What Bitcoin Did - Why This Bitcoin Bull Market Is Different | Checkmate

Episode Date: August 1, 2025

Checkmate breaks down Bitcoin's market structure, why treasury companies are flooding in, and whether the four-year cycle has finally broken. We get into how institutional money is reshaping on-chain dynamics, why long-term holders are behaving differently this cycle, and what the recent 80,000 BTC move signals about dormant supply. Checkmate also explains the risks and opportunities of corporate treasury plays, premium-to-NAV dynamics, and how the rest of this bull market could play out. In this episode: - Treasury company dynamics - Why Bitcoin’s drawdowns are structurally different this cycle - The rise of institutional-sized transactions and empty mempools - What the 80,000 BTC sale tells us about long-dormant coins - The quantum debate THANKS TO OUR SPONSORS: IREN RIVER ANCHORWATCH BLOCKWARE LEDN BITKEY Follow: Danny Knowles: https://x.com/_DannyKnowles or https://primal.net/danny Checkmate: https://x.com/_Checkmatey_

I'm seeing that interest from people who actually have money to protect. I haven't been on this Bitcoin wave, but like they're watching this low volatility climb and they're going, I think I actually need some exposure now. There's just a lot of things that are starting to feel a little bit like we're in a bulletproof bull. And that's okay, right? This is normal for this kind of the cycle, but things can really start to accelerate from this point forward. There is a good chance that we get some serious momentum to the upside. But as that happens, if we leave this stair-stepping pattern, we do move into more unsustainable.

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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 leaden.io forward slash WBD and you'll get 25% off your first loan. That's LEDN.com. Checkmate. My favorite person to interview, I think. I always love talking to you. You're the person I bug offline the most asking questions saying, am I being stupid here? But if I are good right now. Bitcoin is 117K. Yes. I was just comments on how much I like that little dashboard

you've got floating behind you. It's pretty neat. Yeah, yeah. It's good. Shout out to Chester. So Chester was, I think he was our longest subscriber on the Patreon on the old what Bitcoin did when we had one. He's an absolute legend. He's making these. It's called a BlockTron. I like it. I don't know if they're for sale yet, but they're pretty

fucking cool. But I've got this like janky setup behind me because about a week I was upgrading the studio. I was going to put these nice shelves I got in. And I drilled straight through a water pipe right behind me. Nice. So that's been put on hold.

Yeah, you need to find yourself a stud finder or something, mate. Well, I had a stud finder and I was using it. And it said there was like something there. Oh, you thought it was a stud. And you went straight through. Well, I drilled through the stud and then through the water pipe. And so this place was a fucking mess. So I'm on a bit of a janky setup right now.

But we will make it happen. It's worth it. Yeah. That's the joy of home ownership and making a mess of things. Exactly. I'm probably not going to touch a drill again for a little while, but we're here. Anyway, checkmate. I probably spend about 10 minutes a week looking at charts.

It's really like, what's the Bitcoin price? Do I feel rich or poor? That's about it. But I do think even still, like when you've been in Bitcoin for long enough, you just get kind of a vibe of what's happening, like where the market's at. And right now I'm feeling pretty fucking bullish. What's your kind of just give me your vibe take on what's happening? Yes.

So strangely enough, this is actually why on-chain data is so interesting to me because it's all about vibes. It is literally all about you don't look at charts, but you have a feeling, right? And it's generally based on the price. It's based on how long you've been in the market. It's based on your average cost basis. It's also based on your last buy. There's nothing quite like buying and immediately goes red 10%. you're like, God, that sucks. Even if you've been in this mark of like, you know, eight years,

you're buying it goes down, you're like, ah, I should have waited, right? But that, that whole aggregate sentiment, that's really what we're looking at. We're looking at all the profit, all the loss. Now, I think the numbers at the moment, in aggregate, the unrealized profit. So this is, everyone's obviously got their cost basis. You've put X amount of money into the system. And what is your cost basis delta between where the price currently is and where the average guy is? there's $1.4 trillion, $1.4 trillion worth of unrealized profit in the system. An incredible number, right? When you really think about it and the market, the metric that I look at, in my opinion,

it's the most important metric in Bitcoin. Whenever someone asks me about, is Bitcoin being adopted, is it growing, all these good stuff, you can point to transaction counts, you can point to the ETS, but at the end of the day, it all boils down to the realized cap. So let's value every single coin when it last transacted on chain. This is the backbone metric, and it just crossed a trillion dollars. And the cool thing about this, if you've been around for a long time, you've been stacking coins since 2019, 2020, 2020, 2021, you've bought it 10K, 15K, 20, 50, 100. All of those coins, if you just DCA and just like stick it in your cold card,

all of those coins are saved at that price. The last time that you transacted them. Now, yes, there's imperfections here or there for individuals, but like in a broad scale, it actually shows us how much wealth has been saved and stored in Bitcoin. So for this thing to cross over a trillion dollars, you're basically seeing that like all of these investors have trusted a trillion dollars worth of their hard-earned savings, right? Granted, denominated in fiat, but that's what most people earn. We've trusted a trillion dollars to the system to look after it. And there's then 1.4 trillion worth of total paper gain. So like the whole market is really, really up, feeling really good. That's great. Now, if you imagine that, let's make that, you know, keep the cost basis there at a

trillion bucks. Let's push the price up another 2x, 3x, 4x. Suddenly that paper gain, it starts getting a bit stupid. So that's why you actually end up getting a top eventually is because too many people go, it's just a big number. But, you know, I don't think we're there yet. Certainly a lot of like when you normalize this stuff because, like, yes, there's a trillion dollars worth of wealth. There's 1.4 of paper gains. But that's actually a fairly normal statistic. So this is where we look at things like MVRV ratios and basically how in profit is the system. It's nicely in profit, but it's not at some kind of extreme level. Like we're still within the bell curve of normal Bitcoin bull market environments. Once we start getting to the right tail where things get a little

bit stupid. You've really got to get up into the 160, 180k type range before those kind of levels get hit. But, you know, we saw that 80,000 Bitcoin come back to life. I mean, people are saying, why would you sell now? It's like, bro, he's up $10 billion. Like, it literally doesn't matter. But the market took it like a champion. It's amazing. That 80K is one of the other 80K Bitcoin sold is one of the really bullish signals, I think. There was a ton of speculation on who it was selling. I don't know where the Roger Verkame thing came from. I think it was literally someone just guessing on Twitter. People love to just throw random guesses out. And they say it with such conviction, you're like, ooh, what if it is? And then I kind of felt for the narrative that it was maybe

going to be used to fund one of these treasury companies. But that's officially been sold now, right? I believe so. So they went through Galaxy. And this is one of those things, like everyone's speculating and saying, oh, was it sold? Was it not sold? And meanwhile, the realized CAP just says, yeah, we've just seen a coins have just changed hands, move on. And so 80,000 Bitcoin sold on the market. It made like, what was it, what was it, like a 3%? 3.5%. Yeah. It was basically nothing.

Really, I mean, on a weekend too. So pretty amazing stuff. Is that the most substantial single sale of Bitcoin that we've ever seen? I don't know if the most, it could be. I think it's definitely in the, it'll be in the top 10 for sure. I did write a piece on this. I'm just trying to remember the numbers. Certainly in terms of the on-chain world, the metric that it did hit an absolute all-time high

for was Coin Day destroyed. So every Bitcoin in the supply, accumulates one coin day per day that it stays stationary. And when that was spent, because I'm in their 2011 coins, right? So you've got 80,000 every day since 2011, just chunking up all these coin days. So it was the largest expenditure of coin days we've ever seen. The only one that comes close to that was when the Mount Gox trustee moved their coins in 24. I think it was like July or August or something. And they were held since I think 2017, because they did a couple of trenches where they move them to the trustee, and there's a few transactions there. So that's 140,000 Bitcoin,

but held for a shorter period of time. So it definitely blew that out in terms of like realized profit metrics. I mean, very rarely do you just see someone just like move $9.6 billion worth and just like, yeah, it's just one transaction. I mean, it's pretty wild that someone stuck around that long. It's insane. But like when you say, of course he sold like, it's $9 billion, but what, like, I don't understand what he's selling for. Who needs $9 billion right now? Yeah, well, it's a good question because, and if I believe, believe in Galaxy's press release. They basically said it was part of the client's inheritance planning, which, you know, when you really think about it, look, there's, there's every chance that it could be

just like they sold it. They wanted to realize it. They lock in that cost basis. There's obviously a tax implication. They may want to move it to somebody else. They may want to move it from them to a trust. There's all sorts of reasons why they might do this. You know, when you're moving that kind of money. Like, you know, how often do you, I mean, you think about what you've got to do with your cold storage, right? If you just don't come home one day, imagine having to do that with a $10 billion lot. Like, there's a whole legal structure involved in doing something like that. So, you know, who knows? There's a thousand and one reasons why they might have done it. But, you know, to me, I just think it's really, really cool that, A, we can see that these coins are back alive.

And strangely enough, I actually, I'm going to use this as a bit of a talking point because I'm still thinking through and writing my piece on quantum. It's just taking me ages to get my head around it. But there's obviously this debate around should we freeze coins, right? This is one take of it. And the more I've thought about this, the more I'm like, no, we can't because what if they were considered to be lost? And then someone comes back. And by the way, we don't know if quantum moved it, or if someone just decided, yeah, now's the time for me to upgrade my guy cold storage. So we can never know that a coin is lost. We can only estimate how many coins are lost, because really the The owner is the only person that actually knows they don't have the keys.

So, you know, we can measure things by coin day destruction and coin day accumulation. This is what Dave Puehl and I did with coin time economics. We built a fairly simple, I mean, it is simple. It's quite a simple, elegant system to not actually need to know how many coins are lost, but we can still discount them based on the aggregate amount of coin day destruction and holding. You can correct a lot of our metrics to adjust for those lost coins. in a fairly simple way, but we don't actually need to know which ones are lost, which was a really, really cool innovation from that little study.

I think the quantum argument is super interesting. I can't remember if we spoke about this on the podcast or privately, but this idea of whether we need to freeze coins or not, I'm just, as of right now, I'm 100% sure that my belief is that we cannot freeze any coins. I agree. And I don't understand the argument of we should steal them before a bad actor steals them. But I do think that this is going to become a, a very kind of hot topic in Bitcoin over the next few years. And I also think I might end up

being on the losing side of that argument, even though I think morally it's the right stands. Yeah, I mean, from my perspective, if let's just use Satoshi as an example here, if we freeze the coins for the Potoshi entity, if we are freezing our decision, right, the network has chosen. And the debate really centers around what is the actual risk? Is somebody getting into the quantum field and actually extracting the private key and then being able to spend those coins. Is that a breakdown of Bitcoin's security assumption? Or are Bitcoin is freezing someone's coins on their behalf, a breakdown of the security assumption? And from my perspective, he who have the private key has the coins. How they come across that private key, now that

doesn't necessarily mean it's a legal ownership because you can steal someone's private key. Legally, they are the original owner's coins, but you have possession of them. So, you know, was a possession is nine-tenths of the law, something in that ballpark. So if we are, are freezing somebody else's coins, we are making a decision for them. Yes, there's the argument that we can have like flag days and say you have to upgrade by this time, but if they choose not to upgrade to a quantum resistance system and their coins get stolen, that is their decision. That is their choice. We didn't make that choice for them. And the other thing I comment is from, and maybe this is just where I sit as a bit-comer, I do not believe that price is a relevant metric

for consensus code. I think that the market price is completely irrelevant when we're talking about consensus level code. So from that perspective, what is the actual impact? If you're the Potoshi entity, your coins get stolen either by Bitcoin as freezing them or by quantum stealing them, right? Or you come back and spend them. So in either way, unless you're the one that spends them, you lose your coin. So the outcome for Potoshi is identical, no matter what happens. Their outcome is exactly the same unless they come in and take them themselves. So in that regard, if the rest of the system is then saying, I'm going to freeze your coins, what is our motivation for that?

It's actually because we're afraid that the price is going to go down. The other one is, you know, maybe the Bitcoin security system is broken, but this is not a like out of left field thing. People are starting to talk about this, which by the way is really good. This is not like a surprise. And honestly, when I think about it, if a million coins came back on the market or one point, whatever it is, I think it's 1.2 or something, what we call zombie coins, coins from the old addresses that haven't moved since there's been a Bitcoin price,

most likely lost, early miners, Potoshi, all that. If those coins going back to market, there will be a line out the door of Bitcoin and saying, yeah, I'll step in and buy a million sats of Satoshi's coins. Absolutely, of course I would. So I think the market will actually absorb that. There's another claim. I think James and Lopp talked about this, and I disagree with this point, you know, that there's address reuse in exchanges. And, you know, if Binance doesn't upgrade their system full well knowing that there's a quantum threat coming, I mean, that's on you, really.

And then what are you going to do, launder 500,000 coins from Binance through what? Right. So unless like North Korea or one of these actors gets them, I mean, like the odds are it's going to be either, you know, US or Chinese government, it's going to be a high-flying tech company. What are they going to do, steal some, steal Binance's coins and launder them through the dark market. Like, you know, there's a bunch of things that just don't really make sense. So from my view, yes, it's a threat.

Yes, it's probably a long way away. In my view, yes, we have to start thinking about it soon. But honestly, freezing someone else's coins, I think is actually far worse than just allowing the market to deal with it. So that's where I said on the general issue. And just to add to that, like Bitcoin as a system enshrines property rights. And if we break those property rights because we're scared of what happens to price of Bitcoin. Like, I think you can't have that conversation without acknowledging that the price

of Bitcoin is because it intramed property rights. Yes. Like, this is all reflective. And, and without property rights, is Bitcoin worth $11,000? The idea of Bitcoin, in my opinion, is more important than a known technological bug that we can all see coming. We can all start thinking about it in advance. We can all do something about it. Solve it for, give everybody the choice and the option. Once you break the social contract, you're a shit coin like every one. else. And you can't repair that. There's no recovery for that. So in my opinion, the Bitcoin idea is far more important than the Bitcoin code, actually. So really, you have to protect the idea the most. And that is that they are your coins and I cannot take them off you. So in my

view, it's actually in my best interest to say, no, you cannot freeze that guy's coins because otherwise you can freeze mine too. So stuff here. But there is the kind of market participants where price is hugely, hugely important, even short term price. And I'm thinking, and I'm thinking of like the sailors of the world here. And they obviously have a massive, um, kind of social pull. And I think whatever sailor comes out and says is going to resonate with a lot of bitcoins. I don't know what, where sailor will stand on this, but I would assume his incentive is to freeze funds to make the price move as little as possible. So I would go down the path and I think this is interesting because we start getting into consensus code. I also just

look at this thing and say, what is the most likely outcome? Like, like realistically, let's peel away all the narrative. What is the most likely outcome? The most likely outcome is that we're going to do nothing. Bitcoin will not change because not enough people will get on board. So therefore, the most likely outcome is that people can shout and yell and scream and run nodes and all this kind of stuff. But the truth is that I just do not think that we're not going to get some kind of a hard fork out of this and we're going to get two coins. I don't think that's how this plays out. So, you know, we're all part of the same system. And I think the most likely outcome is that we actually don't do anything. We probably implement some kind of quantum resistant scheme. People can optionally

move across, but I do not think we're going to get broad-based consensus for everybody to freeze someone else's coins. And in that regard, people are going to, they can yell and scream, and they're not going to achieve any ground whatsoever. I think that's how Bitcoin most likely plays out, because the rules are hard to change by design. Well, I think we're on the same page with that. But back to the 80,000 coins of move, does that change anything when you're looking at on chain, like, did you assume that those funds were lost? Well, I never look at individual UTXOs, but we can basically say, you know, over a period of time, it's likely that there's this coin, this batch of coins. And I think actually this is

the first time we look at the hoddle waves, which is basically a breakdown of all the coins by age bracket, how long they've been dormant for. If you look at the 10-year hot-a-wave, 10-year plus, it's basically this continuously growing curve, because as coins move into that 10-year bucket. I mean, most coins that haven't moved in 10 years are most likely lost. Now, yes, sometimes they get spent, but very, very infrequently. And, you know, yes, if you were to do like a one-day diff, you'd see that there's sometimes declines in that hoddle wave. But as a just visual look at the chart, you've never seen it go down except for this. So this is really the first time that the 10-year-old hoddell wave has actually declined at a visible scale on the chart,

which is pretty cool. So, you know, very rare, this is not a common event, these kind of things. So how many of these entities are still out there remains to be seen. How many more 80,000 does this dude have? You know, like I often hear people talk about, oh, what about that guy who sold 10,000 Bitcoin for a piece? I'm like, the dude was mining on GPUs. He's fine.

You know, he's got plenty of coins. Don't worry about that 10,000. So, you know, look, how many of these things are out there? There's not many. In fact, I was up in Brisbane recently. I had the pleasure of meeting a bloke who has actually... Thanks for telling me you were here, mate. I was at a dinner and you weren't invited.

But he was, mate, this bloke was mining like 25 days after Satoshi and he's got like mined block coinbase rewards, which by the way, they're so old that they don't show up on Mempool.spice. You've got to go to other block explorers. No way. But yeah, it was mining like 25 days after Satoshi. So like these guys are out there and it's just like amazing to think that this is possible and feasible.

That's incredible. Is this 80,000 Bitcoin sale an anomaly, or are you seeing sort of selling pickup now? No, no, this is very much a unique event. Even not in size, like, but as a trend is selling increasing. Yes, it is. It is. I mean, it always does. And this is the thing. So there's basically two ways you can interpret the data. When we see the market moving higher, which it has been since April, which it did in November, December, which it did in March last year, there's two ways you can interpret it. Lots and lots of people decide to consolidate their UTXOs when the market rallies,

or lots and lots of people like to take profit when the market goes up. It's funny. So the way I look at it, like let's just look at what is Occam's Razor. Yes, somebody consolidated their wallet, but yes, we are seeing a lot of sell side. This is the reason why the market doesn't go straight up. This is a line I use all the time, and I think it's actually really instructive and useful. market are a process, not a result. And I think, you know, we saw today that Sailor bought 21,000 coins, right, two and a half billion.

And people like, why isn't the price in the stratosphere? It's like because someone sold 80,000 Bitcoin and he bought 21,000. So if you've got another four sailors, now we can equalize things, right? So it's one of these dynamics where it just takes time. Markets, like, when a coin gets sold, it doesn't immediately go into like the deepest, darkest cold storage in a vault somewhere. It goes to some guy who's, you know, now going to start trading it and then someone else is going to trade it. And these coins move around the system. They buy and they sell trading ranges and then eventually at some point, some Hodler comes in and just DCA's out.

A million sets puts it away. Sailor comes in, DCA's out, 21,000 coins puts it away. But there's still all these coins like bouncing around. There's trade ranges. There's derivatives. There's all sorts of stuff. That's just how markets work. But, you know, it's all in the good fullness of time.

I know you're joking there about people consolidating while price is ripping, but like, mempools are pretty empty? Are you surprised that the mempool's so empty as prices ripping? Like, this is a pretty new phenomenon, right? So it is, and it's a little bit interesting because the last time we saw the market at all-time high for all-time purposes, the last time we were at all-time high and the mempool was this dead was the second all-time high in 2021. Now, there's a scam all-time high.

Which was a scam all-time high. Now, there's a number of differences. If you look at, I mean, pretty much any metric you want to look at, if you go back and look at that second all-time high in 21, now we can't really use these metrics today because they're a bit spoiled because of ordinals and inscriptions and all that shit. But you had a massive lot. We didn't have any of that back in 2021. So one active address was one active address. And I'll explain why it doesn't count today. One transaction was one transaction, right?

It was all, we're all just talking about monetary transactions, broadly speaking. Massive lower high. That second all-time high in 21, all of these were like a big bearish divergence. MVRV, which is the unrealized profit held by the system, massive bearish divergence. So how can you have price at a higher level, $69,000 versus the first all-time high in April at $64? How can the price be higher, but everyone's unrealized profit is lower? It's because a bunch of people have now sold the top.

You've got a pool of all these new investors with a very, very high cost bases. Now, that part is actually true today. the average cost basis is much, much higher. It's like 76K on average per person at the moment. I use a metric called the true market mean, I won't go to the details of it. Short-term holder cost basis is like 105K. And I've got these heat maps I look at that show where all the supply has been bought and sold.

That 95 to 100K region, there's like 40% of all the wealth invested. I've seen that realized cap before. It's above 90K. Like, that's an extraordinary stat. 17% of the wealth invested has a cost basis in our current trade range. 17%. For similarity's sake, everything below 50K. If you value every coin when it last moved, literally every coin below 50k, 17% of the wealth.

And we've got that in our current trade range. You've been here for two and a half weeks. So it just gives you a bit of a sense of scale of how quickly these things move. Now, on the transaction counts and active addresses, we can't really compare them because the way that ordnals and subscriptions work and they play around with the witness data, you can fit more transactions in. So transaction counts are at all time high, but a lot of these guys are using either algorithms and bots to trade this stuff,

or they treat a Bitcoin wallet like an Ethereum address where they reuse the same address. So in order to not double count, one active address may be sending 20 transactions in a day. So it's still one active address. So some of those activity metrics are a bit, bit bung at the moment. But the other one is on-chain volume is very, very high. So we've got a small number of transactions, but the size of these transactions is massive. So what does that really speak to? Big money. The network is being used by fewer transactions, like the skew has gone towards institutional size money. So we're not seeing retail punters. We're not seeing, like in

2017, people used Bitcoin as the casino chip to go on punt on Binance. In In 2021, we had that retail fervor because, you know, money printing and stimulus and all that stuff. This cycle, it's, you know, yes, there's an ETF component. Yes, there's a, you know, more of these institutions moving around, but like retail aren't on chain. That is a very, very different dynamic. How long it takes radar to come back. I mean, I see posts all the time saying when retail, when retail, it's like, when retail, you don't want retail. Retail means end of days.

Like, that's the top. You actually don't want that. the fact we're not seeing retail right now is indicative of both the market structure. They're going in through ETS, a lot of them, but a lot of them just don't care. They really just don't care. And, you know, really in my kind of last two years, I've had no phone calls from people who are no-coiners. I've had lots of phone calls from Bitcoin as saying how to lever up. But increasingly, I am getting questions. So, and mostly in person, questions from people who actually have money. So these are people who've got wealth behind them. And then, saying, I'm not that scared about Bitcoin anymore. Can you tell me a bit more about it? And for those kind of things, I know a lot of Bitcoiners have the same story. I don't try an orange pill people anymore. But if you have a question about it, I've got all the time in the day. And I think a lot more people are in that kind of world. And I'm seeing that interest from people who actually have money to protect. Increasingly, a lot of retirees as well, who are going,

I haven't been on this Bitcoin wave, but like they're watching this low volatility climb. and they're going, I think I actually need some exposure now. So I think all of this stuff is just, it's a different system. I think you're on the verge of saying this cycle's different. Every cycle is different. Let us hold that for a second because I do have, I was looking through your newsletter, and there are a few really interesting charts that I wanted to pull up and get you to go through. Let me just get these.

So yeah, I mean, every cycle is different. No, no, we're coming back to this because this cycle is really. But the behavior pattern is the same. Human fear and greed is the same. So talk us through this chart we've got here. Yeah, so SOPA is my Swiss Army knife. I use this for everything. So what we're looking at is short-term holders. So people who've bought within the last five months, people love to debate me and say short and long-term, five months doesn't matter. The statistic says five months, the probability of a coin being spent, much has been held for five months is diminuous. It's so small, it's logarithmically small. And actually, there's a power law. There's a very clean power law that Glassstone did a study on a couple of months back, where they showed that it really is a power law between how long a coin is been held and the probability of being spent on any one day, which is pretty neat. And what we're looking at for short-term holders, 95 plus percent of the on-chain volume every single day without

fail is short-term holders. So they just dominate all the coins, move around, move around, move around, until they finally hit a cold card and go off market. Now, I mentioned MVRV before, which is the unrealized profit or loss. Sopa is the systemetric. It's the realized side of the equation. So it shows us the average profit or loss being locked in by coins that are on the move. So for short-term holders, there's this typical pattern is in bull markets. Most of the time, people are profitable. Short-term holder metrics are really, really powerful because they are literally the only ones who can buy the top. You cannot have a long-term holder buying the top because they haven't held their coins for fines for months yet. So when short-term holder soper goes into the red, it actually means

that local top buyers, they bought the top, they watched the market go red, red, red, and then they finally go, ah, damn it, I've got to sell now because I'll buy back later, and they sell the exact bottom. So for me, as a hodler, that's when I actually DCA, when I see those kind of events. So what we're seeing in this bull structure is it's most of the time profitable with really healthy retests of that break-even level, which shows that top buyers again flushed out, and then we spring back again. So it's got this structured bull market behavior. When we get too much profit taking, so the way that I think about this, if the dude who bought two weeks ago is looking at his portfolio and going, I'm a genius,

then something like you're probably a little bit overheated in the short term. So whenever this metric gets too high, it doesn't mean that a top is going to get put in at some kind of global level. Short-term holder metrics are generally speaking. They're more about local stuff. But, you know, like for me as a hodler, again, bring it back to like how I personally DCA, I'm probably not going to lump some a big chunk in when there's stacks of people who are feeling quite happy about their recent swing trade starting to sell on my head. I'm going to wait until that cools down a little bit,

and then I'll step in. So it's just a tool to help me manage my emotions. It helps me manage where the local cycle is. And just I've been in this market long enough. I'm just tired of buying high and then watching it go lower. When I know it always goes lower, it always goes lower in the short term. So I'm just like shifting my DCA over just a little. little bit to try and correct for that. All right, I want to go through all these charts, because the

questionnaire have kind of encapsulates all of them. So then we've got the Bitcoin, Realized, profit, and loss. So talk us through this one. Yeah, so we mentioned before the Realized Cap. So the realized cap looks at every coin based on the price when it last moved. Some guy buys at 10K, sells at 120K. Someone had to come in with the Delta. And this is actually, this is one of my favorite tools for measuring demand. Because even though Realized Profit is a sell-side metric, that guy had to come in with extra money. The original cost basis was 10K, the new cost basis is 120. He's got to come in with $110,000 times the coin value, right, for Taff of Bitcoin or whatever it is. He's got to come in with extra capital. So the reason that the Realized cap increases is because old money is selling to new

money. There is a rotation of the holder base. And this is really, really important. So for Every buyer there is a seller, through every price. It literally requires a buyer and a seller on both sides of the book. So when you're measuring cell side pressure, which is what this metric is, we're actually measuring demand because you're measuring the opposite, the inverse. When you see 80,000 Bitcoin gets sold, that means that someone came in and bought 80,000 Bitcoin. Now, it could be many someone's, but someone.

When Sailor buys 21,000 Bitcoin and the price doesn't go up, I wonder why. It's because someone sold 21,000 Bitcoin. You know what I mean? Like, this is just how the system works. Now, the chart that we're looking at here is basically that volume. I've normalized it to BTC terms so we can pair across cycles. And I believe I do a four-year just to like try and look for, you know, when is it hot, when is it overheated, too much cell side.

I've just applied a four-year standard deviation. So when you go above half standard deviation, you're usually in a ripping bull. When you get above two standard deviations, it's getting pretty steamy in the room. So really what I look at here, it's all about incentive and action. When people are feeling really profitable, we started this conversation by saying, you're feeling good. There's $1.4 trillion in the system. That's the incentive.

If you wind that up to $2 trillion, $3 trillion, $5 trillion, suddenly someone out there is going to go, yeah, it's time for me to lock in that $10 billion worth of profit. At some point, it may not be you, it may not be your friend, but it's some guy out there is going to take that profit. what I'm trying to look at here is what's the incentive, unrealized profit and loss, and then this one is telling me, did they actually sell? Because you actually need sellers to create a top. If you don't have sellers, then the market just keeps climbing and climbing and climbing until

it finds them. So really, price is actually the result of that supply and demand balance. It's going to inflect higher when it cannot find the supply. It's going to inflect lower when it cannot find the demand. That is literally how markets work. And this just gives me a nice tool to understand when are we getting. too much sell side relative to recent history. When are we getting too much demand, right? Trying to understand both sides of the equation. All right. And then the last one, we've got

the bull market corrections. I mean, this is just such an amazing chart. I think I described it in the video for the poster saying, like, this is one of those charts that is worth a thousand words. So for those who are listening, basically what I'm looking at is the last three bull markets. So 2015 to 2017, I use the 2018 bottom all the way through to the 2021 second top, and then our current cycle since basically FTX blew up. So ignore the drawdown from the all-time high. We're only looking at the drawdown within that bull market uptrend. How deep are they? So if you go back and look at the 2015 to 17 cycle, getting a correction of 30, 40, 50%, wasn't uncommon, but maybe not 50.

40 was like about as bad as it gets. the key difference between 2015-17 and today, because we've only had two 30% corrections. And we've got to remember that we are 100 times bigger in market cap size than we were back then. And yet the drawdown profile is actually less bearish this cycle than it was back then, which is incredible because think about the amount of sell-side pressure. Like we're not talking about, you know, a million dollars or $10,000 worth of sell-side. We're talking about $10 billion worth of sell side today, and the market is barely clocking, like the bears can't get any ground, getting like a 30% correction. The other interesting thing about 2015-17 versus today,

the drawdowns back then were much quicker. If you went away for a weekend and came back, you kind of missed a 40% correction, and then it's springing back to all-time highs. Their correction today may take six months, eight months, like they're much longer, more drawn-out processes, which creates a lot of frustration and boredom. but really the cycle's not actually that far away from where it typically is, but we've got to remember that it's much, much bigger. But the middle period, and strangely enough, this chart's actually really good to just, I've been rethinking the idea of cycles.

A lot of people like to use the halvings and the bull market tops and the bull market peaks and all that stuff. I've actually been using a very different framework more recently. They're not too far away from those kind of delineation points, but I use two delineation points, and I think we've had three cycles, and this chart kind of shows it. the first cycle, in my opinion, ended on the 2017 top. So that period was very adoption driven. You can see it in every metric. I mentioned transaction counts and volumes and just, you name it.

There was a very different pattern back in that pre-2017 top era. Very organic. We barely had a trading view chart. There's very few hedge funds. There's no leverage. There's no stable coins. It was just buy Bitcoin and maybe speculate on some of these old coins. But it was, It was a Bitcoin-dominated organic cycle. And the psychological side of this is people were responding to Bitcoin as this brand-new thing. No one knew anything about it. What is this cool thing? That middle period from the 2017 top until FTX blew up, very volatile.

A great metric if you want to actually study this, just use the Maya multiple, a ratio of price in the 200-day. You'll see back in 2017 it had this nice rhythmic pattern. It continued to bounce off the 200-day, and it was quite structured. 2018 to 22, massive amplitude straight down, straight up, straight down. Like, we just had these boom and busts. 2018 was just straight down. 2019 was straight up. Then we had another bear in 2019 straight down.

COVID happened. We went vertical. And then we just like, it was really high amplitude moves with leverage, right? This is where retail suddenly got perpetual swaps on, you name it, token. Now, since FTX blew up, I think everybody knows we can see. see it in the price chart. It is trading differently. The drawdowns are shallower. The rallies are, you know, it goes up 40%, 50%, sometimes 100% in a year, and then chops around sideways for eight months. So we do have a very different structure. It's much more of a slow grind. Yeah,

very much so. And look, at some point, and I think we're probably on the cusp of this, truthfully, of moving into what I call the euphoria phase. So we've kind of got like the bare market recovery where there's a lot of PTSD. This is really 2023. Everyone was like fearing the ghost of Sam Backman-Fraib was going to come back, and we're going back to zero. But we just never got that lower high, and it just kept drifting higher. Then we got the excitement phase. You start getting up towards the all-time high. I thought that we would have moved into the euphoria phase already, because in past cycles,

we have. But I think we're getting there, right? Look at the Treasury company trend. Derivatives leverage is pretty much an all-time high. We're closing on like 5.8% of the Bitcoin market cap for futures and options, so it's getting leverage. As I said, I've had people call me saying, how do I lever up my Bitcoin to buy more Bitcoin?

There's just a lot of things that are starting to feel a little bit like we're in a bulletproof bull, and that's okay, right? This is normal for this kind of the cycle, but things can really start to accelerate from this point forward, which is exciting for those who've been bored to death. There is a good chance that we get some serious momentum to the upside, but as that happens, if we leave this stair-stepping pattern,

we do move into more unsustainable territory and then you start getting closer to a meaningful top. So take maybe the sentiment out of it and just purely from this sort of analytics perspective, do you think there's still a lot of room to run here? I think so. I mean, and I think when you say a lot, that's a relative term, right? So let's just kind of correct what we mean by a lot.

If we go up to 150K, you know, we were at 100K a couple of weeks ago, we got up to 150. We've added a trillion dollars to the market cap. Now, we really prove that we're a trillion-dollar asset in 24. Choped sideways for eight months, every dip was bought. We then said, all right, let's try two trillion. And we chopped around there for six months, right? We had a correction back down to 75, and it was swiftly bought up and I'd

installed the tariff tantrum. In many ways, we've kind of proven that, yeah, you know what, we're a two trillion dollar asset. So the real question is now, how many trillions are we going to add? How many trillions until people start to sell 80,000 Bitcoin is a regular thing? How high do we have to go before people really start to cash in? Now, this cycle is also quite unique. If you look at long-term holder supply, we've had two waves of sell-side, and they've both been very, very meaningful.

I think in total, the amount of long-term supply that's come back to market has actually now eclipsed the 2017 cycle. So this is the largest, in aggregate, long-term holder saleside event we've ever seen. But we've got to remember a lot of that supply, people who bought in 2024, in that, like, 15, K chop range, a lot of those coins got resold for a quick 50% move by hedge funds, trading desks, whatever else, up to 100K. Now, maybe they step back in. And in fact, a lot of the people who bought it in the 85K range on that dip in March and April, a lot of those coins are now being sold up here.

So, you know, a lot of folks kind of missed that there's still a large trading cohort in and amongst the Bitcoin space. The sell side comes from people who bought 50% lower. because 50% in like a three-month period is astounding returns for TradFi folks. It's going to take them a long time to get used to just like buy and hold, but also their mandate isn't to buy and hold in many cases. Their mandate is to swap into Bitcoin, get out of it, move over to Nvidia, get out of Nvidia, go over and punt on Palantir.

Like, they move money. Their job is to move money. And the more they move, the more they clip the ticket, by the way. So, you know, in many ways, their performance is based on this. 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

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dot com forward slash wbd. This episode is brought to you by the massive legends, iron, the largest Nasdaq listed Bitcoin miner using 100% renewable energy. Iron are not just powering the Bitcoin network, they're also providing cutting-edge computing resources for AI all backed by renewable energy. We've been working with their founders Dan and Will for quite some time now and have been really impressed with their values, especially their commitment to local communities and sustainable computing power. So whether you're interested in mining Bitcoin or harnessing AI compute power, Iron is setting the standard. Visit iron.com to learn more, which is iri-en.com. So let's get back to the cycles being different, because at the bottom here we've got the three cycles.

2017 was just like parabolic upside. Next cycle was, like you said, super volatile. And this one's just grinding. Now, I did a show with Nick Bartier very recently. And he was saying, I really liked his framework. He was basically saying he's like 60% sure the cycle's broken, which is a rounding error from 50-50. But like the market is different now. We have the sort of sailors of the world buying massive amounts of Bitcoin regularly. And we've got the ETFs. Like do you put any credence in the idea that even if it's not sort of quote unquote super cycle, it is an elongated cycle that doesn't have the same four-year bull and bear. Yeah, so honestly, I really, I aligned very strongly with what Nick was saying.

I think that's the exact way to think about it, which is I'm extremely flexible and how I'm thinking about this cycle moving forward. The truth is, it is different, but every cycle is different. They all have their own unique characteristics. The one thing that is not different is human beings. We all have our own decision frameworks. There's a lot of Bitcoiners out there who are just simply going to hit a level of wealth where they go, I can finally buy the house. I can finally do that thing that I could never. Bitcoin gives people

opportunities that they would never have had any other way. I was listening to Pete McCormack on Natalie's podcast this morning. And he was saying very similar things. At some point, your Bitcoin, if it's your savings, people are going to find things to do with it because that's what money's for. It's about improving your life. So at some point, people are going to realize those gains. And by the way, that's perfectly fine. That's what savings are for. So the cycle is most definitely different. Human psychology is not different. Bitcoiners have this internal sense. The longer you're around this market, the more your intuition builds. You know when things are getting a bit silly. This is why there's a lot of these debates. This is why the Treasury

company thing is a debate. Every single person who's looking at this can go, I think there's some merit here because they're looking at what sale is doing. He's going, he's going after the bond market. That's pretty badass. That's pretty cool. And you can also look at it and go, it's also a bit Ponzi adjacent. You know what I mean? Like we're kind of sitting on this. two sides of the fence, you can actually hold both of these views at the same time. Things are getting a little bit silly, and we've probably got plenty of room to run. So I think that's the right framework for where we are. I'm very flexible.

And, you know, that's why I'm trying to live within the next, like, six months. Like, I've got my models and I'm looking out where it is, but like, I'm under no illusions. The market could just totally top out here and just be a sad little, you know, curl over, and that's the end of it. I don't think that's likely. I also think we may get a parabolic run, but I, also don't think that will be sustainable. So I've got a couple of like anchoring ideas and the rest of it just allowing the market to just tell me, rather than me imposing what I expect to happen on the market,

I just let the market to the best of my ability, tell me what it wants to do and just try and listen, right? At the end of the day, the data is this information. I'm just trying to listen to the best of my ability. One thing that I think could be different there is, like, I do agree with what Pete's saying in terms of like, this is money and at some point you want to do something with your money to improve your life. that's for sure true. But I do feel like the narrative is becoming more pervasive that Bitcoin is here forever, or at least for our lifetimes. And like, what are you selling for? And this is something we've spoken about a lot. And I think the market might be understanding that you don't just sell Bitcoin for Fiat. Yes. No, I fully agree with that. And I do believe that's actually a unique

element here. I mentioned long-term supply has been sold off. We've had two waves and we've actually just started the third wave of long-term distribution. What is unique, it's actually not the cell side that's unique. What is unique is that when we hit that peak in March 24, long-term supply stops decreasing and then it very, very quickly recovered. So when you think about long-term holder metrics, particularly supply, it takes five months for a coin to get to that threshold. The coin may chop around us several times and move hands every so often, but eventually it hits that threshold. We have not seen in previous bull cycles, we see a massive sell-side event, the top gets put in, and then those coins recycle themselves for ages and ages and ages in the volatility

of the bear, because no one actually wanted to buy and hold it. This cycle is unique, because we've actually recovered back to all-time highs twice now. And that is actually showing you about the buyers. We saw the sell side when the long-term supply decreases, but we actually see that the coins they got, the people who bought those coins are hoddling them. Now, some of it's the ETF, some of it is Hodler, some of it is sailor. That is what's different. We've got a cohort of people who are now acclimatized to 100K. And I know people may not like a lot of Udi's views, but he's had these on this tirade recently, but saying this rotation of holders. And I think this is very, very real. I may be, I'm not quite there on that we're going to 400K this year, but there has genuinely been

a rotation of capital from a 2011 whale to modern buyers like sailor, treasury companies, ETFs, retirees. My old man, my old man, been in the Bitcoin world since 2020. That was his first kind of entry to the market. So he rode the up, he rode the down, and I heard all about it. Now he's writing this low volatility grind up. He is sold during this market cycle to get his initial capital out. And he's now going, should I, what's the best way to maybe, I don't know, get back in? He doesn't care that it's a higher price because he's got his risk out. Now he's willing to take that risk again because he's become comfortable with it. There's a whole plethora of people out of there who now, they don't know anything except Bitcoin going from

50K to 73K to 110K to 120. And every time it does it, it goes there and it stays there. That's the history. They know the ibit chart. They have no idea that Bitcoin came from two cents. They don't care about that period because it's not relevant to them. They see the ibit chart, which is just an uptreet. It's only ever been in an uptrend. So you've got to think about where these people are coming from. We have acclimatized to these price ranges. Like I have long since given up, you know, 80% drawdown, what, to 30K? Good luck with that. Like, it's just not happening. So I've given up on that idea. So I do think that is different. And actually, this is a bearish sign for all the other shit out there, all the old coins, because

people know that Bitcoin is the winning ticket. And I can only imagine how many shitcoiners are out there and they've got big bags of this stuff. They are looking for every exit pump they can because they know that everyone now knows you have to go back to Bitcoin. So the sell side actually is going to show up everywhere else because the rotation is towards Bitcoin. I like that take. We started this talking about vibes. And we've gone through all the sort of positive vibes on the Bitcoin price at the moment. But there are a couple that stand out to me as being like potentially topy signals. One being the fact that we just get in a new treasury company every fucking day. And then the other is that shitcoins are pumping

again. Like, ETH's been flying over the last few months. Do you see that as a sign that maybe the top is close than we think? No, honestly, like when you look at any asset, whether it's a bankrupt company or a shit coin, they do not go down in a straight line, just the same way as they don't go up in a straight line. Every single one of these things is going to get a relief bounce. Now, I think it's actually quite interesting because the core reason I would say, the narrative I would describe, so for ETH, for example, they've been getting quite a bit of inflows for the ETFs. What is the event that might have happened? The Genius Bill. So there's a bunch of folks out there who are betting on usage of stable coins is going to benefit the underlying token. And

something actually I was talking I can remember who was talking about this with yesterday. There's actually Peter Dunworth. I was having a phone call with him. And we were talking about my view is that we're in a hard money world now, not hard, like, gold or Bitcoin hard, but interest rates aren't zero. We're no longer in a Zurp world. I've had this long-running thesis, and we've seen this with altcoins. They've really struggled to catch a bid.

This really is the first, like, actual bid they've had. Yes, Solana had a period of time, but like even its, rolled over and its BTC chart looks just the same as ETHs does just earlier in that cycle. I think the market, generally speaking, yes, there's plenty of stupid stuff happening in the world, but if you look at the Russell 2000, it's doing pretty shit. If you look at the not-so-magnificent 493, that's doing kind of average. Really, we're seeing this like concentration towards the winners. It's very much a winner-take-most-win-take-all-type environment at the moment. This is a, this is anti-ZERP. This is people actually being.

more discerning with their capital. I would say we're even seeing this with Treasury companies. I did a study the other day. The drawdown most of these Treasury companies have had from their IPO, I guess you call it like, I'm going to call it like an IPO pump. When they announce, oh, look, we're a Treasury company. They go up 5,000 percent and then they've just been in a horrendous downtrend trend ever since. It's kind of that initial pump. Strategy, yes, it hasn't blowing through all-time highs, but it's also not down anywhere near as much as most of these other company. So I've had this long-running thesis that more and more people are going to be more discerning with their capital. We're not in a ZERP world yet. I also don't think we're going back

to a ZERP world anytime soon. Maybe if Trump gets his own way. Yeah, maybe, TBC. But I think, I mean, I have zero edge in this, but I would assume that power is already going to stick it out. And this is all just narrative, TBC. But yes, you're right. Eventually, eventually maybe, maybe we get to that point. But the genius bill, just because people are using stable coins doesn't actually mean the ETH price benefits. Doesn't mean that sole price benefits. You know, and I've run this exercise before, go and look at your

all-time high gas consumption and compare it to your all-time high holdings. I did this back when I held my eighth back in 2022. I ran this experiment. I realized I'd bought 250 years worth of excess usage. I sold it all the next day and I was done, right? So that was just the end of it. So if you look at all those different

dynamics, I just, I think that a bunch of analysts are going to realize that there is actually no underlying demand for these tokens. And just because someone's using it doesn't actually translate it to value, right? I think it's Tom Lee. He's saying that they have to buy the ETH to secure their network. I'm like, that sounds like you probably don't want that system, right? That's, is that really the kind of world that we want to live in? Like, in that case, just run a database. If that's the case, just use JPM servers. Why do you need a token to go alongside this thing? And I think a lot of

these institutions are going to work this out pretty quick. So it's an interesting point. I think if Heath rolls over in the next like couple of months and just really struggles to punch a new all-time high, I think the red candles that come for alts, if that happens. And again, I don't know, maybe the world animal spirits just comes back. But if it rolls over, I think that is going to be just the reddest candle you've seen. Because that's the world realizing that there really is no demand for this stuff. And, you know, good luck to the true believers. Yeah.

I do want to talk about treasury companies because you tweeted recently. The drawdowns most of these treasury companies will experience will be epic. 2012 Bitcoin grade depth but with gold grade duration. Yes. Why do we start with just your general take? Because I think we align. We talk about this quite regularly offline. And I think we align quite closely in that there's the sailor and then there's everyone else.

Yes. That's pretty much where I sit. And interestingly enough, and again, people are going to find all the needy-picky reasons why arguments are wrong. but think about things from a general perspective. We have seen this process before in shit coins, in penny stocks, and you name it. I use a framework of like extremes inform the mean. So let's go to the most extreme example and see where that puts us. If you look at strategy, right, if there was only one company doing this strategy,

it makes sense that everyone has to buy that firm for it to do well. If everybody is doing this strategy, then what's your differentiating? probably your size, your liquid options market, your access to debt. The truth is, when you've got so many of these things, when you're printing a million shit coins a day on pump.funk, there's literally not enough money to buy this stuff. I also think about it from the smaller you are, the more your only option is to sell equity. That's the only option you actually have. All the other company, if you look at strategy, for example, they can do all sorts of exotic

preferred stocks and debt financing and you name it. that's going to benefit them in both the bull and the bear because they literally have more access to capital. There's obviously a spectrum, by the way, between all these things and different companies at different distances. But the chasm between strategy and literally everything else is, it's like saying, what's different from a billion dollars and a million dollars? It's about a billion dollars. So like the chasm is so large between strategy and everything else. It kind of doesn't matter to compare them. So then you've got this kind of middle, middle bucket. You know, metaplanet's probably the leading example of those. And then you've got the long.

tail? What is the differentiating factor between the long tails? I really struggle to see it. And there is a reason that these companies are hiring Bitcoin podcasters as their frontmen, because if they do not attract retail speculator capital, there is no other demand for this. Like, in my opinion, there is no serious institution buying a penny stock with a cold card. I just don't see it happening. So, you know, if they can't access debt, if they can only sell equity, eventually people realize, why the hell am I holding this thing? If there's Ponzi adjacent, unless there's more money coming in, and this is the thing with these MNAVs and these premiums, and by the way, this is not throwing out

every single company. This is like a broad statement that we look at extremes and then there's going to be outliers. But if everybody's doing this and your premium expands very quickly, right, let's just say a company has a premium expand to 10x. They can either 10x their Bitcoin balance or the Bitcoin price can 10x or some combination of the two, and your price can stay flat, and now you're an MNAV of 1. Now, yes, can they sustain a premium? Well, that depends on their growth metrics. When the Bitcoin price rolls over, the speculative capital will slow down, and you will not get people going

out on the risk curve. So this all works very, very well when Bitcoin is in an uptrend. By the moment it goes into chop consolidation, where it's frustrating and boring, or it goes into a downtrend, which eventually will happen, I just can't see how these companies. companies continue to attract capital. And as a result, once the engine goes out and this plane's flying in midair and your engine goes out, you've got no fuel to turn this thing back on because suddenly nobody wants to buy your stock. And then you're just like every other penny stock with a cold card. Now, someone's tweeted at me and I think it's a valid point. It's better than penny stocks without a cold card. Agree. But the problem is that once their MNAV goes below one, and I do believe

a lot of these companies will. Once their MNAV goes below one, because there's just not enough money to sustain a premium, they can't sell equity to buy the Bitcoin, but they can sell the Bitcoin to buy the equity and buy their shares back. And then you realize, well, you know, if you're just a company who's like a shitty hedge fund who buys Bitcoin at the top and sells it at the bottom to buy back your own stock, do I really want to share in that? Yeah, it's Bitcoin accretive, but like I can also just borrow money and buy Ibit or

borrow money and buy Bitcoin. So I think that people are over-indexing on this idea that we need a treasury company in every jurisdiction. They're basically taking meta planet success in Japan, which by the way is a unique selling point. And they're saying, oh, well, there's one in Sweden and there's one in Denmark and there's one in Vietnam. And like, let's put a treasury company everywhere. It's like, if we talk about it here in Australia, what is the real trapped capital here in Australia? You know, people say, in fact, I was talking with Pete about this yesterday. like our superannuation funds, which is like 401Ks for people in America, all this retirement money.

It can only buy Aussie equities. And my point was, truthfully, if you're actually buying, like for me, I've got some of my investment that my superannuation fund in MSTR. Why? Because it's really not hard to access. So if we're talking about trapped capital that can only buy Aussie equities, are they really, really that far down the risk curve they're going to go and buy a penny stock with a cold card? No, they're not. Like, the truth is, once these, this trapped capital, it's either not engaged in Bitcoin at all or barely even looking at buying the ETS, so early in that journey.

And anybody who is smart enough to know that this trade even exists is smart enough to open an account with a brokerage that can buy US stocks. Yeah. I'm just really struggling to see this long-term sustained trapped capital thing. People have taken the Metaplanet Journey and said we can replicate. that in every country and I think that's wrong. For me, I think that there is, unless you have deep options, unless you have deep debt markets, unless you can finance without selling equity, most of these companies are absolutely

reliant on this speculative, retail driven gambler pocket money. When you run out of that, the engine goes out and this whole thing. I just think these MNAVs get crushed. And by the way, this is not saying these companies are going to go bankrupt. I think a lot of these companies are going to be fine. But I think the people who bought the shares at the high premium, you're going to experience a 2011 Bitcoin bear market, which is down 95 in like three weeks. And then I don't think they come back. So I think then you get your gold level duration because how do you distinguish between literally every other treasury company?

You don't. Once your engine goes out, rebooting that thing is going to be very, very difficult. Yeah, I totally agree. And I do think Mettaplanet is different. I think that one probably will sustain. I spoke to Dylan recently on the podcast, and he's definitely doing some interesting things. But the thing you hit on there, which I think is the most relevant, is the fact that Sailor is not only the largest in size, but he's also doing the most interesting things on kind of like the financial engineering side with these preferreds. And if he's being both the innovator and he's got the size, like how can you compete?

And I think just selling equity to buy Bitcoin is probably done already. I agree. No, that's my base case. I think that's a line I've been using to try and summarize a lot of these. idea is, the Bitcoin and the Treasury isn't the product. That's not the product. It's a means to an end. The product is the means by which they accumulate the Bitcoin. For strategy, for example, the means by which they accumulate the Bitcoin is they construct bonds. They sell bonds. They're bond salesmen. They sell bonds to a market that wants to buy bonds, that is big enough to make it a justifiable market to go after it. The Treasury is simply a means to an end to make it different to all the

other bonds. Metaplanet, the unique selling point there is that they haven't quite got to the sailor level of innovation, but they are providing a Bitcoin exposure. There's a tax arbitrage as well between spot Bitcoin and equities. They are tapping into a very unique set of circumstances in Japan, which by the way is a massive economy. It's a massive, massive market. Australia doesn't register anywhere on the blip of anything. Now, I think what's, I should also make a very clear clarification here. I am not talking, when we talk, when we talk, about treasury companies, I'm not talking about businesses that sweep excess profits into Bitcoin. That's two thumbs up.

Be a penny stock with a cold card in that circumstance. There's no issue there whatsoever. This is all about the sale of all-in playbooks. And I'm very confident that if you do not go hard, you will go home. We saw this with GameStop. They kind of like half-ass put a quarter of a toe in and the market said, get out of here and wiped out their stock. And I think this is the game.

You are either all in with a very good unique selling point, or your MNAV premiums are going to one like everybody else, and this is what happened to shitcoins. They dilute themselves out of existence, and then watch your differentiator, I'll buy strategy because at least they're doing something interesting. Yeah, I want to just share this chart, because one thing that I have probably said in the past,

but I actually don't think I was right if I have, and a narrative that I would fade is that this has any meaningful impact on Bitcoin. So I pulled up this earlier, and let's say you take even the top 15, companies out of this, assuming that some of those, like some of these are different. We've got like Galaxy in here, Clean Spark. Like they're not doing necessarily the Sailor Playbook. But then if you go below 15, the amount of Bitcoin that these companies hold is only, only, quote unquote, only 70,000 Bitcoin in total. Yeah, superiors. Like most things. And like, again, in here you have people like,

I don't know, Hive, BitDir, Canaan, like Seifert. Like these aren't companies doing the Sailor Playbook. These are just companies that have stacked Bitcoin. in there. So like if you even took 70,000 Bitcoin, like that's not going to make a material impact on the Bitcoin price, I don't think. So do you see this as being just bad for Bitcoin treasury companies not necessarily for Bitcoin? Yes, yes, correct. So I am wildly constructive on Bitcoin. I think Bitcoin is, I mean, it's just an idea whose time has come. That's very clear. So I'm wildly bullish on Bitcoin. I'm also by, and let's go like just keep going down the risk curve here, if I'm wildly bullish on Bitcoin,

it kind of makes sense to be wildly bullish on the entity that's got 620 something. I don't know if this website's updated. 620,000 Bitcoin. That's like a beach ball that's just going to inflate that company. Now, again, I should be very clear, it is much better for a company to have Bitcoin than to not have Bitcoin. So sweeping profits into Bitcoin is great. What I think is going to be a challenge is a lot of these companies, they come out the gates,

they develop a massive MNAV premium. They may stack a couple of Bitcoin for the first couple of months, investors get very excited, they buy into the stock price. This is Ponzi adjacent because if you buy early in that trend, if you're in that telegram group realizing that there are getting one of these scammy pipe deals, if you're in that telegram group, you're going to be fine. If you buy early in the trend, you're probably going to be fine. If you buy late in that trend, you are being sold a dream and it's going to hurt a lot when it reverses.

So I think that's the thing. It genuinely relies on old money exiting out to new money. I know this is how markets work, but these premiums are unsustainable for most of these companies. So it totally depends what premium you get in, what premium you get out, where you buy on that curve. So these are very, very dynamic systems, but you've got to think about the MNAV premium. That is actually the price you're trading.

And buying those MNAV premiums at very, very high levels means the Bitcoin price can rip their treasury can rip. And what we've seen is that the MNAV always has a gravity towards one. The bigger the company gets, the more their MNAV drifts down towards one. Even Metaplanet, they blew up to like 10x. They're now pulling back down to what I think it was like three last time. Three and a half or something. Three and a half. So people who have bought the top of that MNAV premium, they're down 50%. Despite the fact they've probably added Bitcoin to their balance sheet and Bitcoin's probably about to go on a run. It's going to take them a long time to get their money back in my opinion. So the gravity, we get small companies with a large MNAV, large companies with a small

MNAV, and the gravity is pointing from one to the other. The bigger you get, the smaller your MNAV is going to get. So if you like, if we fast forward 10 years, what kind of MNAV do you think strategy will be sat on? Like, what do you think, as this market matures, what do you think the sort of, I guess, like, because I assume Sailor is going to say it higher than one. Yes. No, I think they, and they have deservedly stayed at a premium above one. I mean, look at J.P. Morgan, look at their book value. Like, in my view, it makes sense to be like, you know, 2x, 3X at a bull run and, you know, at book value in a nasty bear market. So, you know, what we're not going to see is thousands and thousands and thousands of companies with an MNAV of 50. It's, this is,

you know, how many people have you managed to convince that Bitcoin is an important thing? Very, very few, most of us. assuming that this is like the we overestimate what we can do in one year and underestimate in 10 years, Bitcoin can hyper-bitonize the world and the MNAV of these companies can still be two, right? It can still be 1.5 because the more normalized these things get, the less of a premium because it's new and unique and interesting. And by the way, the bigger the pre-this, this is the other thing. Extremes inform the mean. If your premium is 50x, what's the company incentivized to do? Sell a boatload of stock. they want to dilute the price.

Yes, they're going to buy a bunch of Bitcoin. That's going to generate a bunch of hype, but what are they actually doing? They're compressing that MNAV. Now, if you buy when that MNAV is small and you ride the wave up, you are relying on other people bidding the stock up to keep this game going

until the engine goes out. And when that goes, then it's just down only from there. So 2011 Bitcoin depth, and I do believe gold level two decades of bear market when it finally hits. Because there's no distinguishing factor for most of these companies. Ponzi adjacent. I like it. All right, checkmate. Let's close out

with the price prediction. So every time we do this, you give me a price and I tell you it's disappointing. I'm not going to do that this time. Where do you think Bitcoin is by, let's say, the end of the year? Well, this is important because you, Pete and I have a bet on this, right? And I think that the level. I know. I know. So at that level, and again, what was that, 2023, we made that. I think my price was 250 is like the top level that we can get to in 2025. And fortunately, I have all the optionality of the downside because it's closest to the pin. Look, we could get to, if you want the most bullish level, and again, none of this is prediction.

This is looking at where investor behavior changes. The 200-day moving average is just like a long-term price anchor. There's only so far you can stretch the elastic band away from that mean before it wants to revert. Mark, it's a mean reverting phenomenon. So that's the simplest one. How far above the 200 day moving average have we got in previous cycles? And the answer is about 2.4.

Sometimes it goes higher than that, but like we're in very rare air at that point in time. Now, the 200 day moving average is obviously a moving target. It's evolving as the price evolves. But as it stands today, it's about 236K from memory. So 236, if we teleport tomorrow into a parabola, you know, 236, might be 240 by the time we get there. 250, I may end up in the money almost on the dot, TBC. The other ones we can look at, which I put a lot more credibility into, is just looking at MVRV levels. And I use different variants, short-term holders, coin time adjusted with AVI.

There's a whole bunch of ones. It doesn't matter. The point is, show me at what price level. We know where everyone's cost basis is. How high do we have to go before the average guy is feeling so bullish and so excited that the smart money is going, there's my target audience. I'm going to sell exactly to that guy. people eventually sell, how high do we have to go before they start selling? Now, I have to remember here that those levels, we then have to say, well, are they actually selling? They have in every single

previous time, but we've always got to check. There's the incentive. That's my idea. That's my concept. Do they actually sell? My assumption is they probably will. We get to 131.40. That's where short-term holders. I'm starting to get fairly, fairly juiced up. Now, that doesn't mean we probably top out there, but I wouldn't be surprised if we bump our head and it takes a bit of time to get through that period. If we just keep going and we get up to like 160, 170, 180, we're now moving into the territory where less than 10% of all trading days

have been that stretched. Now, we could then go through a period of chop consolidation and that would allow all these means to come a higher and start to mean revert and cools things down just by consolidation or even a correction, all of those things. So 150, 160, 170, we're starting to get into thin air. 180 at the moment.

moment is like sub 5% of all days. Can it happen? Yes, 5% of the time it does happen. Do we stay there? No. So there's 95% chance that we're probably not going to stay there. And I think this is also very important. Don't worry about trying to pick the absolute top wick. Nobody can do this. It's just like it's nonsense. No one can do it. You did it. You bought it in 2017. Yeah, that was different. That was different though. That's that that is actually the counter signal. No, you're right. I did buy the absolute top. No, but that's the that's the inverse. You're supposed to sell the top, not by the So yeah, no, I got smoked in 2017, but that's part of the learning journey. So if we get to 180, we're getting really hot.

Like just every metric's going to be overblown. And again, I use my two personas, check the analysts, cannot in good faith say that we're at the bottom at 180K. I just can't because it would be dishonest. So again, they're moving targets. They'll continue to evolve. But that is where I expect investor behavior will really start to shift and change. And none of this is to say that Bitcoin's not going to go to a million bucks.

It's just going to take a lot longer. with the people expect. And if you wake up one day and Bitcoin's in a million dollars, either the world is in a really, really bad spot and it's happening, or it's probably a scam, Wicama coming down 80%. Well, I think I might just send you the 100k sats now. I think I said 282. I've already got it in my spreadsheet, man. It's already accounted for in my inheritance planning. And Pete definitely needs to send you his. He said 350. Yeah, yeah. That's not happening. That's not happening. Checkmate, I appreciate you, man. You're one of my favorite people to talk to. Where does anyone go to find the newsletter and follow what you do?

If Pete wins that bet, I'm just thinking about it now. I mean, that's going to be the ultimate egg on the face moment, isn't it? I will be very happy to send him 100k out if he wins. Truthfully, I'm perfectly hedged because I'll be very happy man as well. You'll find me over at checkonchain.com. We've got our newsletter and charting website. So check us out over there. All right, man.

Appreciate you. Thanks for time. Thanks, mate.