Why the Massive Sell-Off Could Prime Bitcoin for Takeoff in 2026 (w/ James Check)

All right, James Check.

I'm a huge fan.

Obviously, at CheckMadi, follow him, check on Chain.

The newsletter, he does great information,

probably my favorite Bitcoin analyst to go to for

the on-chain analytics and the what is really going on

underneath the service.

So thank you for being on the show, James.

I appreciate it.

Thanks, John. It's good to be here.

Let me start with the first question.

We'll get into the on-chain stuff real soon,

but I always got to ask all the guests,

what is your favorite thing about Bitcoin?

Yeah, so for me, it's how much it's taught me.

Just it's like a forcing function to learn stuff.

I mean, I'm a tunnel engineer by trade or a civil engineer.

And Bitcoin, like, I have no idea about finance

back when I first got into it.

Bitcoin was the very first thing I bought.

I paid my tuition and got minced in the bear market of 2018.

But there's something about markets that just fascinated me.

And like, as we all know, you go down the rabbit hole

and you just keep learning new things on-chain data.

What is that?

That's a whole thing that we had to just like pioneer

and learn what it was.

And even today, I'm combining what goes up

on the on-chain stuff with futures and options.

Now, Ibit's got options and ETFs.

Like, we're watching the monetization

and the maturation of an asset that is both loved and hated

and like, incredible performing

and also has horrendous drawdowns.

It kills people's like mental capacity.

So I love it.

I think it's such a fascinating forcing function to learn.

And that's what I love the most about it.

I couldn't agree more.

I mean, it's definitely taught me so much more about markets,

macro, micro, econ, you know, forget what I learned

in econ, econ, major, and college, you know, and study.

What is actually money, right?

Like, what is hard money?

What's the history of money?

What's sound money, yeah?

You've taught me a lot too, following you, you know,

as an analyst on Twitter and watching

that interviews you've done.

And one thing that I think you taught me

and a lot of other people last year,

there was so much conversation about why is the price

going sideways?

There's so much bullish news.

There's so much, you know, announcement after announcement

after announcement and ETFs and sovereigns

and all these things, why isn't it price going higher?

And then we crashed and there was just you, I think,

you know, you and a few other voices on Twitter saying,

there is so much more selling than you guys realize.

Like, can you go into that a little bit more

and just talk about how much selling there was last year of,

there was like some crazy amount of millions

and millions of Bitcoin that were the change hands

last year and the average price of people who got in

is like somewhere around where we are now

in the 90K range, is that true?

Yeah, so the general framework here,

we use a metric called Revive Supply

and long term hold of selling is a bunch of ways you can describe it.

People love to have an opinion on what a long term holder

is to them.

So basically, unless you are there two and a half days

after the Satoshi Genesis block, you're not really in OG,

you're not really a long term holder, you're just a trader.

Take all that away, just put your own personal definition

of long term holder aside.

The statistics show, it's like it's actually a really

beautiful power law.

The longer a coin is held, the more likely it is to stay held

in a power law distribution.

So when you look at that in terms of probability,

what's the difference between 0.001% chance of being spent

and 0.001%.

Nothing, it's the same thing, it's not going to get spent.

Now, when do we see older coins?

And why we can use like six months or one year,

like some holding period, why does that matter?

Because I don't really care if someone bought yesterday

and sold today, because that's just like part of market,

you know, intraday stuff.

But when you've held a coin for six months, a year,

three years, you've put opportunity cost into that.

You could have owned in video.

You could have owned gold, you could have owned silver.

So there's like an emotional decision.

It's a much bigger decision to sell something

that you're holding disappointed with, taking profits on.

That's why we use this long term holder dynamic.

It's actually not, take away the long term holder name.

It's all about why someone is selling.

They've held it long enough that there's some imprinted decision

to hold, not hold, sell.

Now, in 2025, 24 was also a very big sell side year.

But 25 was the biggest we've ever seen

by every comparison.

If you want to look at the amount of one year old coins,

five year old coins, 10 year old coins, you name it.

It was an all time high in sell side pressure with,

and what we generally see, in fact, not generally,

always like reliably seen.

When Bitcoin rips the hardest, revive supply picks up.

And what happens when revive supply picks up,

the price stops going up.

So it's one of those good things.

It was like, oh, the price is going up,

and then a whole bunch of people sell.

And then the price stops going up,

but no, they didn't really sell

because they're not long term holders.

This is like a narrative where Bitcoin has loved

to convince themselves that no one sells

because they didn't sell.

So what we saw from April onwards,

we got that initial low tariff counter and all that stuff.

From April up until October,

it was basically a linear increase

from a billion dollars a day, up to $3 billion a day,

being sold by these revive supply.

Now, there is nuance there.

Not every old coin that spends on chain is sold.

This is very, very true.

However, when you see a linear up trend

from one billion to three billion a day,

and then the price starts doing this and curling over,

it doesn't take a rocket sign just to be like,

there's probably at least one of those coins

that was sold and clearly it's over saturating demand.

So that is dropping off a cliff as we speak right now.

So it's down and back down about one billion a day.

But this is a great example of like,

how can sale a buy 10,000 Bitcoin on the price goes down?

Because HODL has sold 12,000 yesterday

and they sold another 15,000 today.

There's just a lot of coins coming back to market.

So it was a massive sell side event.

And you know, the other argument I see people come up

and say it's like, it got to 100K in February.

Why didn't they sell in February?

Why are they choosing to sell now in June, July, November?

It's like because life changes over the course of 2020.

I mean, a lot happened in the world, right?

So people's decision frameworks, you know,

it hits 100K and then they like,

they got the tariff tantrum and they think,

oh, actually, you know, I've got to take the next round.

There's liquidity for it.

There's all sorts of reasons why people make decisions.

Decisions take time, people's life changes.

There's all these types of dynamics.

So in my view, that was the number one headwind.

There's a lot of folks who like to say,

oh, the price has manipulated and blah, blah, blah.

It's like, look, on small time frames,

there's manipulation happening all over the place

in every market, always forever.

But over the long arc of time,

I'm very convinced that you don't need a thesis

that is like, it's manipulated.

Oh, and some hobblers sell.

Just flip that around.

A lot of hobblers sold.

Oh, there's been a manipulation going on.

But like, which one makes sense to pay attention to?

To me, it's the $3 billion a day

that's like consistently coming back to market

every time the market goes up.

So that, to me, was the big headwind.

It's only the people really only started to cotton on too.

When we got down to like 100K in October

and heading into November,

people only started to realize, oh, wait a second,

there's a lot of selling and then the debates happen.

They're not really OGs, it doesn't matter.

One saw Bitcoin as one saw Bitcoin.

They could be a momentum trader

who was just sick of Bitcoin not going up

for six months while Nvidia's punching through the roof.

So by the way, those long term holders,

they're the ones that got us to $2 trillion

as a market cap.

They're the ones that like did the initial work.

And then the other side of it is

that those momentum traders

when Bitcoin bottoms and at will bottom

and when Bitcoin starts moving back towards the highs,

which it will, where do you think

those momentum traders are going to go?

They're going to come roaring back in

because that's what they always do.

So I think it's one of those things

of just like understanding expectations,

understanding that like just because you didn't sell

or don't want to sell,

doesn't mean there's a pool of people

who don't sell or aren't selling.

It's just a grounding anchor.

And once you accept the people's sell

and then you realize we can measure that sell side,

we can then start to go, well,

now we've got a risk framework

because when they stop selling,

that's a good thing when they're selling a lot.

It's usually very euphoric and it's times

it's like take a step back.

And you know, for me,

I turn off my daily DCA

when Revive Supply starts moving

because it's very simple.

I'd like tops form when lots of people sell.

I don't like buying tops.

I've done that many, many times.

Like as a Bitcoin,

oh, we've all done that.

I've done my, I've paid my tuition.

Now, I just buy when people are not selling

and more importantly,

when all the people who bought the top,

when they start capitulating in a loss,

now I get very interested

because you're now looking at the less informed,

less experienced faster money speculators,

when they get flushed out,

that's huge.

They all do it at the same time.

They all sell the bottom

and they all decide to go max short in futures markets

and like, I love that.

That's the kind of contrarian pattern

that we're waiting to see.

So we peaked up to like 126K or whatever it was

and then we obviously came down to almost the low 80s, right?

And then now when we're doing this,

the third week of January,

we're in the mid 90s-ish.

So well, first of all,

curious, have we seen that point

where you think we've seen,

those people all come and capitulated?

Did we see that yet?

We've seen a capitulation.

I'm not quite sure we've seen the capitulation.

Same way that there is many a top

and then there is the top.

So this current drawdown,

I'm thinking about it like a bear market

and check the bear first emerged in like mid-October.

I wrote a piece called On the Cusp,

where I sold my MSCR at 300 bucks.

That was my risk position.

I was like, there's just a bunch of things here

that don't look overly great.

So I'm taking away risk position.

My thesis that MSCR was going to outperform Bitcoin

on the highs.

It just didn't happen.

So I said my thesis was wrong, exit.

And I'm just going to sit back and wait and see what happens.

And then as we got down to 80K,

there is a capitulation that's occurred.

We've seen a ton of people who bought the top sell lower.

And just to give a couple of stats around like a,

I've called like the redistribution

or the restructuring of the market.

When we broke below 90K, 70%.

So if we value every single coin

based on when it last moved,

think about like the acquisition cost,

someone invested to buy 100K Bitcoin,

they put 100 grand in the line.

70% of the capital that's ever gone into Bitcoin

was underwater.

So that's at 90K.

So that's a monster amount, right?

That's a super majority.

Now at 95 or 97,

I figured exactly the price,

but on the bounce,

basically the higher the price were at the moment,

that's gone from 70% underwater to 42%.

58% are now in the green.

So now that is constructive.

That's a good sign.

But markets are a process.

It takes time to hammer out bottoms.

And I think that's the right way to think about this.

I think it's a bear,

but it's not going to be a bear like previous bears.

Even if we go and hit price models and levels

and everything that previous bear markets

also won't be like previous bears.

So the severity of this thing is,

I don't believe it's going to be anywhere close

to what it's been in the past.

So the bear is going to be different,

but bear markets are a mindset.

And I think there's a lot of people

who are going to sell about 95, 98, 100.

There's a lot of key price models

that people will just look at

and say, you know, 50 week moving average

I'll sell there.

So it's going to take time for the market

to digest the move that's already happened.

But I think a lot of people who are like,

oh, thanks a lot to you in four years.

So you're at 10K.

I think those folks are going to be proven wrong.

And then I like one of my favorite thought experiments

is looking ahead.

Let's just say we bottom at 80 or 70 or even 60.

Let's just say like that range.

Will people reset their four year cycle charts

like they did when FTX imploded or COVID

or the 2018 bottom or 2015?

Will they completely reset everything?

If we pull back 45% or 50%,

and then we go to new all-time highs,

like at the end of this year,

are people going to call it a new cycle or a super cycle?

An extended cycle, a left translated,

a right translated, an upside down,

like people are going to lose their mind.

They're not going to know how to think about it.

And that's my favorite thought experiment at the moment.

I think people will get lost in the soup

of trying to explain four year cycles,

bull cycle, bear cycle.

I'm looking for that supply and demand balance

and just seeing when it ticks over

to be a more favorable condition.

I don't think we're quite there yet,

but there are certainly some green shoots starting

to pop up.

So I'm not ready to call that like the bottom is in.

My greedy self, the most bullish scenario

I can possibly paint right now

is actually a plunge back down like 80K

or go below 80K,

but then hammer candle right back up again.

That would be a true capitulation style event.

What we don't really want to see

is it go down below 80K, hit to like 70,

and then just stay there.

That would be not a great sign

because that is starting to say like,

probably head down into the 60s or up of 50,

something like that.

None of us really want to see that,

but also if you want to smoke out

all the bears and get them super bulled up,

like you've got to go through these processes.

Yeah, I heard you say that recently

that you actually think it'll be bullish

if we went down again back down to 80 or even a little under.

I'm curious, is that because basically what that means is

the people who are the weak hands,

or you know, I'm just going to use those sort of,

maybe that's a little too simplistic way to put it,

but the weak hands who bought and just hoping

it would go back to 100,

so they could sell it 100,

we can get them to sell,

and those coins rotate to, you know, more hotler,

you know, long-term conviction hands

because those are the people who step in when it dumps.

Is that correct?

Is that sort of the way?

Yeah, it's kind of the market psychology of,

so if we think about, since we hit the old time high,

we're kind of grinding down through 110, 105 and 100,

and there's a ton of people who are like,

oh, but what if it bounces?

Oh, but what if it bounces?

Oh, and then it finally gets to 80, like, oh man,

I missed it, didn't I?

I missed the top again.

So then what happens is you get a bounce back to 95 or 100,

and then they go, that's good enough, I'll take it.

So you get that initial resistance

on these kind of bounces higher.

A lot of people de-risk,

the people who look at technical models,

like I'm a mentor to the downside,

they look for those opportunities to de-risk,

and then you get that final flush out,

which just gets rid of all the remaining speculative capital,

it gets rid of all the people who got in early,

thinking like, oh, 90K, that's the bottom,

let's jump in now, and then it smokes into the downside,

and they go, oh man, it is a four-year bear,

and then they all just get flushed out,

and what generally puts the ultimate bottom in,

you get a mass capitulation of people

who bought high-selling low,

and we see this a lot in the on-chain world,

but then the real icing on the cake,

so many of these levered degenerate traders on futures markets,

they've been long the whole way down,

liquidated long, oh, don't worry, this one,

this is the bounce, oh no, liquidated bank,

and they long at the whole way down,

and then like clockwork,

they all go on Twitter or YouTube,

they find their favorite influence, they're like,

oh, look, he's found this like magic indicator

that says it's going to 10K, I know what they need to do,

I need to win it all back by going max short,

so what happens is you get in the spot markets,

people just capitulate, and you see losses go through the roof,

and then all those degenerates go,

you know what, I'm gonna go max short,

because it is going to zero,

and then they just get short squeezed out into oblivion,

so you kind of need that like overconfidence of the bears,

and a complete and total destruction of wool market sentiment,

and that actually is what a bear market is,

I consider bears to be a mindset,

and what you need to do is completely flush out any hope

that there's new highs coming anytime soon,

people give up, and this is true of not just Bitcoin,

all assets, once people give up that this thing

is never coming back,

that's usually when you've probably

set some kind of a meaningful low.

So you mentioned the manipulation buzzword,

I'm not a manipulation boogie man kind of guy,

I don't agree with your thesis of the vast majority

of it's just normal market behavior,

and then there's some manipulation on the edges,

but that moment you talked about where it finally flips,

where like the traders have been logged the whole way

down getting liquidated, and they finally flip,

do you think there is some manipulation going on there?

I bring that up because there was this period recently,

which maybe it's finally over,

it was like the theory on Twitter was every day at 10 a.m.,

or some of these hedge funds were manipulating it to go,

you would see every day at the open, it would fly up,

two, three percent, and then it would just go,

and then it would fly back down,

and that happened multiple days in a row.

Yeah, far too, yeah, and you get to look at it.

So are those things connected?

Is there a manipulation thing there

that you have a theory about?

I mean, just just had a curious look.

Yeah, look, there's a lot of things to play here.

The period that you're talking about was over Christmas,

like over Christmas and into the new year.

Every single time I've ever analyzed Bitcoin

over that holiday period, my advice is the same.

Turn off the chart, walk away for two weeks,

because the price is going to be absolutely the same level,

and there will be the bodies of long and short traders

lining the roads to get there.

And that is exactly what happened.

Back in, FTX blew up, 2022.

November, December, we're grinding around like 1516K.

That Christmas period Bitcoin traded in a $250 range.

Just dead flat did absolutely nothing.

And in this market, we did the same

just with more like stair stepping pattern.

So I don't think it's manipulation.

I think nobody's trading it.

Everyone's eating their Christmas ham.

No one really is like all these algorithmic bots

are just like their program to do certain things,

but they're hitting lower liquidity pockets.

You know, I wouldn't call them manipulation.

I would say what you've done is you've removed

all the normal stuff, and all you're left with

is like the algorithm's fighting, like it's bought on bot crime.

This is always going on, but like there's no one else,

like all everything else walks away,

and you just kind of see these bots fighting each other,

losing money, and then everyone comes back in

and suddenly the market feels more normal again.

So I just think it's a liquidity environment.

Yeah, that's interesting.

I did hear that it was sort of like, you know,

these hedge funds like hunting to try to liquidate,

you know, the speculators, or got DJNs,

or go on 100X or whatever,

but that makes a lot of sense that it's just.

It does happen.

Yeah, yeah, no, no, that's the truth.

Like in the small time frame,

if you're on the one minute chart,

you will see markets go and hunt these liquidity pockets

because down on those very small time frames,

there are hedge funds and trading desks and whatever that they,

like, I mean, I can see it.

I can see where liquidation profiles is,

like literally for like a $15 subscription,

you can see all this stuff.

So it's not like it's like foreign scary information.

It's like you can see these pockets,

but these guys, their bots are designed to like e-cout

0.01% moves.

It's like suck these tiny little scalping trades.

They go look for these liquidity pockets

to hit them, they move back,

but what I think a lot of the manipulators

or the manipulation Boogeyman folks miss,

both sides have the same weapons.

You know, like the long guys have the same leverage canons

that the short guys do.

They're just fighting each other.

And if you ever really want to see how markets

like truly function,

next time you see the market go,

let's say 100K, probably a good level.

A really obvious psychological zone,

the 200-day moving average, choose your thing.

When you get some like really obvious resistance

or support line, jump on a Binance or a Coinbase,

go down like the one minute chart,

and you'll see the order book.

And when prices just like playing around in normal ranges,

you know, there's orders coming in

and they're moving around.

The second it goes and hits that like key psychological level,

like an important zone.

The trades just go ballistic.

Suddenly there's just trade.

It's all these bots and things fighting each other

to try and like breakthrough support resistance.

And then it bounces away

and then suddenly all that trading volume goes away.

So there's this like these dynamics

where it's coded in, when it hits this level,

everyone's doing something.

And then you find out whether there was like

a oversupply or an under supply in either direction.

So yeah, intraday stuff,

I mean, even for my charts, by design, I could.

I could absolutely do like intraday data for everything.

And my subscribers often say like,

is there gonna be like intraday down?

Like probably not because I actually would rather people

never, ever look at intraday stuff

because it's just bad for the brain.

Take a step away.

Don't get caught up in the day-to-day noise.

Look at things on a much bigger time frame

and you'll be far better off.

That makes perfect sense.

I mean, that's sort of where I led

is that a lot of its noise tried to find, you know,

whatever the signal is.

I do want to ask you about for your cycle,

but because you mentioned signal versus noise kind of thing,

you, there's some metrics that you talk about, you know,

repeatedly.

What would you say are the metrics that are sort of the signal?

If the majority of intraday stuff is noise,

but the zoom out, what are the metrics

that are the ones that are actual signal

that tell you, you know, real information?

Yeah, so some of my favorite tools is to keep it really simple.

What drives people?

Because I view all data really in markets

as it's a reflection of psychological behavior.

It's human behavior, right?

Compounded with leverage in people trying to make money.

Why do people make money?

Oh, sorry, make decisions.

They want profit or they're in pain,

some kind of loss or time pain or whatever.

So it's a psychological phenomena at the end of the day.

Now, what drives people to buy or sell?

It's generally how they're feeling

and what metric helps describe how people feel?

Things like percent supply and profit.

I'm MV RV, which stands for market value to realize value.

You can look at this for short term holders,

people who recently bought long term holders,

the whole market.

It's basically showing you how in profit is the average guy.

So if it's a very high, it's an oscillator.

If it's very high, everyone's feeling really good.

Twitter is very excited.

People have got big green numbers in their portfolio.

What are the smart money doing?

They're going to sell and take profit

because that's what they do.

Then you get the people who buy that top and market sells off.

And there's another metric,

which is kind of the sister called sopa,

spent output profit ratio.

So MV RV describes the unrealized profit or loss.

How good are people feeling?

Sopa looks at the same thing except only for coins

that are being spent and moving.

So what you see is that when people are feeling good,

MV RV is high, unrealized profits are high.

Sopa starts to tick up because people are taking those profit.

That's starting to look like a top,

the top, a local peak, a global peak.

Then you get the people who bought in the euphoria,

thinking, oh yeah, let's go, we're going to 500K.

And then it sells off down to 80 and sopa goes negative.

It means people who bought high are now selling low.

And at the same time, MV RV goes to low levels,

showing that people aren't feeling so good.

So for me as a hotline, having bought the top many times

in my life, I now prefer to look for when people are feeling

kind of crabby and when they're starting to capitulate.

Now I'm like at a minimum.

I know I'm not buying the top anymore.

So you know, you kind of do away with this idea of like,

I don't want to buy everything at the exact bottom

and then I only sell everything at the exact top.

That just doesn't interest me at all.

For me, I just don't want to buy coins when it's high

and I want to stack sets when I know it's not the top.

So just simply switching around your framework there

and like as a daily DCA, when we've got a short-term MV RV,

people are not feeling good below one

and short-term sopa is below one.

So people aren't feeling good and they're locking in losses.

My daily DCA is switched on.

And the moment we start moving higher,

where everyone's feeling good and taking profit,

I switch it off because now I'm not buying the top

and I am buying a bottom, the bottom, every bottom.

But I'm not buying every top.

Just a great way to flip it around.

Yeah, that's pretty interesting.

Do you use those?

Do you think that they're also able to say the reverse,

like times when you should theoretically sell

if that's the thing that YouTube people out there?

Yeah, yeah, totally.

And you know, I write primarily for hodlers.

So my assumption is I know there's people in my

subscribers who want to sell.

So the way I frame it up, I'm not selling,

but check the hodler isn't buying.

So like you can kind of connect the dots and be like,

if I'm not buying, maybe if you're a,

if you are a seller, might be expensive, right?

Whether locally or globally.

So that's how I like to frame it up.

It's like, you know, I'm very honest with what I'm doing.

When those metrics are high, yeah,

it's probably not the best time to be doing a big lump sum

and putting a retirement account in.

When there's a ton of people selling and taking profit

and everyone's feeling great and euphoric,

it's a much better time to just wait until we get a drawdown

that's no longer the top.

So we mentioned that four year cycle,

which I think, you know, there's a lot of talking about how

technically it's dead now, right?

Because we didn't have green, green, red.

We broke that because last year was down, you know,

6% or whatever was on the year.

My opinion I wish that meant we could just stop

talking about it forever, but that's not going to happen.

So, but I've seen you say something differently before.

I don't think you're like a traditional four year cycle

subscriber, you know, green, green, red.

Oh, that's going to happen forever.

You've talked more about like,

there's been three cycles that were not anchored

around the halvings.

Yes. You're going to that a little bit more

of what your thoughts are on the traditional four year cycle

thinking versus what you're thinking about cycles is.

For sure. So it is an interesting topic.

So first thing on the four year cycle,

it's definitely not driven by the halving.

First thing's first, on a bunch of my charts,

particularly ones that describe cell side pressure and demand,

I've actually got a hidden trace on there

where like you can talk with a legend item on

and it's for minus cell side.

So like, for example, when you, like,

and you have to zoom in like 50 times,

and then finally you see this tiny little squiggly thing

down the bottom, it's like,

so this giant chart of could be trade volume,

could be revive supply, could be, you know,

realize profit, whatever it is.

There's a bunch of these metrics that show

the amount of cell side.

And when you zoom in with an electron magnifying glass,

you can suddenly see,

oh, there's the minors down there.

Like, come on, they're so insignificantly small.

So, you know, again,

hold the cell 10,000 bit coin a day,

minus cell 450.

It's not even close, like orders of magnitude different.

So, minus haven't been an issue for a long time.

So, it depends how you wanna measure the four-year cycle.

Is it around the halving?

I would give that a firm boot out the door.

It's only gonna cloud your thinking.

If you look at it by days since the cycle top,

all the cycle low, this cycle peaks like exactly 1069 days

since the peak, which was then like plus or minus 14 days

of all the other cycle peaks.

So, the four-year cycle by time since top or bottom

is dead on, absolutely dead on.

However, if we bottom at 50%, 35%, below the all-time high

and then go back to all-time highs,

are people going to call it a super cycle or a new cycle?

And my view for a long time,

I think I've formed this opinion in 20th, 23, 23,

the bull will not be overly different from previous bulls,

but the bear will break people.

And I think we're in this,

what do this bear thing is we're in now?

I think this will be the thing that breaks people's four-year

cycle view.

It may not be as long, it may not be as deep,

it may not be either.

I think it's going to be like,

what is this moving forward?

Is the four-year cycle green, green, green, red?

Because that's purely based on the calendar,

which is like, how much does that really matter?

So, and also, if you go back through history,

like the manipulation, if you remove the manipulation argument,

you can remove the four-year cycle, pretend it's not a thing.

Can you explain what Bitcoin did based on other,

like just internal factors, 2017?

It was the first time it became a household name.

The infrastructure was there, Coinbase existed.

There was the ICO boom that brought in all the speculators.

There's a whole bunch of things that like,

caused that market to rally the way it did.

In 2019, that little mini bull,

that was plus token Ponzi in China,

they bought like 2% of the Bitcoin supply

in a handful of weeks, shooting the price up,

combined with people shorting the thing

to oblivion on Bitmax at 6K,

bang, next thing in over at 14, 2021.

The biggest stimulus that the world has ever seen,

combined with GBTC having a premium

and soaking up 660,000 Bitcoin in like four months.

So, that's a big demand sink.

And then you've got 2022, why did that happen?

Well, they started hiking rates for the fastest rate

in every history.

We had a complete and up to a fraudulent industry behind us

with lending desks and lunar and like, you know,

three arrows, FTX, Genesis.

The whole industry got smoked.

So, can you explain all of these dynamics

without a single word saying four-year?

No, like, sorry, yes,

you can absolutely explain the entire market structure.

So, in my view, thinking about things in a four-year cycle frame,

it's a great way for people to simplify the world,

but I think what that does is it anchors people

to something that just ain't so.

So, in many ways, you're better off looking

at what is actually driving the market

and using that information because that's real.

That's actually the supply and demand balance.

And if you stick with this four-year cycle,

when something doesn't adhere to that model,

you're going to get lost in the source.

And that's where I think a lot of people will make mistakes

moving forward.

They'll think that the four-year cycle continues

and I would actually argue it probably never existed.

When you say this bear, in this term,

in this cycle, this bear might break people.

You mean, just like break their model

of what they thought the four-year cycle was

because it just stopped behaving the way that they thought it was

and then, therefore, the way they're projecting

that it will keep prevent behaving?

In the same way that people didn't see the sell side

because their four-year cycle model said

that this was the most euphoric time of the bull market,

they missed all the sell side because, like, that can't be true.

It's the fourth quarter of the fourth year of the halving cycle.

So they ignore the information that is there

and in front of them because their expectations

are based on something that is infallible.

So likewise, on the downside,

if your expectations are based on something that must occur,

what happens if it doesn't occur?

And then you're going to be waiting for that thing to happen

and you're not going to see the real information

that's telling you otherwise.

Oh, it reminds me of, I did a video on this a while back

and I think it was you and a couple of the people

I was trying to explain why the M2,

the people who take the M2 at the global M2,

and they fit it to the Bitcoin chart with the like,

you know, made up 80-day, 180-day, 123-day.

192.56-day lag.

Yeah, it was like, you and a couple of the people

on Twitter explaining why that's not a thing,

why it's like, doesn't make any sense.

And I tried to like, synthesize this and make it to a video.

It's just like, like you said, it's fitting the chart.

Like, it's people saying, oh, the four-year cycle must work

therefore I ignore any data that doesn't fit it.

Maybe since I brought that up, can you explain your thoughts

on that global M2 thing and what,

see when you see those charts

if people are fitting it with the lag?

Yeah, so it's a beautiful example of curve fitting.

So global M2, they take the Indian M2,

they take the Canadian M2, they take the British M2,

American M2, Chinese, and what do they have to do?

They've got to, so by the way, this is monthly

or quarterly government done.

So first things first, you're starting off on the wrong foot.

So you're starting with government monthly, quarterly data.

And then what they do is they say, well, I can't compare

you aren't to, you know, to Indian rupees to Euro.

So I've got to convert them all into US dollars

because it'll have to be the same denomination.

So what do they do?

They take the dollar index and they convert Chinese,

you aren't into dollars and they convert the Indian

rupee to dollars.

And then what happens?

The dollar gets smoked last year, right?

Has one of the biggest pullbacks has had in a long time.

So what happens to, if Chinese M2 in yuan turn stays dead flat,

but the dollar exchange rate goes down,

what happens to the M2 chart through the roof?

So what the market was actually looking at

was the dollar depreciating versus other currencies.

Sure, I'm sure their M2 is expanded,

but that big parabolic move higher was just the dollar going down.

M2 didn't increase.

It's just that the exchange rate changed.

So it was a very convoluted, complex way

of just plotting Bitcoin price versus DXY.

And that was the core reason for it.

So you're taking crappy data.

You're then converting it to daily data

by multiplying it by the exchange rate

and they're pretending that the exchange rate isn't a thing.

So it's, yeah, it was just great nonsense.

Yeah, and it's the reason why I think it's,

people can get lost in trying to do that is because

in the, you can tell me if I'm wrong about any of this,

in the long term, my understanding

this is from a Lynn Alden, you know,

researcher for with Sam Cali and they did.

In the long term,

Bitcoin is correlated with global M2 more than any other asset.

But in the short term,

taking a chart and saying this M2 move that I made up

and then fit it with a lag to the Bitcoin price

is not predictive of what's going to happen in the next couple months.

Well, the other way to think about it is

when they expand M2 and the actual units get more,

yes, Bitcoin will go up.

But just because the dollar, just because the dollar went down

doesn't mean every man and he's dog in China decided,

ah, that's my side.

I got to buy Bitcoin and every European's like,

ah, of course, there's no direct pump

from the central bank into the Bitcoin price.

So investors have to make that decision

and what people in India actually saw is

things stay the same.

The Americans, things stay the same

because things are priced in dollars.

So sure, there's going to be like inflation

that occurs over the long term

because the things that they import,

but like there's no direct pipe

from the US dollar depreciating versus other currencies

and people suddenly buying Bitcoin.

That's just not the mechanic that's at play.

So in many ways, the M2 going up is true.

But you have to somehow,

you can't really do this

because you've got to convert it to a common currency.

In some way, shape or form,

you maybe you convert it to gold.

Convert everything to gold

and then you're actually looking at it

versus like a consistent,

you know, consistent baseline.

I'm sure if you did it versus gold,

if honestly, if I was to hazard a guess,

probably looks exactly like the Bitcoin price job

because the spaces and the M2 didn't actually increase,

it was actually a dull thing.

It's not even measuring the real,

the real liquidity injection.

So how can it be?

Yeah, it makes sense to the charger.

That makes sense.

Well, you brought up gold.

I have been wanting to ask.

I'm obviously interested in last year

was the gold year.

I know you own some gold in your portfolio.

I think one of the biggest questions,

me as a big owner,

most people were thinking like,

basically I saw this chart,

a guy made of, you know,

20 different asset classes.

Every single thing was green last year,

gold the best performance,

Bitcoin was the only one red last year.

So, A, I'm interested in like,

do you have thoughts on sort of why that was?

And my biggest thing that I think about

there has oftentimes, for a long time,

been an narrative of gold moves first,

gold sniffs out whatever is coming,

macro liquidity, et cetera.

And Bitcoin will move second.

I don't know.

I've heard it said that that is potentially

because gold moves on the potential

or the signal of the liquidity is coming.

And then Bitcoin moves when the liquidity actually shows up.

Don't know how much truth there is to that.

Maybe that's too much of a convoluted multi-part question,

but of instant your thoughts on the gold running last year.

And then mostly does that foretell

a 2026 screen year for Bitcoin or not.

Yeah, so I'm broadly of the view

that that's probably about right.

In terms of gold is a much slow signal.

For a lot of Bitcoiners,

watching the gold price and the silver price going up

has been painful.

This is how Peter Schiff has felt for 17 years.

So just like, bask in the glory,

enjoy the fact that this is how he has felt

for 15, 16 years, he got one year,

he grew gray silver hair,

waiting for silver to do what he's doing.

So like, you know, you've got time on your side.

So that's the first thing.

I think gold and silver, precious metals in general,

they, in fact, all the metals are moving higher.

The way I would think about this,

there is a supply and demand balance

to every single asset.

Bitcoin simply isn't big enough to replace bonds yet.

So when you're a sovereign,

and you see that the Americans freeze

Russia's reserves in February of 2022,

what do you do?

You have to move some of your savings

into a neutral reserve asset.

Gold is the only, only answer the dissovereign of scale.

So gold has received the bid

from every single central bank

and they're stacking gold like crazy.

Even if I run some charts on my site,

they basically look at the regional gold holdings.

And you can basically see that since 2008,

China, Russia, much of the east

has basically just stacking gold at a very consistent rate.

Until 2008, the Europeans were selling their gold.

And then I think they realized,

oh, maybe we shouldn't sell anymore.

And they stopped selling.

And then only since like 2022 or 23,

have we seen some, I think Poland's a big one,

some European nations go,

actually, you know what, we should actually start buying.

So they started actually buying gold again.

So the world just realized that gold's the thing.

Gold is the shelling point for,

I need a sovereign reserve asset

that is just of that scale.

Silver's got its own supply and demand deficit.

The silver bugs have been talking about

this supply demand deficit since I was, you know,

my son's age and he's four months.

So like, they've been waiting for this move for my whole life.

Finally, they get it.

They finally get it because, yeah,

the world needs metals.

We build all sorts of stuff.

It's in solar panels is all these things.

So there's a supply and demand balance.

Platinum.

People thought that we were going to go to electric vehicles.

And then suddenly there was, oh yeah,

internal combustion is not going anywhere.

So we need platinum for catalytic converters.

There's just like a supply and demand balance.

Bitcoin doesn't have an industrial use case and it's not gold.

So Bitcoin will get there,

but it's going to take time.

It's just going to take time for the markets to kind of work out

that it is this non-sovereign store value.

You know, it'll happen.

So I think the supply and demand balance

is really important to note.

I do think there was a lot of credibility

to the idea that gold goes first

and Bitcoin is much more sensitive.

Almost like a fast, slow moving average type thing.

Gold tells you like when gold moves,

if you are not paying attention to it,

then you're missing the signal because

it doesn't move often.

It just doesn't.

Like the last time it ran like it is right now is 1979.

It just doesn't do this very often.

So pay attention to it.

It is telling you that there is a shifting

of the global savings asset.

And I keep coming back to

how do I see Bitcoin finally entering the sovereign state?

Right?

The sovereign kind of level of size.

Settling gold is great,

but it's a pain in the ass.

You need armored vehicles, armored planes,

it's expensive, like shipping gold bars.

Guys, it's 2026.

Like the internet's a thing.

At some point, like gold is like final settlement,

but there's going to come a point in time

where there's a billion dollar oil deal

or a 500 million dollar,

or five billion.

And they're going to go, you know what?

We could send a plane and spend a million dollars

on carting this stuff around

or we could do a 10 minute Bitcoin transaction.

Let's just try it.

Oh wow, that was actually pretty good.

Maybe we should keep some of that

in our sovereign reserve.

So this will happen, right?

This is going to happen.

It just takes time, you know?

And again, I think there's also another angle here

where it's like, we don't want to wait

for sovereigns to be buying this thing.

Like, I'm a gold holder and I'm a Bitcoin holder.

And I can tell you, having used both,

Bitcoin's better in every single way,

every single way.

So I'm a big advocate for

there's two things that keep me bullish

no matter what's going on.

One, it's a 10x more than a 10x improvement

over its predecessor.

And history shows that technology

as it evolves and we head to those 10x multiples,

it takes over.

And the second thing is,

look at the quality of people who are Bitcoiners.

Look at the diversity of their backgrounds.

I'm a tunnel engineer.

There's people who are doctors.

There's people come from all these like

fascinating, interesting backgrounds,

energy traders, like all sorts of things.

And they've all converged on the same thing,

being like, Bitcoin's like the best thing since sliced bread.

You're telling me that all of these smart,

INTJ, engineer types are just like,

they're all dumb and idiots.

Like, no, the most bullish thing about Bitcoin

is the people who get attracted to it.

And I'm like, I'm not betting against those people

because the other cool thing about this,

so many Bitcoiners.

In fact, I would almost argue most, if not all,

we went, we kind of came up and grew up

in an era where the world hated Bitcoin.

It's like every headline was negative.

Every government didn't like it.

It's getting banned.

It's going to shut down.

And yet we still formed enough conviction to be like,

no way.

I'm putting my whole life savings in this thing.

So like we all formed a consensus that this thing kicks us

independently whilst the government,

the media, our friends, our weird uncle,

everyone was telling us that we were dead wrong

and we stuck to our guns.

I'm sorry, I'm not betting against those people.

They get it.

Yeah, I mean, you touched on something

which I find fascinating, which is basically,

you can say Bitcoin is digital gold.

And that's an analogy that's born from, in my opinion,

looking at the fundamentals of basically what sound money is.

And the fact that Bitcoin has the same properties

that gold had as sound money.

But like you said, it improves on many of them.

And but if you people don't know the context of that,

you say, Bitcoin's digital gold.

They say, well, it doesn't,

it's not a hedge against inflation.

It goes down, just went down.

But gold went up and Bitcoin went down.

How can that possibly be?

CPI was 0.1% above target.

It went down.

What's going on?

It sucks.

Like, yeah, but it's also up like thousands of percent

in the time that I've been here.

Like, it's great.

Right, exactly.

And my sort of response to that is kind of like,

well, that's how you know there's still opportunity.

Like, if it already performed like gold on the chart,

it would already be $10 million.

Bitcoin, there would be no more asymmetric upside for you.

So like, we should kind of be grateful

that the rest of the world kind of doesn't know this yet.

It's sort of like when it's fully monetized and low risk.

It's like, okay, good luck with that.

98% of people apparently are going to buy it

when it's fully monetized and totally low risk, right?

Most of the risks already have been knocked out.

And people still don't want to come around to it.

Totally.

You talked about the, it just takes longer.

There's another thing I believe in.

It just takes time, right?

For it to perform like gold isn't the chart.

And there was an interesting piece recently.

I think it was Matt Hogan.

There's a bitwise guy, the CEO, I think.

And he talked about the fact that like you mentioned,

sovereigns started buying more gold around 2022-ish

at the time when the USC's rushes treasuries.

I mean, basically they basically found out.

You might not own these things that you thought you owned.

He basically pointed out central banks started doubling their purchases of gold.

But that was 2022 and they did that again in 2023 and they did that again in 2024.

And it's still price didn't really really run until 2025.

So that to me is the thing that when you combine that,

he was saying when you combine that with what we saw,

the going back to the beginning of our conversation.

I'm curious if you think that this all

combines to be true and foretell in the future

of Bitcoin price to a degree without exact time predictions.

We're still seeing the demand for Bitcoin.

All those coins that were sold last year,

but we survived all that sell pressure.

Billions of dollars of sell pressure.

We still had the ETF demand was still strong.

So if that demand holds true,

then we potentially are leading up to what the gold holders just saw with gold.

Where it took three years of central banks doubling their buying.

But then the price finally ran.

And so is that potentially what we're running towards with Bitcoin?

Yeah, no, totally.

So there's two things there.

One, if you look at the price performance of Bitcoin

priced in gold since February 2022.

So this includes the nasty ass bear market that was 2022.

Then the recovery and then our current correction.

So all of that we're equal with gold.

So Bitcoin, like you got slaughtered versus gold in the bear,

it then kicked its ass for two years.

And then it had a dollar year while gold had a great year,

right?

I mean, we're down six percent last year.

It's flat, gold's up.

Gold's now caught up with us.

So this is what I mean.

Like don't forget, Peter Schiff has been feeling pretty like you do right now

for 15, 16 years.

So and that's with the bear market involved.

So that's the first thing to know.

We're basically match performance.

Which again, isn't the favorable scenario.

Like Bitcoin should be running faster.

But again, let's just keep things in perspective.

And sorry, the second part of your question,

oh, the sell side, that's something that I was banging the drum about.

Being like the amount of sell side that we saw last year, 2025,

would have killed every pre, like on a relative scale.

The amount of coin versus that big the asset was,

would have killed every bull market in the past three times over.

Dead and buried.

We're down 35%.

Like just save of that feeling for a second.

The amount of sell side that we saw this, I've called it the great rotation.

Some dude sold 80,000 Bitcoin at the top.

He took nine and a half billion dollars out of the market.

It went down three percent and recovered.

Now we're down like good job for selling the top, by the way, whoever you are.

But the market took that like a champion.

Who is buying that much coin?

So yes, the market is down relative to the all-time high.

But the amount of absorption that has occurred.

Like the signal that that sends the market can absorb billions of dollars of sell side

gives these big entities the confidence to say,

you know what I actually probably can allocate a meaningful chunk to it.

So yeah, I think there's a lot of components there,

but don't underestimate how big the demand profile is a Bitcoin because it absorbed

the biggest sell side we've ever seen by every metric.

Took it like a champ.

Down 35%.

We'd be down 99.9% in every single previous example.

Great, great kind of relative scale here.

Lunar sold 80,000 Bitcoin in three days in 2022 and we went from 45K down to 17.

This dude sold 80,000 Bitcoin.

We went from like 110K to 106K and then straight back up again.

Totally different worlds.

Yeah, that's crazy just to look at the scale of that just three years later.

Well, you mentioned who is buying.

I know we can't know exactly who is buying.

I know there's a lot of narratives that like if MSTR wasn't in the market buying,

we would have gone a lot lower or ETF demand is helping or we would have gone a lot

lower without that.

But I heard you say before,

like those things combined aren't actually as big of a as big as much of the pie

as people think they are.

So I know we can't know exactly who's buying,

but their theories around like we absorbed so much sell pressure

and it wasn't actually just MSTR and ETFs putting in a price floor for us.

So they're and it couldn't just be retail, right?

Like what's going on there in terms of who's buying all those coins

that sold that rotate in the last year or so.

Yeah, and that's the right way to think about it.

Like we're talking about hundreds of billions dollars, hundreds of billions.

The ETFs globally all time since they launched have taken in 58 billion.

We saw like 350 billion sold last year.

So the ETFs are like 20, 25% at most that you could possibly say.

And like you can you pair the amount of realized profit that goes on

and all this stuff.

The ETFs are very rarely more than 20 to 25% on any kind of 30 day period.

Strategy comes and goes usually during bullish markets,

but they're usually like 10 to 15%.

So let's just take the ETFs in strategy.

We're talking about 30 odd percent, 35% of the total demand.

What about the other 70%?

People love to focus on these minute things that are like they're meaningful.

Yeah, I think the price will be way worse if we didn't have ETFs in sale.

But I don't think we'd be at zero.

So that's 70%.

Like as an engineer, often when you're designing something,

you can spend countless hours trying to like perfect whatever your design model is

and trying to clean up all the .1% things.

But like if you're designing your whole building doing all of this expensive,

complicated work and your assumption is that the building is founded on rock.

And when you dig the hole, it's clay.

It doesn't matter how much work you did.

You got your base assumption wrong and nothing else matters.

So from my view, focus on like the dominant factors.

That's 70%.

You're right.

It can't be retail.

There's no way retail has got that kind of money.

Retail interest in Bitcoin is as low as it ever been.

It can't be Bitcoin is because I just don't think Bitcoin has had the much capital.

Institutions, sovereign wealth funds,

there has to be buyers out there who are sizeable.

We just don't know about them yet.

So yeah, I think just keeping in mind that we're down 35,

at 80K by the way, we're down 35 at the worst.

And the amount of sell side is bull market slaying multiple times in a row.

And that's falling off a cliff now.

So the profit taken that we saw in 25 has largely abated.

So now we're just working through that digestion period.

Right.

We haven't actually seen that pick back up again in terms of sell side.

So overall things look pretty promising.

The market took a real punch and it's taking it like a champion honestly.

So is that likely to mean that when we

if and when we retake 100K or the level we already saw between 100K to 125,

we don't see as much profit taking and sell pressure when we retake it again because we already,

most of the people who were going to sell at that level already sold and the people who bought

when are likely to be longer term holders who hold through that.

That would be my nice case.

Yeah, yeah.

Now I think that's right.

So I think in the, let's say for the next six months,

it'll be a challenge to get back up to 105.

Because there's going to be people who think they missed the top and then they're going to sell.

So there'll be like that short term resistance that will probably come into play.

And I think we're dealing with it as we speak.

But over the course of like 2026 onwards,

once we start running and this is why I think like I think about this as a bear,

which means eventually we're going to reset expectations form a base.

And then we're basically starting again.

Like I think we start starting again.

And that's people are not going to be waiting for you know,

I'm not going to take my 10% profit at 100K.

You know, they're going to be waiting for 152.

I think we're waiting for higher prices.

So, you know, no one buys Bitcoin looking for a 10% pump.

You know, like there's going to be people who day trade this stuff.

We don't care about them.

Folks who really like drive the sell side and hold this thing for multiple years,

they don't hold for 10 years, five years, four years,

and take the next green candle.

You know what I mean?

Like they're holding for a while.

So one thing I've heard you talk about is ETF holders.

Holders, ETF buyers.

So I'm actually curious, do you, what you just said, do you believe,

does that apply similarly to people who buy the ETF?

Or should we think of them as a different cohort?

Because I think you've said majority of them right now are actually maybe at even

or a little bit underwater in terms of where a majority of them have bought, you know,

Ibit or whatever.

Should we think of them as similar as regular hodlers?

Or are they, are ETF buyers a different type of buyer?

Like they're, they're a boomer who bought it and thought it was something else

and they're more likely to sell it.

Yeah. So when the e-science went live,

the common Wall Street narrative is just like an orange poker chip

and people are here for the casino and the moment they go into water,

they're going to just sell everything.

I would actually say that the ETFs are more hodler than most hodlers.

Because on this, again, 35% drawdown,

we've seen in terms of Bitcoin AUM.

So the amount of Bitcoin that have flowed in about a three and a half percent decline.

So 35% down in price, three and a half percent of the coins come out.

When you look at it from the perspective of capital inflows,

like dollars in, dollars out, rather than the BGC AUM,

we saw about 63 billion flow in at the peak.

And with, it's currently about 58 billion.

So we've seen about a seven, eight percent reduction in outflows.

When you look at the outflows, I like to overlay the CME futures open interest.

So you look at like the 30-day change in the ETF flows

and the 30-day change of the CME.

What did we see over the Christmas period?

They moved together.

Why?

There's a bunch of hedge funds that put on a basis trade where they long the ETF short the futures.

And they're coming to December.

They want to unwind their position so they can show their investors.

Look at this nice, healthy balance sheet.

You know, look at all this P&L that we caught.

And then they start again for the new year.

So that, to me, doesn't strike those numbers.

A very small outflows for a big price decline.

Doesn't strike me as people who are like,

oh, Bitcoin's dead.

I'm out.

60% of the inflows, if you price them when they, you know,

whatever price they float in at,

assume their buyers.

60% of them are under water.

So you've got more than half of all the ETF buyers underwater.

And yet most of the outflows seem to be just like a structural hedge fund arbitrage trade.

Doesn't seem to me like the ETF holders are that phased.

Kind of looks like they're toddlers.

And for a lot of the toddlers out there who are complaining and moaning about the price,

like they're kind of better toddlers than a lot of people out there.

So, you know, in my view, I think it's actually quite remarkable.

I've been calling them the extraordinary ETFs

because they are extraordinary.

They just see these like periods of outflow

followed by much longer and much more extreme periods of inflow.

Period of outflow, much larger inflow.

So overall, they're just coin-eating machines.

And it's been a, it's been really quite remarkable to watch.

Yeah, I agree.

I think that's fascinating because I do remember like what you're saying,

where it's, we basically kind of all thought,

you know, the narrative what seemed to be like,

oh, these are not going to be like,

if you were, if you were going to be a long-term Bitcoin toddler with a ton of conviction,

you'd buy and put it in cold storage.

You wouldn't buy an ETF.

So for people who are buying ETFs,

are going to be weaker hands.

And it's kind of, yeah.

Okay, the way that I do things is the only right way to do things.

And therefore, if you're doing it a different way, you're wrong.

Like, that's just a classic way people think about stuff.

Yeah, well, like you said,

the I would never sell my Bitcoin.

Therefore, there's no way five million Bitcoin were,

were changed hands last year.

Couldn't, couldn't possibly be true.

No, the dot is all wrong.

Yeah, I think you mentioned like,

I've seen this thing about long-term holders

have started accumulating again.

You talked earlier about the definition of long-term holders.

Is there a, is there a like,

oh, we can look long-term holders have now started accumulating

and they weren't before.

And that's a good sign that they are now.

Is that like the way to sort of read that

or that might have way too simplistic?

Yeah, so this is a classic area

that people just don't understand the data and they get it wrong.

So the thing with long-term hold is from an on-chain

nomenclature standpoint.

We define a long-term holder as someone who's helped for at least five months.

And the reason why is the statistics show

on that power law curve

of probability of spend versus holding time.

Five months is where we're comparing 0.001% to 0.001%

negligible.

So long-term holders is five months.

It's enough opportunity cost

where we can consider the probability and the behavior.

It's very similar.

People who held it for less than five months,

those coins represent like 95% of the transaction volume.

So we're talking about a small chunk of people

but when they come back to life,

it's because the market is ripping

and then the market stops ripping.

So it's kind of they're the waiters, right?

So when we talk about long-term holders accumulating,

the problem with that in common interpretation,

it takes five months for a coin to reach long-term holder status.

So if we're looking at a supply,

like the amount of Bitcoin held by long-term holders,

it has this kind of wavy pattern.

It has a very interesting nuance

where if you're a long-term holder,

let's just say you've held your coin for a year.

When you spend it, that's immediate.

It's gone from one year to zero,

immediately.

So spending is instantaneous.

But the guy who buys that coin,

he's got a holder for five months

until that curve starts going back up again.

So when you see long-term holders apply climbing,

it's actually got two,

there's two components.

Long-term holder spending is less than

the amount of coins that were bought five months ago

maturing into that status.

So there's a double-edged sword.

So very often you'll see long-term holders are accumulating.

The correct interpretation is,

a bunch of long-term holders started accumulating five months ago

and they still hold.

So you're actually looking at what happened in the past.

And this is why you have to actually use

short-term holder and long-term holder metrics as

kind of like system metrics.

When you're looking at short-term holder behavior,

I want to see major capitulation.

People who bought high two or three months ago,

all spitting out their coins at a loss all at the same time.

If the price stops going down,

someone obviously bought because that's where support comes from,

then you see five months later that the trend starts going higher

and their spending comes down.

So when their spending is going down,

that's telling you that long-term holders have stopped selling.

What happens when people who understand Bitcoin stop selling?

They're probably moving back to the other

that they're either in hold and weight mode

or they're entering a accumulation mode.

So there's like this interpretation matrix

you've got to go through.

What a short-term holder is doing,

what a long-term holder is doing today,

and what do they do five months ago?

You kind of have to glue this big picture together

and that's what makes it so fun.

Like it's a big puzzle to try and solve.

Yeah, totally.

That's fascinating because you might be looking at something

you think is predictive,

but it's actually lagging indicator.

You're like, what is it really telling me?

It's interesting to see what is it told me about the past,

but what is it telling me about the future,

or maybe nothing?

Yeah, let's see.

And that's where we're going to use the multiple different.

Revive supply is more useful

because when you think about it,

what does it matter if long-term holders hold 80% of the supply?

Like, is that a good number?

Is that a bad number?

Maybe.

But what happens if I tell you that long-term

holds are selling 10,000 coins right now?

That's meaningful information.

So in my view, it's all that rate of change.

What long-term holders supply is doing

is nice is like a big picture benchmark.

Are people in general holding or not?

But what actually matters is,

are they selling right now?

Because that's the thing that they can do

with the coins that they currently hold.

That's the real signal.

So this is why a lot of people miss.

They're looking at long-term holders supply

and they're missing the sell side activity that's going on.

Because if a bunch of people bought,

like here's a real edge case that would break people,

if you've got long-term holder supply that's going up,

but that just means that a bunch of people

who bought five months ago still hold,

that's not strictly bullish today.

It just means that they aren't selling.

But then at the same time,

let's say there's 15,000 coins migrating

into long-term status,

but there's 5,000 coins being sold.

Long-term supply will go up,

but there's still a lot of sell side pressure on the market.

So that's really what people get stuck on.

They're looking at a past metric

and not missing the present metric.

And this is where I was jargon.

This is what I do.

This is what I have a job.

Yeah.

Yeah, I mean,

so I probably need to subscribe to the newsletter.

Well, the whole point is,

I try to get rid of all this stuff, right?

Like at the end of the day,

one sole Bitcoin is one sole Bitcoin.

So just show me when they're selling.

If that's if there's confluence with long-term supply,

that's great,

but I actually don't use long-term holds to apply that often,

because it's a historical metric.

What really matters is what are they doing right now?

Yeah, that's fascinating.

And I know you,

I know so the definition of long-term holder

in terms of the on-chain analytics

is somebody's held it for five months.

So maybe this question doesn't quite apply,

but I do think because there's a lot of like,

talk about whales,

another boogie man is the whales boogie man.

So what whales are doing,

what 10-year-old Gs are doing who have 10,000 Bitcoin?

Is that something able to see

when those coins move that are really old?

And is there more signal

in our 80K Bitcoin whale who's sold?

Is there more signal in that?

You do hear sometimes of this thing of,

oh, if the OGs are the bigger whales are selling,

they must know something we don't know,

which is why they're selling.

Or is it just, there's no signal in that.

No, there's less signal.

The guy is 80 and what, yeah.

Yeah, no, so Mr. 80K is a rare exception to the rule,

rare exception,

where an actual whale did in fact sell,

and that was a real thing.

No, generally speaking,

and again, this gets into the nuance of some of this data,

whale data, and I say this all the time,

don't whale watch kids,

because the problem with whale data,

if you're looking at shrimp, right?

People less than one Bitcoin.

Most, they're individuals,

they're normal people stacking sats,

we all, like there's only so many ways that you can DCA.

Daily, monthly, I buy every month, I withdraw,

I buy every like two weeks,

and when I get to a certain amount,

they know withdraw,

there's only so many ways that people behave.

So the term shrimp is actually very accurate.

What a shrimp do.

They swim around in a big ball,

and sometimes there's a patch that falls off,

but they all kind of move around as one big thing.

So if you look at us as a bigger Morphus blob,

it's correct,

because on average, we all do the same thing.

And there's millions of them.

Once you go over to the whale side,

there's a couple of tens of thousands of them.

Are they exchanges?

And by the way, if you're a whale,

you probably don't keep all of your coins,

like all, I'm like Mr. 80,000 Bitcoin.

You don't keep them all in like one big fat UTXO.

You'll often see people look at like,

oh, look, whales are selling,

and they'll be looking at like coins 1000 to 10,000 Bitcoin.

Is that an exchange breaking up their cold wallet?

Is that a custodian breaking up someone's coins?

And almost always when you see like 1000 coin

while it's going down,

going over a hundred,

it's like 10 to 100 coin wallets.

It's usually going up by the exact same amount,

because someone takes 1000 Bitcoin

and breaks it up into 10 hundred Bitcoin UTXOs.

Why?

Because they don't want every time they move their coins,

a Twitter alert to go off and be like,

oh, whales are selling.

But every custodian does this.

So it's like there is less signal in whales.

Don't whale watch kids.

It's not useful.

Whales exist.

They do sell.

You're not going to get any signal,

trying to pretend that you can track them.

So just ignore it.

It's just not useful information.

You'll get caught in the source.

And that's why I love long term holder metrics

and hotter waves and things

because it just gets rid of all that noise.

I don't care who you are.

Just show me when lots of old coins move.

Because old coins is signal.

We can actually measure probability.

When I was a glassner,

that did a very, very detailed study

where they look at all the different things,

coin size, wallet age, profit, loss,

all these different components.

And no matter which way we sliced it,

the number one predictor of whether a coin's

going to get spent or not is how long it's been held.

It was like the 99% dominant factor.

And all these whale watches are looking at the point 1%,

but you're like, that's the answer.

It's not.

It's all about age.

So basically the hodler meme is the realest thing

there is basically.

If someone's a hodler who buys it,

it goes and closes or it doesn't come back out.

And that's like the number one, that's actually real.

Yep, it's that simple.

And it's amazing because when coins come back to life,

what's the price doing?

It's either ripping to the moon or to the bottom.

There are the only two times we've been long

to have all the coins come back to life.

That's fascinating.

Well, you may,

maybe I'm just like knocking out all the myths

and all the, all the, all the boogie men

that I see go out around.

It's not as good as it's fun,

but you like the,

the other one that you see a lot

is the Bitcoin on exchanges thing.

I basically ignore every time I see that

because I intuitively think it doesn't make sense,

but I don't, never actually looked into it.

I just don't know why it doesn't make sense.

So when people talk about like,

oh, the amount of Bitcoin on exchanges,

I mean, I feel like this could just change in a day

if somebody moves Bitcoin on or off.

So there's no signal there.

But is, am I right that that's just a myth?

Like this whole,

there's less Bitcoin on exchanges

with means people aren't gonna sell

or whatever people think of that.

Totally, complete myth like why I always kick it out the door.

I've been studying on chain data

unlike most people in the world

for like seven coming on eight years.

The field is approximately seven or eight years old.

So like I've kind of been around for the whole time.

Ever since I've known about exchange balance metrics,

forever, there've always been two and a half million

and always declining.

Always, there's always two and a half million coins

on exchanges and it's always an all time load.

The problem with this labeling every exchange

is a hard job.

It's a hard job

because suddenly Coinbase changes the way they manage things.

Oh, that's a custody arm.

Well, maybe that is finance.

Oh, hang on, we actually found a hot wallet for finance

so we didn't know.

But just because we found it on Tuesday,

it doesn't mean it was invented on Tuesday.

It might have been created in 2019.

So we've got to go back and back fit all the data.

So it's this never ending game of cat and mouse

trying to track all the exchanges, keep it up to date.

And when you look at the chart,

that's a snapshot of that data provider's data

on that day.

You may come back tomorrow and they found six hot wallets

and suddenly the data is different.

They've got to back fit it because

that is now a correct estimation of history.

So the problem with these exchange balance metrics,

yes, you're right.

Someone could just send coins to an exchange tomorrow

and suddenly the balance is higher.

If some of the best data I've ever seen,

basically shows exchange balances flat

at like three million for the last seven years.

Just flat.

So and my view is same with whale data.

If you see a thousand Bitcoin moves,

a crowd favorite some time back was Mr. 100.

He's buying a hundred Bitcoin per day.

Do you know that's Mr. 100

or is that Mr. Exchange's cold wallet?

Because if it's Mr. 100,

every deposit is a buy, bullish.

But if it's an exchange,

every deposit is a sale, bearish.

So which one is it?

If you can't answer that question,

then it's useless information.

So exchange balances, high, high highest recommendation,

kick them out the door, not useful.

People will spend so much time because it's exchange,

it's click baity, people love the headline.

It's intuitive and it's literally anything but intuitive.

So I wrote a whole piece called

the exchanges are running out of coins,

exclamation mark, right?

Highlight why it's nonsense

and just not useful information.

And also why exchanges and ETFs and stuff

don't actually impact on chain data

and there's all sorts of stuff

you can cover there, but yeah, kick it out the door

alongside wild data.

That makes sense.

It makes for a great all caps tweet,

but I think in my gut I always felt like,

well this is meaningless.

It's like haircuts because the exchanges

are always running out of coins.

You've always got content.

So the haircuts, the hair just keeps growing.

Yeah, for sure.

There's one, a theory that I saw recently

or the last couple of months, which is part of why

it was a theory that OGs were keeping the price down

by selling covered calls instead of selling their Bitcoin.

Now that the, now that there's more options liquidity

and there's the ETFs and all this stuff,

they're selling covered calls,

which is keeping the price down artificially

instead of selling their Bitcoin.

Is there anything any analytics or data

that can tell whether that's true or not?

I wrote a piece on this as well.

I wrote a piece on this as well.

And this is actually a good example

where exchange data was useful

because the way that I looked at this,

I compared the amount of realized profit.

So we've talked about long-term holders,

revive supply, realize profit.

I overlay all of those dynamics

with, because the primary exchange

where this was being claimed was Deribit.

Deribits exchange balance across all data providers,

including ones that I know are very, very high quality data,

were all the same and they were all,

they were in fact, in decline.

So you're telling me that we saw the biggest amount

of sell side ever in the history of Bitcoin

and not a single one of those coins

went into Deribit, but they also sold covered calls.

And then I got a bunch of people saying,

oh, they're using like fire blocks and copper

and these entities that, you know, but yes, again,

I'm positive that at least one guy out there

set their coins to a custodian

and then sold a covered call.

But you're telling me that of the 300 billion,

not a single one of them deposited to Deribit,

not a single one.

And then you look at the realized profit

and then you compare it to Binance and Coinbase

as two of the biggest spot exchanges.

You look at their inflow pattern.

Oh, what do you know?

Realized profit and spot sell side on Coinbase and Binance

are one to one.

It looks like they just sold spot.

So people love to find a boogie man,

they're gonna blame covered calls,

they're gonna blame whales, they're gonna blame exchanges.

Looks to me like that hard laugh

sold those coins on that exchange.

It's just that simple.

That's interesting.

We've talked a couple of times,

a lot of it just comes out to like trying to ignore the noise,

find what is the real signal.

People love to focus on the 1% factors.

It's so clickbaiting and they miss the 95% factor.

It's like you don't, all that stuff is real and irrelevant.

Yeah, real and irrelevant.

Yeah, because I usually see through the lens

of most people are trying to say the information

as if it's predictive or as if it tells you

what's gonna happen next or as if you should

trade bases off of it or whatever.

It's like, if you just wanna tell me this might be happening

or whatever, it's like, okay, fine.

Maybe there's something interesting there,

but the amount of it that's actually predictive

of what the Bitcoin price is actually gonna do in the future

seems to be very, very, very low.

Basically, everyone is looking for its classic market behavior,

its confirmation bias.

People are looking for reasons to explain

why their expectations were not met.

They had unrealistic expectations about

what the market should have done.

The market didn't do what they thought

and rather than reflecting and saying

maybe my expectations were wrong,

they go looking for Boogeyman to say,

oh, it was this guy that stopped my thing from happening.

This is why the market was curtailed, it was killed.

It was killed prematurely.

It's like, no, you just didn't understand what's going on.

Classic human behavior.

We look for confirmation bias.

Yeah, that makes sense.

Well, speaking of that,

let's see if I could do some confirmation bias

about the future, I don't know if that's you.

I mean, we kinda touched on it a little bit.

You have sort of a, you said you're sort of

in the general bear stance right now.

You think what's most likely

or what's actually the most bullish

is if we go down a little bit from here

before we go back up.

But of course, what everyone probably wants to know

is like 2026, what's your sort of best case,

best, you know, bull bear case scenario

on like what we think 2026 is gonna look like.

I think everybody thought 2025 was gonna be green year

and it wasn't.

So basically it's like, nobody knows, you know, obviously.

So give you the caveat that like I'm asking you

to predict the future or give us a Bitcoin price,

you know, this day one year from now.

But what's your sort of generally thinking

is directionally gonna happen in 2026?

Yeah, I'm generally constructive.

I think that one of the big things that's been lagging

is just the economy.

I think global economic conditions like there's parts of it

that are booming, but other pastures aren't doing that well.

I wrote a piece recently on like my general macro view

and like expectations moving forward for the year.

I think that the US has been like a money sink

for more like decades.

Everyone's been parking money in the US.

I think that is now reversing.

I think foreigners like the Japanese,

they've suddenly got a yield curve.

They've actually got yields again.

So they're gonna start pulling money back home,

whether by choice or by government mandate,

Europeans, same thing.

I think there's gonna be a general move of capital

away from US markets towards the rest of the world.

We're seeing the metals, not precious metals,

but just metals in general.

Industrial metals all doing fairly well.

I think oil looks like it probably wants to go higher.

I think energy is probably undervalued.

So to me, that feels like a rear wakening

of just like the global economic system.

I also think there's the backdrop of just like

the debts a problem.

Like this whole sovereign debt thing.

It's just gonna, it's happening.

It's gonna come.

They're gonna print the money.

So like the way I'm looking at things like 2026,

I think it's gonna be a choppy volatile year,

but I'm generally constructive.

I think in the immediate term,

like just keep your wits about you.

I would say like 70K I think is in play

because there's a thing I call air pocket,

which basically in November 2024,

Trump's just been elected, the market's ripping,

haven't got to all to 100K yet, but we're on our way.

Very few coins traded in that zone.

Now we backfilled some of that air pocket.

It used to be between like 70 and 85.

We backfilled a lot of that in like Q1 March and April,

2025 and the tariff tantrum.

They're still just that zone 70 to 80.

I'm like it just looks so attackable.

It just seems like a zone that the market wants to go and test.

So keep that on your radar.

I don't think we're gonna have like a booming Q1,

but I also think that all of these problems,

like an economic acceleration I think is in play,

I just think that Bitcoin is so undervalued

versus everything else.

So like there's gonna come a point in time where it just flips.

So I'm generally constructive.

I like the green shoots that I'm seeing.

I would call them green shoots at the moment.

Sellers dying off, ETF demand.

We've got a decent week last week,

but one week is not a trend strategy.

Their preferred products have finally hit product market fit.

I think they're gonna start buying again.

Eventually those momentum traders come back in,

we form a bottom.

And I think 2026 will end up being a good year for Bitcoin.

I'm not expecting 200% moves,

but I think it'll be a positive year.

I don't think the bears are right,

and I don't think the gigaboules are right.

So it's gonna be somewhere between those two.

So I think we do have probably a period of choppy downside,

but overall I'm a very, very happy stacker at these levels.

I personally think we're tremendously undervalued.

I think if I look back and one of the best tips I can give people

when you're stacking sets,

which version of yourself are you stacking sets for?

My son's four months old.

At some point I'm gonna want him to go to a good school.

I'm stacking for him.

That's 12 years in the future, right?

So I'm dealing with 12 years.

That's my time horizon.

So for me, am I stacking for 2026 check

or am I stacking for 2040 check?

I'm stacking for 2040 check at this point.

So for me, these prices are just unbelievably good value

and I'll stack the whole way down.

I tend to just generally agree with that.

That it's probably, it's all gonna happen,

and it just might take longer than most people want it to take.

And that's hard for a lot of people to swallow,

but like if you can zoom out and have that longer term lens,

they're like, who cares, man, like it's gonna happen.

And then this is the other thing.

When it happens, if you spent your time

dicking around thinking, oh, buy back lower,

I ran a study, it was a little bit old now,

but I ran a study where I looked at,

it would have been like 2024.