Bull or bear in 2023? Analyzing the direction of markets

Transcript

GM GM welcome to web3 Academy where we're carving a path for doers to confidently build and invest in web 3 don't get caught in the hype cycle we're here so you can avoid it and capitalize on the opportunity of the next big phase of the internet I'm Jaybird as always joined by my co-host Kyle reedhead Kai what are we talking about today are we in hype cycle what's going on yeah well we're going to talk about markets and we've done a few episodes on this lately mainly getting mine and Jay's views on markets are we in a bull run are we not I've been sort of hitting the bell saying guys Now's the Time they pay attention Now's the Time to be at Best of your Capital I've been saying that

for a few months now what's interesting though is I just did a poll in our community in Discord and asked what everyone else thinks in our community and I think we had 20 something people saying that we're bear market and we're going lower and only like five or six people saying that we're bull market and I was like oh well that's very interesting and so we'll talk about why sentiment that is important in this episode but guys I think this is a very very very important time if you're in this space whether you're a builder or not you still want to be getting exposure to this space because of the upside that this brings or downside and so it's important to understand where you should be putting your Capital during this time that's why we're bringing on our guests that Lark Davis because he's been in the space for a

long time and has done really well and we want to make sure that everyone's kind of up to speed on markets and so I think now it's just more important time than ever I was just loving that Lark says dan only season is over and you gotta listen the episode to find out why he said that because he's got a lot of good background to back that up and today we are joined by Lark Davis Lark is a real leader in the crypto space a leader of teaching those how to turn your money into wealth how to build wealth and he's doing this through his Twitter Channel which has over a million followers his YouTube was over 500 000 subscribers his newsletter he's coming at us with so much great content and he's really able to break down these

Concepts in a way I think that everybody can understand Kai which is really what was so great as we walked through this episode I certainly feel confident about my investments the reason why I wanted to bring Lark on this episode is is because on the podcast is because Lark is not just like a crypto Trader there's a lot of crypto Traders on YouTube that honestly I recommend you don't look at Lark understands markets right he's been trading or not trading he's been investing in markets long time before crypto came along and so he gets to macro he gets like technical analysis he gets you know now that he's been in the crypto web 3 space for years he went through the last cycle as well he gets the Unchained stuff and he understands

these markets the crypto markets are obviously something very different in the traditional world he gets it from a very like Global Perspective and that's what I've been trying to teach especially to our Pro subscribers either a newsletter I've taught a lot about macro we brought in the guests to teach about on chain and just recently in our eyes on chain report we just talked about the different perspectives we talked about sentiment technical analysis on-chain and macro and all of those are kind of converging together and those are what guide you in making Investments and large just does an incredible job at all of those things and so I think it was great to have someone with so much experience and best knowledge to come in and kind of walk us through this and like you said in a very simple way for everyone to understand

yeah and if you're listening to this take a second to answer our poll because we're curious what you guys want to hear us talk about more we're talking a lot about the things Kyle mentioned macro talking about on-chain analysis talking about technical we're talking about sentiment and we want to bring this more into our content because we know that being part of being in crypto and being web3 means that you are investing in this so be curious answer the poll on Spotify if you're listening on Spotify but let's get into today's episode before we do just take a minute to hear from our sponsors who make the show possible the future of social media is here and that future lives in web 3 on top of lens protocol web 2 social platforms are broken and right for disruption you see the epicenter of social media is the creators and yet

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Portugal the 9th of June at the Epic web 3 conference welcome back everybody today on the show we have with us Lark Davis the wealth Master here to talk about macro because I think we're all wondering in this current condition can we be confident with our investments are we in a bull run or is this just another trap nobody better to break this all down for us than Lark Davis welcome to show Lark thanks for having me on excited to be here all right let's start with the most obvious question right now are we in a bull run in your mind how do you feel about the current market short answer yes but we're at a very very interesting stage in the bull run because this is the earliest stages of a major Trend shift right we've gone past

the down only season a down only season was not a lot of fun we've gone past that now and I think it's very unlikely at this point that we're going to see a new low come in for the cryptocurrency markets however this is a very interesting stage of the bull market right because nobody wants to believe it yet things are going to go bad us recession is coming everything's going to go to zero still we still have those voices right people are not ready to believe yet that a trend shift is underway but a trend shift in my opinion is indeed underway in these early stages of a bull market are tricky right because there's so much fear still there's so much PTSD from when things were bad but I'll tell you one thing for certain the only people who are gonna make big money in the bull

market are the people who pay attention early everybody who shows up on Bitcoins at a new all-time high those people are going to be essentially exit liquidity for everybody who's buying in 2023 before it's it's harsh but it's true it's harsh but it's true right everybody's got to go through that tough Learning lesson right if you come in too late on the bull market if you enter the bull market when everybody's screaming it's a bull market that's time to get out exactly now is the time when look we are seeing a a major shift underway and that shift is being led by a Supply in the increase of money which was led by China back in November 2022 they started putting money in the Chinese economy's reopening very shortly thereafter Japan started emergency buying bonds U.S

banking crisis started happening the U.S federal reserve was 4 forced to then start buying up truckloads of stuff putting lots of money back into the system so markets rise and fall based on liquidity largely narratives also too that's also great but when we see the money supply going up asset prices tend to go up and so we are the earliest stages of that happening now so you're not a believer that the market cycles that we have in crypto are from the Bitcoin having it's very very interesting the Bitcoin having a narrative because yes no we see that liquidity Cycles in China for example happen every three and a half to four years it's very coincidental right if you look at the overall Market Cycles go back to

2017. what was happening when Bitcoin hit its all-time high in December 2017 the S P 500 was also smashing a new high so we correlate and then we don't correlate right we correlated in 2017 on the run-up we didn't correlate very much in 2018 all the way down for Bitcoin because the s p went on to hit three or four new all-time highs in the next two or three years Bitcoin did not so there are times when we correlating times we don't it's not always as clear as we'd like it to be we do correct quite well with the liquidity Cycles though which those really started in 2009 with the bank with the financial crisis which is also when Bitcoin was invented right so that's kind of a coincidence that these liquidity Cycles are happening at the same time as the Bitcoin happening but it's just that's just when they both

started and all because of the financial crisis was kind of interesting let's dive further into are we in a bull run or not I think Lark you'd like to take multiple perspectives from what I've read in your wealth Mastery newsletter which by the way anyone listening if you're interested in markets check out his newsletter wealthmaster.io is the website we'll put it in the show notes but does it a fantastic job of kind of covering markets from a Global Perspective and you look at a few different perspectives which is what I really like you look at macro you look at technical analysis you look at on-chain and you look at like sentiment so what are people thinking and feeling and I think those are kind of the four areas that you want to look at to decide are we in a bull market what phase of

that market are we in let's start on the macro side which we sort of just dove into we talked a little bit about liquidity although it's interesting you say liquidity is increasing because a lot of people right now are stuck on the US inflation is high although coming down but it's High Core CPI is actually continuing to rise somewhat I think you have interest rates still high and people are predicting that it goes up again so like liquidity in the U.S is kind of a difficult thing to understand at the moment give me your like high level overview on what's going on I guess in the US and then maybe time that into your Global thesis of macro as well sure absolutely right now the US is still the global leader when it comes to equity markets money I mean obviously US Dollars Reserve currency the world the

US Equity markets account for 50 to 55 of global Equity markets in total right so it's a big deal what happens in the USA right now the market is predicting that we have one more interest rate hike to come just one and then it's done if you look at how the market is anticipating things to go we have one more interest rate hike we have about three to four months of pausing so no interest rate X at all and then either at the end of the year or the start of next year we can see interest rate Cuts started to come in which historically has coincided with bad times in the market but it doesn't necessarily have to mean that there's going to be bad times in the market right they could start cutting interest rates and not have Armageddon happen so that's a possibility although often when they do

cut interest rates things can get a bit dicey in markets so what happens the US does have that very much reverberating effect around the world however we are seeing a lot of other economies coming up in a big big way we are seeing China for example being a major leader of those global liquidity Cycles right and if you actually look at the data it's very interesting to show that for more than a decade now it's been China that has led the global liquidity cycles and the impact of the US has actually been a lot less during that time so it's a very interesting thing to note right we have the brics group coming together and they together represent half their world's population half the world's economy

approximately et cetera et cetera so it's a big deal what's happening in that situation so if you look at the total Global macro perspective the US's leading role particularly in the cryptocurrency markets is starting to diminish now obviously still have strong correlations between what happens in U.S equities and really just a risk on or risk-off attitude globally right so that's very much a real part of thing the United States economy is not to be ignored by any means it's still a massive consumer of global products and if the U.S stops consuming hit the mass recession that does hurt China because they're not going to have as much stuff to sell the Americans at that point I think the most important thing to watch is the money moving from East Asia in particular and of course everyone's

gonna be watching for that interest rate to finally stop hiking and if this is indeed the last one then that's a pretty big deal for markets now there's a lot of people saying that inflation is sticky it's here to stay it's kind of like anyone who's going debating on the Bowl in the bear Market which one we're in right now it's the bull market people tend to say that inflation is sticky it's here to stay we can't cut rates or if we do it's going to be a long time from now and we're in this like inflationary world for a long time and so that's super bearish for crypto for equities in general give us your like case of why inflation is not going to be stuck around or maybe you think inflation is still going to be around yet we're still going to go through a

bull market I don't know but walk me through your thoughts on that well there's there's multiple scenarios that are possible here right we can have a situation where inflation is kind of high it's not actually that high anymore it's down to about five percent in the USA which is not actually in fact it dropped by a full percentage point at the last CPI release which is pretty big deal so inflation is actually not very high to where if you want to look at high inflation look at uh Tetris like Argentina it's over 100 you know that's high inflation five percent is not ideal but it's half of what it was a year ago or it got up to 9.6 or something mid-year last year that was pretty damn High right so inflation's already come down significantly now how does inflation factor into this bigger picture well we can have a situation

where inflation stays at five percent forever and markets will bump right we've had a situation before we've had high inflation and positive Market correlations at the same time too so those things are not necessarily exclusionary although I think we are seeing inflation continuing to come down and there's still plenty of wild cards that could cause inflation to go back up but a big spike in the prices of oil for example could cause a big inflationary Spike back up but right now inflation seems to be on track to continue falling and let's say inflation gets back down to let's say 3.5 or 3 percent that's really not a big deal realistically so the key thing to watch is the trend on inflation right if it keeps trending now we're thinking it Trends downwards slowly that's going in the right direction we don't want to see

the big spike back up because that could cause a bit of panic in the markets to say get everyone to start saying oh crap inflation's about to go back up this was just the temporary correction and inflation and now we're going to go back up and that's gonna be bad that's definitely some watch out for the oil braces and of course the war in Ukraine all this kind of stuff factors into this how things can play out but maybe a bit less these days because that oil has been rerouted that gas has been rerouted things have been figured out I mean what a banking crisis which we're going through right now is very deflationary right like bearings just stop lending up money at this point so something that's going to bring down inflation a big crisis is the perfect thing it's actually interesting so that you can

still go into a bull market when we have you know five percent inflation or whatever which to me makes complete sense especially in technology and crypto because these things are growing up way faster than five percent I mean if you look at open Ai and the thing went from zero to 100 million users in like two months or three months whatever it was do you think open AI cares about five percent inflation the thing just grew like a thousand seven percent you know what I mean and so I don't think that technology over time maybe short term it can be impacted by inflation but like I don't think it really matters but anyway let's go back to the liquidity side of things you talked about okay Global liquidity is increasing and especially outside in Asia we're seeing it increase a lot what are your thoughts

on the situation the Balaji situation he's talking about okay we're gonna have hyperinflation because we're going to print too much money right and I know this is probably just like an advertisement for him he says in 90 days interested just to hear your like kind of overall thoughts on that scenario what do you think it's 90 days or not it's kind of irrelevant but we'd love to hear your thoughts on that topic so this really comes down to the US dollar his whole thesis is based on that well the us about to enter hyperinflation which is not a particularly realistic expectation in my opinion I think the US dollar is fundamentally doomed we've got a country that's currently 32 trillion dollars in debt and it's not like they're paying the debt down they actually keep putting more debt on every single year by 20 30

20 40. I mean we're talking 40 50 trillion dollars in debt and we're very quickly uh running into a situation where the interest on the debt is going to be the number one line item on the budget in the USA even more than the military if you can imagine that and they spend a lot on the military in the USA so this is a real problem for the U.S structurally strategically long term we do see a situation as well where it couldn't happen at an absolute worst time for the us to have all this crushing debt piled up on top of the country because right now the US is in a very strong situation of potentially losing its Reserve status we are seeing increasing trade amongst the brics group for example with bilateral trade happening between Brazil

and China and Chinese y1 and Brazilian real they're not using the dollar anymore same with Russia and China Saudi Arabia and China starting to sell oil in Yuan this is a big deal Saudi Arabia the one of the world's biggest oil players by far coming on saying you know what we're not going to exclusively accept the US dollar and we're looking at other currencies we have Russia saying hey we're willing to take Chinese Yuan from anybody in Africa or Latin America wants to pay for oil and gases and Chinese E1 that's fine that's a big deal we have the world's biggest exporters of oil gas Metals Timber diamonds food all the stuff all collectively coming together and saying enough's enough we're not

going to use the dollar anymore we're going to use our own currencies now and that is a real problem for the US dollar because if people aren't forced to pay for oil anymore in US Dollars they're not forced to keep the dollar then as a reserve asset in their central banks they'll need a depreciation currencies and if the U.S is not the reserve currency of the world it becomes a real problem for them because suddenly the ability to print money as much as they please is very much diminished because if they start doing that then they do run the risk of massive inflationary problems domestically so the US is a very tricky situation now I want to be clear with all that this doesn't happen overnight over the past two months we've seen more stories and we've seen about the US dollar losing its Reserve status

and the challenge of the Ewan and all this stuff that we've seen in past decades but this doesn't happen overnight we're talking something that's going to take a decade maybe more to play out before you see a real fall in the reserve status of the US dollar my opinion anyway one of the things whenever I talk about markets I also believe that we're entering the early stages of a bull market everyone's like how can that be we're going into recession or we're in a recession things are so bad there's all this stuff happening banks are failing like how can assets go up in price you know what I mean this is a common thought by many people I'm wondering if you can just kind of walk us through the Dynamics that I play here of like okay maybe we are in recession right now we're going

into recession maybe things get worse and they probably will over the coming months especially if interest rates stay at the height they're currently at and then you have this conversation of well currencies are all screwed up and maybe we're not going to be using the US dollar so much anymore like how can that still be bullish for assets can you sort of just like walk us through how that all makes sense that people can wrap their head around that 2008 was a pretty important year for the way we understand money because suddenly Banks got too big to fail suddenly infinite bailouts were put on the table and this is exactly what has distorted markets effectively the US went into a recession last year if you base it on historic metrics of how we count recessions however the White House came out and said well we

don't actually do that anymore we have a little organization of five or six guys in a room and they say when there's a recession and so everything has been completely distorted in markets so when you understand everything's being fully distorted in markets all these ways that we understand how things have worked can be challenged and so if there's recession officially cleared the USA it basically already been a fact for a while by that point and we're seeing a lot of things challenging that inflation's coming down company earnings aren't all that bad yeah banks are collapsing the banks collapse everybody's taking the money over to JP Morgan big Banks get bigger et cetera et cetera the key thing has come out is banking collapse prices though is infinite money printing once again you see there's 100 Regional Banks or

something United States at risk of collapse but what have they said in response that look we know you guys are sitting on a 620 billion dollars of the fdic's estimate at the time that the First Bank collapse happen and really bigger now but they said we're you know we know that these Banks yesterday has 620 billion dollars of unrealized losses meaning that people want to go take their money out of the bank they have to realize the losses and the banks collapse essentially that's a pretty tricky situation you don't want to have this crisis of confidence in the U.S banking sector which is already happening but they want to mitigate that as much as possible so they've gone to say hey we're gonna launched this Bank term funding program which is essentially a giant money printing program where they're going to guarantee the treasury bonds the mortgage-backed

secured all this stuff that all these banks are holding because they couldn't find enough people to give house loans and stuff to so they started investing all that money acting like hedge funds investing all their money into treasuries and in to these mortgage-backed Securities which fluctuate in value right they're not always worth a clear price and now we have that massive losses sitting there so not only did the Federal Reserve roll out this program to cover hundreds of billions of dollars of losses in the USA they extended that program internationally to Japan to Canada to the UK and to the European Union so this is a pretty big deal so we have them essentially saying to foreign central banks don't worry all your local banks

that are also sitting on giant unrealized losses because they bought U.S treasuries and because they bought U.S mortgage-backed Securities we're going to cover that tap too so this creates a situation of nothing is allowed to fail in the markets money will be printed and as we see money printing come into play markets can indeed rise now look if there is a U.S recession U.S equities will be hit that'll be a near certainty but how bad they're hit how shallow or how deep of a recession is I mean if you go to social media it's you get every ranging opinion from there will be no recession there'll be a super sour recess and so this is the new Great Depression by guns and food now because your money will be worth nothing okay chances are I think it's not be that bad because again central banks are distorted everything

it all depends on the liquidity this is the thing I think that people need to wrap their heads around liquidity is everything at this point I saw a chart in um Global macro insiders as well we'll pause like Investments newsletter type thing that he has reports and they have a chart that shows that the global M2 so Global liquidity the correlation to that in the NASDAQ is 97 of the financial crisis that is absolutely unbelievable they're now calling this the everything code we're just everything relies on liquidity and so what I think people need to wrap their head around is like okay there's interest rates there's inflation there's recession there's all these things ultimately though the only thing that matters is what is going to happen with liquidity and interest rates or inflation might impact liquidity that's why we want to know what's happening

with interest rates but also like it's like if liquidity is going the assets are going at least assets that are a hedged to currencies or that produce future you know revenues like technology kind of thing so at least anyway that's my sort of idea of how macros work right now it's like it's just all matters liquidity that's it and especially if you go to recession what's the answer to recession print money right what's the answer to a banking crisis print money yeah right what's the answer to all the stuff it's all just print more money back row outlook for the rest of this year then macro look maybe then for next year any opinions on that or are you not really going that specific well I think that there's still a pretty decent chance the US does enter a recession but it's probably not going to be as bad as

a lot of people are anticipating and that kind of fits in with my general thesis of where Bitcoin could go this year right that we could see a rise of Bitcoin up to potentially forty eight thousand dollars I think that's if you look back it's historical charts we tend to see Bitcoin rally near to the previous all-time high about 30 away from it but never quite get that before the Bitcoin having now we could see an unprecedented event where we have essentially broken that four-year Bitcoin cycle which is largely lined up with the three and a half to four year liquidity cycles that we see globally primarily in the vagina so we could see a breakout here where we see just so much liquidity in response to a crisis that asset prices on but if you think well there's a crisis going on surely asset prices can't pump we just

had the covid crisis that would happen they prayed to Giants money they gave everybody free money asset prices went absolutely insane so there's precedent for this in very very recent history right so that's something to keep an eye on but if we do get that rise up to 48k after for example the FED stop their interest rate hikes people get a little more excited about markets they take more risk on attitude but then we do get that papers I can allow prices over a summer maybe it leads to U.S officially declaring a recession either it's a shallow one that could bring markets back down later into the year so I'm not expecting a new all-time high for Bitcoin or ethereum before we see the Bitcoin having come in next year we get a lot of this macro stuff kind of

dealt away with to an extent right we need to know that look is the US gonna is it or isn't right going to get into recession if it does how bad is it going to be how long is it going to last just declare a recession already guys let's get it over with let's just deal with it and then move on come on Jay any other questions on macro or should we move on to the next uh I want to hear your take for the rest of the year where do you think you could see in the rest here and if you want to pick a price for Bitcoin I know we don't usually predict prices on the show but anyone love to hear your thoughts dude I was actually going to ask where you got the would you say 48k or did you say 30 48k where did you get

that from was that like a technical analysis if you look at the previous cycle right so from 2017 we had our 20K price and then we got for about 14k in 2019 looked back to the previous cycle also very interesting it came the bull market peak of what was that math brain here 2013 right if you look around um about a year later we came back up within 3 30 of that price again that lines up some Fibonacci levels and stuff like this so plus a major major area of price resistance around that 48k level as well right so that was sort of the final rally before markets completely tanked in 2022 so yeah for a few reasons I'm looking at 48k as that potential area where there's going to be a lot of

liquidity looking to get out of the market and all that kind of stuff so I think it's really important area for us at 48k that could potentially from based on the charts and stuff I've looked at could be a potential high point for the year right I actually very much think very similar to Lark I think that we have entered a bull market as well I think it's early phases one thing I think when we say bull market it doesn't mean the bull market we all think of of 2021 right or of 2017. like you could have a bull market where things go up somewhat normal although I wouldn't even say this is normal because already in the first three months of the year we went up like 80 something percent you know I think we're down to like 65 Bitcoins up or whatever on the

year that's insane in any other Market you know what I mean we have some room to grow this year I think that the more we have Banks collapse or the more we have these like problems I think these are only good things this is actually bad news is good news right now because I think it just means more money is going to get printed it's going to happen faster and so I think inflation's not even a conversation anymore I think interest rates start to go down and they go down this year at some point and I think the money printer has no I mean the money print is already going off around the world I think in the US we're probably probably going to see it this week because of the recent bank that just went down I think we're going to see another shoot up in this and so I

see no reason why crypto doesn't continue to go up I don't look at technical levels like you do Lark so I have no prediction on that though I would say I think outperforms a Bitcoin big time and maybe even makes an all-time high I don't know this year but um I think next year is when we go into a raging bull market and this year kind of like what you said we go up and I think we go up considerably more now and then we kind of either just chill for a little bit or maybe we start to go back down for a little bit until the next Bull Run starts when whenever that is but you want to be buying now as I've been saying this I've been yelling this for the past couple because I didn't I was like now is the time you want to be

putting your money in this market and it will go up and down then that's fine but like I think we're in the early stages now for sure I think for equities too I really do I think even if we hit recession it might be a quick jump down when they finally announce it but I think they'll already be printing money at that point and they're gonna probably set an interest rates super super low at that point and I think that's when we hit that like raging boom market so I don't know company earnings are Goods labor Market's still pretty strong in the US inflation's coming down like you know it's not as bad as portrayed in the media I just want to add two quick points on what you were saying there one is that I like to think that wherever Satoshi is he's still out there he's

somebody who's just smiling to himself Stone yeah Bitcoins fumble when banks are collapsing good people yeah yeah and the other thing is that people understand as a bull market I think people fundamentally misunderstand the bull market is only being that like two three four five month period where like everything's going completely crazy that's the top of the bull market right we're at the bottom of the bull market right now and that's a very different kind of phase psychologically to be in because you still don't want to believe things are real you still are suffering from PTSD from all the crazy crap that happened in 2022 but from all the indicators that we're seeing on chain technical so on so forth we are at that face well that's a great point because what that makes me think of is if you remember the beginning of 2022 when some people were saying okay

this is the bear Market this is the down only phase there were so many people were like no no no we're going back up we're going to all-time highs again and that's the same feeling that people have right now where no no we're still going to go down and we're like no this is the actual to be in the bull market right and so we'll talk about sentiment in a second because I think this is actually a really good indicator of when you should be shifting but let's go to technical analysis I know you have wrecked Capital who does a technical analysis kind of report inside of your newsletter on a I think it's a monthly basis maybe it's weekly I'm not sure weekly weekly yeah and so I know she was showing like hey we've entered the next phase in a technical analysis way I'm

not sure what those charts are representing but I know you also had your own stuff so why don't you walk us through all the technical side of things kind of what you're seeing and if that leads you to believe we're all sort of a market from that one thing I always I look at when I'm trying to say okay where's the market at is those bigger time frames right so we're looking at the one week time frames the one month time frames and those tend to tell us some very interesting things compared when you look at the daily right this is the thing you gotta remember if you're a Trader you're looking at the hour the four hour charts the daily charts that's a very different perspective right you're looking at what's going to happen where's the short-term momentum at if well it could wear the long-term

momentum at is that we are seeing some very very different things starting to form up here right so we can even zoom out to the one year charts right and look at the four-year cycles and basically you know this year would be the accumulation year right in the next year would be the big exciting year right potentially the blow off in early 2025 or something like that after which we get a big candle down but if you look at all these different charts that we can see for example like the monthly macd great indicator for long-term trends that is getting close hasn't confirmed yet but is getting close to confirming a bullish crossover now that bullish crossover on the monthly macd has marked the the start of a new bull run every time it's crossed so we're getting close that hasn't

confirmed yet but we're getting close to that confirming so these kind of bigger term Trends are definitely the things to be keeping an eye on here we can look at RSI for example and even in this big rally we recently had we didn't even get to over bot levels on the RSI on the weekly for example right so normally if you want to say well that runs had his head is filled you'd want to see an overbought signal on that RSI we haven't got that yet making me think that again we still have fuel left in the tank for a potential rally up to 48k for the rest of 2023 for example the higher time frame charts tell you a very very interesting picture compared to the the chaos of looking at the four hour of the daily charts yeah I am not a technical

analysis but analysts by any means and I can't stand the like one second one minute type stuff like unless you're day trading it's pretty useless in my opinion but when you zoom out I think it's actually very very useful to look at this kind of stuff and that's something I've got a lot from your newsletter which has been very very helpful in like my understanding of where we're at in the cycle so I think that's that's really good Jay any questions on technical side of things no I'm excited to get into the on chain stuff speaking about the newsletter I know that you just launched your first on-chain analysis by the time our viewers will hear this your second on-chain analysis would have come out what did you find from releasing that first on-chain report well we've been doing some different on-chain stuff relatively frequently in the newsletter

but I decided yes finally it's time to actually do like a proper breakdown every week of what's going on and there's just so many on-chain things that are interesting and we'll take a little nugget from Bitcoin and a little nugget from ethereum here because it's two very interesting things one if you look at what's happened with Bitcoin there's two things I really want to point out here the first is that the Bitcoin on Exchange balance is incredible because we have seen a Non-Stop decline in the Bitcoin on-chain balance for about two and a half to three years now we have reached Peak Bitcoin on exchanges and it's only going down over time now this is the first cyclist has ever happened in previous Cycles always more Bitcoin though initiation more Bitcoin going into

exchanges so we've reached Peak Bitcoin right it's only going to go down from now remember BlackRock and all these guys are coming after your Bitcoin they're gonna buy it off of coinbase and stick it in their little fund where it's never going to leave the black hole for Bitcoin right that's something very important to point out there the other is that the number of holders of course in direct correlation to the exchange Mouse continue to go down keeps going up over time and what is very encouraging to me is that yeah there's still you know big whales out there and stuff like that but I'm much more excited on a personal about the guys who are buying you know 0.1 Bitcoin that means it's Regular People zero point one Bitcoin what's 2500 three thousand bucks right now whatever it is at the time you're gonna listen to this and that really

means that more people are understanding Bitcoin and getting on the Bitcoin train right so reaching new all-time highs consistently for people who have one Bitcoin or more people have zero point one Bitcoin people have 0.01 Bitcoin or more so this in an on chain sense is really really exciting because it means people are buying and holding if you look at so these are all new numbers right hit these wallets and then you look at how much Bitcoin has moved over the past two years we're also a new all-time highs for Bitcoin that has not moved right we're at about 65 percent of the supply has not moved on chain at all for two years means people are just buying and holding it they're sticking it away in a safe and they just forget about it and that is a very very powerful thing and I want to mention

something real quick about ethereum on chain because this blew my freaking mind not only of course has ever since we've entered the merge right and ethereum switched over a proof of stake and all that stuff have we seen a situation where we now have because the emissions have gone down by uh 90 we now have a situation where instead of about 2.5 million new ethereum entering ecosystem with the burn in effect as well so not only do we have that 90 Supply reduction we also have the burn we actually have ethereum now being deflationary by about 0.1 percent per year we've had over 100 000 ethereum burnt right so that the supply has actually gone down by a hundred thousand pretty crazy thing and the final thing I want to mention here because this is super interesting on

chain data is that the ethereum staking unlock right there was a lot of fear and uncertainty around it and I had no idea how the market was going to react right I actually thought it would be even more people trying to get out than there was but actually in terms of validators looking to exit the biggest validator that had to exit was Kraken exchange because the SEC forced them to shutdown to taking program had it not been for them very few validators would actually exited on A1 now it's very interesting is that about a week or a week and a half or so two weeks after the stakey unlock happened we're actually at a new all-time high already for the total amount of stake ethereum so far from people rushing for the exits people rushed to get in because now they have

the certainty that they can get out if they want to it's crazy it's so interesting that right now we're seeing all-time highs of new wallets buying as you said 0.1 or 0.01 in this market sentiment what do you think is driving that we're in this formal usually the people that come in with new wallets are buying at the top when everybody's screaming bull market bull market bull market who are these people where are they coming from people that are increasingly waking up to what's going on around the world they're seeing the banking crisis they're feeling like well where can I keep my money I guess I can buy gold but you know maybe there's something else so people are learning about Bitcoin learning about ethereum right people are learning about these alternative Investments I mean one thing that has been again fascinating to see if we'll

get on chained at and something we actually covered this week is that the total number of daily active Eustis is near an all-time high right now which has never happened at the bear Market before no no it's absolutely saddy the users are here people are sticking around I mean for anybody who wasn't around in 2018 2018 was a very rough bear Market because there wasn't much built right you just could send largely just transactions back and forth but what happened in 2020 and 2021 we saw this absolute like Cambrian level explosion of evolution of this technology where we have all these D5 protocols we have different chains of people actually using actually want to use things are very exciting now people stuck around in 2022 in a way they absolutely did not in 2018 2018 was a

ghost town in crypto 2022 people stayed people kept doing stuff people kept trade and kept doing D5 flipping nfts all that kind of stuff so remember we are right now at about 300 million approximately people globally who have some kind of exposure to crypto they bought in nft they have 50 bucks for the Bitcoin whatever it might be to write up to the whales a lot of stuff we are predicted based on the growth curve of cryptocurrencies we could be up to 3 billion users by the end of the decade and people are still fading crypto you're gonna tell me 2.7 billion even if I have crypto assets the number is not going to go up come on next time we should start with Deon chain stuff because this is way more positive than the macro conversation we're gonna flip the order here guys next time

like macro seems to deal with boom I think the macro is still super positive so I don't know it is it is super positive it's just it's Doom and Gloom because it's like we're all kind of because our whole braking system is going to zero boss is say you know we're talking like okay on chain data is at all times in terms of like those blind Bitcoins sure but it's also just in terms of users and blockchain in general we saw that say the crypto report that just in general they also have stable coins which the use case of stable points going through the roof in terms of like new wallets using that which is crazy considering like you've had the usdc peg you've had UST what is it UST collapsed last year the fud with like bus D so like it's crazy that's actually still going that's almost at

its own bull market and I think that's happening you ask a coup are these people Jay I think it's the people that are in all these countries that either have sanctions that their currencies are going through hyperinflation like in Argentina it would be crazy to hold on to your peso right now you can't get US Dollars unless it's on the blockchain right so like my assumption and we have two argentinians that work for us they both that's all they use is crypto it's the only way right all they use usdc they just have to well I think they use tether but I imagine this is happening in many countries around the world because there's many countries that are having all these failures with their currencies right now so like I don't know that's why I said who people might be and what did Val just say who's on

our team said that she just spoke to her friend who she considers educated in Argentina and she said that she currently loses 30 percent of her money per year and she thinks that's good look she thinks she's doing well compared to her friends and her family she's doing better losing 30 what well this is actually because of such a good point guys is that I think a lot of people in the English-speaking countries right all the the highly developed economies we forget what is going on in the rest of the world for a lot of people in like the us or Canada or whatever like Bitcoins uh wobble it's a thing to invest in and it's fun and like hey more people wake up to the idea of monetary Freedom more people waking up to ethereum decentralized finance and how powerful it is and digital

Collective also that's great but what's important to remember is that for people all around the world who the banking system has not catered to who central banks have screwed over beyond your imagination as somebody who lives in Western Country these people are actually using crypto on a day-to-day basis they need crypto and we are seeing that this is the growth opportunity Africa is the growth opportunity remittances people escaping from failing Fiat currencies Latin America is the growth opportunity again same stuff Central Bank Insanity cross-border women's is cross-border business with Argentina again great example they have city capital trolls can't get dollars people trying to export stuff are totally screwed because they're forced into government exchange rates and stuff like this it's they need crypto right and characters under sanctions need crypto and countries like veteran Africa

India Etc these all have young populations that are all entering the workforce and they're all educated for the first time you have people who are making money on the internet that don't have any other currency except to use crypto basically because their entries are screwed for me anyway the setup for the secular trend of crypto adoption just makes complete sense just from the financial side this is nothing to do with like the web 3 side of like nfts all that kind of stuff you can forget about that we don't need that for the next cycle though before we get a sentiment I do have a question for you like typically with each cycle these Cycles in crypto and I think it's more liquidity driven but they also are partly driven by like some new thing happening in the space right we had the first cycle was when like the new like

the Bitcoin Forks all came about then you had the ice seos back in like 2017 and then this last cycle we had you know D5 and nfts what do you think and maybe it's just liquidity and maybe it's just people recognize the need for self-solver money but is there another use case that you think like really takes off and like is the thing that takes us to that sort of like blow off top kind of thing I think all that stuff comes back in a raging way right we're gonna see new blockchains we're already seeing like Aptos and sui and stuff the blockchain's higher you know faster smarter stronger blockchains whatever right they're not eight minute after seven minute abs right kind of thing so we're seeing these new blockchains come through those are going to get a lot of attention especially from people who are

less worried about questions about decentralization your blockchain even staying on all the time stuff like this we're gonna see definitely an appetite for those kind of Technologies and that's going to drive people in right nfts are going to take off and find new use cases and go beyond just the crazy speculation that we've seen in the nfts right now remind me of where we saw a lot of altcoins in like 2017 2018 I guess that's more like a 20 18 moment for nfts but there are use cases there there are strong projects and even though we had an abundance of crap we do have some good projects that are shaking up the game that are doing interesting things right but one thing I think is probably really going to be the big mover in crypto that's going to bring in literally trillions of dollars into this

Marketplace is real world assets right we are going to see more tokenization of real estate more trading of real estate we're going to see tokenization of equities tokenization of bonds we're already seeing it I want to be very clear we're already seeing that I mean isn't it I think maker Dallas taken half a billion dollars of U.S treasuries we're seeing different companies actually in like Europe for example they're tokenizing corporate bonds and putting them onto the blockchain and then companies are swapping them back and forth like these early pilot cases are very quickly going to become really big deals and really big Ong marketplaces where suddenly you're going to be able to buy treasury bonds if you want to on chain this stuff's all going to move across borders across blockchains it's going to be absolutely

nuts and it's going to bring a lot of money into the market and I know we've been talking about real world assets for a long time in crypto but I think this is probably the bull run where we could see it really be a big thing as more institutional players get involved and they want to see these institutional grade assets brought on chain and they're going to be the ones bringing them on chain so technically that's defy you think D5 is going to be the big thing that Cycles what you're kind of saying institution or d flat yeah it's an interesting very interesting I haven't thought of that one I was hoping you weren't going to say gaming because that's what everyone says well gaming will make a comeback but gaming Gaming's got a lot of sins to answer for with their tokenomics and bad pains and the

rest of the stuff whereas a will there's a way don't worry Kyle we've got human greed gaming will come back okay let's finish this off talking sentiments I think this is an important part in terms of just like understanding markets and investing because oftentimes people just go on Twitter or they listen to the media and they just hear what everyone else is saying and if everyone else is saying they're bearish they're like okay then I'm embarrassed too I'm gonna sell or we're bullish okay now it's time for me to buy just like you said that last five minutes or five months of a bull market that blow off top that's the last time you should be buying but that's when everyone's telling you you should be buying so sentiment is actually a really really important thing to be looking at as an investor as someone trying to understand

the markets talk to me about how you look into that and how that plays a role and like when you're buying when you're selling that kind of thing the sentiment is such a big thing and it's hard to be contrarian right we've all made plenty of mistakes when it comes to that I mean early 2022 I was late to accept that things are pretty bad right as a lot of people were right yeah sure I took plenty of profits during the run-up in 2022 but um not enough yeah no more a little bit more so spontaneity is a very very tricky thing because it goes completely counterintuitive to what your brain is telling you and you have to say no brain you're wrong right be quiet lizard brain rational brain is going to take over here and actually look at things as they are so when Market

sentiment is bad Lily wants to buy because everything's bad right but that's actually the time to buy fundamentally strong assets because if you believed in Bitcoin and ethereum and all this stuff and everything we've talked about on chain and then you know billions of users coming in these assets are going to go off in price at some point now if your whole idea is well but I'm gonna buy it when it goes down it's going to go down you guys reception's got to come I mean Bitcoin for three thousand bucks good luck you'll be sidelined when it hits through all time high and probably full moon at the all-time high and then give 75 percent of your money back when you capitulate in 2025 spare Market that's tough but true right but if you want to think about okay well now is an interesting time to be buying because sentence

really bad you know and nothing we're not saying rush out roll your money in overnight right that's that's never the message it's about learning about assets taking the time to educate yourself dollar past averaging and finding good entry points all that kind of stuff right Buy on red days not green days et cetera et cetera but if you're looking okay well that's all great I can accumulate that but then what right when do I get out well some simple things you can keep in mind in terms of gauging social media center one equal to the Bitcoin fewer and greed index when that starts hitting like 85 90 95 and stays up there for a couple weeks or something that's the time to consider hey maybe things are going to be crazy right when we see for example people boasting daily pictures of the new Rolex they bought a

new car they bought the mom all that stuff that's great stuff but that's also saying markets are overheated when we see the coinbase app crypto.com app hitting number one number two number three on the App Store also a time to be worried when we see the mainstream media saying hey new paradigm money everyone I mean there's that famous article from I think it was the New York Times in 2017 it's got these two crypto Bros ones wearing a Bitcoin cert ones are in ethereum sure that the headline is everybody's getting silly rich in crypto something like that that's the Hop signals right these are signs that say Hey the greed is getting out of bounds right now at all bunch of different technical indicators and look at you know weekly RSI over 90 and stuff like this but if we just go for a real

sentiment point of view that's the kind of sentiment that's actually dangerous in markets right we can end this conversation on the simple quote from Warren Buffett because he's absolutely right you know be fearful and others are greedy and be be greedy and others are fearful well and to give context to this if you think about it just like how this actually works if everyone is bearish everyone's like I'm not buying anything right now I've sold all my crypto well then that means there's no sellers left that means it's the good time to buy as long as what you said the key component was that's the time to buy fundamentally strong businesses or Technologies right when everyone is bearish it's not the time to go and buy the next mean coin

okay but it is the time to go and buy the thing that you know is going to make it through the bear market like Bitcoin and ethereum because look everyone right now is bearish because they're just lagging right they're lagging on the indicators they don't understand the macro they don't understand the technical analysis they're missing something but if everyone is already bearish there's just no one left to sell and that's why like when the FTX collapse happened it didn't even reach a new low because at that point everyone had already sold there was no sellers left and at that point when you want to start deploying your capital and then same thing when you're saying like when we reach that top when everyone one's like oh I've made all this money it's okay no one has any money left to put into crypto which means everyone has to

sell like gravity is is now going the other way right so it's like that's the way that you need to be thinking about the sentiment stuff and right now everyone is still super super bearish and so I think again when I look at the four things it's like okay macro good technical analysis good on chain stuff really good and then sentiment really bad perfect you know like that's the time you want to be if it was sentiment also is like good and everyone's bullish I'm like what's the Ebola or something's wrong yeah yeah what's going on here at that point when those four line up that's probably when next year or something right when we're out of recession everyone's feeling good and everyone's pumped because everyone's making money their houses are worth double what they were you know this year and that's the point where you're like

okay I gotta get the heck out of here so yeah we remortgage the house buy Bitcoin at the poppy oh yeah yeah when you see that guy posted on Twitter you know oh crap or once your friends or your family starts asking if they should be buying Bitcoin and Eve you sell in like April 2021 I had a couple buddies come and I met with them separately maybe two weeks apart for each other or something like that and they both told me that they were thinking about getting into crypto and they were going to buy Shiba Inu and I was like oh oh God feeling I guess sat down sit down the whole business I got to go back to something earlier you mentioned price prediction for Bitcoin at 48 000 and we'd never get price predictions on our

show so it's always fun and exciting for us to get something different here and I our listeners I think are really liking this let us know if you are by the way guys eth do you have a price prediction for each this year I do not have a price prediction for eat this year I think it depends on how the markets go in general but if we see Bitcoin get up to 48k I do not believe that ethereum will go off and hit its own new all-time high but I think we could see ethereum getting up to like 3K something like that by the and the situation where Bitcoin hits 48 okay so at the majors will hit new all-time highs we'll see random coins pop off to new all-time highs stuff come out of nowhere hating all time highs that's fine but those are the outliers right and the

points that have been around ethereum Bitcoin Avalanche stuff like this they're not gonna have new eyes here in my opinion so to wrap a lot of our listers are new into the space and this might even be their first cycle so advice for what they should be doing now and maybe even just some advice for for the cycle itself but also I know summer listeners were also many of them were around in the last cycle as well so just knowing the context of who's listening right now any advice you can give them as we wrap up here I think the most important thing is to be paying attention right now and look at everything we just discussed right liquidity situation online shape match with all this stuff right sentiment now is the time to be paying attention right and now is the time not to get caught up

in having that post-traumatic stress syndrome from 2022 with 20 types was bad we all we're all here through we all suffered through it we all know what happened but if you update your psychology too late then you're gonna miss out on a lot right if you're waiting for everybody to tell you it's safe to buy then you're buying at the most dangerous time right now it's time to be paying attention now it's time to be putting in those hours doing the research getting those test Nets man getting those air drops getting that free money putting in the work you know I want to talk about putting in the work it's real because people don't right if you want to make money in the cryptocurrency markets you need to take the time put in the work arbitrum everybody screamed from the top of their lungs about the

average from airdrop for like a year and probably only a couple hundred thousand actual people got it right because multiple addresses and all this stuff out of 300 million crypto users globally only a fraction of a percentage actually got it when all he had to do was Bridge some money over make a couple swaps on Unity Swap and you could about three four or five grand for free but in the work there's test Nets coming up that are going to make big money there are new D5 protocols they're new altcoin gems that are going to be the next big things in the next cycle right even just focusing on what's happening on the ethereum ecosystem updates and stuff like that and building your portfolio around that like now is the time to pay attention and to put in the work when things are quiet because when things go

crazy again you're not going to have the time to do that stuff nor will you want to because it's going to be the time danger a great place to wrap up because it feels good to know that we all can invest confidently right now we're in a good place as everybody seemed to feel macro technical on chain and sentiment all going in the right direction although you never know what the future can hold so pay attention do the work keep listening to Webster Academy check out Lark Davis if you're not following them on Twitter if you're not following them on YouTube if you're not subscribed to his newsletter he's got everything that you guys need to know to stay on top of it and invest with confidence thanks so much for listening and everybody have yourself a great week thank you for listening to web3 Academy

we hope this helps you along your web 3 Journey if it does please share this episode And subscribe so you don't miss the next one nothing in this podcast was Financial advice crypto web3 can be risky you can literally lose it all in fact if you invest on account of what we say you probably will lose it all so don't do that in all honesty the point of this podcast is to remove the noise of markets and price and focus on utility implementation anyway so you should not take any of this as Financial advice thank you friends and see you in the next one