don't know enough about Metaplanet. I do think with strategy, like, I'm sure

they will outperform Bitcoin in the bull market, but I'll be really interested to see over, like, say, the next four-year period, how it looks. I think outperforming Bitcoin, even for like, the strategies of the world is going to get increasingly hard. Yeah, it is difficult. And you mentioned it earlier. I want to really hone in on this point. They are kind of figuring things out as they go. Like, kudos to Sailor and Fong Lee.

They are trailblazing. What I think is a potentially legitimate path. But because they're figuring it out as they go, you can't assume every action is perfect. Because they've already unwound certain, you know, a year ago they're like, we're not diluting under two and a half XMNAV. And then like a week later, they changed it. Yeah.

And now they're diluting under 1XMNAF. So I'm generally a fan. I don't like when they say they turn Bitcoin into money, but that's a side point. But you can't like praise everything they do as if they can never do any wrong. And I see a lot of that. Yeah, I totally agree.

And I'm with you with like saying you make Bitcoin better money. That's the thing that really rub me up. Yeah, major red flag. Yeah. All right, let's do the next one. So this is what John was talking about earlier. OGs and long-term holders selling. And I do think the psychological

impact of $100,000 was underestimated, certainly by myself. So this is the Bitcoin price in black. And then in orange is the percent of the supply that hasn't moved in at least two years. So it peaked right before we made new all-time highs in Q1 of 2024, is about 57 percent of the supply had not moved in at least two years. So those are people, you know, they bought at a minimum in the 2022 bear market or before held through all of that. Of course they're going to start selling when Bitcoin reaches 70K and when it reaches 100K and 120. But it dropped to a low of about 47%. So that's 10% of the Bitcoin supply.

About 2 million Bitcoin have been sold into the market over the last two years. Of course, that's going to make the price go down. But what we've seen over the past really six months is that metric has tapered off. So you're not seeing these long-term holders selling. and they're just, you know, slowly but surely starting to build back a new base. And eventually it's supply and demand. Supply is constraining. You've got all the potential demand from the liquidity that went to AI.

I think we're going to get fireworks in the next 12 to 18 months. Yeah, it is the question, like, who is left to sell? Like, at this point, who's going to be selling? Like, the one thing I'm not sure of is I know ETFs, you know, at the start of this bear market were really good. Like, they held stronger than, like, the average bitcoins. Have you had any idea of what's happening in the last, like, a few months? 22 was capitulation.

So it was like the most amount of coins the ETFs have sold ever in a quarter. I think net net it was around like 80,000 Bitcoin, which I mean, there's a lot of capital, but it's not. It's one whale. Yeah. It's the one galaxy guy. Yeah. Interesting. I think like just on vibes alone, I feel like we're making it.

Like we must be near the bottom here. If we're not already hit it, I just, I can't see it going much lower. Yeah. I'll just say back to that 2022 comparison we were making earlier. If we go down 75% and there's not like some ridiculous event that we can point to, that's like it's just going to frustrate us a ton more. Yeah. Because it's like I don't see why.

I do see a lot of people making comparisons to 2022. And they say, well, this is what happened in 2022. So the price is going to, you know, follow that same trend now. And I just, I just can't get my head around that because if that happens, but we don't have some event that we can point to that. caused it, then to me that kind of implies that all the things that happened in 2022 wasn't the cause of the price going down. It was like just the time on the calendar. And I don't think we're going to have a FTX type crescendo. And you know, you mentioned

FTX, but there was five things before that. There was Luna, Celsius, Voyager, BlockFi, three hours capital. Like we had like Block fills, I think, was the big one of this cycle. You guys might not have even heard of this one. Never even heard of it. What is that? Blockfields was like an institutional. They did a other thing. Were they the one based out of Chicago? I think so. Yeah. And so they went under. They were a market maker.

I think they had multiple business lines, probably market making, some lending, brokerage. Did they get blown up in that like crypto crash, the finance thing? Potentially. Yeah, it got uncovered, I want to say, in February. It's a few months back. Yeah. The only reason I remember is because, like, I think the Chicago Black Hawk's hockey team had, like, Bitcoin on that platform and they were in the bankruptcy claim. So a professional sports team now holds Bitcoin. That's pretty cool. I mean, that is, like, to take a bullish perspective on that, one of the bullish things is that we've not really had a big blowup. This is the first bear market where we've not had a huge company go under, I think.

Yeah. Since I've been in Bitcoin, at least. Agreed. I think it would be block fills, which again, most people haven't even heard of. and then the capitulation might be what we've seen with strategy, that they had to sell some Bitcoin, that they had to pull out a few wildcards that they probably didn't expect to pull out. If we look back and we say 50% drawdown,

and those were the big items, I think that's a sign of Bitcoin maturing. That's night and day different versus what happened in 2022. I totally agree. You know you talk about the 100K psychological level. Do you think that will exist when we go back there? potentially. I think previous all-time highs are always going to be a psychological level because you get the FOMO newcomer that's chasing price action finally at their break-even

and they can kind of wipe the sweat off and be like, I'm out of this thing now that I'm back in the money. Yeah. So I think more so like the $120,000 level would be probably a new psychological barrier. And do you think obviously it was a very muted top this time? Like it wasn't like what we've had before. Do you think that's a permanent fixture now, or do you think we'll have kind of blow off top, euphoria again? I left side of the bell curving this. Don't think so. You don't think which one, sorry?

I don't think we'll have these blow off tops anymore. But that goes hand in hand with, I don't think we're going to get a 75% drawdown. I would give myself, like, 95% confidence that the bottom is in, in terms of price. I do think we could stay at this range for another three to six months, potentially, but I seriously doubt we get a 75% drop.

That would be another 50% drop. Think about all the pain we've endured over the last 12 months, do it all over again. Yeah, the only thing that makes me think it has a potential is the market likes to play games, and doesn't NACA have like a liquidation level at like 48K or something around there? They do have encumbered Bitcoin,

so there's some liquidation level. I don't know what that is, though. The market might want to try and sniff that out. Potentially. All right, what if we got next? So this and a few of the other charts in here just kind of show evidence of when there is capitulation. So this is the transfer volume from Wales to exchanges. So any address or cluster of addresses with 10,000 or more Bitcoin, you can see there's a few distinct moments when they send those coins to exchanges.

During, you know, euphoric bull market tops and all-time highs, they're going to take some capital out. They make the tops. They make the tops precisely. And then during capitulation. So you kind of see smaller but still, you know, visibly present spikes at moments where the price drops. So you can see this in Q1 of this year. And then more recently you see another little spike there.

And it kind of, you know, causes the price to go down all these whales, sending coins to the exchanges. That is interesting. A lot of the time, and they're much smaller spikes, obviously. but they're kind of selling the bottom a lot. Well, them selling makes the bottom. Yeah, they make the tops, they make the bottoms. We're seeing kind of lower highs here,

so they are, you know, it would appear they're running out of coins to dump on us. That's what we need to see. Yeah. All right, let's see what we've got next. So this is kind of just like short-term, you know, focus. Like I think this has served as pretty much the key indicator

of whether or not Bitcoin's in a bull or bare market. And it's the cost basis of anyone who's bought Bitcoin in the past six months, This is the newbies. This is the newbies, correct. And it's that psychological effect I was talking about earlier. When they're back at break-even in a bare market, they're probably like, all right, let me get out of this thing.

They might not have the conviction. Yeah. In a bull market, it's kind of support because, all right, Bitcoin pulled back. I'm at my cost basis. Let's DCA in again. So it functions as support during bull markets. It's already been rejected here twice in 2026. Looks like another three or four weeks.

we're going to see the price have to have to face this level again. So my base case would be, I don't know when this podcast is going to come out, but sideways for the next probably four weeks until maybe late August, early September. And then I think Bitcoin is going to make its next move. And we'll get clarity on, you know, where we go from there. Are you in agreement on that? My base case, predicting the next four weeks is always tough. You know, you could do it.

My base case for a little bit longer than that is coming back to, this four-year cycle thesis. Even the people who don't like the four-year cycle, I think, have to admit now that calendar-wise, it's playing out. And that would imply something between September and December is when things start to get more favorable. Obviously, that could be off by a quarter or something. It could happen in Q1. But I think Q4 is when things start to get more favorable. And if you couple that with AI starts to cool off a little bit, I really mean just like cool off. I'm not, I'm not one of these people who thinks we're in a year 2000 moment. And Amazon's going to fall 93%.

And I don't think that's what's happening. But these stocks that have gone up, 3x, 10x, whatever, they could easily pull back 30, 40, 50%. That wouldn't be crazy. So, and that could be on so many different headlines that could happen, right? I think a lot of the data centers have had those pullbacks already in the last few, like, last couple of months. It started to in the past like month or two.

Yeah. But when I track 55 high-flying AI-related stocks and they're the ones that high flying i mean like they've done really well uh when i look at that in the last month most of them are in the red yeah in the last three months it's like half and half year to date though they're still in the black big time so like they're still up a lot um so if more start to pull back in q4 and then at the same time bitcoin chart looks favorable for calendar reasons. And then Bitcoin's starting to go from 65 to 70 to 80.

I think that could cause the capital rotation back. That's kind of my base case. Does it have to happen in Q4? It doesn't have to. Maybe it takes till Q1 or something. But that's what I think is going to happen. So you used to work with like real investors. Real investors.

But like, so one of the things it doesn't make sense to me is the four-year cycle. No idea why that should exist. I don't think the subsidy is enough now. But the other thing is selling May and go away always seems to be true. Why is that? So I've worked in the fixed income markets, I think, which just means bonds for anybody who's totally unaware of that. I think selling May and go away has been more of an equity story. And I'm sure someone out there has done the research. Maybe it works more than half the time, but I'm sure there's years you can point to when

it didn't work. If I was going to point to anything, it's like, summer is a real thing in the world. People want to go to the Hamptons. People want to go. And I mean like, you know, politicians want to go. Central bankers want to go. CEOs of companies want to go enjoy the summer. So I think fewer things happen in terms of headlines. Fewer people are around to trade. These are very broad comments, right? You could still have a crazy thing happen in July. But like generally speaking, it's going to be less active. And then September comes around and people are like, I'm back at work. The kids are back in school. Let's pump it. Congress is back in session.

Like, let's have something crazy happen. Yeah, it's... It's the summer doldrums. Yeah, I think it's a real thing to some extent. All right, what have we got next? Yeah, so there's a few good chart. Yeah, a few charts in here that all, you know, you don't want to take any one chart as gospel,

but when you look at them in the aggregate, they tell the same story that if we're not at the bottom, we're darn near close and you should be aggressively accumulating. Tell me on this. How does this work? This is all UTXOs. All UTXOs. And how many...

of them were moved at a price higher than where the Bitcoin price is today. Over half of them are underwater, so they're at a loss. I've asked this question to checkmate a million times, but I want your perspective on it. How do you trade off that obviously every time someone moves Utex O is not a sale? Right. You just kind of run with the assumption that it is. Because for the most part, in terms of quantity it is. Like if you're paying for a beer at public, key with Bitcoin, that's, you know, even if you do that on-chain, layer one, that's like a $5 transaction, which is pretty insignificant to all 21 million Bitcoin. So I think just by the law of large numbers, like someone moving a thousand Bitcoin,

they're probably exchanging the capital for cash. So it's just enough probably our sales that it makes the data useful? Correct. Okay. I've had the same thought to any, like, and it's particularly in a bull market on the the upside, you could definitely make the case that a raging bull market could cause someone to be like, oh, I should upgrade my custody solution. And that would cause them to move Bitcoin onto like, I'm going to do multi-sig now or whatever. They're moving from one thing to another

for better security, better estate planning. That would show up in these types of analyses as like, oh, that's a sale. But I think if you look at it in aggregate, most of them probably are still sells. Yeah, that makes sense. But it's interesting that we very, very rarely get to these levels and we never go very far below. Yeah, and it only happens at like the exact bottoms. I do wonder how useful on-chain data will be going forward if we get more and more paper Bitcoin if that's where a lot of the market is. But inversely, imagine how useful this data set would be if the entire economy ran on a Bitcoin standard. Yeah. Like if you could see the precise movement of Treasury bond, who they were sent to at what time, in how much quantity, how long they held for.

That would be a very valuable data set. So if we do over our lifetime shift to a Bitcoin standard, I think a lot of economic research could be conducted based on on-chain activity. Everything's better on a Bitcoin standard. It is. All right. What we got? So this is similar. So of the coins that are being moved on chain, how much of that is at a profit versus a loss?

And I've highlighted here the very rare regimes in which, more coins are being moved at a loss than out of profit. You could see kind of, and that's that red line. So anytime the red is over the green, more transfer volume at a loss, again, it all lines up with bottoms. It does not happen a lot. No, it doesn't. And we've actually been in one of these regimes basically all calendar year.

So they don't tend to last too much longer than what we've already endured. So the data is totally on our side right now. It is. It is on the side of someone who should be not waiting for Bitcoin to go lower. You should be deploying capital now. And if it goes lower, deploy more capital then. Yeah. And like that's the thing. People, I think, get too caught up in trying to pick the absolute bottom.

Like, now is a good time to buy. Yeah. You might miss it by 10%. It's still, like, you're going to be happy in the future. So it's important to be a productive member of society. Like, if you have a job, if you make income, all right, you can buy it now. And if it goes lower, buy more then. Like, as long as you have an income stream, you should just be dollar cost averaging always.

Yeah. $100 dollar cost average always, but more so. Yeah, more so now. Also, I'm going to be a broken record here with 2022 comparisons, but Bitcoin hit like 19K in June of 2022. And the rest of that year happening with like FTCS happening, which was the biggest blowup ever, he's the SBF of crypto, my great aunt who's 80 years old knew about it.

Like everybody knew about FTX and SBF. That only took Bitcoin from like roughly 19 down to like 16. So, like, if it took that and, you know, that didn't cause that much of an additional price decline, for someone to be thinking Bitcoin has to go to 50K from here, I would just ask them, like, what's going to be the catalyst for that? And I don't have a good list of potential catalyst. Is that right? Was Bitcoin at 19K when it blew up and it only went to 16 years?

Yeah, it was only like a 10, 15% drop. Crazy. But it felt way worse. Yeah, yeah, because you never knew it yet. That one felt like not existential to Bitcoin, but, like, in terms of the market's perception, of Bitcoin, it felt real bad. Yeah. Why is this, like, these, both these lines dropping?

Less on-chain activity. I thought that's what you're gonna say. I see that as a bearish sign for Bitcoin. You think so? Like, why are we not transacting on train anymore? Like, I know, obviously, lightning. So it's actually interesting. This would be volume, so the actual total quantity of coins being sent.

I've got another chart in here. The number of transactions is actually at an all-time high. Oh, okay. That's what I thought we were looking at here. Yeah. Okay. So this would be amount of coins being sent. Okay, you can ignore what I said then.

All right, let's do the next one. So this is yet again a signal that only flashes at the bottom. So any, this is the cost basis of people that bought Bitcoin between 12 and 24 months ago. So in bare markets, that would be the folks that FOMO'd in at the top. And now they're underwater. You've seen in 2015, 2018, 2022, and then now those coins are out of loss. See, the interesting thing on this one, and perhaps this is to do with us not going as high, we've not been under this for very long.

Like, we were under that a lot longer in 2022. Yeah, it's been five or six months. But yeah, 2022, it was almost two years. See, that one I could see as being like maybe we need a bit more time paying in this bear market. Potentially, but also if you kind of like, you know, I don't like to cherry pick, but let's cherry pick. If you grab the midpoint of that 2022 regime, it was the bottom. So it was, you know, it was a grind up between the midpoint there and the end. That's going from 16K to like the mid-30s.

That's a nice little recovery. That's true. And like if you took 2018, I think you can actually ignore when we went above it there because that was the plus token Ponzi. Is that what it was called? Do you remember the Chinese Ponzi? Predates my time in Bitcoin. Okay.

So when Bitcoin was pumping then, everyone thought it was making a recovery, but it was actually like a Ponzi scheme running out of China. Very nice. And so I think without that, we probably would have. stay below that line for a lot longer. Yeah, yeah, probably. Interesting. I think maybe more time pain.

That's the only one that kind of... That's where I'm at right now. I think we're going to get time pain. I think, I don't know where it is in this deck, but there's a chart. The percentage of a rate hike in 2026, those odds are always kind of dynamic. But whenever I made this chart, which is about like two, three weeks ago, like right after the last Fed meeting, it was still like an 80% chance. by the market that we get one rate hike this year.

I think I might have said cut before, rate hike. The market's still pricing in that. Yeah. The new Fed chair is going to increase interest rates. And I do not see that happening. So I think as time goes on and it becomes more and more clear that maybe he doesn't cut, but just pausing, I think that's going to be received bullishly by the market. Yeah.

I think Polly Market has it that a hike is the most likely right now. Yeah. And that's not going to happen. I think the, my most interesting and, in, insightful takeaway from the recent Fed meeting. I was talking to John about this. Do you remember when Jerome Powell said, we are navigating by the stars under cloudy skies? I don't remember that. That's an awesome quote. Yeah, it is an awesome quote, but maybe not from the guy who pulls the streams on the monetary system. The idea is the data that the Fed uses to make policy is incredibly

flawed. As we all know, it is a CPI is a handpicked basket of goods that they're constantly changing. literally apples to oranges, not to mention it, it's lagged, it's delayed, and it's very analog. It's literally like government employees going to a store and like writing down the prices of things. GDP is a little, you know, finicky. Anyways, the data that they make their decisions by is lagged, it's outdated, and it's maybe directionally accurate, but not perfect. Kevin Warsh is throwing all of that away. So he's got these five task forces.

He didn't even give his own forward guidance on where he thinks rates are going to go. He did not fill in the dot plot. And if he was really trying to be a hawk, like he probably would have filled in a dot plot, I think him not doing that and him taking the view that, hey, we are going to reassess the actual data that we look at could potentially give him the justification to cut later. because he couldn't just come in and just cut on day one. That wouldn't have been received very well. Because he'd have just looked like a Trump stooge. He would have looked like a Trump stooge going to do anything.

The orange man tells him. And he's actually being very precise so far in that the increase in CPI earlier this year. We all know what cost it. It's the war in the Middle East making energy prices go up. But the market is pricing that in. Oh, inflation is like getting back out of control. We should hike rates. you shouldn't hike rates, you should just like stop going to war.

Stop following people. Yeah, and let the energy markets function freely. And so I think he's taking the perspective, like with that, hey, we don't, there's no need to hike rates here. Core CPI is trending down. Like the trend is directionly accurate. If we figure things out in the energy market, there's no need to preemptively hike rates. And so I think he's, you know, kind of establishing that position, but the market's not

pricing that in. Yeah, I think to add to that, the other interesting thing you said is that he cares about the left side of the decimal place, not the right, meaning like 2.9% inflation might still count as 2% to him. So he's obviously like increasing the scope a little bit there. Right. Which I think is also inevitable. Yeah.

Yeah. At some point they're going to have to lower rates and the market still doesn't seem to have that figured out. Yeah. Bullish. All right. Very bullish. This is very interesting.

So it's a little cut off here, but you've got the Bitcoin price in gray and then the realized market cap in green. but then in orange at the bottom, you have to draw down in a realized cap. So when realized cap draws down, those are affected. The UTXO is being moved at a loss. And you can functionally think of it as capital leaving the Bitcoin network. So realized cap is all the capital that's been entrusted to Bitcoin to be stored. If it's pulling back, people are exiting.

There's an exodus from the market. It's only down about 5%. So it's not like this rapid outflow of, demand per se, it was just an influx of supply that made the price go down. It realized caps down 5% compared to 14, 16, and 19 in previous spare markets. Wait, explain to me why that shows that it's not a lack of demand. Because if I buy a hundred Bitcoin at $100, I'm what, that's $10,000 I'm putting into the market versus if I buy a hundred Bitcoin at $100,000, that's what, $10,000, $100 million worth

the Bitcoin. So when you multiply the amount of coins by the price, you can determine how much capital is input into the market. And so if I take those 100 Bitcoin, I bought out 100K, and I move them again on chain. Again, you know, there's assumptions being made. But if I move them on chain at 50K, I'm selling, you know, we would assume that's a sale. So instead of, you know, that 10 million or whatever being entrusted to the network, it is now 5 million. And so it's a net decline in capital. here is these seem to turn around very quickly. They do. Yeah, as soon as it's, you start to see Realized Cap going back up after it was going down, it almost always confirms the bare market's over.

It isn't another interpretation of this data that a lot of the sales that happened in 2025 were people selling at a profit. Correct. Rather than people saying, I bought in Bitcoin at the wrong time, I'm down 30%, and now I'm out of here. Yeah, more evidence of your thesis that it was long-term holders and OGs. Yeah. Interesting. That also kind of shows that conviction across the board might be going up. Yeah.

Yeah. And I think much better for Bitcoin that people did choose 100K as like a generational exit. And then you get distribution of coins rather than 2022, which was like those sellers who sold that down 20%, and that's an aggregate number, obviously. But that was like a lot of people thought, oh, Bitcoin's dead forever. I don't think this is a Bitcoin is dead forever moment. Absolutely not. Okay, what we got?

More capitulation. The title's cut off here, but this is the coin days destroyed chart. So one Bitcoin that was held for one day and then moved is one coin day. One Bitcoin that was held for a thousand days and then moved is a thousand coin days.

So it's just... So they're showing that we had a lot of OG sellers. A lot of OGs selling. It's transaction activity weighted for the OGs and you see spikes at tops and then capitulatory moments. We had a major capitulation at the end of last year, all those OG coins being sent to exchanges,

presumably to be sold. But we've started to see it die down. And again, that's just more evidence that you're not getting an influx of supply on the market, which means we're probably going to time-based capitulation more so than price. This is cool. There's a lot of different data that shows if we're not at the bottom, we're probably close. Yeah, yeah, a lot of it. Again, you can't take any one metric and cherry pick and say, I'm going to input my entire life savings based on what this might indicate.

But all of them, you know, we looked at like 10 different charts here that kind of tell the same story. Yeah, very cool. All right. And this is the zoomed out, you know, low time preference chart. So the amount of Bitcoin that hasn't moved in six months or longer, you know, it's subjective what a long-term holder is. Glass node categorizes it at six months. they did a huge statistical analysis of this a few years ago. Any coin that doesn't move for six months, the odds of it then moving any time in the near future decreased dramatically.

I just love that the 2017 top, like, all the OGs did so well as all the retail got absolutely screwed. Yeah, you know, as they should. I can't imagine holding through like the 2015-16 bare market. Because today it's so obvious what Bitcoin is doing. But I can imagine back then it was not quite as clear that Bitcoin, would win. That's a great point, Mitchell.

Just to underscore that real quick, in 2017, there was not this narrative of, like, stack as much Bitcoin as you can. Bitcoin's going up forever. Obviously, some people believe that. But I think people buying Bitcoin, even in 2017, it felt more like you're buying a lottery ticket. It didn't feel like I'm stacking generational wealth

and sell my chairs, like, it's all up only. Yeah, I think for the people that knew, they knew. Like, when you read, like, Pierre-Rashar's articles and Goldstein from like 2013 and stuff. Like, they knew. But I think the interesting there is that was such a retail-driven market. Like, that's, I came in in 2016. Like, that was my first experience of that.

And the sort of pie in the sky crazy number that I remember people talking about was 100K. Like, will we ever get to 100K? And like, now that number's a million and we're going to get to that as well. It's just going to take time. Yeah. Two decades. And, yeah, this is the chart. If you could jump back real quick, just the, I think the bigger picture idea here is,

That is Bitcoin's finite supply visualized. So you get supply available to the market if the price gets bid high enough. But bidding the price higher is the only way to find new supply. You can't mind more. You have to bid the price higher. Supply reacts. But over the long term, it's just becoming more and more finite and scarce. Every subsequent bull market, you get fewer coins distributed into that price action.

Up into the right. Up into the ride. It's a bumpy ride, though. Oh, that's what we just talked about here. Yeah, so this is the odds of a rate hike by December. So before the end of this year, it's still like well over 50%. Where are these odds coming from? They are coming from the CME Fed Funds futures data.

Okay. Yeah, and I think this is going to unwind, and I think Bitcoin is going to perform well as these odds kind of get priced out. I do wonder where rates will go. Like, even if they do drop, like, I can't see us getting back to 0% or close to. 0.0.000. Can you? I think it would take a big time crisis, which on a long enough time frame, our system is designed that there will be some sort of crisis. And when I say crisis, I mean like the big ones. Like 2008 was a financial crisis, obviously resulted in a big print,

a big print. COVID, yeah, another one. So I think that will happen at some point. And that gives the authorities the cover to say, this is a once in a lifetime thing. know, rates have to come down and they'll give all the lingo. But if you're one of those people who's forever predicting that to happen three months from now, you end up looking kind of silly. So it's more, it's like, it's a matter of when, not if, but I'm not going to be the one who's always saying it's a quarter away. Yeah. And then bigger point related to that, I would just say is, you asked the question earlier, Danny, of like, do you think we have these euphoric price run-ups? in Bitcoin. I think generally speaking, no, as the asset matures, but if there's another big print

like a 2008 or a COVID type of environment, that I think could cause euphoria to the upside in Bitcoin. And I would couple that with that's when I think adoption follows a similar pattern. There's like, there's always going to be a gradual trickling in of people that learn about Bitcoin going through a book, a podcast, a friend, whatever. But then I think adoption happens in waves as well. And COVID was like the biggest example of that. So those waves will happen. I'm not predicting it to happen in a quarter from now,

but like over a multi-year time frame, they will happen. A number go up is what brings in new people. But I think because we didn't have the euphoria is why we got less newcomers to Bitcoin in the last cycle. Yeah. I think it was on your show with Brandon Quidim recently. Did you have him on? Yeah.

Yeah, and he was talking about like the different personality types that adopt Bitcoin. Yeah. And I don't know much about the Myers-Briggs stuff, but I guess like the I-N-T-P or whatever. Yeah. That's like us. That's like the schizzo's like we don't trust anyone. No, you know, institution can pull the wool over our eyes. We're already all here.

Like the people of that archetype have found Bitcoin. So I think the next wave of adoption, it's going to have to be force-fed to some degree. it's going to have to be like MSTR inclusion into the S&P or Bitcoin becoming part of like a state pension fund. Like I'm not necessarily convinced or are going to get too many more like, let me set up three geographically distributed cold cards and run a node type Bitcoiners.

Yeah, no, I agree with that. The only thing I would add is I think I agree with that, but I think it's like if you wait that for capital, it could be a little different. What I mean by that is the young. The younger people might be into Bitcoin now, but they're not, like, earning a bunch of money. So the money that they're putting into Bitcoin, it might be very small. As they start to earn more, as they get inheritance from their parents, then you could, like, they're already here.

But, like, they're not here in terms of capital. Right. So that could, like, be another catalyst, I guess. Yeah. That's a good point. Totally. One of the, like, hypocrisies that I have as a Bitcoiner is, like, I look at this and I'm like, I want this to go down because I know it makes Bitcoin go.

But also, the cost of capital should never be 0%. Like, that's absolutely insane. Yeah. I don't know what like a healthy level is, but it's clearly not zero. I wrestle with the same struggle because it's like, why am I rooting for them to debase the currency? Well, it's because my personal, you know, financial eggs are aligned with that thesis, that they will do it. And so it does kind of distort, you know, what money, money does distort. But, you know, we're in Bitcoin not because we're like rooting for them to cut rates,

but because we know what's happening. We know what's the data, believe it's inevitable. Yeah. And so you should, you know, not try to row against the current, just position yourself so that when they follow the natural path, which is to devalue every fiat currency to nothing, you're not totally screwed. You got a whole hard assets. There you go.

All right. What if we got next? Yeah. So this, a bit of a 180, but what you're looking at here in the great, line is if someone makes $250,000 a year and they live in the state, so not particularly relevant to you as an Aussie, but how much they pay and federal income tax over a 30-year career, it's $1.68 million. So making a quarter million a year for 30 years, you pay almost $1.7 million to Uncle Sam so he can do whatever with that. The Green Line is if you could instead invest that

capital and something growing at a modest 8% per year. Obviously, Bitcoin's done much better than that. And so, you know, if you weren't already like aggravated by inflation, here's how much capital you're likely forfeiting over to the government that doesn't generate you any kind of return. And then it's juxtaposed with the opportunity cost. So if you could actually keep the capital that you're giving to the government and instead invest it, that's almost a $6.5 million opportunity cost. So this is where we can probably introduce you as a member of the BlockWord team. Thankfully, there is a solution. There is an option where you can, instead of giving capital to the government, put it into an asset that appreciates.

My first thing I would say is I would only work at a company that sponsors the What Bitcoin did podcast. There you go. That was my requirement too now. Yeah, I would say, so yeah, I've joined the Blocker team, super pumped about it. I look at it really simplistically, and I did this myself as an individual, so obviously I think it's attractive. If someone owns Bitcoin, if someone has a high or really any amount of ordinary income, to be honest, an ordinary income, that's like W2 employment income. If that's true and if you find it attractive to receive a Bitcoin dividend, which is what owning Bitcoin miners gets you, if those things, are true, then this strategy makes sense for you because you'll get a Bitcoin dividend, you'll lower your taxes, and I could just leave it there. But then icing on the cake would be

if you believe it's a local low point for the price of Bitcoin and therefore the machines that you would be buying, then I think this strategy makes a ton of sense. So that's like my own very simplistic explanation of the strategy. But it's also an explanation of why I thought moving to blockware was attractive for myself to take advantage of that. And I think the message of getting that out to the Bitcoin world were like only in the early innings of that. Because one of these tax policy things just changed in legislation last year. And I think most people are literally unaware that they could benefit themselves tremendously from this. So I'll leave it there. Just to clarify for people who have no idea what we're talking about. The ads probably already run.

Yeah. They watch the show all the time. So I'll leave it there. Now, if you switch to the next slide, it quantifies this a little more. You can take a 100% deduction on Bitcoin mining servers in a single tax year. So it's literally like dollar in to miners, dollar off your active income. So we've really hit kind of a sweet spot with doctors, lawyers, attorneys, and business owners. Anybody who makes a lot of gup and has to give a lot of it to Uncle Sam. So if your tax rate, for example, is 37%, your marginal tax rate, and you spend $100,000 on Bitcoin mining servers,

you will get roughly in an end check with your accountant, $37,000 back in tax savings. And we were just talking about going with the current, don't row against it. Tax law, as boring as it sounds, is just a blueprint of incentives. So the same way you don't want to save in fiat currency because that is not the proper incentive,

it's going to depreciate. there are tax codes to incentivize certain types of behavior. The big, beautiful bill incentivizes investing into physical capital to run a business. And we were talking earlier too about, you know, they're throwing the kitchen sink at this debt problem. This was one of the resources in that kitchen sink. They want the economy to grow. So they're creating an incentive to start a business. So Bitcoin miners can be fully deducted in year one.

Like if you bought a scissor lift and you run a construction business, that can be fully deducted. So don't go against the grain, just find whatever incentives are in the tax structure and then follow them. And that's a significant amount of capital over a lifetime that could actually be working for you. Yeah, buying a Bitcoin minor

rather than giving money to the government sounds like a pretty good win. Yeah, they're subsidizing it for you. This is how high net worth individuals think. This is like tax strategy is part of your investment strategy. So I think there's a lot of Bitcoiners who are just stacking as much Bitcoin

as they're, they can. They should continue to do that. But you should also think, how can I minimize my tax bill? Absolutely. And the other thing that's interesting about that is, like, as all the Bitcoin miners move to AI, move away from Bitcoin mining, it also helps, like, decentralized hash rate. Yes. And that's what the next chart shows. So what we're looking at here is the Bitcoin hash rate. I think it's on either a 14 or 30-day moving average. It has not made a new all-time high since November of last year. That's the longest stretch in Bitcoin history. It's like eight months with no new all-time high.

All of, like you said, all the large data centers that were mining Bitcoin are running AI servers instead. So it's creating a more open playing field for the middle guy or the little guy who can actually now mine at a nice profit margin because they're not competing with these billion-dollar institutions that can tap into debt and public capital markets and just endlessly finance mining out of loss because a lot of the large public miners were mining Bitcoin out of loss. and now they're all exiting the network and hash rates down about 16%, which mean blockware clients are earning 16% more Bitcoin now than they were at the

hash rate peak. Yeah, the interesting thing here is like that is literally an up-only chart until very recently. Yeah. I remember, I think Sam Woters at River did a report on Bitcoin mining, the Bitcoin network getting to a Zeta hash, which it obviously did. And when he did that in like 2002 or something like that, and it seemed like the most far-flung, like crazy projection.

We got there in four years. Do you think this will continue to drop now? I think in the near term, yes. A lot of capitalists, like the marginal dollar in the data center industry is not going to Bitcoin mining servers. And so there's kind of three bottlenecks at the moment. Number one is simply power. You need power to operate large-scale Bitcoin miners

to actually move the needle on this chart. So you've got power. then you have the physical data center infrastructure. Even if you have access to power, you have to get transformers, containers, all that. And then third is actually on the ASIC level. So there has not been a new air-cooled Bitmain ASIC in almost two years. The AMP miner S-21XP came out at the end of 2024. The S-23, they do have the hydro equivalent, but the air-cooled's been delayed and delayed and delayed

because the semiconductors in a Bitcoin miner are also in. in artificial intelligence servers. Just made more money selling it there. Yeah, exactly. So TSM and Samsung are going to fill all the orders for the hyperscalers before they go to Bitmain and help them make their A6. Yeah. Is that also because they're reaching like not necessarily a peak, but they're kind of plateauing in terms of how much incremental difference each model. That's another factor at play. So the S-21 XP now is about 10% better than its predecessor.

It used to be like if you bought an S-19, like all the S-9s, basically overnight became unprofitable. So it's longer for machines to hit the market. And even when they do, the impact on hash rate is pretty negligible. Do you think there's a bullish side of this, which is taking hash rate away from just a few public Bitcoin mining companies into the hands of more and more regular people? Yeah, I think that an argument could be made that that's a good thing. I don't know.

I generally think it's kind of like a non-factor. Like some people would point at this and like, oh, it's the minor doom loop. Like all the miners are turning off. I don't think that's necessarily the case. I also don't think it's necessarily like bullish for the Bitcoin price, but it is bullish if you are in the mining business. And you no longer have to compete with your biggest competitors. Yeah.

And I think there's a good argument to make that I do think this on a long trend is still going to go up into the right. But I think at least for like the next year or two, and Mitch you can tell me if you agree. But I think even if hash rate starts to go up a bit, I think there's a good chance the Bitcoin price will go up faster. And it's because of all these factors that Mitch is highlighting, which is a lot of these players that moved,

they're not like waiting for Bitcoin to go back to 100K, and then they're like, oh, we're going to go back into Bitcoin mining. So Bitcoin could go to 100K in the relatively short term. And I think that increase will happen faster than hash rate will. So it'll be more profit, even though hash rate will be going up nominally, it'll be more profitable for the people who stay in mine. Correct. Yeah, there's a lag. At this point with Bitcoin at 60K, any new capital is going into AI,

and it's going to take a massive bull market before they're like, maybe we should mine a little more Bitcoin. But even then, if you compare some of the hosting deals in the AI space, they make more money running these AI servers than even mining Bitcoin when Bitcoin is 120K. So I think it's going to take like a blow off top before you see significant amounts of capital put back into the Bitcoin mining industry. I'd actually be surprised if a lot of them come back ever. I think Iran have said they're not.

Like they've, I don't know if they're still mining Bitcoin a little bit, but I think the plan is to completely deprecate that entire business line and just entirely to AI. But I guess all that's opportunity. It is opportunity. Yeah, it's more slices of the pie available for everyone else. Yeah. And you get a full tax deduction on the machine.

Sounds like a win. It is a win, big time. All right. What if we got next? I think that's it. That's it. Yes, sir. Anything else we want to talk about then?

No, this was great. I appreciate you having us, and I'm looking forward to your live show tonight. Yeah, I'm excited for that. I just got a call from Jen Seth just before we recorded. I was like, shit, he's missed his flight. But he's on his way. Perfect. We've got Hoddle and Eric Hason landing at 4 p.m.

So I'm just desperately hoping their flights aren't delayed. We can actually do this show. But it's going to be good. Yes, sir. Puckie. Let's go. Gotta love Pocky. Like I said, it's the first time I've been here in the morning when it's not dark outside.

It's a little odd disorienting for me. I've got to love poking. It's 11.30 a.m. You're just going to sit downstairs until for seven hours now. We're going to Wall Street to ask Wall Street people what they think about Bitcoin and see if they've really taken over. Let's go. We'll come back with the data tonight.

Well, thank you guys. We've obviously spoken about blockware, but where can they go to find out about it? Blockware Solutions.com. 4.wbD. Yeah, yes. Slash WBD. And fill out the form there. and you can also DM myself at Mitchell Askew on X.

And you can also DM John, who is now J.HAR Blockware. That's correct. Good memory. Thank you, guys. It's been awesome. Thanks, Danny. Nice, Danny.