Did the Bitcoin Bull Market Just End? | Checkmate & Alec Dejanovic - What Bitcoin Did

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
When I see all this selling, who is buying?

(00:06):
Who is buying?
It feels to me like it's got to be banks and it could be sovereigns because it's in the
spot market and the size, the size of it is just extraordinary.
But this cycle has been very, very unique in just the scale, dollar value.
Is it a new cycle or is it a super cycle?
Is it a four-year cycle?
Is it a five-year cycle?
gold doesn't move until it wants to move and when it moves you should pay attention it's telling us

(00:33):
that the system is bankrupt and we have to move to a new reserve asset all roads converge to there's
going to be more dollars 200 would be fantastic um i do think it's gonna be a positive year
get bullish because bitcoin's not going anywhere it's going to come back like a cockroach happy days
all right it's rock and roll sweet jack mate you're on this show every week at the moment

(00:56):
I know.
How's it going, man?
This is the first one in person, though.
It is, yes.
Since the new pod.
We were talking about what we're going to talk about today.
It's like, I don't know, maybe the red candle, the 80,000, might have something to do with it?
Well, the plan was, I was obviously coming down here to do a couple of interviews.
I wanted to record a show with you that was like evergreen so we could release it on the
first episode of the next year because you started off the podcast.

(01:16):
But Bitcoin didn't let us do that.
No.
A bit of volatility, though.
I mean, like, I'll tell you what.
How bored was it at 100K, at 110, going sideways, doing nothing?
like and i've been thinking about this a lot of hodlers the 15 down sucks because it's like not
enough of a discount where you're like yeah okay now jump in once you start talking about like 25

(01:36):
30 30 something everyone's like okay now it's like uh now it's like cheap sats right now we're
trying to find where that bottom is but like it's it just fires up the hodlers again i mean i felt
myself 100k i'm like it's a dip like i stack sats up there but i'm like now we're at 80 i'm like
let's go oh this is value oh yeah this is value but before we get into that alec welcome to the

(01:59):
show man how you doing very good super stoked to be here you're the uh you're the man behind the
scenes at check on chain and the scenes yeah so yeah introduce yourself wow well um yeah i'm alec
i'm co-founder of check on chain and been working with james for about four or five years now we
started a glass node together actually so i was like the first marketing hire at glass node um

(02:19):
we were trying to build some stuff over there and then we decided you know what it's time to do our
own thing bring back to home soil come to australia and kick off check on chain what's with the aussie
contingent at glass node is that we were the only contingent okay yeah yeah no we were it so i think
i was employee number eight you would have been like 12 or 13 or something like that um but alec
and i we've known each other our whole lives yeah oh cool yeah yeah no since we're like three years
old preschool buddies yeah yeah it goes a long way um and then we worked together because you know i

(02:44):
was a civil engineer working at a data company sending marketing emails like i mean it's it's
It's horrific.
So I was like, I just need help.
We were living together at the time.
And I said, can you give me a hand with these things?
Sending emails and all the rest of it.
And next thing you know, we've got a marketing hire
and lived in Mexico for what, nine months after the pandemic?
Kind of building out all the different products and things there.

(03:05):
And by the time we got to 2023, I was like, you know,
it's time to set our own sail.
And check on shame was always something I wanted to do,
but it's really that challenge of like, let's start the business.
You know, start from zero.
You've got to find subscribers.
You've got to keep them, right?
You've got to actually give people value.
And we spent a lot of time designing what the product was going to look like.
And, you know, at the end of the day, you've got to give people something that's worthwhile

(03:26):
reading and watching and, you know, value their time.
And I'm also a big fan of valuing our time, right?
So everything we do is paywall because it's, you know, I value my time, even like Alex's
time and our customers, we value their time as well.
So it's part of the mission.
And yeah, we've got some exciting stuff coming up.
I consider myself like an on-chain Padawan, kind of.
I've been able to sit with Czech.

(03:48):
I mean, I moved in in the pandemic.
We had nothing to do.
We couldn't go outside.
So I'm just soaking up all this on chain information.
And yeah, just over time, over osmosis,
I'm kind of getting used to all these charts.
I consider myself kind of like a pleb hodler,
if you can think of that way.
But yeah, I love helping and teaching
and making sure hodlers are coming along in this journey.

(04:10):
And just getting that data-driven side of the market
is super important.
Like getting off the price chart specifically
and getting off X and just seeing all these crazy M2 charts.
And by the way, which drives you mad,
drives you mad.
Yeah, the database approach with Bitcoin's beautiful blockchain
is just so fascinating.
So yeah, we're also building an exciting new project,

(04:32):
which a bunch of people are going to be pretty happy to see
coming out, our new charting platform.
Long time coming.
Yeah.
I mean, right now, so the charting platform we had,
I started building that in 2019
and that was actually my excuse to learn Python.
So back then, I'm a civil engineer, and what do civil engineers do?
They use spreadsheets for everything.
So I would download, I think CoinMetrics had the very first on-chain data set.

(04:56):
I'd download that, plug it into my spreadsheet, all the charts would update once a day.
I was like, I just can't do this anymore.
There's got to be a better way.
So I taught myself Python.
And check on chain the software.
It's like 150,000 lines now that runs every day.
Oh, yeah, no, there's a lot of code.
There's a lot of duct tape and a lot of zip ties in there, but I know where they are.
So yeah, I mean, it's basically pulling

(05:16):
all your different on-chain futures options.
And that's what I love about,
I think a lot of people know me as like an on-chain analyst,
but I consider myself a Bitcoin analyst
because we've got all these different market sectors.
And more often than not,
the ETS tell the same story as the on-chain DA,
which tells the same story as the futures.
They just have a different way of displaying it.

(05:38):
But anyway, that software,
I mean, it's literally the charting platform right now
is a handwritten piece of HTML that I wrote.
years ago it's it's real it's real basic but it's it's a journey to try and get it dude I remember
I remember when we used to hang out when we were much younger and we played Counter-Strike
like the Counter-Strike 1.6 which is like an FPS shooter if you're not aware um and he was coding

(06:00):
up bots and like customizing in the console and doing all this wild coding stuff back then and
like making all the custom maps for us so like I can really see he's basically all that was just
All that was training.
And now it's a giant code base of a million lines.
You don't leave university.
That's the other thing.
I paid off my student debt for my engineering degree
on the day that I quit to go and work at Glassnode.

(06:22):
So that was kind of like a nice way to wrap it up.
So it got me through my first 10 years of work experience.
And then, yeah, I mean,
I consider myself a Bitcoin analyst now.
So it's one of those fascinating,
you don't set out to be a Bitcoin analyst.
You don't even know that Bitcoin exists.
You don't set out to be a Bitcoin podcaster.
You don't set out to be a Bitcoin podcaster.
It's just one of those things where it pulls me back in, right?

(06:42):
Sucks you back into the industry and you just can't leave.
Honestly, one of the things I find most fascinating
is when you meet people who have found out about Bitcoin,
they know in a little bit,
and then they can just go on about their life like nothing changed.
Like, I don't understand how that mindset exists.
What's the line?
Nobody's a Bitcoin critic once you understand the difficulty adjustment.

(07:02):
Yeah.
Once that part clicks.
And the other one, have you seen the Matthew McConaughey scale?
Like, the grid of nine.
Is this where he's like smoking on one of them?
No, no, it kind of goes like he's really green,
he's coming in, he's like looking all happy,
he's got his cigar like before the bear market hits.
And then as you go down, you go through the bear
and he's crying and then by the time you get to six,
panel six is where he's standing there with a shotgun, right?

(07:24):
Standing out there like-
I am number six for sure.
But I was number six, that was like my 2019, 2021 era.
I don't think you ever leave six,
you always revert back to six.
I feel like I'm a six right now.
So I gradually get up into like a seven and an eight.
No one gets to a nine.
Like nines, you're living on a boat and all the rest of it.
You get hauled back to a six, especially on drawdowns.

(07:45):
Because you're like, I'm not crying.
Because I know what this bear happens, right?
Bears go down.
The market's going to recover.
Bitcoin's going to be fine.
But you get that like hardcore, cold card wielding.
I'm holding my ground.
I'm standing on the floor.
You know, keep stacking set.
Stay humble.
It's funny.
When stuff like this happens, I love it.

(08:06):
That's great.
And obviously, I don't want to see anyone getting wrecked and all that stuff.
And that is obviously happening right now because people are taking leverage or whatever.
But I love it.
It's like, this is the stuff that makes you feel alive.
But it's weird because this year, we did off the first show on the new What Bitcoin Did was with you.
We recorded it twice because the first time we recorded it, it was like 95k.

(08:26):
And then it went over 100k.
I was like, dude, we've got to do it again.
I don't think if you ask many Bitcoiners then, if we would be at a lower price in 12 months time, they'd have said yes.
this year has been really strange, I think.
Agreed.
It's not really gone up much.
Now we're entering this period where who knows
if this is just a dip or if we're going into a bear market,
what that's going to look like.

(08:47):
But has this year surprised you?
It has.
I mean, it has.
And I think the back half definitely surprises.
However, I think the story of where we are right now
has unfolded progressively.
So if I was to really just recap this cycle, let's call it.
2023, I would broadly just say, was the recovery from the bear.
there's rumors that start to come in about the ETFs,

(09:08):
but there was a lot of PTSD.
That was the recovery of PTSD phase.
2024, ETFs go live.
We get the pump to 73K.
And then we had the first period of chop consolidation,
which a lot of people were calling for a bear market there too.
And just for a bit of context, the 2024 chop,
the tariff tantrum, and right now,
all very, very similar.

(09:28):
All very, very similar in their structure.
This particular dip is the angriest of them now,
but back at 95K, and we'll talk a lot about 95 shortly,
at 95k looks exactly like all the other dips. That level was where it actually looks just the
same as it did. Now, this chop solidation thing, this sideways grind is obviously new.
2025 going sideways, in my view, there's three core pillars that I think have really driven this

(09:54):
market cycle. And we were talking before about how data gives you just like, you look at all
the Twitter narratives and you just don't see it happening in the data. How many people have seen
of people talking about OG selling in the last like three weeks. I've been writing about it for
six months because the, and that's not because I'm overly pressing, it's because literally you
can see the amount of sell side that's going on. So the three pillars, ETFs, massive, big demand

(10:18):
vector, in my opinion, just orders a magnitude more important than treasury companies in terms
of the actual demand. And they're more like a passive bid. They've just been consistently buying.
And honestly, we're seeing outflows. The outflows we've seen in this entire corrections, about 3
billion that's been one day of hodler sell side in recent weeks so hodler sell side and people can

(10:39):
argue and debate say oh long-term holders not really six months and they're not an og if it's
only five years drop the terminology somebody had a opportunity cost of six months where they could
have bought nvidia they could have bought literally anything else they held the coin for six months
and the beautiful thing about the six month period ignore the fact that they're a long-term holder
whatever your precondition of like, is it really long-term,

(11:02):
they gave up six months of opportunity cost,
and that naturally filters out the guy who bought yesterday
and sold today, which is kind of just daily chop.
You don't really care that someone bought yesterday
and capitulated today.
What you care about is someone who bought
and is now selling later on.
So the second pillar is that HODL or SEL side.
It's been absolutely enormous and has been accelerating.
It continues to accelerate.

(11:23):
We're talking about billions of dollars a day
in these revived coins.
Now, not every single one of those coins is sold,
but a lot of them are, you know, like a lot of them are. So you've got to just look at it from
that perspective. And whenever you see revived supply ticking higher, the market is usually
rallying and then peaks and then slows down and then backs off. So, you know, it doesn't take a

(11:43):
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So I want to get into like what's happening now and what you think the next few months
will look like.
But if we just go back to when we first recorded the show nearly a year ago,
just passed 100K.
Has this been a bull market?

(14:22):
Good question.
Good question.
So I've been calling it more recently, to be fair, the great rotation.
I think Geordie Visser actually had a really good piece,
which captures like the zeitgeist of it.
Now, I don't know if it's 100% accurate,
but I do think that that essence of like the existing holder base rotating out,
and this is the story that I think people really want to capture.
So let me just quickly, before I forget, the three pillars I think change this market, ETFs, the HODL or sell side, and the IBIT options, which is going to move forward, be a massive, massive factor.

(14:51):
But going back to the great rotation, huge amounts of coins being sold.
Now, we did not see those show up as demand in the ETFs, not even close.
When you compare the amount of sell side pressure, profit taking, no matter how you want to frame it up, the ETFs typically are 20% to 30%.
So we're missing the other five,

(15:12):
you know, there's five times more stuff
happening in the spot market.
Same for Saylor.
When you hear these narratives
of Saylor has cornered the market
and he's the only one who's captured,
all the ETS have captured Bitcoin,
they're kind of forgetting
that the existing spot markets
are still out there
and they're still the dominant factor
in what's going on.
Now, obviously derivatives and stuff
are a layer on top of that,
but when I see all this selling

(15:32):
and we went sideways for 12 months,
so 2025 has been a sideways grind
up until very recently who is buying who is buying this is the thing it's an unanswered question at
this point in time i'm dissatisfied with the answer but i like geordie fisher's idea of like
this great rotation or this ipo moment i've been calling the great rotation all hands getting out

(15:55):
no question it's been massive 110 billion in 24 and 25 combined from five-year-old plus coins
to you know you don't move a five-year-old coin unless you mean it yeah i mean like you
you don't just go moving it around because you want to there's a rhyme and reason to it
who are the buyers because it's not happening in the ets so it's not some hedge fund it's not some
like random entity it's spot so the fact that we went sideways under tens of billions i mean

(16:21):
you could argue and i'll talk about today at the conference like hundreds of billions of dollars
worth of sell side this year in spot markets and the price went sideways until very recently
who's buying that's the really interesting question i don't have an answer for but i
it's fascinating to think about just for anyone who's listening who doesn't know what the geordie
visa piece was basically he called this bitcoin's ipo moment and he he sort of draws a parallel to

(16:44):
traditional markets where people take an early stake in a company they're taking high risk
and the ipo moment when they've gone through all the pain to get there go public like these are now
publicly traded shares that's their opportunity to see liquidity for the first real time and so what
happens is a load of those early investors will dump their shares who knows you normally get an
an IPO pump and then price comes down. And he says that this is happening now in Bitcoin because for

(17:08):
the first time, if you bought Bitcoin in 2010, 2011, you're sat on hundreds of millions or billions
of dollars. In a legacy wallet somewhere. Yeah. And this is the first time you actually have the
liquidity to get out with the ETFs and all the treasury companies and whoever else who's on the
other side of that trade. I like that framing. I don't know if it's correct, but I think it's
interesting. The other thing to think about is like, imagine selling, we saw that dude who

(17:30):
offloaded 80,000 Bitcoin held from like 2011. Can you imagine offloading $10 billion worth of Bitcoin
in the previous US administration? You'd have the feds up your ass. You know what I mean? Like you'd
have your bank account shut down. So for the first time, the regulatory environment, there's the
price, there's the demand, there's the liquidity, and there's just, you're not going to get taken
out the back by the government. So I think there's a lot of elements here, which it kind of makes

(17:54):
sense. And that's why I'm saying, I think it captures the zeitgeist of what's going on. It may
not be perfectly correct, but we always have to use simplified models to understand the world.
And I think it's actually a very valid way to think about it. It makes sense from just a
narrative perspective. And importantly, he calls this like a sign of success, not failure. Like,
this is a good thing that this is happening. Like, there's also the idea that this is moving funds

(18:17):
from being like concentrated in a number of like massive whales to being in everyone's hands,
which is again, good for Bitcoin. But I think, does he say that he expects this to last somewhere
between 6 and 12 months.
Yeah, I mean, it's hard to tell
how long this whole process lasts.
I mean, to be fair, this rotation,
like the majority of the selling
has occurred really within the last six months.
So that was, and a lot of it was above 120K.

(18:40):
If we look at, we use metrics like realized profit,
which shows the delta between when a coin was acquired
and when it was disposed of,
we saw, you know, again, billions of dollars a day
in realized profit.
And this is the other thing you can see,
coin day destruction,
lots of old coins coming back to life,
revived supply, the volume of them,
how much profit they're locking in.
All of these things were like record highs

(19:02):
in the March pump in 2024,
in November, December, January,
when the kind of called the Trump pump.
And then this has been a very sustained period
of the back half of 2025,
just tons and tons of sell site and ramping up.
But what we're now seeing is the folks who are selling,
there's a lot of people who are like six months,
six months to a year.

(19:22):
those guys are people who wish they had a board in video they gave up the opportunity cost they
held bitcoin the momentum went nowhere there a lot of those guys are now selling and taking a loss
crystallizing a loss and this is probably if there's one thing i can just help people understand
right now 70 of all of the wealth that's ever been invested in bitcoin we price every utxo

(19:44):
based on when it last moved 70 has a cost basis above 85k that's insane 70 this is bitcoin's new
home. So, you know, if you're talking about 30K and 10K and 5K Bitcoin, the truth is it's like
ancient history. It just doesn't matter. There's not enough wealth down there. The wealth is all
up here. Now, because we're below it, that's a lot of potential sellers on the way back up. So,

(20:05):
the bulls have got a lot of work to do to get us out of this mess. However, the rotation of this
capital, think about who these new buyers are, right? These aren't retail hodlers putting in
their pocket money. You know, no one's got these kind of deep pockets. We're talking, there has to
could be banks could be sovereigns could be a bit of everything I saw the other day I forget which Gulf state but there a Gulf state that bought like half a billion dollars worth of ETF So like sovereigns are interested in this kind of thing And these folks feel like price insensitive buyers

(20:33):
Yeah.
Where they just accumulate,
they're just forever allocators.
So there is going to be this rotation.
Markets have got to go through this process.
It'll take time to hammer out this bottom.
But at the same time, these guys probably aren't,
you know, they're sailor types.
They're not going to sell.
So there's going to be this process of,
you know, as we hammer out a floor,
wherever we find that clearing price,
you know, Bitcoin's got a really bright future ahead of it.

(20:55):
In terms of revived supply,
so what's the average age of coins being sold right now
from the long-term holder cohort?
Because when we studied this data,
like long-term holder sell side has been incredible this cycle.
Like nothing like it.
We've never seen something like this.
But a lot of it's from younger long-term holder coins,
which kind of can be a little confusing,

(21:15):
but it basically means one year plus held Bitcoin.
They're all kind of just, get me out.
that's the kind of vibe with that yeah so the way to think about it and glass and actually ran a
really good study i think maybe last year um called time is money and they basically showed that there
is a very clear power law relationship it's a beautiful power the perfect perfect power law
relationship between the probability of a coin or utxo being spent on any one day and how long it's

(21:39):
been held so in other words that means most of the coins like 90 of them that move on any one day
moved yesterday or the day before.
The vast majority of on-chain volume moved recently.
The older a coin is, the less likely it is to be spent.
But once you get to about five months,
what's the difference between a probability of 0.01%
and 0.0001%?

(22:00):
In practical terms, nothing.
It's the same probability.
It's very, very unlikely.
So five months is where they get to the point
where for practical purposes,
we can just consider them to be a long-term holder.
But within that long-term holder set,
they're very different to the short-term holders
in their overall behavior.
But you're right, the six-month-old long-term holders
are more active than the one years,

(22:21):
and the one year is more active than the two years
in a power law relationship.
And another fun fact is that the on-chain volume,
if you break up what the size of a per transaction is,
the average transaction right now is moving $1 million plus.
75% of on-chain volume is moving $1 million plus.
All-time high of that ratio.

(22:41):
So institutional capital is what's moving around on chain.
And you asked before, what's the average age of things?
The baseline through most market cycles is the average coin that moves is 30 days old.
On average, the average spent coin is 30 days.
This cycle has been an almost linear uptrend and we're now at about 100 days.
So that's more than three times as big as what your average is over any other previous cycle.

(23:06):
So it always spikes in bulls because old money takes profits.
but this cycle has been very very unique in just the size scale dollar value coin day destruction
there's a metric we use called liveliness which shows all the coin days that have ever been
destroyed and all the coin days have ever been created dave puerle and i when we wrote uh coin

(23:26):
time economics we kind of described that since 2017 the 2017 bull was actually where the the most
coins came back to life and a lot of them were because of the bitcoin cash hard fork they wanted
to move coins to a new wallet,
take advantage of the dividend.
We've just broken to new all-time highs in liveliness,
which means-
I guess people were getting them off exchanges then as well
so they could have the-

(23:46):
All sorts of things.
So there's just a lot of activity.
And the thing with liveliness,
it helps you understand how many coins are not lost, right?
Because if a coin has been spent,
it might be, you might move it to your wallet
and then immediately lose the keys.
But we're not going to know that
until 10 years down the road
when it still hasn't moved
and the probabilities increase that it's lost.
When coins come back to life and liveliness,
It's just punched a new all-time high, which is honestly something I didn't expect to happen.

(24:10):
I thought it was going to be range bound for a long time.
We have seen just an old coin transfer that is, frankly, it's unprecedented.
The only other time you can put anything similar is the 2017 bull.
And a lot of that was the Bitcoin Cash Hard Fork.
Yeah.
And in terms of bull market correction, drawdowns, we have a chart that compares all of the drawdowns

(24:30):
in the current bull market, if we still think it's a bull market.
Right now, we're down 30%, I believe.
that happened in the tariff tantrum back in april when trump announced his with that big huge board
of crazy tariffs and everything new tariff the penguins yeah is this not more than 30 now what
35 is the deepest okay yeah yeah but in term it's similar to the tariff tantrum but we were under

(24:53):
100k at that point right i think the 100k having six figures is a very key like psychological level
for a lot of human beings just looking at the price so people who got in a year ago at 100k
because we're basically down on the year now.
Like they held for a whole year
and they got invalidated.
They saw AI just ripping.
And missed everything.

(25:14):
They missed all of that.
The government's very, very kind to AI.
You can see like the Trump administration is very,
it helps AI pump right now.
They're doing whatever they can
to like make sure regulation is lower.
The smart money just go,
I'm just going to rotate into AI.
Why wouldn't I?
Like Bitcoin just didn't do the thing.
The AI is going through a generational run.

(25:34):
like this why wouldn't the smart money this is my perspective anyway the smart money should rotate
into something that is more of a guarantee and that's kind of to me it's kind of simple almost
why bitcoin's a bit weak right now it's just because there's a more uh i don't know people
lusting over ai and it's just a better trade right now well i mean the world's a relative place
capital markets money will move where it's treated best market doesn't go anywhere that's why you

(25:58):
see these six months guys they're momentum traders but also bitcoin will find a flaw we all know it
find a flaw we're talking about this before shit coins the problem with shit coins is that you don't
know if they will ever find a flaw you don't know if they're already going to come back bitcoin you
know will find a flaw and will start moving and that momentum money will come ripping right back
right back out yeah so for me as a hodler that's why 15 down you're like okay but once it's like

(26:21):
30 you're like oh i could maybe i should start driving ubers as well like you don't be like you
start thinking for other ways you can maybe i can delay that bill maybe i can sort this you start
getting hungry for the sats again. So once that market finds a bottom and starts moving,
a little bit of money is going to come roaring back in because the same reason I started buying

(26:42):
Bitcoin in 2019, when like it finally dawned on me that, hey, the government's a bankrupt and
they're going to have to print money to solve it. We were talking about it this morning over
breakfast. When you play forward, whether it's AI is deflationary or if it's inflationary,
I don't know which way you go, they're either going to have to pump the market because it wants
to collapse because we're seeing the popping of a bubble,
or they're going to have to UBI because it's displaced everyone.

(27:03):
So pick your poison, all roads converge to there's going to be more dollars,
and there's going to be 21 million Bitcoin.
There's 5% left to mine.
It's going to take 110 years or 130 years to finally mine them all.
All roads lead back to Bitcoin.
All roads lead back to Bitcoin, stack sats.
One of the interesting things, and I think this is because we didn't have
a bull market that almost anyone expected,

(27:24):
is sentiment is absolutely shot, right?
But it was shot 10% below the all-time high.
It was shot so quickly.
This has been a really interesting dynamic
is watching how flaky sentiment has been.
Now, I don't really have a good reason for that.
I think it's because we didn't have a bull run.
At least not one comparable to previous bull run.
Yes, and I heard Lin say this in your pod,

(27:44):
and I've been saying it for a long time.
Expectations not meeting reality.
Massive, massive reason,
because people had the green, green, green,
and the last green was the big green.
And if you actually look at the average monthly performance,
I've run this for like the whole of Bitcoin's history.
I've run it for just from 2015 onwards,
from 2020 onwards, from 2023 onwards.
And the pattern is very similar.

(28:05):
September is the only month where on average it's shit
and every other month is pretty good.
And then the last part of the year is the best.
This year, every single month has been out of consensus.
September was a good month.
November has been terrible.
October has been terrible.
So like it's just been a different year,
but expectations not meeting reality,
I think is a big part of it.

(28:25):
The other thing is like,
no one cares about who wins the bronze medal,
essentially.
And we've had gold tearing, ripping,
and we've had the AI.
So Bitcoin's kind of like had bronze medal this year.
And comparison is the thief of joy.
Totally.
Is a quote I love.
And basically all Bitcoiners have been doing,
especially on X,
is comparing to things that have outrun Bitcoin,

(28:48):
which just makes everyone so sad.
Like there's no way to,
even though Bitcoin ripped to 125,
everyone should be joyous.
It's like, goes down a little bit
and then, but gold.
But AR, oh, this sucks.
Like immediately, especially humans,
just like getting that third bronze medal
is just never a good thing.
It was so funny watching Bitcoin
has become gold bugs

(29:09):
when gold went on its run.
And like gold is the other,
like I have 90% Bitcoin, 10% gold.
That's my portfolio.
And I sleep very well.
And I actually heard Luke Groman,
I can't remember when he said it,
but he said it some time back.
someone asked him what's his like non-consensus opinion and he goes that gold's going to have a
period of time where it outperforms bitcoin and that's stuck with me for a long time and like

(29:29):
the reason i have gold is like it's almost like a ballast in my portfolio where it's the same trade
it's just not as volatile i can tap it when i want it and also i just sometimes want something that's
not going to rip go down from 125 to 80 that's where it sits like a ballast part of my portfolio
And in fact, I always try to get gold to 10%,

(29:50):
but as we know, Bitcoin runs too hard.
So I'm always chasing.
I literally have to continue to buy gold to get it to 10%.
We might have finally hit it now at Bitcoin.
I think the interesting thing about Luke,
like Luke's clearly a genius.
Like I love talking to him.
I get his newsletter.
I don't think there's really very many people
that are better than him at doing what he does.
But in one of his recent newsletters,
he basically said, you need to start trimming Bitcoin.

(30:12):
I think he might have even said,
time to get out of Bitcoin.
Do you think the fact that the bull market
was obviously completely different,
if it even was a bull market,
the bear market is going to be completely different.
Do you think if you're selling now on cycle expectations,
that's a mistake?
That's my view.
So there's no reason that the four-year cycle has to play out.

(30:33):
A lot of people are going to say that it has played out,
but we are down 35%.
My base case for now is,
and I've been saying this for a long time,
there's a model called the true market mean,
which is 82k which we tagged overnight so the true market mean again dave puer and i built this in um
in coin time economics there's a model called the realized price which is the average on-chain cost

(30:56):
basis per bitcoin but the problem with the realized price we've actually traded below it
way back in 2015 way back in 2018 like it's always been we trade below it and that's when
bottom formation really starts i was of the view that we shouldn't actually have hit it in 2022
And the reason why Satoshi, lost coins, early miners, they're sitting on tremendous unrealized profits, but they're not going to take them because they're lost.

(31:21):
Put the quantum thread aside as a potential for bringing back to life.
Those coins are not going to come back to market in just normal participants.
So in order to hit the break-even level of the realized price, you need, let's say Satoshi's up $25 billion.
People who are active in the cycle need to be holding $25 billion of losses to offset it, to get to break even.

(31:41):
So the higher the price goes, the larger the market gets, the more those unrealized profits swell, which means the larger the damage has to be for people who are active.
And what happens when people go underwater?
They sell.
They capitulate out.
And those losses actually get kind of tempered because people respond to the sell-off.
So the true market mean uses liveliness, and I won't go into all the details, but it basically zones in on active investors.

(32:05):
the older coins that haven't moved
and have just huge amounts of coin days within them.
We start to discount them the more that they have.
And from that perspective,
that's like the average cost basis for active investors.
And it's, statistically speaking,
the price oscillates around this thing.
It is the middle, statistically speaking,
of the entire Bitcoin market.

(32:26):
It's at 82K.
You know what else is at 82K?
The average inflow cost basis for the ETFs.
Saylor, who I would say is, broadly speaking,
the average dude in terms of like they buy all the time in a bull uh his cost base is at 74 which
is not too far from 82 and the reason it's there is because they've been struggling to buy more
coins which if there's one challenge i'd give to sailor it's like you need a bear market strategy

(32:47):
here because these coins are cheap and for me as a hodler i'm happy as larry right i'm going to keep
buying down here but the average hodler is about 82k the average etf investor is 82k that also
tells you that the ETFs are also kind of the average market participant. The average market
participant is around $82,000. If we were to bottom there, it was at $30,000 back in the previous

(33:11):
cycle. What did it take to get us below that level? Because we bottomed there in like mid-2021,
then we bounced off it. We came back down to it. We needed Luna to market sell $80,000 Bitcoin in
distress. We needed Three Arrows Capital to be a fraud. We needed Genesis and Celsius and then
finally ftx that's the kind of damage we needed to get below down to the realized price so i actually

(33:34):
lost a hundred dollar bet with my colleague from glass node because like i don't think from first
principles i don't think we get to the realized price i didn't know that fraud was there and that
hundred dollars is worth a whole lot more now bitcoin with it um but for now i unless sailor
implodes i'm not sure where that gfc grade deleveraging comes from that could take us down

(33:57):
to the realized price of 56.
Could it happen?
Yes.
It's not my base case.
So my base case for now
is that we probably hammer out a bottom somewhere.
Like we might tag the 70s.
I think getting down to the 50s is,
you know, Bitcoin's a trillion dollar asset now.
If you have 50K, it's,
you're almost undoing the ETF.
So like, can it happen?
Anything can happen.

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(37:13):
the market is far more healthy
than it was back in 2022.
Like I can't think of,
besides some treasury companies imploding,
anything that could do that.
I don't think there's any,
I mean, touch wood.
I don't think there's any like fraudulent businesses
in Bitcoin at the moment.
Like it seems like everyone's learned their lesson
from 2022.
And if we have a bear market,
let's just say for argument's sake,
we bought them at the true market mean, 82K.

(37:33):
If we bought them at the true market mean,
it's 35%.
Is everyone going to reset their cycle chart
at the same way that they did FTX?
At the same way that they did,
and this has been my case for a long time,
I think the bull isn't going to be that,
like we didn't have a blow off,
but generally speaking, the bull market
did exactly what a bull market does.
Price go up, old hands sell.
It's how they use things generally play out.

(37:54):
My view was always that the bear was going to break people
because they're not going to know when to reset their chart.
And if we bottom at 35% down
and in six months time we're toying with all time high,
is it a new cycle or is it a super cycle?
Is it a four-year cycle or is it a five-year cycle?
And again, this is all speculation,
but I just wonder if you have to be so flexible

(38:15):
in your thinking moving forward.
You've probably seen people sharing,
there's like a big table of all the metrics
that didn't hit zero out of 30 hit their on-chain top.
And it's like, yeah, but that doesn't really matter
because there was a tremendous amount of sell side.
When we started talking, I think it was about 113K,
I wrote a piece called On the Cusp.
And On the Cusp is where I sold my MSTR of 300 bucks.

(38:37):
And I said, I think, check the analyst,
who's supposed to be very objective,
said something doesn't smell right here.
We're below the short-term cost basis.
We've failed two all-time high attempts.
Something's wrong.
I'm selling my risk position
because I want cash for the road down.
And I started highlighting,
and we were talking about it before that, 95K.
95K is where we got about 60% of all the money underwater.

(39:00):
And I said, look, the road from 115,
we're down around the first line of defense.
100K is the next line of defense.
Once you get down to 95, we're really testing the waters
and the trip from there to the 80s will be swift.
So we've kind of watched this thing devolve over time.
And again, no one can predict the future,

(39:20):
but what we can see is where is everyone's cost basis?
And just drawing that line in the sand and saying,
and I called it the bull's last stand.
And when we got to 95, what happened?
Straight to 82.
And that's not because I can predict the future.
That's just because there's a lot of people
suddenly underwater, we can see all of their cost base and you go, it's a sensitive spot.

(39:41):
It's where people's sentiment is going to shift to, oh shit, we might've just flipped over and I
could be late to this party now. So what's the check on chain take now? Is it that we're going
to hammer out a bottom basically where we are? Or do you think we go lower? Yeah. So my base case
for now, there's two elements. One, I do think so for the longest time, I think in 2024, I wrote
the true market mean, wherever that was at the time, 40K or 30K or something. I said, I wrote a

(40:05):
piece called Rethinking Bears. And I said, at some point when the bear shows up, here's the
fundamental reason why I think the true market mean is more likely, which I was describing before,
more likely to be that floor level. It's at 82 now. That doesn't mean that we bought them at 82,
but that's kind of the realized price. I think we chop around it. It's kind of a center of gravity.
I think the ETFs being there is also a very good confluence. We also have, unfortunately,

(40:29):
in the very, very near term, so probably by the time people will listen to this,
we've probably already seen this there's a ton of people longing the bottom with futures on leverage
so what i suspect happens is we probably get a wick we probably tagged seven something but i do
think that gets bought up so i would be very surprised if we go down too far below the 2024 chop zone my base case and again we can only work in scenarios my base case is that 2024 chop you know 70 plus

(40:58):
I think that's going to work as support.
I mean, you're going to give me coins at 70K.
I'll think about this in the shower this morning.
If price goes down to 50K,
you can now with a 5K slug buy 0.1 corn.
Give it me.
I'm sorry.
I'm sorry.
Give it over right now.
When you're going to give me five grand
and I can buy 0.1 corn,
suddenly people can start being whole coiners again.
I'm sorry, it's too cheap.

(41:19):
It just doesn't make sense.
There's too many people like me.
I'm going to step in before that.
So my base case is somewhere between when we've tagged 80.
Could be the low, probably get retested because of futures,
but this zone, this air gap between 70 to 80,
I suspect we'll find a base somewhere in there.
That would be my base case.
Yeah, I would take that all day, every day.

(41:39):
It's too cheap otherwise.
Have you guys been following this winter mute Binance thing?
No, I'm sure there's bodies out there,
but you know
this is the thing
everyone goes looking
for a boogeyman
you know
from my perspective
we broke below
the base
of what I call
the hodler's wall
where all that supply is
a bunch of people
are now scared
that they bought the top
they start responding

(42:00):
there's no support
between there and 85
so you don't think
it's down to these
market makers
so just for anyone
listening who's not aware
like the
I've not been following
this super closely
but from my understanding
it's that
when crypto
like the broader
crypto market
had that big crash
a few
like a couple months ago
um binance's api stopped working for winter mute and they lost i think billions of dollars in it

(42:21):
and so winter mute are now suing binance i believe um and like one of the theories that i've heard is
that market makers are like pulling liquidity from the bitcoin market i don't know if you yeah i mean
i'm sure all of that's true i think generally speaking there's 50 different things that are
going on right so they all have different components uh but you know from my perspective

(42:44):
we got below 95. We got below the bulls last stand. That was my thesis. Next thing you know,
we're at 80K. Whatever the cause, the thesis was, there's too many people who are underwater.
Keep it simple. So you talked a little bit before about who's buying here,
because like someone's buying in massive size, volumes are high. Who do you think that is,
if you had to speculate? Because you mentioned before banks, I could believe that. I think,

(43:07):
especially in the US, the banks are going to be stepping into Bitcoin in a pretty big way over the
next few years. I think they'll start custodying Bitcoin, offering loans and all this kind of stuff.
Who do you think that might be? It is very interesting because it's not happening via
the ETFs. That to me is the most intriguing part of it, which also means we don't know.
Yeah. Right. So you can never know the buyers until later on. But what I suspect we will see,

(43:29):
long-term holder supply takes five months till a coin reaches that level.
The amount of buying that's occurred over the last six months, so we're probably getting close
to it. I would say that long-term supply starts bottoming soon and starts moving significantly
higher. If it breaks to a new all-time high, this is the only way we can really speculate
about this stuff. It feels to me like it's got to be banks and it could be sovereigns because

(43:53):
it's in the spot market, which is a strategic position. And the size, the size of it is just
extraordinary. And how do we know it's big? Because we saw the selling. The sell side was
massive like three billion two billion dollars a day i'm not bringing that in i'm talking about
being happy with a 5k clip you know what i mean so like the average investor is not bringing

(44:13):
tens of billions of dollars a week and it's in spot markets yeah feels feels meaningful like i'm
buying here but the market doesn't care that i'm buying here we want i want to know who the big
buyers are so uh yeah no very interesting one sold bitcoin is one sold bitcoin doesn't matter
who's selling it that's why we use that six month cutoff because at least it's a sold bitcoin that
we know wasn't just transacted day to day and part of the noise.

(44:37):
Well, all these long terms that sold at above 100, they could buy back in.
And they will.
They just made the best decision of their lives to sell at 120, 110.
Now they're going, oh, okay.
I just clean that profit, jump back in slowly.
Props to Mr. 80,000 Bitcoin who sold the Pico top.
He literally could just have a bid now.
What a go.
Why wouldn't you?

(44:58):
You can now rotate right back in.
That sell side could literally just go, okay, thank you.
imagine the tax bill on 9 billion oh my god that's a good problem you need a legal
i always think about like the prep you need to sell that much bitcoin would be a nightmare
like you're just sitting there with spreadsheets and just talking to accountants and being like how
how do i get like i need to find the right otc i need to write find the right desk

(45:22):
how do i even sell this thing i mean is it hard though or is it literally just like
alex thorn i'm gonna send you loads of bitcoin selling to you with tax man yeah thinking about
the tax part, I think that's what's really hard.
If you think about it, if you're cashing out that much,
you're setting up an estate.
That's a job.
That's like a whole thing.
And there's a lot of people who are like,

(45:42):
why didn't they sell the first time we got to 120K?
It's like, because these decisions take time.
It's a big job.
It's a huge job.
A lot of stuff to do.
Yeah.
Alex Thorne is the reason for this bear market.
Cheers, Alex.
Thank you, Alex.
Obviously, while Bitcoin's been crashing,
It's not like the whole macro world has been super healthy.

(46:04):
Like everything's going down at the moment.
I don't know what gold's at the moment.
But how much of that do you think is playing into this?
Oh, macro is a huge part of it.
So I would generally just go and listen to your podcast with Lynn,
who's going to have far more of a...
I consider myself a macro tourist,
so I certainly rely on other people to think about it.
But I also like considering these ideas.
My general view is that liquidity just hasn't been ripping.

(46:25):
There's been a whole bunch of things,
TGA, sucking liquidity and all that stuff.
um my kind of if i was to give it a general description we're at the very tail end of all
the money that got pumped in in covid and it's now as alec was saying trying to just find the
place where it's being treated best and it's a bit of a dog-eat-dog world uh i think actually

(46:46):
if you look at the way that the bitcoin crypto world has operated this cycle there's been bitcoin
that's run and like the occasional pump somewhere right meme coins meme well they had their time in
the sun then what do you hear about them anymore yeah um solana had a time in the sun then it's
who cares like eth got there with like 50 bucks of its all-time line is now in a horrendous bear
market so there's all these things where like it's money just kind of rotates so if you if you think

(47:10):
about if you're awash with liquidity rising tide lifts all boats yeah if there's a limited amount
and it's starting to get scarce this is also why i think and txmc and i have a very same opinion
here that altcoins were a zerp phenomenon yeah we are now we there's no narratives left there's no
reason for anyone to like be bullish on this stuff so they're just kind of chasing that final pump

(47:32):
everyone's now decided the z cash is because like we can't pump all the tokens we can't pump 10
tokens let's all just get a marketing team and just pump one it's just a vc company it's a vc
company so everyone just goes for the one thing because like at least we can pump one coin right
can we do that have we got enough money left for that so i really think we're at like the tail end
and also interest rates aren't zero.

(47:52):
Yeah.
And that's a hard, like, it's not a hard money environment.
The dollar's still a shit coin, but it is a hard-earned money.
So as a result of higher interest rates,
people have to be more, you know, they have to think about.
I mean, if interest rates went to 20%,
you better believe that people would only be buying stuff
that's worthwhile.
Yeah.
It's the same idea of moving to a Bitcoin standard.
People are only going to invest their Bitcoin

(48:13):
if it's a good idea.
So in a harder money world where it's not Zerp,
fart coin doesn't make as much sense so i think people are going to start having to think that way
i think when i was speaking to lynn she had a load of interesting stuff that um i'd not really
considered before so she first of all was talking about like liquidity potentially drying up she

(48:34):
actually said it's not that bad a spot right now but like qt is coming to an end um and she was
talking about this idea of qqe but following gdp um obviously in bitcoin people like to talk about
these huge print events. And if we're not going into that world, and instead it's just going to
track GDP at 3%, 4%, or whatever that is, I think that's going to change Bitcoin's market dynamic

(48:56):
completely. And I think it might look more like 2025 for a longer period of time.
Potentially, but at the same time. So I do think that everything about rate of change. So a lot of
people like to look at absolute value, but in reality, the rate of change is in most things,
engineering systems in markets, the whole lot, rate of change is actually more important. So
we haven't seen an explosive growth in liquidity. But if you think about what is likely coming down

(49:21):
the road, QT comes to an end. So at the margin, the rate of change is that's going to be
less restrictive. They're going to have to go back to balance sheet expansion. And my general thesis,
like in the macro world, I don't have the skills and the chops to get into the plumbing and
understand sofa rates and all of that.
I certainly, I mean, we work with the Bitcoin layer.

(49:43):
We rely on Nick for a lot of those types of things.
Nick's the guy for that, yeah.
Nick's the guy for that, Linz for that.
Luke, understanding the plumbing.
But I'm just, I'm a simple dude.
I just look at gold, and I think gold and Bitcoin
are two very special assets because their prices
are not just a price, they're actually information.
When you see something happen on a Sunday night,
you see all the TradFi guys posting the Bitcoin shopping,

(50:04):
like, look at shitty store of value this is.
I'm like, that's your equity portfolio tomorrow, sir.
what you're looking at is a lens into what's coming down the road.
So gold doesn't move until it wants to move.
And when it moves, you should pay attention.
And it's clearly moved.
The most overheated it's been since 1979
in terms of distance from the 200-week moving average,

(50:24):
no matter how you want to cut it,
it's telling us that the system is bankrupt
and we have to move to a new reserve asset.
That is a very important signal.
In my world, gold tells me where we're going.
Bitcoin is much more sensitive to the near term.
And the near term, the rate of change of liquidity hasn't been great.
It may actually be kind of hairy moving forward.

(50:44):
You get any weakness in equity market, that falls off.
Suddenly collateral goes down, bond volatility goes up,
and everything just gets squeezed.
That doesn't mean that the follow-up is not going to be tremendously on the side.
So I do believe there is a convergence between Bitcoin and gold that shows up.
But I think Bitcoin goes the road to get there.
And it's been telling you that the equity market probably is due for a pullback as well,

(51:04):
kind of front runs that liquidity profile.
So my base case is that Bitcoin will probably lead us back out of this thing
when all the equity guys are going, shit, call J-PAL, it's all over.
And Bitcoin's going to start bottoming out and moving and say, here it comes.
Do you know one of my favorite, this might be a really stupid take,
but one thing that I quite often watch is,
so UK markets opened five hours before New York.

(51:27):
And it seems like for those first five hours,
all that those markets are doing is basically guessing
what the US markets are going to do when they open.
So there's no signal there.
It's like, we think it's going to go down
so everything goes red or whatever.
But if you watch that happen
and then you compare it to Bitcoin,
like Bitcoin is actually the signal.
And I don't know why the people trading UK equities
aren't just looking at what Bitcoin's doing

(51:49):
and be like, today's going to be a green day.
Absolutely. No, I fully agree.
And like on Mondays,
I often see the Australian stock market
doesn't know what to do
because it's been the weekend.
And then on Tuesday,
America's done something in Australia.
It's like, oh yeah, we got to sell off as well.
Like something wrong.
So it very much, it's a response type factor.
I love the idea that Bitcoin is basically just a global prediction market.
It's the index.

(52:09):
And I think that is coming more and more into people's view.
Like, again, let's think about where we are right now.
We're at a point where sovereigns are taking positions in Bitcoin, right?
We're 16 years into this experiment.
We don't have to convince anybody that Bitcoin is going to stick around.
Even the bears that are out there are like, okay, now it's starting to get a bit undervalued versus gold, right?

(52:31):
It's probably going to come back.
it's a cockroach that keeps coming back
from these 80% drawdowns.
Like, oh, it might go down further.
It's like, yeah, but they also know
that they should probably buy that dip too.
I think even Andy Constant bought this dip.
Yes.
No, even guys who don't like it,
like Peter Schiff,
eventually he's going to realize
that he should probably just,
probably should just actually.
And a couple of,

(52:51):
or one of our orange subscribers
said something very interesting,
which is,
I don't care about Bitcoin tops at all.
I care about the bottoms.
That's all.
And these guys are like serious
serious traders and so that's a really interesting way to start thinking about bitcoin especially as
a hodler investor where is the bot like as long as the floor keeps rising over the long arc of time

(53:12):
that is actually the success metric of bitcoin like there's always a fair value of bitcoin that
and the price is like oscillating around it up and down up and down i will kind of a bit too high
this is the way i frame it in my mind and now we're just finding that fair value and all the smart
money they literally just go where's the bottom that's all i want to know i just want to know when
And finally, after this really human organic hype cycle comes over

(53:35):
and they're finally back at that fair value,
which Bitcoin should probably have just been priced
at that level this whole time anyway,
if it was like not a human market,
that's all they care about.
So it's super interesting to think of that way,
which is why this bottom formation period
is going to be like super exciting.
I'm super keen to just watch this bottom happen
and be hammered out
because that is the fair value of Bitcoin

(53:55):
that is now being reset.
So we're in like a new chapter now.
And this is where you start thinking about the psychology
of resetting cycles. We were talking about this
morning, there's this process where everybody
over the next couple of days,
you were using the term, it's going to
have to grieve this red candle.
We need to grieve a little bit. So people are going to grieve,
but even just having this... What does grieve mean?

(54:16):
Go sideways for a bit? No, no, no. People need to
come to terms with the fact that we're 80K. Personally.
Yeah, yeah, they're going to come to terms with it. So I think
people are going to go through that process. I mean, even just
having this conversation, I'm like, fuck, I'm actually
more bullish than I was this morning, and I bought the dip this morning.
I don't know. When you see a 30% down and you've invested and been watching this thing and like
been a fan and really excited, and then you kind of get denied and then Thanksgiving's coming up,

(54:37):
Christmas is coming up. You have to see your family that you've been bullish to.
You all just, you have this heavy, heavy heart.
You sold them on it last year at a hundred and something K.
Exactly. And you have this heavy heart, like especially men. We don't take the time to just
sit and feel that. Oh yeah. I kind of have to like feel the loss and like breathe through it,
talk to some friends, but you need to do that ASAP

(54:59):
instead of sitting on X and just watching all these charts.
Because every single person who was saying
it's going to go to 250K is now calling a bottom
and calling something.
Calling for 50.
We're going to go straight back up.
It's fine.
We're going to be 100K in no time.
You need to stop looking at all that.
You need to grieve a little bit.
I think, yeah, and it's okay.
It sucks.
It's okay.
It's a new chapter.
It's going to be exciting.
And that's the thing, bear markets.

(55:20):
And I think the correct way to think about
this current market structure is to think about it
as a bear market.
and do not anchor to bear market must go down 75%
or must go down 55%.
Drop those type of metrics.
Bear markets are things that reset investor expectations.
I think most people, after we hammer out this floor,
will have reset their expectation to say,

(55:43):
okay, we're probably not going to a million dollars
on the fourth year of this halving cycle.
People are going to have reset expectations.
In fact, people are going to probably have expectations
that go too far the other way.
Everyone's going to converge
and you'll start seeing those dudes on Reddit
being like, I've sold everything.
I'll buy it back at 12K, right?
That's what we saw back down there at 15K
when FTX blew up.

(56:03):
When you start seeing everyone over-correcting
in the wrong direction,
we have now reset expectations,
which is the job of bear markets.
Probably a few treasury companies have to puke as well,
but that's a different topic.
Do you know, can you remember
what we closed the year at in 2024?
What, like, the final price of Bitcoin?
I guess it was 92 something, I think.
Okay.

(56:23):
Do you know the thing that I'm most concerned about
is that HODL's green, green, green, red is wrong.
We need to get above 92K by the end of the year
to keep that meme alive.
If we get above 92K,
I mean, that's a pretty significant bounce.
I mean, again, 95 is a very important level.
The Bulls have a lot of work to repair this price chart.
No question.
Not impossible,
but I'm not anticipating all-time highs this year.

(56:45):
I know some people-
Oh, no, me neither.
No.
However, I also wouldn't be-
Honestly, I wouldn't be surprised.
I mean, my base case has been the true market mean.
Now, again, true market mean, 82K,
that doesn't mean that's like the wick of the bottom.
We've historically traded below it,
but that is the zone where investors
are going to be so sensitive
that they're going to have to reconnect.
So if you think about an ETF investor,

(57:07):
they've been DCAing since they went live.
They are now underwater or at their cost basis.
They now have a decision to make.
Do I still like Bitcoin?
I liked it at 95 and 100 and 110.
And I liked it at 70.
and I liked it at 45.
Do I still like it?
And if the answer is yes,
we'll start seeing the ETF outflows slow.
We'll start seeing realized profits on chain slowing,

(57:29):
which we're seeing already.
We'll see the people who bought the top
and don't have the conviction,
realize losses will spike higher.
We saw a billion dollars yesterday.
I'm sure it's higher today.
We'll start seeing these signs of like a reset.
People who bought high are going to get out.
The people who bought high and kind of don't care
are going to hodl.
Long-term supply will start climbing.
We'll probably start seeing bear market formations,

(57:52):
I think, hammering out now.
I thought back in 2022, the 17K,
the first time we got them, three arrows blew up.
That's when I think bottom formation started.
And every metric I look at says that's when
bottom formation started.
I have a feeling that this might be,
and perhaps with that wick to just get rid

(58:13):
of all the leverage, I want to see all the degenerate
leverage guys get washed out first.
I have a feeling somewhat similar to that.
We still went down lower because of FTX,
but it was like down sideways
and then straight back up.
It was like a hyper extension
and a lot of buying happened there.
But bottom formation,
I don't think we're too far away
from starting to hammer out that flaw.
That's my base case.

(58:33):
Again, base case is just base case,
but that's where I sit at the moment.
Based on nothing analytical,
I think we might be getting close to the bottom
just because I've started seeing
the flood of texts come in from people.
I actually got my favorite one yesterday
from one of my friends.
He's been in Bitcoin for a little while,
but he's not like a full-on Bitcoiner.
I just got a text from him saying,
why Bitcoin cheap?
I think when you start seeing that,
you're probably getting towards the bottom,

(58:55):
at least from a sentiment perspective.
Yeah, yeah, exactly.
And bear markets aren't a drawdown percentage.
They're not anything other than
resetting investor expectations.
What resets expectations?
People flying high
and then being brought right back down to reality.
Once your feet are on the ground,
you then go, okay, we're at 80K.
I'm going to accept that we're at 80K.

(59:15):
you're telling me if we go down to 50k,
I can buy 0.1 with a 5k slug?
I don't think we go there.
So therefore, am I happy with 60?
Am I happy with 70?
Am I happy to start just like DCAing now
and like taking nibbles?
Like you start making decisions accordingly
once you have just come back to reality
and said, well, look, we're not at 100k anymore.
So one thing's for sure.
The top may be in,

(59:37):
but we're not at the top right now.
Yeah.
Once people start doing the calculations
to figure out their net worth,
that's normally a sign
that we might be getting too close to the top.
Well, I mean, for me, I knew that the gold had hit its top of 4,300.
Why?
Because I updated my precious metals spreadsheet three times in a single day, right?
Normally, I update it once a week at most.
Did you sell any?
No, I didn't.

(59:57):
And the main reason is a tax thing.
I still think the gold's going to have a good year.
So for me, it just wasn't, it's not a good year for me to sell the gold.
I thought about it for sure.
I'm actually kind of thinking about like, even can I make the tax work?
Because I like would rotate the gold into Bitcoin now.
So I'm actually playing around with that idea.
That's certainly where I sit,
but I knew that it was the top for the meantime
because I changed my spreadsheet three times.

(01:00:19):
I'm like, that's it, it's over.
So going, like there'll be a lot of people out there
panicking at the moment.
Sure.
What would your kind of message to them be?
So I think really you got to just,
why are you here in the first place, right?
Most often your expectations don't align
with your timeframe.
So a lot of people who buy
and then the price goes down straight away feel bad,

(01:00:42):
but you have to remember who did you buy that for when i'm stacking sats i'm buying them for like
my future self in many many years i'm buying them for my son who's you know 10 weeks old i didn't
know you said you had a son publicly no no no so i'm 10 week old boy at home um congratulations
he's gonna be 18 it's the best fucking thing ever isn't it it is no it totally is so he's gonna be

(01:01:03):
18 before he starts seeing any of those sats i'm like if i'm buying an 80k 82k and it goes to 70
Where is it going to be when he's 18 years old?
Substantially higher.
We talked about this when we were moving our retirement fund across to Bitcoin That was the case It like okay I going to retire in 30 years I going to need this in 30 years Where the hell is Bitcoin going to be in 30 years time Much higher

(01:01:25):
Yeah.
I mean, I do the same thing.
Since the day my daughter was born, she has a DCA that just hits every week.
And like, if you're buying Bitcoin for that long term, just who cares about this?
Exactly.
So I think first things first, just accept what has already happened, right?
Go through the grieving process.
If you bought the top, it's okay.

(01:01:46):
There'll be many tops.
There's always many tops in Bitcoin.
And you have to then make, I think,
really the right way to frame this up,
no one can predict the future,
but if you prepare for it,
like I've been talking about this 82K level ad nauseum
when we're up at 100-something,
and it seems completely irrational to get there,
but the idea is that by the time we get there,
we've already, like, our subscribers

(01:02:07):
have already mentally processed it.
So the grieving period for a lot of people
who have no idea what's going on
is going to be months. And what's going to happen is they're going to get increasingly bearish as
the bottom gets hammered out and every sell-off goes down lower and lower and they're going to
get disillusioned out and they're going to walk away. What you actually need to do is think about
what would happen if we go to 80K. You can't control the markets like the tide. You get sucked

(01:02:30):
out to see if you swim against it. The only thing you can control your decisions. I've already made
my decisions at 115K when I sold my MSCR. I said, I'm going to start allocating that capital.
if we get anywhere within a sniff of that true market mean.
Here we are.
What am I doing?
All the money I sold for my MSTO is now allocated.
And now any income that I kept coming in, straight in,

(01:02:53):
because I believe this is a good place to buy.
The funny thing as well is like when Bitcoin is flying,
when it's 120K, people are like,
oh, I wish it was 80K still.
And then it gets here and everyone panics.
Like instead of grieving,
you should just celebrate the opportunity to buy more.
If you're buying for the right reason,
you're buying for the right timeframe,
then just buy more.
Absolutely.
And for me, like I'm a simple dude, I don't trade.
A lot of people think that you should trade.

(01:03:14):
Trading is a horrible sport.
I don't.
It is a horrible sport.
Everyone's tried to do it.
I learned my lesson in 2017.
Yep.
You've got some stories for it.
Oh my God.
Same.
Same.
So trading is a horrible sport.
It consumes, like for me, if I put a $100 perp on,
I don't care about my net worth, which is 90% Bitcoin.
I'm the same.
It's so weird.
I'm worried about the 30 bucks that I'm down on my perp.

(01:03:35):
It's because it's gambling.
I was talking to, me and Pete were in Vegas recently,
And he was like, we were talking about betting, you know, $100 on blackjack or whatever.
And he was like, why am I more worried about this when my net worth in Bitcoin is fluctuating
in orders of magnitude more than that every day?
Because you believe in it.
So a few kind of tips for people.
One, if you're levered and you're looking at a liquidation level that's like anywhere

(01:03:56):
close to this, just sort it out.
Don't dick around with it.
Sort it out.
As the market belts out of bottom, work out who you're buying for and what time frame.
allow yourself to just like realize that we're not at the top anymore right so you now have to ask
are we going much lower and if so by how much and like as a hodler you never buy and it goes

(01:04:19):
straight up from there you always go down five ten percent so work out what your pain threshold is
there is a thing called pain to the upside it's rare it's rare most of the time pain is always to
the downside because you're allocated and the people saying the pain is to the upside generally
is because they're super long
and they want to tell Peter Schiff that he's wrong.
Pain is usually to the downside
and markets love to hunt pain.

(01:04:41):
So if your liquidation level is close,
get rid of it.
If anything in your portfolio,
and this is just like a general piece of market advice,
if anything in your portfolio has you unable to sleep
or you think about it every single day,
you are overexposed.
It's just really simple.
If you are thinking about this thing
and it is like drawing your mind power,
for me, I don't think about my Bitcoin or my gold ever,

(01:05:03):
honestly.
so I avoid buying the tops, right?
That's, for me, if I just stopped buying high
and really I didn't buy very much above 100K,
if I stopped buying high,
I have cash to buy when it goes lower
because it always does.
So that's the same thing as selling the top,
just minus the tax bill.
Just understand who you're buying for,
what your timeframe is.
If your position is keeping you awake,

(01:05:24):
you're too exposed, make some decisions
and try and make them months ahead
when you actually need them.
Totally.
I don't know how long ago it was.
It was maybe, was it about two years ago we made our bet for the end of this year?
It would have been 2024, because I think we would have just started Check on Chain when
we had that.
So it would have been early 2024, so maybe 18 months ago, a bit more.

(01:05:45):
And mine and Pete's guesses look absolutely moronic at this point.
I think I said 282k by the end of this year.
And it was the maximum price by 2025.
Yeah, Pete said 350k.
And mine was 250, which to be fair, I think like back then, it's much harder to read this
thing, right?
The ETFs have just gone live.
$250 was where I kind of said
that's probably as high as we go in 2025.

(01:06:08):
However, I would say a couple of months later,
a lot of people have been calling me bearish all cycle
because I said like $150.
I'm one of the people who's been calling you bearish.
I was saying $150 is, and to be fair,
I wrote a piece at the top, right,
where I said it's called Add Another Trillion,
where I was like, you know, honestly,
I think we deserve a run at $150.
And that was because back in January,
this is looking at capital flows

(01:06:28):
and how much money had come into the ETFs and whatever.
And my view was when we were at 100K in January,
I don't think we deserve a run at 150.
I don't think we've had the inflows yet.
When we got to like, it was like 118,
we're going for the second all-time high.
I wrote a piece saying, look,
I think we deserve a run at 150.
We got to 126 and that was the end of it.
The reality is we then have to adjust.
And by the time we had that second all-time high fail,

(01:06:51):
we had the liquidation event.
By the time we got to 115, 113, 112,
I'm like, I think something's up.
So you got to update your prize and say, look,
I still think we deserve a run at 150.
People call me a bear
because that's not high enough.
It's like, yeah, but that is also the level
where statistically speaking,
people were going to offload.
It just turns out they were offloading at 126
rather than at 150.

(01:07:12):
And to be honest, through the whole hundred zone.
So you got to be flexible, right?
You got to be flexible when you're thinking.
And like Lynn said in the show we did,
there's probably some amount of self-fulfilling prophecy
that people think a cycle still alive
so they start selling.
But I think here right now,
we should make our prediction for 2026.
Oh, we can have, so I owe you 100k sats.

(01:07:33):
Pete owes you 100k sats.
I'm willing to concede that here.
You're conceding December already.
I don't think we're going to go to 282k
by the end of December.
What are you thinking?
Honestly, I actually think 2026,
I mean, it's going to be driven a lot by macro,
no question.
I think 2026 is actually going to be constructive,
honestly, because I can't see a world
where the liquidity doesn't come back in.

(01:07:54):
I do think the Fed's going to have to expand
their balance sheet.
So if we think about like 150,
I think probably happens, honestly.
And the thing is, now that we've had this
at another trillion, we've had the capital flows
in my mental model to actually justify a run to 150.
I don't think we had that in January.

(01:08:14):
Let's have another year of bottoming out,
80K, maybe it takes a couple of months.
By the time we start drifting up towards the all-time high,
the capital flows that I personally, and I stand by this,
I still think that the capital flows justify that move to 150.
there's going to be more capital coming in by that point.
So then you start talking about, well,
maybe the levels start drifting higher.

(01:08:35):
So look, 200 would be fantastic.
I do think it's going to be a positive year
and it's a positive year coming off something like 80K.
So for me, if I'm buying 80K
and we're going to go up to like 150, 160, I'll take it.
So look, let's stick with 150 as a level
because we're talking about a 12 month timeframe.
I think we could probably get there, truthfully.
I hate price predictions, but they're quite fun.

(01:08:58):
But it is a bit of fun.
Like the thing, when I look at next year,
Jerome Powell's out.
Someone's going to come in, step in at the Fed,
who is probably going to be more in line with Trump,
if not just an outright Trump stooge.
They've got midterms.
They're going to want the economy flying.
Like I can see a lot of reasons why macro starts going ballistic.
Show me the incentive and I'll show you the result.

(01:09:19):
I'll go higher than you just because I may as well keep the theme going.
You want to get your 100k sats back.
I'll go 190.
Ooh.
yeah well i mean you mentioned midterms um i think trump and the republicans are going to have a
really rough 2026 like i i don't know if they're going to be able to keep the house um they have a
stacked house right and senate if that flips to dem oof i don't know if that's looking good

(01:09:44):
especially for ai and that type of trade so for me to make a prediction where bitcoin bottoms is
super important if we bottom around the 80s yeah easily we're gonna surpass all-time high next year
i think i think but it depends how low we go so my prediction is gonna be 126k just just tag just

(01:10:06):
tag just tag by like end of year by this time pull an eath get 50 50 bucks below your and then
we're gonna have this discussion again and we're gonna be like so now like it's the same as last
year what the hell i feel like that's the type of vibe that i'm feeling is probably statistically
that's probably the best guess i would say so yeah that's good we've got a nice spread actually
there so there's enough gap between them i hope you're right i do too um is like if i would never

(01:10:32):
have guessed we were going to end this year below 100 when we made that no that's that is surprising
yeah it's uh it's exciting especially inflation adjusted yeah and to be like that's the thing
right when you're at 126 it's actually not the worst year right i think a lot of people
expected substantially higher, but like 126 is still within like reasonable bounds.

(01:10:54):
But coming down to 80, I think that's surprised a lot of people, no doubt.
Do you think that we're going to see a rotation from gold into Bitcoin?
Oh, totally.
Totally.
I mean, I'm literally thinking about, do I take an extra tax hit to do so?
But you're an outlier there because you're obviously, you're a Bitcoiner who has a bit
of gold.
Most people are gold bugs that maybe don't have any exposure to Bitcoin.
Yes, but at the same time, people love momentum.

(01:11:17):
And I think if we find a floor and then Bitcoin starts moving, because again, once the thing starts moving, everyone's going to go, oh, that cockroach didn't die.
I get, oh shit, I sold one with Bitcoin.
Maybe we should get back in.
Smart money wants to find the bottom, man.
Totally.
They don't want to, they don't care.
They want to find the bottom.
I can't stop thinking about the just sheer magnitude of selling.

(01:11:37):
Who are the buyers?
Yeah.
Someone serious.
It's someone very, very serious.
And we're going to find out at some point, but it's someone very, very serious.
has to be because otherwise we'd be at zero.
You know what I mean?
Like the scale of it is just too big.
When you say sovereigns,
you mentioned that a couple of times in the show.
If you had to guess,
what kind of sovereigns do you think are buying?
It's not some peewee country in Europe.

(01:11:59):
You think it could be like Gulf States?
So my base case is it's going to be
either the biggest countries
or the smallest ones that have nothing to lose.
They're the most likely.
Like Australia ain't buying Bitcoin anytime soon.
Yeah, neither is the UK.
Neither is the UK.
Neither is like probably Germany sold theirs.
I think these like middle of the road countries,
they don't have the incentive.

(01:12:21):
The little guys have the incentive
because they could get shut out of the financial system.
They could also just like, you know,
like El Salvador, they want to get ahead in some way.
And then you've got the big dogs, the Chinas,
the US, the Russias.
These are like the big countries
who are like they have a real incentive,
which is we need to save our money somewhere.
Do you not even think like Australia's sovereign wealth fund
could be buying?
I don't think they're that smart.

(01:12:43):
Because it's interesting. Was it the Belgian sovereign wealth fund that bought some recently?
I'm not sure.
I could be wrong on that, but a country like that has recently come out and said they bought Bitcoin.
Was it Czech Republic?
That would make sense. Yeah.
Yeah. They're pretty bullish on Bitcoin, I think.
I feel like any carbon neutral government isn't going to be able to buy it yet.
Do you think that they still care about that?
They don't understand yet. Like, especially Australia, like they'll get one bit of pushback,

(01:13:07):
just it burns all this. And then they'll be like, okay, we can't touch it.
Yeah, even though the economy's run on oil.
There's a good story.
There's a good story.
There's up in Newcastle, which is about an hour north of Sydney,
there's a bit of an uproar because it's a little bit old now,
but there's these wind turbines that have been sitting on the docks
for like years.
And there's all these like government proposals about they want

(01:13:28):
to build offshore wind turbines.
People are like, no, the whales and blah, blah, blah.
It's finally come out that those wind turbines actually aren't
for the offshore.
They're actually for like an inland wind turbine,
but they can't fit them on the trucks because they don't
fit on the roads. So these wind turbine blades are just rotting on the docks because they
can't move them. That's your Australian government in a nutshell. So I don't think they'd be

(01:13:50):
clinging to Bitcoin anytime soon.
That's almost any government in a nutshell, I think.
It's kind of sad.
It's going to be, this year, even though it's been maybe disappointing from a bull market
perspective, is probably the most interesting year in terms of what Bitcoin is going to
look like in the future.
A total reshaping of, and that's what I mean, the three pillars. The ETFs changed a lot,
not because they're like the biggest buyer,

(01:14:12):
not because they've changed market structure
or the way the on-chain works.
Like from my view, they're 20% of the demand.
They changed the regulatory understanding.
They allowed institutions to come in.
They can put on basis trades.
They can put on long positions.
The iBit options are now 60% of the underlying.
So you've got 60 cents of options.

(01:14:33):
Now they can buy Bitcoin and rent it out with covered calls.
And we're going to see a lot of that.
So I think that the ETFs just completely changed the perception and the access.
The hold the sell side and the great rotation has genuinely been a changing of the guard.
It'll take time to process it and for the market to hammer out a floor and find that
new equilibrium, but that has changed the holder base.

(01:14:55):
And then the world of options is going to be very, very interesting moving forward.
It's going to change market structure forever, already has arguably, but we're going to see
a lot more of that.
Again, gold's options are 120% of the underlying for GLD.
If you look at iBit, we're halfway there.
So they're going to get much, much bigger.
Well, I think, so we should talk about why we're here.
Oh, yes.
Because there's a shitcoin conference going on in Sydney at the moment.

(01:15:19):
I had no plans to come, but a few of my friends were coming down.
I was like, okay, I'll come to a show.
We can hang out, have a few beers.
But I went to the opening party last night, and it really surprised me.
So this was a room full of shitcoiners.
A couple of people came over, joined in with our group, and started talking.
and they couldn't understand why we only cared about Bitcoin.

(01:15:41):
Crazy, right?
Like, I don't know.
I think we're really insured.
We're in a bit of an echo chamber with like the Bitcoin community.
Like we think everyone thinks like this.
So being in a room with people that are like talking about meme coins
and like whatever shit going under the sun
and then them totally not getting why you're into boomer coin.
Like how weird is that that still exists

(01:16:01):
despite the market just absolutely tanking?
Totally.
And I tapped it, Matt, because I very much view being here as a business maneuver because
I just want to get exposed because the Australian Bitcoin scene is actually very strong.
There's some great Bitcoins.
The great Bitcoins in Australia.
The Bitcoin Bush Bash is fantastic.
Bitcoin Alive is an actual conference, Bitcoin only.

(01:16:21):
Really, really good.
So the Bitcoin contingent, albeit small, right?
The conference gets 400 people there.
So it's a small, which by the way, makes them better.
Yeah.
Small, small.
But they're like hardcore.
Hardcore and really high signal.
Yeah.
But the Australian crypto scene has no idea we exist
and we don't care that they exist.
So I very much view this as like, it's like going to the zoo.

(01:16:43):
And we were talking this morning about like the impacts of AI.
And I'm a little bit more skeptical about like how much AI is going to,
it's going to be transformative, no question.
I don't trust it for anything that I use it for.
Like it makes mistakes all the time and I find I'm constantly checking it.
But I also like to think.
like thinking is my one of my favorite things to do so for me i actually don't like outsourcing my

(01:17:06):
thinking so for me as a professional ai doesn't help me but then we talk about like the zoo that
we're about to go and see you then realize where the actual bell curve is people still think that
ripple is going to be a thing um i was talking to a mate the other day who said that like the
solana and the ripple etfs had really really strong inflows like the best etfs of the year
and I'm like, okay, so AI may be retarded,

(01:17:30):
but so are the people that's going to replace.
So I'm like, it's actually not that AI is great.
It's that the bell curve is kind of challenging
and we're about to go and look at it.
Yeah, the bar's not that high.
I know, that's the scary thing about it.
I was there for like an hour last night
and then people around me were talking about shit coins.
I was just like, I'm just going to go home
and watch the ice shoes.
I literally just bailed and came home

(01:17:50):
and watched the cricket.
Honestly, it's just fiat.
that they're just stocks that can pump and make Aussies love just making money like we're a super
rich country everyone just you just invest in ETFs here or property and there's just this new thing
that's just stock it's just stocks yeah so people just can get rich off of it it's just rich guys
doing rich things yeah they don't care about the fundamentals like there are no fun the reason they

(01:18:13):
don't understand bitcoin is because they have never actually studied the thing all they know is that
is this thing going to go up like that's kind of the questions that they have with each other is
like is it going to pump like we don't talk about that with bitcoin really we like the fundamentals
of bitcoin are why we're here and just a lot of people don't have the time or i don't know they
don't have the uh long-term vision to actually buy into that so they just don't understand it

(01:18:35):
like why would you buy that it's not it's not just going to rip a million percent it's like
it's not about that well i've actually been enjoying because you've recently been going down
the level six matthew mcconnell scale like getting into like the why bitcoin like you've been in the
industry for years now. Ages, yeah. Tell us about like going into the actual Bitcoin rabbit hole,
because it is, you go through this phase and it's very nostalgic. As you were telling me,

(01:18:57):
the stories are like, damn, I remember when I went down the stairs. Oh, the great old days.
Yeah. We like understanding mining and all that. Yeah. No, I mean, I got a little too attached to
the price with Bitcoin and short term, and I really needed a way to zoom out a little bit,
because Bitcoin is not a 2025 asset. You do not buy it. I mean, if you're a hodler and you're
trying to accumulate for your 10-year self, price movements today shouldn't affect you as much as

(01:19:23):
they do. And they were affecting me a lot. So I was like, I need to study UTXOs. I need to study
how the blockchain actually works. I need to go deep, read the Stoshi emails, really understand
the fundamentals to build my trust again in the actual asset itself, in the system, in the software,
in the group of nodes in the world.

(01:19:43):
And I just got like,
I reinvigorated my excitement for Bitcoin
because I'm like, no, this thing fucking is amazing.
Was there anything when you were doing that
that was like, holy shit?
Like, even if it was just like learning something again
or was there something that really sort of settled you?
Oh my God.
Just like the brilliance of the design of nodes and mining

(01:20:05):
and how multiple nodes can have different copies
of the ledger. And then you must require one node to decide that this is the next block. Is everyone
happy with this? Yes. If something goes wrong, it auto-corrects itself. And then I was imagining
how banks manage their ledgers and humans manage ledgers right now. And no one knows. It's a black

(01:20:31):
box. Humans make wrong decisions all the time. It's not automated at all. They can shut down
your accounts. They can move your money. So many governments just take people's money.
Like I think in Lebanon, like a bunch of places, right?
All over the world.
And just the brilliance of the Bitcoin network and software to just automate and take the human
error out of that. I was like, no, nothing can fuck with this. And nothing will ever get the

(01:20:57):
amount of broad reach that Bitcoin has. I just don't think so. There's a first mover advantage.
like the whole Satoshi story is also just fascinating.
The fact that he hasn't come back,
the fact that there's no guy that he can,
imagine Satoshi could tweet.
Like I feel like, dude, I swear,
like he would say some whack stuff
and like tank the market.

(01:21:18):
I don't know.
I just, I love the entire,
it's almost like a biblical story.
Like the narrative of Bitcoin is so strong.
So I think just it has all the elements
to be a long-term stalwart asset
and price this year,
it doesn't really matter.
You know what's actually exciting?
We can buy cheaper Bitcoin.
Exactly.
This is not something to be scared about.

(01:21:38):
This is opportunity.
The last bottom was,
what was it?
FTX was 16.
15.6.
15K.
If our bottom now can be anything
over that. That's fantastic. Again, if you zoom out, like if you zoom out to the 2028,
when the politicians switch over in America, that's going to be a whole other world. Do you
think Bitcoin will be up or down by then? It's like, I'm damn sure it's going to be up.

(01:22:03):
Yeah. Less fucking-
So fuck yeah.
Yep.
Get bullish.
I'm excited to go and see this zoo. I'm going to go for exactly 20 minutes. I'm going to watch
your talk, watch you dunk on the wall, and then I'm going to leave.
And basically, a lot of the things that we talk about is the ETFs, granted, mine excluding
the last couple of days, the ETFs are bigger in terms of capital inflows.
Just the dollars people have actually invested are bigger than every single ASX stock in

(01:22:27):
the Australian stock market, except for the big four banks and BHP.
So the inflows are the sixth biggest company in Australia.
And if you look at the AUM, where the AUM peaked, it was bigger than everything except
ComBank, which is our biggest bank.
So the scale of it is just tremendous.
And they've been around for-
Since January 24.
Yeah.
So it's remarkable just seeing the scale of it.

(01:22:50):
And actually, I should close with my favorite metric in all of on-chain data, and it's the
backbone metric, is the realized cap.
The realized cap values every UTXO at the time when it moved on-chain.
If you bought a coin in 2019 at 10K, it's saved at that 10K price.
The realized cap is how much we as Bitcoiners have entrusted to the asset.
$1.12 trillion.

(01:23:12):
So whenever someone tells you that Bitcoin has no intrinsic value,
there's $1.12 trillion that disagrees with you where Bitcoiners have gone,
no way.
I trust this thing to look after my savings.
It's a monumental amount.
At the all-time high, we had more unrealized profit.
That's our cost basis.
We're at two and a half trillion.
We had the unrealized profit in Bitcoin is bigger than Berkshire Hathaway, right?

(01:23:35):
Rat poison squared by R.
So get bullish because Bitcoin's not going anywhere.
It's going to come back like a cockroach.
Happy days.
Let's fucking go.
All right, this has been awesome, guys.
We'll be back in a year together.
Can I add one more thing before we close?
Because something I think is actually important,
Charles Edwards has been on about the quantum threat recently.

(01:23:56):
It's very hard to handicap what is true and isn't in the quantum space.
I do think it's worth, like Bitcoin is just generally speaking,
having a conversation about what we do.
because you know what would just destroy the final piece of FUD that's out there
is having a strategy, working out what it's going to look like.
Whilst, you know, I'm not quite sure that I agree with like that it's coming in a year,

(01:24:19):
it's coming in two years time.
I still think Charles is very right that we should start talking about it now.
And we should just have a game plan.
If we have a game plan by the end of 2026, let's use this bear market, put aside the price.
Let's work out what the strategy is.
And if the strategy is we need to do more coding, more work, more research, which we will,
I'm in no way qualified enough to understand what needs to go into it.

(01:24:42):
Let's have that conversation now.
Because I'll tell you what, when you solve that problem, there ain't nothing left.
Well, let's have the conversation.
Because I think this is super interesting.
I, again, have no idea what the timescale is on this.
But let's just assume it happens at some point.
And if over a long enough time span, it will happen.
Yeah.
So the question is, like, what happens?
we're going to move to an address format

(01:25:04):
that is quantum proof.
I don think that will be contentious because everyone will have to do that So that part easy The tricky part is what do you do about all the coins that are in these old PaithPubKey hash addresses or whatever
Do you freeze them or do you let them be stolen?
So first things first, I think separating those two, they're two separate issues.

(01:25:25):
It is an absolute mistake to put them in the same bit.
Two separate issues.
We have to deal with them separately.
So first things first, let's build, research, design,
whatever we got to do.
I know Bit360 is out there.
Again, I'm not smart enough
to understand any of it.
Let's get the option,
the option for people
to upgrade build first.

(01:25:46):
Yeah.
Ship that.
Well, that's happening.
Like HuntsBeast is working on this.
Like that's,
maybe it needs more eyeballs on it.
I think it needs more people
to just understand what it is,
how it works.
So I think first things first,
just get that done.
Now on the second topic
of what do you do with old coins?
If you solve that first bit,
this is lore of the jungle
until proven otherwise.
But at least you had people
with an option
Sort that out first.

(01:26:06):
My personal view on the, what do you do with the old coins?
They come back to market.
I totally agree.
I don't think, and the reason I want to go down that approach,
there's two angles, and we had a big talk about this
in a cheat code last year.
There's the argument of if someone's coins get stolen,
the security assumptions of Bitcoin get broken.

(01:26:27):
But then the other side is if you freeze someone's coins,
I think you taint the idea of Bitcoin, which is property rights.
if someone has your private key,
they legally don't own the coins,
but they do own them, right?
Possession is nine-tenths of the law.
If you leave your private key in a desk drawer
and someone gets it,
or someone uses quantum to extract them,

(01:26:50):
you have kind of made the decision to not upgrade.
So if we take Satoshi, for example,
if we freeze his coins,
we are doing so before Q day,
because otherwise they would have been stolen.
If we freeze Satoshi's coins,
we made that decision for him.
What if it was on a Monday and on a Tuesday
he comes back from the dead,
or he is Hal Finney and he's frozen,

(01:27:11):
and he brings back man in the coma and he goes,
whoa, quantum hasn't been invented or it failed,
and you bugger sold my, I froze my coins.
If we freeze other people's coins,
irrespective of flag days and all of that,
we made the decision to take someone else's coins.
Yes.
If, on the other hand, we build the system
and allow people to migrate, which will take time,

(01:27:32):
and that's a whole process,
Q-Day comes along and they get taken.
In that instance, they chose not to save their coins.
That's their decision, not our decision.
Now, the one proposal, I think Hunter Beast talks about this,
which I think is potentially worth thinking about,
is a rate-limiting approach.
Yeah, so he talks about only one transaction per block
to be a non-quantum proof address.

(01:27:54):
Yes, and I think the...
Of the legacy coins.
And I think that his rationale there is a sound one,
which is that if you look at the current performance of the chain,
you're very, like the on average is less than one per block.
So right now, the rate limiting wouldn't affect anyone on average.
Could you break down the rate limiting just for their play?
Yes.
So the idea is that you could set a rule where the miners

(01:28:14):
could only include like the legacy addresses
which are vulnerable to quantum.
You could basically say that they're only allowed
to include one of those spends per block.
So quantum comes along, all the lost coins
that we're going to upgrade, upgrade.
The ones who don't, we presume they're lost
and going to get stolen.
Quantum shows up and they don steal them all in one big chunk they steal them one per block They have to drip feed them out Drip feed them Now the other thing I think is also worth thinking about Just quickly on that there also an interesting dynamic

(01:28:42):
where, say, quantum computers can steal coins from these old addresses.
There's then a fee dynamic that goes into it,
where, say, you have a UTXO that has 50 Bitcoin on it.
You want to steal that as quickly as possible
before someone who owns that Bitcoin upgrades.
So what do you put in as a fee
to make sure you're the one transaction in the next block?

(01:29:03):
And it might end up,
instead of giving all those coins back to the market,
just give them to the miners.
Well, that's an interesting thing.
And I think that comes down to the next point,
which is who is going to invent this quantum computer?
Because IBM invented it.
What are they going to do?
Steal Satoshi's coins?
Like, what are you going to do?
Launder it through Binance?
Like, you're going to get a benevolent dictator, most likely.
It's going to be Chinese or US government.

(01:29:23):
It's going to be a high-flying tech company.
And if you're unlucky, it'll be North Korea.
Yeah.
Right?
it's not going to be North Korea. Exactly. So you've got to think about like,
who is actually going to be the one to crack this quantum thing? What are they going to do? Start
ripping into banks? Like, I don't think so. And again, it depends on access and all these types
of things. Irrespective. I actually think all that stuff is kind of irrelevant. The threat,

(01:29:44):
if you run the human experiment long enough, we will eventually break elliptic curve photography
because we're smart. Don't bet against innovation. I also don't want to bet against innovation by,
I certainly don't think Bitcoin's going to die.
I think the coins come back to market.
I think that's a separate conversation
and it's a mistake to cloud the tech
with that decision.

(01:30:05):
Separate the two,
get the option for people to upgrade first,
do the requisite work.
If we as Bitcoiners solve that problem
in the next 12 months,
just what we're going to do,
have the plan,
what's the FUD?
What FUD is left?
On that point though,
I think there's a really short-sighted view
on the sort of market impact
of all these coins coming back to market

(01:30:26):
in that, like, to me,
I agree with you totally.
Bitcoin enshrines property rights.
That's like one of the
absolute fundamental things to me.
So if we as Bitcoiners say,
we're going to freeze those funds
so a bad actor down the road doesn't,
then the property rights are broken.
Agree, agree.
And so if that happens-
You break the idea of Bitcoin.
And if that happens,
what should the price of Bitcoin be?
And to me, it's far lower.
Agree.
So like, even though there might be
short-term impact on the market,

(01:30:47):
if these coins do go to like bad actors,
they dump them.
Like, in the other scenario,
Bitcoin doesn't have the same future value anyway.
So it's actually a really short-sighted way of looking at it.
I would put it in the realm of reputations take forever to build
and one bad tweet to destroy.
And I think that's more or less the way I think about this.
We've built such a tremendous thing with Bitcoin.

(01:31:08):
It will take one mistake like that to affect,
you can't undo that from the idea.
You're actually hitting the idea of Bitcoin.
And if you take that to its log, for me,
if I take that to its logical conclusion,
I don't believe that the price is something we should care about
when we make consensus changes.
When we make consensus changes, that should be about the security

(01:31:32):
and the decentralization and the properties that make Bitcoin
worth something.
The market will then value that.
If we start making decisions because we're afraid of Satoshi's coins,
which, by the way, Satoshi's coins come back to market,
they're going to auction, and I don't know about you,
but I'm going to buy some for sentimental value.
How many Bitcoiners are going to go buy a million stats
of Satoshi's coins.
I'm totally let go.

(01:31:52):
It's the ultimate ordinal.
I don't, yeah.
It my my my rare set Um I don think you know I really just don think that anyone gonna aren the ordinance guys gonna go nuts over that there your rare sets right um no look i i think
the um the idea is build the tech have the option let's have the conversation now i'm not smart

(01:32:13):
enough to work it out but i think more public discussion about this is going to be really
healthy yeah it's going to set up become just a tremendous tremendous road ahead if bitcoin has
freeze that that's the equivalent of the us freezing russian treasury i fully agree i fully
Same framework.
If you freeze Satoshi's coins on a potential
that quantum is going to come out,
there's older coins that are going to be aging as well.

(01:32:34):
So do you start freezing more?
Well, it'll depend on the address format.
Address format.
Yeah.
But it would be a monumental mistake.
And more importantly,
I actually think from a pragmatic standpoint,
I believe we can come to consensus on this.
I think there's zero chance
we ever come to consensus on this
because immediately I'm not changing anything.
So for me, my node says no.

(01:32:55):
there'll be a lot of people
in that same camp
and there's a lot of people
who want to freeze it
because they don't want
the market impact
we will never hit consensus
on freezing the coins
I'll take an airdrop
therefore
exactly
therefore
the base case for me
is you spend time
arguing over this
you're going to waste time
let's focus on this
yeah
makes sense
this has been fun
it's been really good
in person
it's way better

(01:33:15):
it's way better
well I'll come down to Sydney
whenever
maybe we just
refuse to do
remote shows from now on
I'll fly to Brisbane
there you go
done
hell yeah
alright thank you guys
appreciate that oh actually before we close check on chain tell everyone about it yeah send us off
oh well check on chain so we run a newsletter on substack and we basically help hodlers navigate

(01:33:36):
the volatility that's kind of our major kind of selling point where basically your bitcoin personal
trainer we have a big community now we have a couple of chats we also have check on chain orange
which is for more institutional uh larger investors and we have a private telegram there a lot a lot
of insights are shared and yet we generally just want to give people that data driven approach

(01:33:57):
to stay calm stop looking at the price chart stop looking at x and believing any narrative and
that big anxiety that builds up when kind of crazy movements happen our job is to help guide you
through that so yeah we work every day we fucking love it uh we talk about this 24 7 um and yeah
come join us come along with the ride and it's gonna be a fun next year honestly my main motivator

(01:34:21):
i don't make price predictions i price calls i just want people to have made their decisions
which is the only thing you can control months before you need to use it and if you make a
decision like let's say we got to 95k and we just bounced to all-time highs totally was a valid
thing if we didn't need our bear market decision framework for what am i going to do at 82 that's

(01:34:45):
great i'll put it in my back pocket and i'll use it when it happens now that we're at 82 i don't
want any of my subscribers to ever feel like a deer in the headlights. Not because I can predict
that it was going to happen, but because we just thought about that scenario as a possibility
ahead of time. So prepare. That's it. You prepare yourself. Can't predict, just prepare for it.
I love it. It's one of the best newsletters in the space. I read everyone.
Thank you, man.

(01:35:05):
Thank you, man.
Yeah, you guys are awesome.
Thank you, man.
Thank you for listening, too, man. Thanks for inviting me.
Of course.
Thank you.

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Did the Bitcoin Bull Market Just End? | Checkmate & Alec Dejanovic

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.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}Did the Bitcoin Bull Market Just End? | Checkmate & Alec Dejanovic