How He Knew The Cycle Was Over

Begless Nation, this is Ryan Sean Adams. I have Michael Nato here from the Defi Report on the podcast today. Uh Michael,

we are fresh back from holidays, man.

How are your holidays? How was

Thanksgiving? Did you get any weird crypto questions from your family?

>> Uh a fantastic Thanksgiving. I

appreciate you asking. I'm uh I'm actually on the road right now down in Florida. Um but no, had a nice little

Florida. Um but no, had a nice little break. Talked a little bit about crypto

break. Talked a little bit about crypto with the family. My dad's uh flying high. He's actually more of a gold bug.

high. He's actually more of a gold bug.

Uh so he's pretty excited about gold right now.

>> Yeah, you should be.

>> Yeah. Enjoying the break. Uh hopefully

you have as well.

>> Yeah, I have definitely. And uh

hopefully your family members were following the DeFi report cuz you made some calls that actually held up very well and uh they should be pretty happy for for receiving them. There's a few

things I want to talk about today on the agenda. There's definitely no sugar

agenda. There's definitely no sugar coating it. Crypto prices are down bad.

coating it. Crypto prices are down bad.

At the time of recording, we are well below 3,000 on ETH price and I don't know, are we 85K something like this on on Bitcoin? We're recording this on.

on Bitcoin? We're recording this on.

Yeah. Monday, December 1st. We got to talk about that. It feels like investors are moving towards the acceptance phase that this is more than a pullback that maybe the cycle is over. So, Mike, I want to get your perspective on what

happens next. And one of the things

happens next. And one of the things you've done is really called this cycle better than pretty much anyone else I'm following closely. So, I got to ask you

following closely. So, I got to ask you how you saw this in advance. What data

you used and if some of that data can be used to help us predict the way out, the next leg up. Hopefully, there's some hope here. And most importantly, I want

hope here. And most importantly, I want to find out what you are doing now when you're buying back in and what assets you're looking at. You've told me before, Mike, that you actually get more

energized during bare cycles, during the the big long-term dips. So, are you feeling energized right now? you know,

there there's been a lot of negativity, you know, on crypto Twitter and I think people are are um a little soured by just price action out there. Um I do

feel energized and, you know, I think my sort of long-term bullish outlook for crypto like hasn't changed at all. And I

think the reason that I kind of enjoy the the bare markets is just you get a little bit more clarity, especially for folks like me that are really focused on on on data and fundamentals.

um it's sort of easier to sort of see what's real once some of the froth gets gets kind of taken out of the markets.

And so um that's where a lot of the really uh strong sort of conviction thesis work uh comes into play. And I

think the nice thing about like these four-year cycles is you sort of get a chance to kind of reunder your thesis uh with these sort of little bare markets that we get. So I'm looking forward to doing a lot of that work uh over the

next, you know, 3 to 6 months or so. you

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All right, Mike, here's what we're gonna do. Um, first I want to take some time

do. Um, first I want to take some time to recap where we are. We had an episode over 30 days ago. I think it came out on October 21st, so what transpired since then. Then we'll get into where we are

then. Then we'll get into where we are now. We'll zoom out a little bit, look

now. We'll zoom out a little bit, look at the cycle, and lastly, we'll talk about what's next and how to play it.

You ready?

>> Sounds great.

>> All right. Um, where we left off, our last episode was right here. uh is

entitled is the cycle over and I think my hope was no and you were saying yes.

Unfortunately, Ryan, you have to accept the truth that the cycle very well could be over. Uh just to give bankless

be over. Uh just to give bankless listeners some context, you and I started doing these episodes on bank list about 6 months ago and the goal was really to um use some of your insights

to look at onchain data to make better crypto investing decisions. and your

orientation has always been long-term permable on crypto, but you play the cycles and you buy quality on the dips.

So, uh, I said in the intro that you've been probably the most correct cycle investor that I've seen. And I think part of the reason for that is something we'll get into. I call it I'm I'm

calling this cyclmentals, which is maybe the the DeFi report's unique brand of using onchain data to to predict these cycles. Um, so let's get into your calls

cycles. Um, so let's get into your calls back in October. Right now, of course, uh, Bitcoin price looking kind of ugly.

84,000 at the time of recording. ETH

price 2,700 at the time of recording.

Bitcoin is down 22% on the 30-day. Ether

is down 30%. Other down market assets, of course, down to greater degrees. So,

this is feeling kind of bad right now.

Um, the first indication that I received that you were moving towards a riskoff position was this email that appeared in my inbox on October 10th, 2025. And it

said portfolio update shifting to risk off. I looked at this and I thought, oh

off. I looked at this and I thought, oh Mike is going risk off. Last I

checked, he was like, you know, 25% cash, 75% crypto assets. So, what's he doing? What's going uh what's uh risk

doing? What's going uh what's uh risk off? And you gave some reasons for this.

off? And you gave some reasons for this.

You said Bitcoin had some lackluster trading volumes. Uh even it had kind of

trading volumes. Uh even it had kind of this run from 108K at at the beginning of October, end of December to 125. You

felt like that was lackluster. But

mostly I think you were seeing a lack of demand signal and uh there number of other things that maybe awoken you to the to the fact that something was feeling off in these markets. Something

was feeling kind of end cycle. And so

you made a decision I believe on that Thursday to switch to a riskoff position and move to like 60% cash from 26% cash.

And then that day, that same day, later that day on Friday, October 10th, uh we had the 1010 flash crash and it was pretty obvious that something broke in

crypto. Um maybe I'll just pause there.

crypto. Um maybe I'll just pause there.

in early October, right before the 10-10 event, what were you seeing in the markets that caused you to send this email and switch to a riskoff mode?

>> Yeah. So, I think at the time, and again, always just kind of trying to play the probabilities. Um, what what we're looking at is really market structure for for Bitcoin. And we we

look at a lot of these sort of holder cohorts to understand what the market structure looks like. And Bitcoin, you know, had basically traded at an average

uh price of about 102K over the last year from like October to October. And

so all of the sort of new money that came into to to to Bitcoin at the time, it's coming in at that that sort of elevated price range. And we could see that the sort of more longer term

holders were were exiting the market uh while that was taking place. So that the market structure was tilting more towards sort of like uh newer money, possibly weaker hands sort of sitting at

the top while at the same time we were starting to get uh nervous about the sort of the amount of uh leverage that was in the system at the time. And so

you kind of have this like kind of lopsided lopsided market structure setup with lots of leverage building. And then

we were starting to get nervous that the liquidity conditions in the market were starting to sort of turn over. we're

starting to see some u some tension in the repo markets uh a lack of liquidity in the banking sector and that sort of lined up with our view that like the the

on the on the margin uh fiscal spend was was was sort of winding down and you have tariffs also pulling liquidity out of the markets and so when we kind of added all of these things up we started

to feel like okay the probability is actually pointing to a riskoff stance um that was that was the call that we made we were we were sort of confident that the every stage that we would expect to

see play out in a in a crypto cycle had essentially played out even though you didn't have sort of that euphoric period um at the kind of like October uh peak which I think was around like October 6th or so.

>> That's right.

>> So that was kind of the the summary and it's really kind of adding all of these things up to kind of land at like okay the probability points to to risk off.

we've had a good cycle. You know, we were we were buying at the lows and so it's it's kind of time to take risk off and and so that's that's that's what we did and that's that's how we're playing these cycles and now it's kind of uh

pivoting towards, you know, where is fair value potentially going to come in uh for BTC if we are in fact, you know, heading into like a longer term uh bare market setup here.

>> So that's exactly right. So, not only did you make this call in early October and interpret these uh indicators correctly, but you also did it with conviction. And I I will say this was uh

conviction. And I I will say this was uh definitely a contrarian call in crypto circles. Like long-term bulls like me, I

circles. Like long-term bulls like me, I mean, we don't want to believe it that the cycle's over because the indicators had not been hit at the time. And so,

you came on the podcast. This was our monthly October podcast or you know, like into November, October 21st. And um

you were saying likely the cycle is over. At the time though, this was even

over. At the time though, this was even after the 10-10 event. It felt like a flash crash. Markets had partially

flash crash. Markets had partially recovered and you were saying, "Hey, it's more than fair odds." My base case is that the cycle is over, unfortunately. But at the time of

unfortunately. But at the time of recording, Bitcoin was 110K and ETH was um 3,900.

So people kind of hated the episode to be honest, Mike. Right. And that's

that's how you know you're at least in a contrarian place. Um turned out that

contrarian place. Um turned out that call has been contrarian, right? And

we'll talk about maybe that was your October call and let's talk about um November because November was I think the market scratching its head and waiting for a confirmation. This is

probably you looking at some of the data and waiting for a confirmation as well.

So you had this November 5th report on the DeFi report website and uh the title was has the bare market arrived at the time. you were like 75% cash I think so

time. you were like 75% cash I think so you were had already placed your your bets that basically it looked like it but you were open to alternative data and you said this the bull market structure hasn't technically broken yet

we're looking for weekly closes below the 50we moving average at the time that would be about 103k Bitcoin you're waiting for that the 50we moving average two closes below for confirmation but

you said your base case is the cycle is over uh and you're open to data proving otherwise let me let me just ask this this chart the 50WE moving average. This

is folks are looking at the chart. This

is from from the uh early November. Have

we broken those weekly closes of 50WE moving average for Bitcoin uh being being below the 50we moving average? Has

that now happened yet? Dad, do you have the confirmation you were looking for in early November?

>> We do. Yeah. So, we do have this this confirmation. This uh the 50we moving

confirmation. This uh the 50we moving average is around the 100k uh mark. And

so that has served as in in the last few cycles that has served as bull market support. We can see that in the um the

support. We can see that in the um the kind of the green arrows there. We've

kind of been bouncing off of it whenever Bitcoin has a a little bull market correction. We now have broken through

correction. We now have broken through that. So So now and and we've had

that. So So now and and we've had multiple weekly closes on that. Um, and

I think, you know, the market sold off uh pretty hard last night and um, you know, we had a big sort of monthly close uh at, you know, Sunday 8:00 p.m. last

night. Came in kind of lower than I think the the market was hoping for. So,

it looks like some of these critical um, resistance points are turning into resistance and not support. what I would have been looking for to potentially change my mind was would be that okay

maybe we reclaim that and it starts to serve as support then you can start to turn bullish u but seeing it get rejected and then the market reaction to that with a pretty hard selloff last

night um tells me that the this is deteriorating for further and it's sort of um my my my the probabilities of a sort of a longer term bare market are

starting to be confirmed uh for me >> okay so this November was definitely confirmation. And by the way, this 50we

confirmation. And by the way, this 50we moving average, why why is that important? My understanding is that um

important? My understanding is that um the past cycles in crypto um every time we've had at least two weekly closes, multiple weekly closes, uh below for

Bitcoin as below the 50we moving average in the fourth year of the cycle, uh it's been over. It's been the cycle's been

been over. It's been the cycle's been over and then we see kind of a a more prolonged bare period of time where prices dip and we get kind of you know very negative sentiment for you know 12

months or so. So that has always been the case in previous cycles and you're just saying now we have that confirmation here and you're saying that's like it's always been the case previously so why wouldn't it be the

case now? Yes, I think I think so. But

case now? Yes, I think I think so. But

it's also I think important for people to maybe you know it's one indicator. Um

and you know we're looking at a number of data points here but this if we want to sort of go under the hood and think about this one indicator and why it it tends to tends to work. I think it's it

comes back to the market structure and we talk what we talk about in terms of the sort of holder base and how that has sort of gotten lopsided. So if you think of the width the 50 50 week that's about

a year's worth of moving average and we just we I was mentioning earlier the um over the last year the average price is about 102k or so. So all of the the new

money that came in is coming in at that that higher level and now we're sort of breaking off of that. So those th that that holder cohort is now uh has a has

an unrealized loss. uh they're sitting on losses and what tends to happen is when the when we break down from that we will see some bare market rallies and what I'm looking for is like when you

get those bare market rallies are these people that came in like as tourists over the last year are they selling as we get the bare market rally because they just want to get out at like a you know as close to break even as possible

I think that's the sort of market structure that sits underneath you know that indicator of the 50WE uh moving average >> okay so that's what you mean by market structure So, it's not just one

particular like um technical analysis indicator and a moving average indicator. This gets into kind of maybe

indicator. This gets into kind of maybe your brand of of fundamentals, what what I called earlier in the episode, you know, the the TDR cyclmentals, which is

you're using some of this onchain data to kind of predict the stage of the cycle, right? That's the cyclmental. And

cycle, right? That's the cyclmental. And

uh something that has come across in all of your work like this post that that you wrote uh in mid November um the question of the Bitcoin market structure you said the Bitcoin market structure is broken. When you say market structure

broken. When you say market structure you're really talking about this long-term holder activity. I know that's just one data point among many. Yet your

work seems to focus on long-term holder activity and in general holder activity more than I think any other cycle analyst I've seen in the space. Why why

is holder onchain holder activity so important to you? And was that the key data set that you use basically to make these calls in earlier October?

>> I think so. Yeah. So it's it's I I view this this data this is like a gift uh that you know we get with onchain data and I was actually sort of having a conversation with some family members

over over Thanksgiving about you know imagine if you could tell uh what the sort of holder base of the gold market looks like right now.

>> Your dad doesn't have that right he doesn't have that insight.

>> So this is like a you know this is kind of like a little cheat code that we have if you have access to this this data to be able to see actual market structure.

you know there's there's plenty of analysis that we're also doing on you know looking at the macro setup and looking at the business cycle and looking at all these other things. Uh

but then we can come back to this and say well well if we we we don't feel really strongly about the macro setup the liquidity setup and we know that the sort of um the market structure has

shifted to this sort of like lopsided topheavy structure then it just adds to that conviction. I think that's what

that conviction. I think that's what allows us to kind of make those those bets that maybe seem to be really bold contrarian views, but for us it's just, hey, this is what the the data is telling me.

>> But why is it? So, we have this data.

It's a gift that we have in in crypto where we can uh track holders over time and how long they're they're holding and kind of their their sort of a proxy for cost basis of the the cost at which they

they acquired uh the the assets whether it's Bitcoin or Ether or some other crypto asset. So, we have that data. We

crypto asset. So, we have that data. We

don't have that in other markets. You

don't have that in equities. You

certainly don't have that with commodities or or gold. We have that in crypto. But what's the intuition as to

crypto. But what's the intuition as to why it should be the case that long-term holder activity and whether they are accumulating or whether they're they're

they're selling. Why should it be the

they're selling. Why should it be the case that that actually dictates the cycles here?

>> Well, it it doesn't have to. Uh it

certainly doesn't have to. And I think the way that I would think about this is like if if we know that uh historically long-term holders tend to come in and sort of set the bottom of markets, they

tend to sort of you know uh exit markets when um when there's a separation between their cost basis and kind of the market price. Um I I think you know if

market price. Um I I think you know if we know that that's sort of the the probabilities, we could say well wait a minute, you know, how could we be wrong on this? What what would it look like if

on this? What what would it look like if we're actually wrong about this? And I

think that that's where you have to have some clear catalyst for a new wave of money or there's new money there's a new buyer um something happened whether it's in the you know regulatory or um that

you feel confident that there's a new buyer that's that's happy to buy Bitcoin that um 100k or so and we couldn't really find that that catalyst you know sellers you know kind of tapped out uh

most of the debt buying you know had sort of played out uh you know over the summer months and So I think I think that was uh the factor where it was like okay we could be wrong about this but

what is the catalyst if you're you have to replace what typically is the the the the market participant that sets the bottom who is going to do it we couldn't we we didn't have clarity on that.

>> Okay. So you didn't identify a source of demand but but it does seem to be the case that Bitcoin assets and maybe crypto assets more generally because Bitcoin kind of you know moves the liquidity of the entire crypto market

right now. It seems that it happens in

right now. It seems that it happens in these like accumulation adoption types of waves with different cohorts across each cycle. And maybe that's just a a

each cycle. And maybe that's just a a structure of the market. Maybe that's

the the market structure. So, first you have like weird crypto anarchists and early believers and maybe then at some point they kind of exit some of their assets to sort of the the early hedge

funds and early VCs and they sort of exit to the next and now we have it it seems to be the case that we have some larger institutions not maybe the largest institutions of the world we we

still don't have kind of the um the sovereign funds maybe have not entered in size but we we do have the black rocks of the world and that demand source has now exhausted, but you know,

kind of the earlier adopters have sold into that net new demand source and now the demand source is exhausted and we kind of roll into another cycle. That's

essentially maybe the narrative story for why the this onchain data actually matters for you.

>> Yeah, I I think so. I I think that that lays it out pretty nicely. And something

that we should also mention here is that this is this is constantly uh evolving, right? So we we are looking at when we

right? So we we are looking at when we look at this glass node data here you know and really the holder cohorts this is onchain only. So there is a growing part of the market now that's as bitcoin

gets more financialized you have the ETF products about you know 6% of the supply is now held in those ETF products and so this is you know getting potentially getting more challenging as we go as

bitcoin becomes more financialized in and almost like some of this these kpis become a little bit more offchain. Uh so

that's not something I'm looking forward to as an analyst because you know this is this is fantastic data for us but it's something we do factor in and we we've actually been doing some work to actually try to understand what's the

sort of average cost basis of the ETF holders uh as well. Um, but yeah, I think I think just kind of the way you're you're laying this out is correct and and I just view this as like uh it's

out there, it's available, this is unique data and you can't get this type of data uh in the traditional markets.

And um I find it like really really helpful even though it's not perfect either. Like these are sort of proxies

either. Like these are sort of proxies for uh what we think the cost basis is and what we think sort of the setup is with with different holder cohorts. Uh

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>> All right, so that's a recap of of where we are now. Let let's zoom out on the cycle for a minute. And uh you wanted me to include this slide, the classic psychology of a market slide where um

you know hopefully everyone is seeing this uh on screen on on YouTube or or Spotify video but you know this is the classic um disbelief, hope, optimism, belief, thrill, euphoria and then the

market spikes up and then you get complacency, anxiety, denial, panic and then it levels off into anger and depression. Right? And that's a that's a

depression. Right? And that's a that's a full cycle of a a bubble basically or any large market cycle and something that we've seen recurring in crypto. I

guess my question as we look at the psychology of a market here Mike is uh okay where are we now? Where would you place us?

>> I think we are uh you know what's kind of weird about this is that we didn't really have the euphoria uh in October.

When I think about the the when I think about the cycle, I sort of think of the euphoria really came uh really Q4 of last year into January into sort of when

Trump was was coming into office. We had

uh you know the Trump memecoin launch and that was kind of when the that was probably the most euphoric period of the market. I think this uh threw people off

market. I think this uh threw people off a little bit, but I think it it was kind of similar to what we saw in the 21 cycle as well. I think the the the first peak was in April of 21 around when

Coinbase went public and I think that was really sort of the uh the euphoric top of the 21 cycle. we did end up going back and getting up to like 66 cars, but

it was kind of a muted uh sort of end to the cycle. And I think we had a similar

the cycle. And I think we had a similar um you know setup that that that actually played out in in this cycle and I think that threw people off just that we didn't see that that sort of euphoria

um you know at that time. Um I think we are in complacency now and I think uh that was sort of the conclusion that I I was coming to even back in early October that the market was too complacent. Uh

and that uh there was quite a bit of push back on sort of my view at the time I think that is becoming a little bit more uh consensus now. But as this plays

out, as Bitcoin, you know, continues to to drop or or sort of chopping around in the 80s and the longer it goes and it's sort of breaking these technicals and and and the market structure that people

are looking for to to confirm maybe a more bullish view, then we start to get into the anxiety phase and and and that's when maybe people that came in over the last year when they see like a

little bare market rally, they kind of want to get out. Um and and that starts to kind of rule the market a little bit.

I saw somebody come up with uh some you know an analogy for for u bare markets and it's kind of like think of it as like a bouncy ball like going downstairs like it's going down but you do get

these bounces uh where things come up >> and it's that the market structure is such that I'm concerned that these like sort of weaker hands might just try to look to to get out and then once that's

all done and we get you know maybe we still don't know if there's um bad debts out there that sort of need to come to the surface and things like this. This

this happened in the last cycle. We had

a number of like CFI companies that were in trouble and that all had to get reconciled. Um and you typically have a

reconciled. Um and you typically have a few more legs down as that plays out. So

that's sort of the setup um you know moving forward and I think the market is you know based on what I'm seeing on X um we are certainly not in the the greed uh you know buy zone uh anymore. It does

seem like we're kind of coming off to the the right side of that chart.

>> Definitely. Yeah. I think October maybe was more complacency and um then some denial. Now now I feel like we're in

denial. Now now I feel like we're in anxiety mode and denial. I think a lot of the folks listening to this are probably anxious listening uh to you as

as you speak here. So that indicates where we are. Maybe not quite panic although I don't know how much of a panic we'll get this cycle. Uh but it is roughly the psychology here is is

roughly playing it out as it has in previous cycles. Let's maybe map this to

previous cycles. Let's maybe map this to your idea of the stages of a cycle, right? And so um talk about this chart.

right? And so um talk about this chart.

You've got four different stages of the um cryptomental cycle, let's call or cyclmental uh part of the cycle. You've

got the early bull, you've got wealth creation, you've got wealth distribution, and I'm guessing we are now in the wealth destruction zone, October 25th. Um, so talk about this and

October 25th. Um, so talk about this and and why are you putting it on this specific chart? Is this a price chart?

specific chart? Is this a price chart?

>> Yeah, this is a price chart. So that's

this is kind of like the the 25 cycle here. So kind of starting in uh early 23

here. So kind of starting in uh early 23 when Bitcoin had just kind of bottomed after FGX and you had this early bull period which was really kind of like the

first part of 2023 and like uh something that I always come back to with um sort of the early part of markets and also the later stages of markets is that uh

most market participants will be late to uh actually acknowledge a bull market um in the early stages. So, an example of this is like, you know, by October of

23, Bitcoin was up 100% or so on the year, but I don't think people sort of did not feel bullish.

>> Did not feel bullish, right? It was

still kind of like uh I it's almost like people don't want to admit there's the bull market's on until you actually go back to all-time highs and cross over alltime highs even.

>> But also, they just open their their portfolio tracking app and they see that they're still down. They're still down from the previous all-time high. So they

they don't feel bullish because they didn't position themselves in a cash position across the cycle and they weren't buying that, you know, October 23, that Q1 October uh, you know, 23

play there. That's that's probably why

play there. That's that's probably why >> there's no FOMO at that point, right?

And that's that's the interesting thing to me is that you could be up 100, you know, up 100% off the lows, very little FOMO. So that's kind of the early bull

FOMO. So that's kind of the early bull period. Um and then you know in this

period. Um and then you know in this cycle the wealth creation period was was sort of an interesting period because we had the the Bitcoin ETFs uh came out and that happened before the the having

occurred and we actually went to all-time highs before uh the having which is the first time uh that that's happened. And so that was another you

happened. And so that was another you know period where okay now we're you know people are feeling good. I think

everyone's um uh back to you know just just feeling good about where the markets are. probably uh getting getting

markets are. probably uh getting getting more FOMO at this stage as Bitcoin's the price of Bitcoin's probably moving past sort of the average holders cost basis and people start allocating again and

then this starts pushing >> that was the move from like 35k Bitcoin all the way above 100k Bitcoin by January 2025. So and the 100K felt like

January 2025. So and the 100K felt like quite a milestone to be above that for the first time, >> right? And by the end of that, by the

>> right? And by the end of that, by the time you got to January 25, you know, a lot of the people that were buying in the early bull, some of them are are happy to exit. They're up they're up 5x

or so. They're they're happy to exit.

or so. They're they're happy to exit.

So, you're already starting to get a like we talk about market structure.

You're starting to see the market structure turn over uh once you get to those elevated levels. And that's a thing that's a thing to pay attention to uh because that leads into the the

wealth distribution zone there uh which played out over the last um the last year or so and we can get into some uh metrics that we look at from in terms of

like the cycle cycle metrics here. Um,

but as you get into wealth distribution, we didn't, this is part of the reason we didn't get the euphoria is like people long-term holders were happy to exit at, you know, 3 to 5x gains, but we didn't

have the, you know, the new buyer uh, coming in at that time to really steady the the ship and allow us to to go to new new highs. We did have a lot of leverage in the system, I think, because

of the DATs. I think people got complacent thinking that there's a there's a price agnostic buyer in the market with these debts. Let's go ahead.

Let's put the leverage on. A lot of this was more in altcoins. Um and then that le that leads to um those those m those big liquidations which I think that the one that we had on October 10th really

kind of broke broke the market uh structure broke the psychology of the market a little bit. So January 2025 to October 2025 is a wealth distribution

phase and now we're in presumably if all of this is lining up correctly. Um you

think the weight of probability is we're in a bare market wealth destruction phase for what you know 9 12 months maybe we'll talk about the the next early bull market indicators in a moment

but is that how you're anticipating this plays out the wealth destruction? Yes, I

think we are sort of in that zone uh right now and I know people don't don't want to hear this. Doesn't feel good hearing it. Um I think that's that's

hearing it. Um I think that's that's kind of um you know where where we sit and we can get into kind of what's what's coming next. I think

>> before we do though um you mentioned the the the cycle um key performance indicators like the the main metrics that you're looking at for 2025 and these are some of the the onchain

metrics. So I guess this is mapping them

metrics. So I guess this is mapping them to the different points in the cycle, right? So for each metric we're looking

right? So for each metric we're looking at early bull, wealth creation, wealth distribution, and then where we are today, presumably early wealth destruction phase, let's say. So what

are these metrics and like how would you explain these numbers across the different phases?

>> Yeah. So this is kind of what uh we use.

This is just a a small sampling of some of the the the data points that that we look at. Um but but as you can see, so

look at. Um but but as you can see, so if we just look at maybe the market value to realized value, the MVRV there, that is measuring, you know, what we think the average sort of cost basis of

the network is relative to the market value of the network. And so we always want to buy Bitcoin when it's under one because that means sort of on on aggregate you know as a proxy for co the

average cost basis the price is below that. So in the early bull um you know

that. So in the early bull um you know bitcoin bitcoin price in back in early uh 23 is you know just around 20k or so

and the you know average cost basis of the network is sitting around 24k or so.

So when you when you have that disparity, that's like a flashing green um sign to go ahead and buy and buy Bitcoin in in in my view. Um and then as

you can see as you go to the next stage of the cycle of creation, you can see now you're above one. So uh maybe it's not like perfectly fair value to be buying Bitcoin at that time, but you are

in a bull market structure. You know,

it's pretty you can still buy Bitcoin there. you're probably buying it at, you

there. you're probably buying it at, you know, 50K or somewhere somewhere at that stage and you still have some nice upside left. U but then as you get into

upside left. U but then as you get into later into wealth distribution, you can see um the the the the market value has now detached considerably from the um

the average kind of cost basis of the network. Um we only we we only got up to

network. Um we only we we only got up to about uh we didn't even hit three as a peak um in terms of that that ratio um this cycle. So, we were expecting it to

this cycle. So, we were expecting it to get a little bit higher uh earlier, you know, when we were making our calls um earlier in the cycle and so it was it was slightly muted and then you can see now it's it's starting to it's starting

to trail off. It's kind of going in the opposite direction. U so that's just

opposite direction. U so that's just kind of one uh metric that we look at the we we're also looking at the um you know we talk about market structure. A

lot of that is looking at the percentage of the Bitcoin supply that's held by long-term holders, you know, versus uh short-term holders. You can see there's

short-term holders. You can see there's kind of like a a a process here where in the early stages of the cycle, you tend to have a much larger um base of

long-term holders uh dominating the market. And then as you go later into

market. And then as you go later into the stages of the cycle, those those folks exit the market. And so you can see the percentage of long-term holders starts to decline uh as you go through

the cycle. And then we can also look at

the cycle. And then we can also look at like, you know, are they in profit or are they in loss? And you can see a story there where um when you're at the bottom of the market or the early bull a

decent percentage of even the long-term holders are are actually um at a loss and then you know as you go through the cycle that that comes down typically you get to a place where actually 0% of the

long-term holders are in loss. That's

that's once you get up to alltime highs again. Um today we're at 12%. So now

again. Um today we're at 12%. So now

we're we're kind of going back uh in the other direction. So these are some of

other direction. So these are some of the the key metrics and this is just how we anchor. um you know to to and it

we anchor. um you know to to and it allows allows me to sort of sit back and have conviction um over because we know

what uh the return profile can look like based on you know these types of metrics uh over a one two threeear periods >> and so this is also an indicator of when

you should buy back in I suppose which we'll maybe talk about one question before we discuss like what's next and how you think about this um >> part of the narrative that you're talking about. You're talking about

talking about. You're talking about long-term holders basically selling, basically exiting their positions to the newer entrance in the market. There was

uh an article that I read, I think I mentioned to you, by Jordi Vir. It was

entitled Bitcoin silent IPO, why this consolidation isn't what you think. Now,

he was setting up this article to say, hey, this is just a temporary uh bump in the road, temporary dip, and you know, longer term things get bullish. I think

he was maybe talking about um uh some more shorter term. He he wasn't predicting a a end of the the cycle as maybe you are, but he was saying effectively that early Bitcoin holders,

this is kind of their IPO moment basically where you've got ETFs and you know they're exiting to newer holders and like is that what you're seeing in

the data effectively? Did did whales and long-term holders kill this cycle? Is

the Bitcoin silent uh IPO narrative correct?

>> I think there's some nuance here uh and I read Jord's piece and I I thought it was a well-written piece. Um he didn't have a ton of data uh in in his piece.

So I was this is something we've been tracking and and and you know we're following this structure and we we've been pretty vocal saying, "Hey, yeah, like long-term holders are are exiting

the market. this the structure is a

the market. this the structure is a little bit um a little bit lopsided but you know is that actually like materially different from what we saw you know at the peak of the 21 cycle

that's that's really what I wanted to investigate a little bit further and you know my conclusion here is that probably not you know there there did look to be

a little bit um you know higher levels of kind of inactive supply so what we're looking at here is um total supply that was inactive uh over a 3 to 10 year

period. So this is like the stock of

period. So this is like the stock of Bitcoin that has been inactive over from a 3 to 10year uh period. And so we kind

of look at this to get a sense for um did this did this come way down in this cycle relative to you know the last cycle or the 17 cycle. You can see the

blue line kind of goes up as coins age into this cohort, right? As time goes on, more coins that haven't moved are aging into it. It's growing. And then as Bitcoin kind of goes into price discovery mode, you tend to see that

blue line drop down where those red arrows are. And you see that kind of on

arrows are. And you see that kind of on the back side of each each cycle. Um, we

can see a pretty significant move there in the 17 cycle, a much smaller one uh in the 21 cycle. And I think, you know, I'm kind of like guessing here, but it

it feels to me like there were a lot of whales that probably thought that Bitcoin was going to get to 100K last cycle and were maybe planning to sell at

that point, but never got the chance to.

And those those whales seem to have, you know, stepped in and uh, you know, made their coins act active again. And that's

what shows up in the data here. Um, but

why don't we flip through a few of these slides because we can kind of start to tell a story here. So, so what we did there, you know, we just kind of looked at the chart to see if there was anything visually that's like really making us think that there was a big

change this cycle. What we're looking at here is we're actually quantifying the total amount of of coins within that 3

to 10year inactive supply cohort that that actually became active in the year before the price peaked uh over each cycle. So we're we're we're doing like a

cycle. So we're we're we're doing like a relative comparison in terms of the the total number of coins with within these inactive supply cohorts that actually became more active and then we're

normalizing that to the amount of the total bitcoin supply at the time of uh the price peak for each cycle. And so we can see that actually this is sort of

interesting because the the amount of inactive supply actually grew in the year leading up to the 2021 peak. So

more coins were just aging into this this cohort. And it tells you that maybe

this cohort. And it tells you that maybe there wasn't a ton of selling or a ton of movement of these coins. Um and we can see that in in this cycle um about 2

point I think it's 2.9% or so of the um of the circulating supply actually moved within this cohort. So that tells me okay that looks like you know maybe that

that narrative is correct. Um and and that's this is the key thing to pay attention to with those stats is that's just tracking movement of coins. It's

not telling us for sure if somebody sent their coins to an exchange.

>> Um it could just be somebody, you know, moving some Bitcoin from one wallet to another and then actually sell, but it's going to show up in that data. Um so I wanted to then look at, hey, can we

confirm that with like what we know to be actual transfers u from long-term holders to exchanges? This gives us a a

totally different view. It actually

looks like there was less um movement of of coins that that went to exchanges.

This data is going to pick up everything that was a direct transfer to an exchange. It's not going to pick up uh

exchange. It's not going to pick up uh an OTC sale, for example. Um and this just kind of gets into a lot of the nuance with this data. An example of an

OTC TC sale that wouldn't show up there would be uh like Galaxy process like a $9 billion sale made in July, right? So

that would show up on the revived supply, right? It's going to show up on

supply, right? It's going to show up on this chart, but we're not going to see it on the transfer to exchanges because that was an OTC uh uh sale. So that's

why we look at both of these. There's a

lot of nuance here because I think a lot of people will see people putting charts up on Twitter or something and it just uh it's easy to sort of look at that and say, "Oh, yeah, that's that's obviously what happened." But there's quite a bit

what happened." But there's quite a bit of nuance to this.

>> I think maybe what you're saying is so the question of did did whales um and long-term holders kill the cycle? The is

the answer to your question, yes, but not anymore than usual. This is how cycles always end. So, this was there was this was nothing special. This is

always how they end. And of course, long-term holders are selling to shorter term holders.

>> That's kind of how I think of it. Like

it I didn't find anything that like totally jumped out out to me. And the

reason I say this is that, you know, to me it's really more about there's just you lost the marginal buyer. Uh you lost the marginal buyer. And like it wasn't an issue when um in July when you had

someone dumping $9 billion of Bitcoin.

Uh we were at 117K Bitcoin. the market

absorbed that pretty well back in July.

But that's, you know, once once we kind of moved through that, there just wasn't that marginal buyer to to to capture that. And so, so, yes, there were

that. And so, so, yes, there were certainly, you know, large whales and long-term holders that were selling, I think it was mostly in line with what we've seen in past cycles. And just like

in past cycles, they tend to end when the marginal buyer just isn't there uh anymore. So

anymore. So >> for for all the talk, this cycle has played out a lot like previous cycles, right? Maybe we didn't get some of the

right? Maybe we didn't get some of the euphoria or we we didn't feel like we did. Um but everything else has played

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free. Link in the show notes for more information. Let's let's talk about

information. Let's let's talk about what's next. And one of the other

what's next. And one of the other indicators that I know you look at besides the onchain data is macro indicators like Michael Howell's global liquidity index. Um, can you talk about

liquidity index. Um, can you talk about global liquidity and and how that factors into what you think happens next for for crypto? So, weight of probability is we're in a bare market.

What do you think the global liquidity conditions will be?

>> Yeah. And I I recommend I I know you interviewed Michael uh recently, so I recommend people check that out. we um

source uh from a lot of his work and I think this is really helpful to sort of um map out not just what we look at in terms of the crypto native data but then to kind of come to conclusions about

what where we think we are in these liquidity cycles and when we were kind of getting a little bit concerned um you know late September early October we

were starting to see the signs that the global liquidity cycle might be sort of you know topping out and you So, I always want to like understand why.

Like, I'm not just going to look at the chart and be like, "Okay, it's topping out." Like, what's actually going on

out." Like, what's actually going on under the hood here? And to me, what we're in a period of transition, and a lot of this has to do with, uh, the Trump administration, uh, tariff

policies, um, and really what's happening in terms of like the the the fiscal side, uh, of what of what we're seeing from the US government. And I think it's like

government. And I think it's like probably not a super well-known thing that the um fiscal deficit actually came down for FY25. Trump was only in office

for, you know, about 2/3 uh of of that that that ended FY25 ended the end of September. And so we we're still running

September. And so we we're still running a big, you know, deficit, but on the margin, it's actually coming down a little bit. Part of that's because

little bit. Part of that's because tariff revenues are are increasing. And

then the other part is that the spending levels are just not growing at the same rate that they were under Biden. And so

when you you add those two things up, that is liquidity um negative to to the markets just in terms of what what we're seeing on you know in in the United States. Um I think there's this view

States. Um I think there's this view that you know we have a new Fed uh president likely coming in. It sounds

like Trump is close to making a decision on this person. market expects this person to uh be very doubbish, you know, lower interest rates and I think that

that is the setup, but I'm not convinced that that is going to actually be uh really positive for for for risk assets.

And part of the reason for that is um if you have less uh less capital like going into the markets from the treasury in terms of just treasury spending um and

on the margin that's just not growing as much. If we see a Fed president come in

much. If we see a Fed president come in and cut uh rates, you know, 100 basis points or so, that's going to be even less. that's, you know, that that

less. that's, you know, that that potentially is going to increase and boost liquidity with bank lending, but you're actually lowering uh fiscal spend, right? Because we're we're paying

spend, right? Because we're we're paying interest on a on $ 38 trillion of debt.

And so if you drop that by one, you know, 1%, that's hundreds of billions of dollars less going out into the economy.

And I don't think the market is really appreciating uh this. It's sort of just, oh, it's going to be the dollar is going to drop, interest rates are going to drop, good for risk assets. I'm not sure about that. And that's part of the

about that. And that's part of the reason that um even with this sort of like more maybe, you know, dobbish FUD president coming in, we we're not, you know, convinced that this is going to be

great for for liquidity and great for markets. So you you think the GIL um

markets. So you you think the GIL um this global liquidity index Michael house will continue to kind of like taper down at least for a while like we're at the end of one large cycle and

there's going to be draw down first before there's uh an injection reinjection of global liquidity >> that that's basically my base case and this is this is global so it's it's factoring in all the major central banks

and you know what China is doing and everything as well but if we really think the United States is kind of driving the bus and you know we tend to have these you sort of periods of transition. We had one when when Biden

transition. We had one when when Biden came into office uh during also during the midterm year where we had to get, you know, we had to kill inflation. Uh

and so it was a little bit of a different uh transition where the Fed was was hiking rates and you had, you know, we were ramping up fiscal spend and then we were hiking rates. This time

we're going to be dropping rates and lowering the fiscal spend. But I think the outcome is going to be a bare market uh for for each each scenario.

>> That's interesting. And that's why investors should stay tuned to obviously your work but also Michael Howell's work because like I think if you look at the headlines and you're like, "Oh well, Trump is just getting a very dovish Fed

chair next and we've already started the rate cuts and so we're just going to cut cut cut." Well, what if those cuts

cut cut." Well, what if those cuts actually don't impact global liquidity in the positive way? What if it, you know, global liquidity the the big picture story is actually it's continues

to taper down? Well, it doesn't do what people expect and that's why they need to dive a little bit deeper on some of these numbers. Okay, so the setup uh

these numbers. Okay, so the setup uh we've t looked at the onchain data, we've talked about um global liquidity.

So that is uh going down. So I guess what's next it sounds like is some sort of prolonged measured in months kind of

uh bare market. Can we talk about how to play this? So, I know your style is to

play this? So, I know your style is to look at the cyclmentals and like trade these trade these things. Tra trade kind of the four year, the the six year, whatever it ends up being rather than

buy and hold. Some people listening to this might just be like, Mike, this is still too complicated. Um, you got lucky. Okay, good calls September,

lucky. Okay, good calls September, October. You kind of got lucky. I'd

October. You kind of got lucky. I'd

rather just buy, hold, dollar cost average my way through these cycles.

That's how I've always done it. Um, what

do you think of buy and hold versus a a trading these cycles type of strategy?

>> I don't hate it. Uh, I definitely don't hate it. I think if you're it's a it's a

hate it. I think if you're it's a it's a definitely a personal decision for for people and um there's kind of a few schools of thought that I guess I have

around this. Um, for me, I prefer to uh

around this. Um, for me, I prefer to uh try to buy, you know, the lows and and have conviction and look at, you know, have be rooted in data to do all this.

um and then you know try to try to get out of markets once we think like some of the the uh sort of bull market metrics are being hit. Um the reason I

like this is we can I think you can get better returns. Uh I like the idea of

better returns. Uh I like the idea of being able to sort of uh reunderite the thesis you know every few years as we kind of go through through cycles. Um,

and >> different cycles have different winners too, right? I mean, presumably Bitcoin

too, right? I mean, presumably Bitcoin and Ether, they win some set, but then there's going to be some breakouts down market.

>> 100%. And that's the other that's the other piece of it is like we're still so early in crypto. It's hard to be like a just fully long-term on anything besides maybe like, you know, Bitcoin and maybe,

you know, a couple of the majors. And

so, we do think there's going to be, you know, new assets that come in and new projects that that that we will likely be interested in. So, it gives us a chance to kind of step back, you know, books some profits. At the end of the

day, what we're trying to do is is increase, you know, the amount of Bitcoin that that we're holding through cycles, improve our returns, and and then be able to underwrite maybe uh

other other big bets as well. Um, you

know, I get that this is complicated.

This is something, you know, we're in these markets looking at data every day, doing this 24/7. If you're just a professional and you're, you know, just looking to kind of build some wealth, you know, by holding some crypto assets,

you know, maybe it is better for you to just uh try to buy when, you know, you think you're in a bare market and some of uh these like more fair value metrics are are being hit that we report on. Um,

and maybe you don't sell, you just or you sell maybe a very small amount or and then you just try to fire more again in in in the bare market. So, I think there's different ways um to play it and

it's kind of a personal uh decision. So,

>> okay, just as I've watched you play it through the DeFi report and all D5 report subscribers of course get access to your portfolio on kind of like a weekly basis or if there's some sort of catalyst type of event. Just I mean

you've been in your risk on mode you were like uh you close to you know 15% 20% cash and the rest fully deployed into crypto. Um after the events of

into crypto. Um after the events of October you've kind of reversed that. uh

and I think you know October the morning of October 10th you were like you know 60% 50 to 60% cash something like that and the rest crypto now you're uh 80%

cash and and 20% crypto and that's that's really how you play these cycles right you want to be primarily cash so that you can redeploy into cheap assets

with strong fundamentals and fortunately that's that's the position that that you're in and I guess listeners their case will somewhat vary but Now for

those with some spare cash uh looking to deploy across this cycle um let's talk about when maybe they should deploy at what price point. So you wrote this post

uh there was a report earlier in the month in of November which is like what what would it take for Michael NATO to turn bullish like at what price point?

What are you looking for? Maybe we'll

talk about Bitcoin. You said we can track several key indicators to gauge where we are in the cycle. In bar bare markets, we expect the Bitcoin price to drop somewhere near the intersection of

the realized price and the 200week moving average and the cost to mine one Bitcoin. You also said there were some

Bitcoin. You also said there were some additional indicators that you were going to look at like the 40% of long-term holders in profit, price below the ETF average cost, which gets into

some of the offchain metrics, I guess, price below the sailor in the micro strategy average cost, and uh the 12-month RSI approaching 40. And so

that's when you are going to start to get bullish. I read a Chris Bernitzki uh

get bullish. I read a Chris Bernitzki uh post. I think he put this out on

post. I think he put this out on November 20th and he said there's so much pessimism and short-term thinking on crypto uh assets. You can start to

get tilt towards long-term optimism.

That said, not yet. He said, I shared my view 109K that Bitcoin only starts to get interesting below 75K. So he's

saying Bitcoin start to get interesting below 75K and a revisit of the 200E um simple moving average is always possible which is at about 50 uh 56K currently.

So below 75K Chris is a buyer. What about your indicators? What price point are you

indicators? What price point are you kind of looking for and what metrics are going to tilt towards? Okay, Mike is back on, you know, nibbling on in the

risk risk mode.

>> Yeah. So, um, the 200week moving average is definitely a really good one. And I

like that Chris Chris mentioned that.

That's around 57K or so right now. And

and Bitcoin, um, actually dropped below that in the last cycle. It was the first time it actually dropped below just below it. Um, I think that's going to

below it. Um, I think that's going to probably it's it's a rising, you know, it's it's a moving indicator. It's

rising over time. I think that's probably going to land somewhere around, you know, 65k or so over the next, you know, 6 to 9 months or so. Um the

realized price uh is also actually sitting around 57K uh right now. And so

I think you know that's also a rising number as as new people come in uh and and buy at these more elevated prices.

And so I'm thinking we're probably going to see uh an intersection somewhere around 65K or so. So I will probably be getting interested uh similar to Chris

around the 75 you know K level and then looking at all these metrics looking at market structure looking looking at sort of the outlook uh for macro and everything moving forward but these are

the areas I would say that um you know we're targeting. I think I would be very

we're targeting. I think I would be very happy to be able to buy Bitcoin at 65k.

That's that is um you know that's like a 50% correction. So it's a it's a

50% correction. So it's a it's a actually a a lower you know correction than we've seen in the past. I think we got we went down 75% in the last cycle,

closer to 80 85% in prior cycles. So,

this would be a much shallower um you know bare market for this cycle.

>> Well, do you think that could be the case since we never got the the heights of a super euphoria? Maybe during the bare market we don't get the depths of a super despair and it's sort of a shallow

shallower high and also a shallower low.

>> It makes sense to me that that would be the case. Um exactly. you didn't get the

the case. Um exactly. you didn't get the euphoria and just because of what we've been talking about the market structure that you're actually going to be setting like kind of a a higher base I think and

this is this should continue uh as we move forward and we could just continue to see less even even less elevated bull markets and maybe quite slightly shallower um you know bare markets as

Bitcoin >> contin to take some time to play out because for all of the reasons we mentioned already is just because um >> you know sellers have to feel that point of kind of

exhaustion and despair and just like like check out completely and the tourists have to leave and then you have to sort of start a floor of now the long-term holders are coming back in.

They're saying, "Hey, you know, it's still here. Crypto is still here. It's

still here. Crypto is still here. It's

still growing and they just have to start nibbling at the edges." And then as the cycle the next cycle progresses, you have to establish a new group of buyers. Maybe this will be sovereign

buyers. Maybe this will be sovereign wealth funds in the future. Maybe this

will be central banks. who knows what the next new crop of buyers might be.

But that doesn't happen overnight. We

don't just flash crash down to like below 75k Bitcoin and then oh, we we hit the numbers. Like this is kind of like a

the numbers. Like this is kind of like a a grueling, you know, month by month where markets go apathetic and mainstream starts stops talking about uh

crypto and Bitcoin altogether and they just say, "Oh, there's another bubble."

Right? That's how you expect this to play out.

>> That's the base case. um unfortunately

is that yeah, like I think I think there's still um probably still some people in the market that that are looking at rate cuts and still thinking um you know that that's going to that's

going to be you know big for for risk assets. Maybe it is. Uh it's possible it

assets. Maybe it is. Uh it's possible it is. Um but I think where that depression

is. Um but I think where that depression and sort of the later stages kick in potentially is if you start to see the rate cuts and it's not you know we end we were going to be ending QT I think um

you know basically very very soon here.

I think this must be beginning of December. So that's ending now. Um I

December. So that's ending now. Um I

think when that was announced about a month ago, most people thought that was going to be bullish for risk assets. So

let's see how that starts to play out.

Let's see how the market starts to react to um maybe, you know, an announcement on who the next Fed share is going to be. And and and I think that's where

be. And and and I think that's where depression potentially starts to set in where where like these views that people maybe had that were these catalysts would be bullish. If they're not bullish, then that that's where you kind

of get the capitulation. And you know, we're already starting to see it's fascinating to see how the psychology shifts where I'm seeing a lot of content now about more of the you know, I don't know if I'm going to call it, but I

think it's I think it's actually fair criticism, but like uh you know, quantum computing is going to break Bitcoin.

These are the types of stories that you see in bare markets. So,

>> this is narrative following price as well, right? all the bearish news every

well, right? all the bearish news every like oh it's because of quantum that's why price is down obviously >> right right so yeah these are the things I'm looking at and I do think no historically you know we this cycle did

play out you know so far has played out similar to last cycle so I would you know my my base case is that the bare market probably plays out similar to to past bare markets as well I saw an

interesting uh stat actually uh on X the other day on midterm years um and I was not aware of this but since 1926 six.

Um, the average draw down in a midterm year is 18.2%.

>> Equities as well.

>> Yeah, for equities for the S&P S&P 500.

So, for whatever reason, midterm years tend to be um tend to be bearish. I

think the market still thinks that Trump is just going to somehow will the market up in >> for those that don't follow US politics.

Next year is a midterm year, 2026. Um,

and so next year is a midterm year base case is that, you know, probably a better market for crypto.

>> Okay. All right. Let's talk about if people want to play this the way DDR is playing it. Uh, if they want to, you

playing it. Uh, if they want to, you know, because I've I've been looking at your work, uh, reading the reports on a weekly basis. We've been doing these

weekly basis. We've been doing these episodes. We will continue to do these

episodes. We will continue to do these episodes on Bank list on a monthly basis to update you of everything that's going on in Mike's head. We're actually

considering maybe doing a weekly episode here too and maybe publishing that uh elsewhere. So bankless listeners are

elsewhere. So bankless listeners are interested in that. Uh let us know because we'll do more of this content because this is um the most energized I

think Mike actually is and uh he is looking both at this cycle cycle data set. He's also you're compiling a watch

set. He's also you're compiling a watch list I believe of crypto assets beyond the majors right now. that 20% you hold in um in crypto assets is kind of the majors, right? It's like Bitcoin and a

majors, right? It's like Bitcoin and a little bit of Ether as well. But during

these bare cycles, you like to go down market and find assets with strong fundamentals as you're kind of like resetting everything and you're saying, okay, like what's going to do well? What

looks strong from an onchain perspective? So, you are compiling a

perspective? So, you are compiling a watch list on the DeFi report that is available for subscribers of assets that you're essentially putting in this bucket. um I don't if there's going to

bucket. um I don't if there's going to be 10 to 20 to 30 or so of these that you have not yet taken a position in but you are watching and uh they're of note.

So I think you're going to be publishing that for DeFi Report subscribers. But

just in general, how are you how are you playing this moving forward in terms of the assets that you're going to allocate to and and how are you keeping your subscribers informed?

>> Yeah, and and this is uh this is why I like the bare market. So the the watch list is essentially a curated list of projects that in some of these we actually were invested in uh in during

this this past cycle. Um these are projects that maybe they came out this cycle, maybe we've had an eye on them for a while and we're tracking and when we get into the bare market, we get a lot of signal as to which ones are going

to be the ones we think are are going to emerge um on when we we get into more bullish conditions. And so that's the

bullish conditions. And so that's the watch list that goes out to all of our free subscribers. It's a report that

free subscribers. It's a report that goes out every Friday based on fundamentals. We typically share a data

fundamentals. We typically share a data dashboard, a dune dashboard that goes with that. Um, and what I'm looking for,

with that. Um, and what I'm looking for, I guess, broadly within the portfolio is a lot of these sort of fair value metrics that we track for Bitcoin is we

want to, you know, have clarity on when we were going to buy Bitcoin, when those metrics hit, and then we want to know, you know, we want to know which of the products on our watch list are the ones we feel most strongly about so that

we're ready not only to buy Bitcoin, but when we think those other assets are at fair value or um below fair value, that we're ready to add those to the portfolio.

>> So, you're looking for entry prices for those assets.

>> Yeah. Yeah. Exactly. That that's the idea is to put them on the list. Let's

let's track track fundamentals. Let's

have a view and and then the ones that we think we feel most strongly about get, you know, basically make it into an even smaller list. Uh and those are the ones that we'll be looking to uh add to the portfolio.

>> This is effectively what you did during the bare cycle of uh 2022, I believe, and into 2023. And I think you you picked up some big winners, right?

Salana was one of those that you noticed in kind of the depths is like hey there's onchain activity here there's stuff going on here and you bought that on the lows. So are you looking to kind of repeat that that level of success?

>> That's the idea. Yes. And um you know that was an interesting one because at the time Salana was a new project. It

was a little bit harder to have like really strong you know fundamentals but it was more of a bet on the developer uh ecosystem at the time. And so yeah we we felt strongly that Salana was just like

way way way oversold and that that was a big winner coming out of this. we were

um allocating to assets like like Robin Hood and coin uh as well as crypto equities making it into the portfolio and um yeah that's the idea is let's find like what we think is the strong

strongest projects that are just wildly oversold kind of at the bottom of the bare market >> looking for gems here Mike this is going to be a lot of fun I think uh it's got me more energized even though we are in

a bare market and I don't like to look at prices but we get to do more research and of course this asset class um we are both bullish will be uh do very well uh

from a long-term perspective. So maybe

we will leave it at that. I will be following your work at the DeFi report.

We'll include a link in the show notes.

There's an option to be a free subscriber. You just access to the free

subscriber. You just access to the free reports or a paid subscriber where you get access to two weekly reports, all of Mike's portfolio holdings, when he does what, where he's allocated, and also um

access to some of those watch list assets. So we'll include a link in the

assets. So we'll include a link in the show notes for that. Got to leave you here. Of course, you know, none of this

here. Of course, you know, none of this has been financial advice. Crypto is

risky. You can lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but

frontier. It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.

bankless journey. Thanks a lot.