Bitcoin: Is the Bottom In?

0:00Today I sat down with Michael from the DeFi Report because he thinks there's a high likelihood that the bear market is over, the final bottom is already in, and we're currently in a bull market. That said, I don't want to spoil too much, so let's get into it.

0:21Obviously, the big question right now is: Is the final bottom already in for Bitcoin? What probability would you currently assign to the fact that Bitcoin has already seen its bottom?

0:25It's a great question. That's the question that's on everybody's mind right now. I think if you asked me this about a week ago, I probably would have said we're roughly 65% chance that we would see a lower low than the June 30 low, which was $58.5K.

0:51We cover the cycle from an On-Chain data perspective. We prepare weekly reports. We're covering market structure. We cover a lot of the high-level cycle KPIs. We're tracking Bitcoin's relationship with the S&P 500, with NASDAQ, and with gold.

1:08We're roughly almost 11 months into this bear market. Most of the On-Chain data and the signals that we're tracking there are indicating that we're very, very late cycle. We do a lot of stuff with market structure. And maybe I'll share my screen, and we can just kind of look at some of that data that we look at, and I can kind of get into this a little bit and why my sort of where the probabilities are pointing is starting to shift here. So let me share my screen.

1:42Okay. So this is just a little sample of kind of how we assess the cycle in terms of market structure. And what we're doing here is we're tracking the cost-basis cohorts, basically where Bitcoin sits at all times. We track this through the bull market. We track it through the bear market as well.

2:01And what you'll find is that when you get into a—you know, you're at the top of a bull market—you know, these cost-basis cohorts, these are sort of the, I call them the sort of top-buyer cost-basis cohorts. So this is where most of the coins consolidate during the bull market. And you can see that more than 28%, more than 29% of the supply was over $92K. That was back on October 10th.

2:31Now we're 11 months in. We can see that a lot of that supply has actually been passed to newer hands at much lower prices. And when we went risk-off back in the last September-October period and called for $65K Bitcoin, what we were projecting is really that most of the coins would actually consolidate into this cost-basis cohort, which is the prior-cycle-top cost-basis cohort, which is also what we saw in the 2022 bear market. The equivalent cohort at that time was like $17K to $21K or so.

2:58So last week when we ran this data, we were able to check that box. This actually had the most coins last week. We can see now that it's actually dropped below the $66K to $78K cohort. So that's kind of interesting.

3:23We had a big short squeeze last week. We had a 22% move off the lows, or we're actually at about 36% if you go all the way back to the June 30 lows, which is pretty much in line with the bear-market rally that we saw back in April and May.

3:38So this data looks mostly complete to me. When I analyze this, there's a chance that we could see Bitcoin fall back again, but I think it's going to be hard for us to get all the way down below and into deep value, below $58K or so.

5:44So this is kind of one way to look at market structure and have confidence that enough of the coins that were purchased sort of at the top zone over the last year in 2025, that a lot of those coins have been rotated to stronger hands. We can then start a new base and kind of move into the next expansion phase. So that's one example of data that we look at to build conviction in this.

6:25We're also looking at realized cap. So realized cap is tracking basically the aggregate capital that's coming into the Bitcoin network. Somebody buys Bitcoin at $10, sells it to someone else at $100. You've just created $90 of realized cap.

8:37And so in bull markets, we typically see the realized cap rise pretty aggressively. We added $750—$740 billion to the realized cap in the last expansion phase. And then in bear markets, we tend to see some of that capital get destroyed as the guy who bought it at $100 sells it at $70. Right now, you've taken $30 out of the realized cap.

10:26And so what we're really tracking here is the realized losses relative to the increase in the realized cap to sort of normalize those losses as Bitcoin progresses. And as you can see here, we've taken out almost 30% of that $740 billion in realized cap that was added last cycle. At the equivalent stage of the 2022 bear market, we had taken out almost 50%.

12:14So we're kind of hitting a lower low, or a more shallow low, which is also in line with Bitcoin's drawdown, which came down about 54% at the lows back in 2022. It was closer to 75% here. So this makes sense to me that this would also be a lower low.

29:34We could still see it go up into the sort of low thirties, which is kind of what I'm projecting. But it makes sense that it would be a lower low just because of the size of the denominator, which is that $740 billion in realized cap.

29:39So again, kind of another thing for me to look at to say: This looks pretty much in line with what I would expect to see at the lows. This is just another view of the same data, just showing the total realized losses. Three hundred twenty-three days into the bear market, you can see we have surpassed where we were at the same part of the cycle back in 2022.

29:39So again, what we're trying to do here is aggregate a bunch of data, paint a picture of what we think is happening On-Chain and with the market structure and with the cycle data to sort of assess probabilities. We don't know—nobody knows—if we've actually bottomed or not, but we kind of assess probabilities based on what this data is telling us.

33:14And then when we look at high-level cycle KPIs, things like market value to realized value, market value to realized value Z-score, we talked about the realized cap, supply in profit, long-term-holder supply in profit, some sort of long-term momentum indicators. Again, all of these indicators—you can see we got pretty close to what I would expect to see at a cycle low.

33:24The highlighted numbers here are numbers that I think could possibly drop lower, but they could drop lower without Bitcoin actually hitting a deeper low than what we saw on June 30th. So, as you can see now, we're potentially moving into metrics that look more like an early bull phase of a cycle to me. We can get into what I'm looking at to really confirm that.

35:59When you combine the market-structure data and these sort of high-level cycle data that we track, we also track a lot of these current conditions. We spent a lot of time this week doing what I would call, as the smoke clears from the volatility that we saw last week, a lot of work to assess: Was that an idiosyncratic move that Bitcoin made last week that was mostly related to market positioning, short positions, Trump comments in the market, basically blowing out shorts at a number of different levels and creating a pretty reflexive move for Bitcoin?

36:09Again, up 36% or so off those June 30 lows, what I would say is, to me, there's not a lot—we've taken out most of the open interest in the market. So what we just saw was not really what you would typically see. To me, it was a healthier move off the lows because it was a lot of Spot buying. Yes, there were short liquidations and some market positioning that played into that, but I think when I look at the derivatives market, to me, that looks pretty healthy right now in terms of a lack of leverage and really kind of resetting a healthier base.

44:48When we look at ETF flows, ETF flows came back really strong. Sorry, I don't have a chart for that right now. When we look at ETF flows, it looks like we had the most pain in the ETFs in the sort of May-to-June or June-July period. We've now seen about $1.8 billion in inflows over the last week. That was in the top three percentile since the ETFs came into play. So, a pretty big move in the ETFs last week.

44:54And we're tracking a lot of stuff just related to Saylor, MicroStrategy, and what the miners are doing. Miners have been selling. We typically see miner capitulation at the cycle lows, so we've been seeing some of that. We're tracking Bitcoin Dominance.

44:54And what's interesting to me is when we saw that move from Bitcoin last week, we had a very large breadth move across the entire crypto ecosystem after Bitcoin moved. That is a little bit different from some of the bear-market rallies that we saw earlier in the cycle.

44:54We've seen a pretty nice little uptick in Stablecoin supply, USDC supply, and DEX volumes. We've seen a pretty big uptick in what I would call the animal-spirits sector of crypto. This is sort of the fast-trading, Pump.fun, meme-coin trading.

44:54So we're seeing an uptick in desire to speculate, an uptick in people that want to come back On-Chain. These are all pretty positive indicators in terms of where we could be heading here.

44:54But for the most part, I've been of the mind that the crypto cycle has largely bottomed. We're almost 11 months into a bear-market cycle. All this data kind of points in the right direction for me.

44:54And what's been holding me up on having real, strong confidence that the lows are in is more the macro setup. I'm happy to get into any questions you have on macro. But what happened last week, which really kicked off that short liquidation and the big move that we saw, was largely a macro development.

45:09That's really important. That is really why I'm shifting to say: Okay, maybe last week we were saying a 60% to 65% chance that we could hit a lower low, to actually going the other direction, saying probably 60% to 65% that the lows are now in because of these signals that we're seeing from the U.S. Treasury related to volatility control of the long end of the yield curve and what that potentially means for Bitcoin and other sort of non-sovereign hard assets.

45:11So, a bit of a ramble, but that's kind of the high level of the market structure and how we're thinking right now.

45:11Okay, a lot to unpack here. Yeah, very, very interesting. So we're definitely going to talk a lot more about macro later.

45:11First of all, regarding the timing and the price: As of right now, it would be an anomaly price-wise and in terms of timing, in my opinion, or at least when I look at the data. Because timing-wise, you could say, well, historically, the low should be in around October-ish, but not in July.

45:11And regarding the price, historically we've seen much, much larger drawdowns in comparison to this bear market. Also, you've shown the unrealized losses. I mean, yes, they're higher in comparison to the last bear market, but Bitcoin as an entire asset class is also much larger, right? So you would expect this to be much higher, in my opinion, right? So what do you make of that?

45:11So that basically means this time is different. “This time is different” are the most dangerous words in investing. Do you factor that in—the timing, the correction? Is that something that still makes you a skeptic?

45:11I would probably say, I guess my view on it is it's not that different. I think it's pretty much aligned with what I was expecting to see in a bear market. We've got—we're almost 11 months into it. Yes, we bottomed sort of late June. So maybe like nine months or so into the bear market if that was the low.

45:11We've seen sort of what I would expect to see in a bear market in terms of basically breaking the key levels early in the bear market. If you go back to the November-December period, we came down to $84K. We had a bear-market rally up to $97K. Then we dropped down to $60K, went to $82K. Then we dropped all the way down to $58.5K, and now we're sort of bouncing out of that.

45:11So the structure, the way it played out, the timing, the structure of it, the sort of social sentiment around all of it, to me, is very consistent with what I would expect to see.

45:11I think the thing that maybe is a little different is that it's a shallower bear market. If $58.5K was the low, then that's like 54% or so off the cycle high of like $126K. We went down 75% or so back in 2022. I think we went down 83% back in 2018. So, yes, that's a shallower bear market.

45:11And you mentioned that the realized losses have surpassed 2022. But maybe you're looking for it to be significantly higher than 2022 because of Bitcoin's larger asset size, its growing market cap, all those things.

45:11I'm not so sure if I follow the same line of thinking, because the way I think of it is the market's also becoming more sophisticated. There's more access to information. Bitcoin has been around for a lot longer, so people are becoming more used to these cycles. And there's more data. There's more information out there.

45:11So, yes, the realized losses haven't exceeded 2022, but I also think you have to factor in that the investor base is becoming more sophisticated. And then the other piece of it is that the data is not picking up the ETF flows that are going through the ETFs. It's roughly 6% of the Bitcoin supply sitting in those ETFs, so that's not getting factored into that data.

45:11You have to think there's probably more realized losses that are in those ETFs. I think the ETFs are largely probably around cost basis now, so most of those holders have come back to cost basis. People tend to want to allocate again once their portfolio looks like it's above water.

45:11I see what you're saying, but my view is that it's actually pretty much what I would expect to see in a bear-market cycle. It doesn't mean the lows are in, but I think from a probability perspective, it's starting to point in that direction.

45:11Yeah, makes sense. I'm currently in the same position. I also changed my view on that. Before, I was leaning more towards—definitely, or not definitely—there's a higher chance of seeing a lower low. But as of right now, I would say the same.

45:11What makes us very, very different in terms of what we look at is the macro data, because I myself don't really look at it. What does the macro environment tell you as of right now? And why do you say macro as of right now is very important, and this made you extra bullish, so to say?

45:11Yeah. So the biggest risk that I was looking at over the last month or so is largely related to Treasury yields here in the U.S., long-end yields. The 30-year yield got up to like 5.36% or so. So that was breaking out of a 20-year high for the 30-year.

45:11Rising interest rates, especially on the long end, are not usually good for risk assets. That has to do with discount rates and valuations and investor allocations when rates go up like that.

45:11And so, if that is going to be playing out, then you have to ask yourself: Why is that happening? It's happening because the economy is running hot here in the U.S. It's natural for yields to rise when the economy is running hot and inflation is running hot. There's a ton of fiscal spending over here.

45:11If the government's going to keep spending money and then getting into geopolitical conflicts that are creating rising inflation and rising oil prices, the bond market is going to demand a higher yield for those risks that are being taken, right? It's a natural thing that's playing out.

45:11So it just gets a little tricky when you've got debt to GDP at 122%. Our interest payments have become a pretty significant chunk of the overall spend, the overall budget of the government, pretty much in line with what we're spending on the military.

45:11So the bond market is sort of looking at all these things and saying: There's a lot of risks that are starting to build here. We need more compensation if we're going to buy the debt of the Treasury.

45:11This is what was giving me pause, and I was having trouble seeing how that starts to get reversed. That's not great for risk assets, not great for the AI trade, and not great for crypto.

45:11But what's interesting is, if we go back to July, there was the largest foreign-exchange-market intervention in the Japanese market towards the end of July. And this is kind of a signal of just what's happening around the world related to the war in Iran.

45:11Japan has very high inflation right now. They've got rising interest rates as well, and their currency has been getting crushed because of this inflation, which is creating a very large gap between U.S. rates and Japanese rates that opens up for basis trades. But it's causing a problem domestically in Japan that they have this high inflation. They don't produce their own energy, and so they have to import. And that's part of the issue here.

45:11So they need to strengthen their currency. And to do that, typically you would sell another asset to buy your currency, to strengthen your currency and try to suppress inflation.

45:11And what happened was the U.S. actually coordinated with them to strengthen the yen. But there was concern that they might have to sell U.S. Treasuries. They're the largest holder of U.S. Treasuries. We didn't want them to sell Treasuries; that would cause long-end yields to go even higher.

45:11So you could see that the U.S. Treasury was becoming concerned about volatility in the bond market, and so they coordinated with them. We actually sold euros instead of dollars and bought yen. And we basically gave them the opportunity, by giving them a loan, to go out and buy yen instead of selling their Treasuries.

45:11And they also set up a facility for basically all of the major trading partners to do the same thing, so that if they need to strengthen their local currency, they don't have to sell Treasuries.

45:11That was the first thing that we saw, the first signal that this is a concern of the U.S. Treasury. They're coming up with policy to try to prevent this volatility in the bond market.

45:11If we fast-forward to last week, the day that Bitcoin went up roughly 22% or so and had that short squeeze came after the Treasury announced that it was going to double its buyback program from $2 billion to $4 billion on 10- to 20-year bonds and 30-year bonds.

45:11So that's, again, another signal that they're concerned about volatility in the bond market and that they're going to try to suppress that volatility by doing buybacks—basically removing longer-duration bonds from the market and replacing them with T-bills, which is almost more like currency-like liquidity.

45:11That is positive for risk assets and liquidity conditions. And it's also just a signal to the market that, hey, we're not going to let the bond market find its true market price. We're going to intervene because we don't want a chaotic repricing of the long end of the curve.

45:11That would probably cause an unwind in the AI trade, and it probably wouldn't be great for crypto either. So that was a signal that they sent. The next day they said that that doubling would be the floor, so they're prepared to do even larger buybacks than the $4 billion that they announced.

45:11The Treasury General Account, which is basically the checking account of the U.S. Treasury, has been stockpiled to almost $1 trillion right now. There's also been some speculation that they could potentially use some of the cash in there to do buybacks as well.

45:11My take on this is that this is basically a Treasury QE-type program here. It's not as powerful as Fed QE, when the Fed is printing money and then just going up and buying—just pinning interest rates and buying up all the bonds. It's not as aggressive, but you're removing the long-end bonds from the free market and saying to the market: Hey, you don't need to absorb it. We'll absorb it for you. And we're going to give you this cash-like liquidity to get into the system as a replacement.

45:11To me, that's a stimulative move. And I think that's why we saw Bitcoin basically go up so much. Part of the reason it went up so much is that there was positioning and there was a short squeeze, but then we saw the reflexive move behind that.

45:11We saw the move also in gold, which, again, is interesting. And then we saw 30-year yields coming down a little bit. So it's sort of a signal to the market that, hey, maybe you want to buy some hard, non-sovereign assets.

45:11We're entering a period here where it looks like there's going to be debasement, monetary repression, that type of setup. To me, when you see stuff like this, you've got to react to it. When the conditions change as an investor, we have to update our views.

45:11We were already heavily allocated into the market at that point, but that just gave me more conviction that the lows could be in because the On-Chain data was already telling me that we were kind of getting to what I would say is a pretty comfortable level of what we'd expect to see at the lows.

45:11Now that Bitcoin has rallied out of that, it's going to be interesting to see where we go from here. And I'm happy to talk into some of the key indicators and sort of price levels that we're watching at this point.

45:11And that's also my next question. What makes you more confident—or is there any indicator level or something that would make you even more confident—that the low is in, or the opposite, something that would make you expect another major leg lower?

45:11Yeah, I think the short-term-holder cost basis for Bitcoin is about $70K right now, and the 200-day moving average is just below that. It's like $69.2K or so. So that is a key support zone for where we're at right now. That's kind of the number that I'm keeping an eye on.

45:11If we drop below $70K or so, then there's a chance that now we're sort of back to where we were a few weeks ago. We're kind of between the 200-week moving average, the longer-term moving average, and what I would call the bull-market support band.

45:11So $70K is a critical level to hold. If we hold $70K, then I think the probabilities continue to move in the direction that the lows are in.

45:11And $82K is the 50-week moving average. When Bitcoin durably moves past the 50-week moving average and gets a week or two close there, that tends to be the bull market. To me, that's the indicator that we're back in the early bull-market phase of the market.

45:11The problem is that if you wait for that, you've missed the buying opportunity, right? That's going to come after the lows are already in. So you have to assess the probabilities and be in the market ahead of stuff like that.

45:11But that's really what I'm looking for to confirm the bull market: that we would move past $82K and establish that as support. That would indicate to me we're back in the early bull phase of the market. If we break below $70K, I would say the question is still out there as to where we're going to go from there.

45:11Makes sense. So another common concern among investors as of right now is the stock market, because many investors expect a larger drawdown in equities. First of all, do you share this view? Do you also think equities are going to have a correction soon? And if you do, do you also think this would bring down Bitcoin, would drag down Bitcoin basically with it?

45:11Yeah, I think I have had the view that we've seen peak speculation in sort of the AI trade. We had over a year or so of what I would say looked like a wealth-distribution phase for the AI trade. We went up a lot, and then we've kind of been in this sort of zone for about a year.

45:11It looks similar to kind of the Bitcoin and crypto cycle. We also had what I would call a blow-off top during that period. NASDAQ went up 30% or so in the April-to-May period, right after the ceasefires. That's a massive move for the NASDAQ.

45:11And that requires an immense amount of leverage coming into the system and also pulling a lot of investors from the sidelines who weren't in the AI trade, but everybody sort of got in the boat. So to me, that was an indicator that that may have been a sort of cycle peak. That would have been back in early June for NASDAQ.

45:11It's been unable to get back to that level. We had like a 10% correction or so, again bounced out of that, but we've been unable to get back to that level.

45:11And when you look at the high-flyer stuff, a lot of the memory stocks, things like Micron and SanDisk, if you look at those charts, they look kind of broken to me. It looks like they're in a pattern that looks pretty weak right now.

45:11So, yes, I think this issue that I just spoke about with the long bonds, in conjunction with some questions around the AI trade, the profitability of these companies, the demand for inference, dropping costs, and competing models— I think as soon as prices start to come off a little bit, people start to question the whole thesis and the whole narrative that was behind that.

45:11So I think we could certainly see another correction here. I don't think it's a recession, that type of thing. I think it would probably look sort of similar to 2022.

45:11If you go back to 2022, we had an environment where we had lots of inflation and rising interest rates. The Fed was hiking rates. So if the Fed has to hike rates in September, possibly October, or later in the year, I do think we'll see another correction in NASDAQ.

45:11So whether that impacts Bitcoin, what I would say there is that Bitcoin and NASDAQ have actually been most correlated in 2026. It's been the most correlated they've been in their entire existence on a sort of—we just look at the year—that's using the weekly Pearson correlation.

45:11With that said, it's still a moderate correlation. It's not a super-strong correlation. And historically, that correlation does break at various points in a market cycle.

45:11So, yes, that's a risk for Bitcoin. I think it would probably hit Bitcoin as well. But I would also say that what I just mentioned with these new policy signals that are coming from the U.S. Treasury, sort of managing volatility at the long end of the curve, and the reaction that we got from Bitcoin and gold when those policies were announced—to me, that's an indicator that you may be in one of those markets where those correlations are actually breaking down a little bit, where the capital wants to seek out a place that makes sense for these new policies that are coming in.

45:11And so I could see a scenario where NASDAQ drops, maybe Bitcoin doesn't drop as much, or just kind of chops around. But Bitcoin outperforms NASDAQ during that period. I could see that type of setup. I could also see crypto just getting totally caught up in that.

45:11But I do think the market structure for crypto suggests that it's less of a risky setup because most of the leverage is out of the system. Most of the assets are well off their all-time highs still. There isn't a ton of new money. It's mostly crypto natives that are still in the market right now.

45:11So you kind of have the healthy investor base in on the crypto side, whereas on the AI side, I would say you still have a lot of the hot-money speculation and that type of thing. So I kind of think crypto is in a better position right now. But we'll see. Nobody can predict what's going to happen.

45:11Makes sense. Yeah. What do you think about Strategy? Lately, we've seen a lot of panic around Strategy. They've sold some Bitcoin. They gave out a lot of new shares. We've seen the depeg of STRC. But as of right now, it feels like most of the drama is already over. So do you think Strategy is an attractive investment as well at current levels?

45:11You know, it's kind of interesting. I've never owned Strategy, and I've always kind of just—if I want to own Bitcoin, I own the ETFs or Bitcoin directly. And I've kind of always viewed that if you want to get leverage in crypto, you can just find beta to Bitcoin and find a high-beta asset that you have a thesis for, that has a different sort of business model, token economics, cash flows, things like that.

45:11So I've historically structured my portfolio to have a store-of-value sleeve in there. It's a significant position in the portfolio. And then we try to identify areas outside of Bitcoin and sectors and themes and assets that we have a fundamental thesis for.

45:11With that said, I do think Strategy is kind of interesting right now because MSTR has been diluted and had a really rough bear market. So basically, what Saylor has had to do once we got down into the 60s or so is try to defend the STRC peg, which is his fixed-income product.

45:11How has he been defending that? He's been issuing MSTR shares, diluting MicroStrategy shareholders, taking that capital, and over the last month or so going and buying back shares of STRC to try to get that back up to par, and also taking some of that capital and putting it into a cash pool so that he can pay dividends on that STRC product and sort of install some confidence in the market for holders of STRC that there's runway for those dividends to be paid out to them.

45:11So he's defending STRC, he's diluting MSTR at the bear-market lows. What's interesting to me is I believe this is going to flip, and he's going to start to pay back MSTR holders.

45:11How is he going to do that? So he just issued about $2 billion worth of MSTR. About $1.6 billion of that is now in a cash pool where they can buy Bitcoin with that. They also have three years of runway for that STRC product, which is now trading back towards 100 on the chart.

45:11And if that gets back to par, he could potentially issue more shares of STRC, and now he's no longer diluting MSTR shareholders. He's actually accretive to them.

45:11So if he's taking the capital by issuing STRC and he's going and buying Bitcoin, now he's increasing Bitcoin per share for MSTR holders, which he has not been doing so far in this bear market.

45:11So I think it's kind of interesting from that perspective. MSTR holders have been killed, and he's had to sort of dilute MSTR holders to defend this whole capital structure. But it looks like he's kind of in a good spot now. He's got runway to pay STRC, STRC looks like it wants to trade back to par, he's got cash to buy Bitcoin to sort of get MSTR holders excited again, and then he could potentially issue more shares of STRC if it gets back to 100 and then buy more Bitcoin, which increases Bitcoin per share for MSTR.

45:11So I think it's an interesting setup. And then when you look at just MSTR's performance against Bitcoin in the last cycle, it significantly outperformed Bitcoin on the way up. It's more volatile on the way down as well, but it significantly outperformed. It had high beta to Bitcoin.

45:11So it's a way to take, if you have a view on Bitcoin, I always like to be in things that I think will actually outperform Bitcoin through a market cycle. So I think it's kind of interesting from that perspective. I don't hold it in my portfolio, but it is sort of an interesting setup right now, I'd say.

45:11Makes sense. Yeah, I have the same opinion about Strategy as of right now. I think it's very interesting. And this dynamic between STRC, their reserve, and their shares—it's going to be interesting how it's going to develop.

45:11So, last question, because before we talk a little bit more about your newsletter: What do you think is the one thing most crypto investors get wrong right now in the market? What do you see in the market that you think is just wrong as of right now?

45:11So I can't think of anything that people are just totally missing. We have been able to get into some nice positions, and we got into some stuff I think we were early on. Maybe the market was not seeing it and is starting to see it now, but I think we're still very early.

45:11And a lot of the work that I do in bear markets—we have something called the watchlist. It's about 35 to 40 assets that we think are investable, that we've initiated coverage on. We build dashboards. We do research reports, fundamental research reports, on these assets.

45:11And through that work in a bear market, we've identified some of the key sectors and themes that we think are going to be the best performing in the next expansion phase.

45:11One of those sectors or themes is what I call fast DeFi social-trading experiences. And we had a thesis for Pump.fun. Pump.fun was extremely oversold. I started talking about it, writing about it. We built, I think, one of the best dashboards tracking all of the data for Pump.fun.

45:11And I was sort of shocked at the user retention that they were showing in the bear market, the level of activity that was on there, even though nobody was talking about meme coins. Prices are way down. There's not a lot of speculation in the market. So I thought that was really interesting, and I started to build a thesis for that.

45:11I would say the market has caught up to me on that, so it's not something I'm necessarily contrarian on anymore. But that sector, I think it's important for people to understand why that's sticky and why that's probably going to be one of the best-performing sectors for this cycle.

45:11The other sector or theme that we identified is Perps and options. On-Chain options, I think, are going to be an interesting segment, similar to almost what happened with Perps in the last cycle. There's some interesting projects out there that we built positions in. That's starting to become consensus now, I would say.

45:11These are things that we were buying when nobody was talking about them. We were covering these assets in the watchlist, sharing portfolio alerts with our members around these purchases.

45:11So, yeah, it's maybe a little bit harder for me to find something that I'm totally contrarian on. I would say the big picture is what we were talking about with the macro setup.

45:11I think we're entering a period here that kind of looks like what we saw in the 1940s and 1950s with monetary repression. And we have a very high debt to GDP, and that setup is very interesting for crypto.

45:11And what's possible to me—and maybe this is a good way to answer your question—is that, given the financialization of Bitcoin, Bitcoin has been integrated into the financial system. That is now happening down the curve with Ethereum, with real-world assets, with Solana, and with ETF products.

45:11So you're just seeing more and more integration of crypto into the financial system. We have this setup where crypto is no longer the pariah of finance. It's actually being integrated into the system.

45:11And we have this macro-geopolitical setup with an administration that is pro-crypto. And they're telling the market that, hey, we have to manage volatility at the long end of the curve. Capital can move very fast these days.

45:11And I think what we saw with Bitcoin and with gold is a signal for what's potentially coming here. And I think people should sort of re-underwrite their thesis for crypto right now because this next cycle could be much, much larger than people expect.

45:11And I think because crypto underperformed last cycle—there were other areas of speculation, AI, and gold really outperformed crypto, or outperformed Bitcoin, during periods of the last market—I think a lot of crypto investors sort of feel like the dream is over.

45:11And I would say, I don't know, I think this is a really, really good-looking setup for crypto over the next few years. And you should sort of re-underwrite your views on what's coming and cleanse yourself of what just happened, because what's coming is going to be different, I think, from what we saw in the last cycle.

45:11Sounds very good to me. So you also have a crypto newsletter that I really like, that I'm personally subscribed to. For people who've never heard about your crypto newsletter, what would you say? What is it about, and who is it for?

45:11Yeah, great question. You know, I love what I do. I've been building the DeFi Report since 2021, and we serve both institutional and retail investors.

45:11I'm managing a portfolio. I'm an investor. I'm a consumer of information and data in this space. And I've tried to create something that allows people to follow the framework that we've created, which works really well for us.

45:11We're cycle investors. We follow the big cycle, right? I'm not a trader. I'm not in and out of positions. I'm a sort of high-level thinker, building theses for assets, themes, and sectors that we want to be in.

45:11We initiate coverage on those assets, come up with fair-value targets, and provide a framework for following the cycle, as well as portfolio management and execution through that.

45:11I think this has worked really well for me. We've been able to return a lot of value to the DeFi Report readers. We were going risk-off last October, as we mentioned, got into a nice cash position, and we've been building out and sharing all of our fundamental research and trade alerts, allowing people to have a thesis for what we're seeing in the market.

45:11They can pair that up, maybe copy-trade, or incorporate some of what we're doing into their own portfolios. So it's going really well.

45:11The portfolio is up 62% over just the last year or so through the bear market. That's really awesome. If I'm at the end of a bear market and I'm up, if the portfolio is kind of breaking even, I think that's kind of a success.

45:11So we're in a really good spot. Our non-Bitcoin exposure is up 87%. And we've got some really good positions in place. We're about 10% cash in the portfolio, and we've got some key themes and sectors that we've identified.

45:11What we try to do is be as transparent as possible. We try to identify all the problems with research shops and other data companies, and we try to give people a product that's really affordable, that has really, really strong ROI behind it.

45:11I think, you know, happy to have you as a customer. I think we have a 20%-off link that we can share with followers of your show if they're interested in checking us out.

45:11Yeah, people, I'm going to put the link in the description—20% off. I think it's for the yearly plan, if I'm not mistaken.

45:11Yes. Yeah.

45:11So I can definitely recommend it. And, yeah, Michael, thank you very much for taking the time.

45:11Yeah. And maybe we'll see each other again in about three months, when we're hopefully in a bull market and Bitcoin is around $90K to $100K-ish. Let's see. And, yeah, thank you very much. This was awesome.

45:11Let's see. Yeah, no, it's always fun to come on and chat with you. And, yeah, three months or so. That sounds about right to me.

45:11Sounds good. Yeah. Okay. Awesome.