Bulls versus bears: Bitcoin's next move with Michael Nadeau

Transcript

you could even get to 90K and 90K is like the short-term holder cost basis. That's another important level. It wouldn't be crazy at all to me to have another a 40% move down after that. And then now you're down into those deep value zones that we said we we haven't reached just yet. You know, you get to 85K and have a pretty standard 35% correction. You're back down to 57 58K or so. That seems very reasonable. >> Bitcoin is over 75K, but is it going to hold? Are the bears going to win this battle? Are the bulls going to take us to new highs? What is all going to happen? When is this range finally going to break down? Hello and welcome to the Milk Road Show, the podcast that knows that whoever Satoshi Nakamoto is, he probably never thought that Bitcoin would be used to pay tolls in the

straight of Hormuz. I'm your host, John Gillan. Today is Tuesday, April 14th, and today we are joined by Michael Nato. Michael is the founder of the DeFi Report, an industryleading research and data advisory firm focused on decentralized finance. He is also a frequent guest of the Milk Road Show and one of the best analysts in all of crypto. Michael is going to break down what's going on right now and give us a lot of alpha in this episode. So, that sounds good to you. Make sure you like and subscribe. Share this episode with somebody who needs to hear it. Today's episode is brought to you by Consensus Miami where the next cycle starts. Some turn crypto tax chaos into confidence and Nexo earn interest, borrow and trade crypto. And without further ado, welcome back to the Milkro Show, Michael Nato.

How are you? >> Great to be here, John. Doing great. Yourself? I'm doing really well. I'm excited to talk to you today. A lot of people, I think, have questions for you and for cryptofocused analysts right now. I want to start with the thing that's on everybody's minds. Bitcoin, as I said, recently broke 75K on expectations of a peace deal in Iran. Uh, but that hasn't happened yet. The market still seems to be front running that move. Just give me an update generally on your thoughts on crypto here. What are you watching for in these markets right now? >> Yeah, so uh so much going on. The the lot of lot of news out there related to the war and I think everyone's like really really anchored to that. Um, and we can get into kind of how I'm how I'm thinking about that. But what what I do

is really try to follow a process that is really disciplined and really anchored to our understanding of cycles and how cycles work. And this is really rooted in our understanding of, you know, traditional market cycles. I've actually got a a book here uh, Mastering the Market Cycle, Howard Marx. And, you know, we've basically adapted our understanding of how cycles work to crypto. Um, and so I kind of thought that everything I would expect to see in a typical bull market had played out, you know, going back to like early 23 through October or so. So, we kind of had turned risk off back then and we're now clearly in a sort of reset mode for the crypto markets in in my view. We're about six months into the current the

current bare market. Um, we've had sort of two periods where there's sort of like this bull versus bare battle. I think the last time I was on the show was during the first battle um when we were kind of ranging between 84K and 97K or so. The bears won that battle and we we we saw a leg down. We've now been trading in the next channel which is 62 to I think where are we around 76 or so uh today. So we've been in this lower channel. Now we have another setup here where bulls versus bears. Who's going to win this one? Um, and we can kind of get into, you know, what I'm thinking and how this could play out from here. But that's kind of the overall structure, I think, where we're sitting right now.

>> Everything you're listening to today is also covered in our daily crypto newsletter. And on Sundays, we even recap the best parts of the entire week's worth podcasts. So, check it out at the link below. >> Great. I think that's a great framing. I I do want to ask about this range because uh you you've pointed this out for a while and I think most people who have been paying attention have noticed that for I think around 70 days over two months anyway uh Bitcoin has been bouncing between this 62 65k 76k level and we seem to be near the top of that range right now. It seems like the bulls are thinking we're going to break to the upside. So let's start with the the bull side of this case and this you know this battle you've described between the bulls and the bears. Let's start with

the bull case. What do you think the bulls have going for them to say that we're going to break out of this range and move higher here? give me your view on that. >> Yeah. So, you know, and I guess we should maybe we can can we assume for this discussion that the bull view is that we've already bottomed and that we're sort of moving into a new a new market structure. If if we assume that's the case. I think there's there's some arguments to be made for this and and a few of them would be, you know, everyone's focused on the war right now and what's interesting to me is that Bitcoin actually bottom before the war started. So, we came down to, you know, 62K or so, uh, very early in February, and the war didn't start till, you know, late in February. And Bitcoin's been

been in a range moving upward through this whole time, even even rising um through a lot of volatility and through a lot of um, you know, volatility in the traditional markets during that period. So, I think if you are bullish, you could say, well, the market has already looked through that, right? Oil prices are went up to 115 or so. we've we've come off a little bit. The market is processing this. We can look through, you know, geopolitical conflict and, you know, that that that looks that looks clean. I think that has to be your view if you're you think we've bottomed. Um the other thing is when we had the uh second correction that took us down to the low 60s, we did come into what I would call, you know, fair value uh territory for Bitcoin. We we were

calling for 65K or so back in October. we we came into that zone and some of these KPIs that we track to really kind of understand where we're at in the cycle, some of those were hit, at least the sort of upper range of those were hit. So, I think that's another sort of check mark if you want to say, you know, we we're potentially going into another expansion here. We've seen you know if you follow the fear and greed index that has you know been quite uh depleted uh over the last few months and you know you could sort of look at that and say well we can only go up uh from from here right we've been in a very sort of an extreme fear uh zone for a while we know that you know crypto VCs are sort of in reset mode right now and that's

typically what you would what you would see in a in a bare market to the extent that VCs can start raising capital start pushing that capital back into the markets you know maybe that's the beginning of the of the next cycle. Um, and then something that's, you know, I know a lot of people are pointing at right now that's different this cycle that I do think warrants um, paying attention to is what Micro Strategy has been doing um, and their ability to raise capital for the first time in a bare market. Uh, we haven't seen this uh, we didn't see this in the last uh, bare market. Micro Strategy was really not buying at the lows. uh that has changed, you know, quite significantly in this cycle through this new STRC product that they have. Um and to my account, they've already made uh $7.6

billion of Bitcoin purchases uh in 2026. Um so that's that's something to pay attention to. And you know, if you fold that into your framework, you could say, well, it's it's reasonable to say that maybe we won't go to these sort of deeper levels that we've seen in past bare markets. The other thing that I think is a posit very positive sign is the performance of the ETFs. So again, this is a new thing this cycle. We first bare market with ETFs. Um and the AUM, you know, in Bitcoin is only down about 5% currently from the highs. Um and we know those have been some of the most successful uh ETF products that have ever come into the market. So, that's another, you know, positive sign that there seems to be um, you know, maybe we're not seeing like a a massive

inflows right now, but we're not seeing these investors that came in over the last year, you know, capitulating and trying to exit those positions. So, I think that's a that's a positive sign. And then I think on the other side of this, if you sort of look at the traditional markets, you know, if you look at like analyst earn analyst projections of forward-looking growth, that's like very very positive uh, right now. So, analysts are projecting 19.2 2% earnings growth in Q2 in this current quarter and 21% in Q3. So the analysts are looking at you know the largest companies in the US and saying these these businesses are healthy and they're rerating earnings. At the same time you know we saw uh PE ratios drop you know

they've sort of rebounded back a little bit since we've we've had like I don't know seven or eight updates in a row now. So the PEG ratios had sort of come down where the PE ratio had dropped but growth is rising that looks like a buying opportunity kind of on the traditional market side and then the AI story doesn't seem to be losing any steam. There seems to be really strong demand for for compute. Uh so those are all like positive signs I just think in the in generally in the economy and I think that's if I was going to like anchor to a bold thesis I think that would probably be the the main themes that I would be looking at. I like that comprehensive answer. I think you covered like five or six different things in there. Um, but I do want to

kind of key in on one thing you mentioned before we move on to the bull the bare side here. Um, which is like the the ETPS ETF products. Both Black Rockck and Goldman Sachs have come to market with new Bitcoin income ETFs which I believe are are using a covered call strategy to sort of strip out some volatility, pass on the the income to to the buyers of those products. It seems like an attempt to sort of mimic a little bit of what Micro Strategy is doing with their their stretch product. So, it seems like these have found product market fit. Morgan Stanley obviously went to market with their spot mark uh spot bitcoin products as well recently had their most successful ETF launches ever. Talk to me about how this changes your thinking for the overall market structure here. Is this already priced in this new capital, this new

institutional bull run, or do you think this changes how we're going to see m market cycles play out from here? I I think it's interesting to watch and I'm looking to see if there's if there's still going to be demand from this from you know kind of institutional investors at kind of this stage of of what I think is kind of very late stage uh across business cycle liquidity cycle asset allocation cycle. So um I think I think it's interesting that these products are being rolled out right now and we'll definitely be monitoring them. In terms of like micro micro strategy itself maybe just to to to hone in on that one a little bit. I think the perception in the market is that these buyers, these institutional buyers are essentially just going to mop up. If there is volatility in the markets, they're just

going to be there to c catch all of that and mop all all of that up. I'm not sure if that's the right way to really think about this. You know, Micro Strategy has been buying a lot of Bitcoin right now. When they're doing that, they're not necessarily like, you know, catching the the capitulations in the market and moving the market price. They're kind of quietly in the background just just sort of accumulating their Bitcoin. So, I'm not sure if it's like really going to impact uh market structure if we do see more volatility and potentially another another move down. But for me, it's like it's a very positive sign as somebody who is a long-term bull, you know, in this space and is projecting Bitcoin to go to, you know, a million dollars at some point. These are all like really awesome, you know, signs for me.

>> Gotcha. Okay. So, it's a long-term bullish indicator, but you're not so sure about whether or not it it matters so much in the short term here. We'll have to see. uh makes a lot of sense. Okay, let's let's go to the bare side here because I think you've been uh let's say eloquent about making that case. What is the the bearish case that we might continue lower here? And you know, it seems like we're 75 we're around 75K right now. That's around 15K off of the the low. It seems like a big move to go down and make newer lows here. What do you see being the thesis for that happening? >> I think the thesis for this happening is there's a few things. So, um I mentioned that like there's a lot of sort of cycle awareness KPI indicators that we look at. These are you know really long-term

things like realized price which proxy for all of the um you know coins circ proxy for a cost basis of all the coins circulating on the network. Uh things like 200 week moving average things like um the percentage of the network that's in profit. Some of these like really important indicators that we look for uh to be hit in bare markets. A lot of them have not been hit. So that would be sort of an anomaly to me to have a sort of bare market and a sort of a capitulation that we saw back in February that we bounced out of pretty quickly. I mean we went down to, you know, 62K or so and it reflexively went right back up to about 70K. So there was really not that much of an opportunity to buy it in that zone

in that sort of fair value zone for for investors. And then what we're seeing is like people start to chase that, right? And and the same thing happened after the first capitulation down to 84. We didn't go lower. Like we kind of just grinded up from there and and for a long enough period of time where people start to flip bullish, maybe they were bearish, now they're trying to chase the market. So I think that that is in play right now where you know typically when you get to like the macro low of a of a bare market, you're going to have a capitulation and you're not going to have a reflexive move straight back back up. you're gonna stay there and it's gonna get quiet and sort of everyone's going to have to come around to, you know, the that that this is a crypto

winter. I don't think that has played out just yet in this cycle. And so that would be, you know, an anomaly for me to for for for this to be the case. And like basically the bottom is in. The other thing that we look at pretty closely is uh market structure in terms of cost basis of different wallet cohorts on the Bitcoin network. So I want to understand, you know, how many people came into the market at like the highest prices of the last cycle and and then I want to understand at various points of the bare market, how much of that has actually turned over and been sold back into, you know, maybe more stronger hands. And that's a process that typically takes about a year or so to play out. And when I look at that

data, it doesn't tell me that we've sort of kind of like turned over the the market structure just yet. So that would again that would be another sort of anomaly that I would be looking at. And then you know I was bearish. I I believed we were going into a crypto winter regardless of this this geopolitical conflict which which did happen. And I think that's kind of mostly a distraction uh in particularly in the crypto markets right now. Um I don't think it's having that much of an impact on the crypto markets. And you know if you look at global liquidity and and there's different ways to to look at that but to me global liquidity cycle has already peaked and we're now you know turning over there's different ways to measure this. We also look at you

know the fiscal impulse uh as bitcoin has been correlated not just with global liquidity but actually fiscal policy in the US. Um the fiscal impulse has been rolling over as well. Um, and so if you just think about kind of where we're at, I think we're late we were already late stage. And so the the story of the war is not really impacting my framework so much. Um, and I just think there's there's a there's a an element of time to this that that just hasn't quite played out just yet. And so that's kind of the uh maybe the more bearish case where you could look at some of these things and say, well, the probability probably still points to f further weakness. And the more that we sort of

have these choppy periods where price is grinding up, the more and more people are sort of that maybe we're bearish are capitulating that and then sort of chasing the market. And we'll see. I mean, this can go on for a little while. Um, and there's some probably some interesting price levels that we're going to hit here pretty soon that will give us more of an indication of whether this is like a really durable durable move. >> This is the other question I wanted to ask before we unpack some of the pieces of this this bearish thesis you've laid out here, but we've been in this range for a really long time. Do you think that there like how long can we stay in this range before the market is kind of forced to pick a direction higher or lower? Because 70 days going sideways is

a really long time. Like do you have any thoughts around that of like when the decision on this battle is going to get made between the bulls and the bears? >> Yeah, short term is really hard hard to say. I mean the last phase we went through was roughly two two months, a little over two months. I think this one is is getting close to to the end, but um I try not to make too, you know, I'm not a trader. Uh and so I don't try to make too many predictions on short time frames, but we are 70 days in. So, this has been going on for a little while and the the closer we get to like 80 if we get up to 80K or so, you know, I think I think an interesting level would be like 85K or so, that's where most of the dip

buying activity happened during the first uh move down where people weren't convinced we were going into a bare market. So, there's there's a there's been quite a bit of buying at 84K early earlier in this cycle. So, that's a level that I'm I'm watching pretty closely and we could get up there and then I would want to see like, you know, some, you know, weekly closes, maybe multiple weekly closes, maybe a monthly close above that level for me to kind of say, all right, something has changed here and market structure is is moving in another direction to to sort of uh push me out of like maybe a little bit more of a bearish stance. And like just for people to kind of think about, you know, where how that could go is you could get up to 85K. You could even get to 90K and 90K is like the short-term

holder cost basis. That's another important level. It wouldn't be crazy at all to me to have another a 40% move down after that. And then now you're down into those deep value zones that we said we we haven't reached just yet. You know, you get to 85K and have a pretty standard 35% correction. You're back down to 57 58K or so. That seems very reasonable. uh to me that that that it could play out that way. Um so we'll see. You know, these are some of the important levels I think to keep an eye on if this this grind higher continues. >> Got you. So Bitcoin could go from being this sort of stable coin here in this in this range to suddenly having huge volatility again.

>> Yeah. And what's what's interesting is like what's interesting is you know during bare markets the price is actually grinding up for most of that, right? It's like these quick moves down and then you're grinding up. And that's what makes it just really hard. I think psychologically on on investors um especially if you're trying to buy and then it grinds up on you and it's easy to chase it. So that process is almost a necessary process to chop the market up and kind of twist people up that ultimately leads to where you're you're ultimately going. I think >> one of my favorite analysts Ben Cowan likes to say that bare markets make fools of bulls and bears and for the exact reason you're describing. Right.

So well we won't go into that any further. I want to ask another question around this. I've heard a lot of analysts saying that there are a lot of metrics, a lot of indicators onchain or otherwise that we still have to hit to sort of satisfy what they'd be looking for to see a bare market bottom formed. However, in the prior top, we kind of topped on apathy as opposed to euphoria. And there's one website that I I look at often um called Coin Glass that had 30 different top signals, you know, onchain metrics, all different kinds of top indicators for Bitcoin, none of which really fired in this prior top. Do you kind of think that that might change the the the bottoming process here? In other words, so we didn't get a lot of top signals fire at the prior top. Do you

think we might not have a lot of bottom signals fire at this bottom or or does that not impact your analysis here? >> It's possible. It's definitely possible. And I think, you know, what I'm trying to do as an investor here is align my portfolio with what I think the probabilities are for some of these outcomes. And so, um, you know, you always want to be long and and we were buying that capitulation back in February, but I've still got some cash on the sidelines because I think the probabilities are still pointing towards more weakness. And my framework is to basically, like I said, be really disciplined about all this and look for the the key indicators. I don't follow those the I'm not sure what the ones on coin coin glass are that that you're referring to. And it's true that a lot of the um KPIs didn't hit like extreme

any of the extreme levels that we would look for, but there's still plenty of ways for me to have a pretty good understanding of like where where we're are at in the cycle. And yeah, so that's kind kind of my framework. I mean, I think you have to be open-minded to all the different outcomes out there. And it's it's possible that we did bottom. I don't want to just completely um dismiss that. And we are in a bare market and people should be, you know, more in a riskon stance at at this stage of a of a cycle. >> Crypto taxes are a nightmare. You've got trades across 15 exchanges, DeFi positions, you forgot about, NFT flips, staking rewards, airdrops, and somehow you're supposed to report all of this to the IRS. Good luck. Cue the solution, SUM. You may know it by its old name,

crypto tax calculator. The Sum platform connects to over 3,500 exchanges, wallets, and crypto projects, including full support for DeFi, NFT, staking, and airdrops. It finds deductions you'd miss, reconciles massive transaction histories without losing track, and generates IRS ready reports that will help you pay the least tax possible. Oh, SUM is also the official tax partner of Coinbase and MetaMask, rated 4.6 out of five on Trust Pilot. Turn cryptot tax chaos into confidence. Get started for free at milkroad.com/sum. That's sum.com. Milk Road listeners can also unlock 20% off their first year subscription with code milkroad 20. Wall Street is here.

The White House is here. All of crypto is here. We're talking about Consensus, the world's longest running and most influential digital assets conference happening in Miami May 5th through 7th. This is where 20,000 plus decision makers from 100 plus countries gathered to shape the future of finance. 72% are director level or above, representing over 4 trillion in crypto AUM. Three days, six stages, 500 plus speakers including Michael Sailor, Brad Garlinghouse, Anatolia Yakoenco, and Eric Trump tackling the three forces driving trillions on chain, cryptocale, institutional integration, and agentic commerce. Deals get signed here, funds get raised here, the next cycle starts here. Register and save 20% with code milkroad at consensus.coindes.com.

>> Gotcha. I I appreciate that transparency because you're totally right. There's not certainty here. this is all probabilities and and trying to learn as we go. And something else I think you said that's valuable is that, you know, if we do bottom here, there'll be some anomalies associated with that. And I think there's going to be a lot of anomalies in this market going forward. So, we're all going to learn as we go here. Uh, Michael, I wanted to ask you some questions around Ethereum because I think you're one of the best an analysts in the DeFi and in the ETH space. Uh, you posted uh on X recently about uh ETH's network dilution rate and you were calling this the most important chart for ETH right now. Talk to us about what a network dilution rate is. Why is this so important for ETH and uh just what is

this telling us about Ethereum right now? >> Yeah, so we did we put out a report on we do a quarterly update on Ethereum and we put that out last week and this was like the probably the key chart that that I was kind of pointing people towards and net dilution is just the uh ETH issuance of you know that's coming out being paid to the supply side of the networks being paid to the validators and the stakers. It's kind of your security budget to run the network and it's just that less any ETH burned. So, it's kind of giving you an idea of what is the what is the delilusion rate if you're not staking your ETH. And what's what's pretty interesting to me uh right now for Ethereum, I think this is a story that the Ethereum community should should start to, you know, get behind is

Ethereum had its worst quarter ever in Q1 in terms of uh real economic value in terms of actual onchain activity, in terms of fees that are getting paid down to validators and stakers. at the same time the e stake rate actually went to all-time highs during during Q1. So that's interesting to me because at the same time that you know the you know onchain activity and actual fees being paid are at the lowest more people want to stake and are more people are securing the network. So it's at its most secure level ever. Um and while that's playing out the net dilution rate is at at or below uh Bitcoin's inflation rate. Uh so that's kind of an interesting story if you're an investor

uh because now ETH has uh a stable yield, right? It's securing the most assets of any other blockchain. It's the number one smart contract network and even when the network is in this riskoff mode and there's not a lot of fee activity on there, it's still extremely secure and that inflation rate is still below bitcoins. Of course, now we do have ETH staking products where institutional investors can access that staking yield through an ETF wrapper. Um, that's sort of interesting if you're thinking about, you know, what's your what's your crypto sleeve going to look like? Is it going to be 8020 uh Bitcoin to ETH or is there a chance that people start to look at ETH as um a store of value that has utility behind it and

then it has this token economic structure that works and there's not high inflation and you can actually get a yield off of it. So that to me is a pretty good story for Wall Street. And I just think this is what ETH really needs to focus on. What concerns me with ETH is that it's just kind of falling into like this narrative that, you know, I'm not sure if this is a narrative, but I do think this is what institutional investors think about ETH is that it's sort of like silver to gold. And if you think about if you look at how investors allocate to ETH, you know, if you're a commodity investor and you're looking at precious metals, like you're mostly in gold and then you've got a little bit in some of these maybe like beta products.

And I think that's how investors think about ETH right now. And that needs to change if ETH's going to become the number one crypto asset, if it's going to, you know, become the, you know, maintain its lead as a number one smart contract network. And so that's just, you know, maybe there's a narrative that can form around this. you get the yield, it's really secure, it has utility, it has these features that Bitcoin doesn't have. And hey, it also has really low inflation. Um, similar to Bitcoin. So >> interesting. Okay. So I think what I'm hearing you saying is that as digital assets evolve, mature, as institutions come into the space, there's a need for networks, for assets in the digital asset space to tell a story that that connects with those new investors and to attract that new capital. That's a

really interesting uh way of telling E story there. Uh, I want to get your thoughts on something else about ETH here. In this recent bullish period we've seen in the last week or so from Bitcoin. Bitcoin's up around, I think around eight or nine% on the 7day, somewhere in that area. Ethereum has outperformed a little bit. It's around 11 or 12% on the week. Um, so is that a sign to you that the market is starting to understand the value on Ethereum that there's starting to be a preference in the market for Ethereum? Is this just a momentary thing? Like how are you thinking about ETH's relative strength against Bitcoin here? It's it's a good sign that it's it's it's done doing well against uh BTC right now. In the last bull market, that was a painful period where ETH BTC was kind of just in a

downward phase for a while. We came out of that last April and it's it's it's been performing well against BTC. I think part of this, you know, maybe part of the story here is I think something Ethereum's been very smart about is they've come out and I think been the the the leading uh blockchain network on sort of quantum getting quantum ready and they're putting out a road map and and basically a process for how they're going to do that and trying to put investors at ease. Bitcoin has struggled a little bit on this and so there's a chance that that's you know playing a little bit of a role here. I don't know if that's I, you know, I think historically, you know, ETH did not outperform Bitcoin in the last cycle, but it does have periods where it shows, you know, really strong outperformance.

If you go back to, you know, the June, July through September period, ETH was was also outperforming Bitcoin. So, um, to me, this this is just going to come down to like how do how does big money perceive these two assets and how do they what becomes the standard sort of like way that you allocate to crypto as a sleeve of your portfolio? Is it 50/50? Uh, is there a chance that actually ETH can become the number one crypto asset? Like those are the things that that get me excited. But I think right now um it's probably a little bit more of just an anomaly. ETH was sold off. you know, ETH is sold off and it's it's it's having a nice little little rebound here.

>> Okay. So, it's it's good to see, but you're not reading too much into it. Michael, one more question about something you posted on X just a couple hours before this conversation. Uh, you shared some charts on on Hype, Hyperlid, uh, which has also been performing very well among the the the highest market cap crypto assets, but you said a lot of people don't want to hear this, but this uh, data on hype shows that the market was in a previously risk-on environment, not currently in a risk-on environment. elaborate for us a little bit what you're seeing here. What's your take on this? >> Yeah, and we've been doing these quarterly. It's an interesting time to be looking at a lot of crypto charts.

We've been we do the quarterly updates on Ethereum and we do one on Salana. So, we we were looking at Salana this week. Um, we have a really nice dashboard for Hyperlid as well. And if you look at any charts across the crypto landscape right now, it's very clear we are in a riskoff uh market. And I share the the hype charts just because Hyperliquid has been I think the the ecosystem that everyone is sort of corraling around in this bare market for good reasons. There's a lot of uh interesting innovation happening there. There's a lot of stuff happening with traditional assets now being uh integrated into the the perks platform and we've seen how investors have come around that especially during like oil volatility. So, there's a good story

with Hype. Um, and those charts, if you look at our dashboard on Hyperlid, it, you know, it kind of looks similar to what you see across the crypto landscape, but the charts are a little bit stronger just because Hyperlid has performed better. Um, but it's, this is, it's just very clear to me where we're we're not in a risk-on environment. And I think there's a coming back to the sort of cycle in how this works, like there's a very clean sequence in my view in terms of how you get to a risk-on market. And that sequence tends to start with, you know, global liquidity and and liquidity metrics that that either bottom or start to inflect in in another direction. Um, that kicks off basically onchain activity and people that want to

get access to uh DeFi and want to access DeFi loans that kicks off a race between DeFi protocols to capture those customers. So then they will boost yields to attract customers. That creates more reflexivity. it creates more people coming into DeFi and then you see media attention like this is sort of like what you look for for the start of a new cycle and all of those things are going down and to the right not not up and to the right. Um so that's kind of my you know we're going to share a report tomorrow that kind of goes through some of that. You know there's there's many ways to look at you know kind of where we're at in the cycle. One way to do it is just go look go look where the animal spirits typically are and that gives you an idea

of kind of what's happening in the market. So, >> okay. Appreciate that analysis there. Uh, Michael, I think you've made a reputation for yourself being very data driven doing a lot of this analysis and just like you said, like that's what you're reading in those charts there. A lot of people are thinking that this market is mostly driven by headlines right now. And I think that there are a couple of big bullish catalysts that the market feels like it's front running, which is one, a ceasefire in the conflict, and then two, the potential passage of the Clarity Act. Do you think that if these things both happen sort of like simultaneously or near one another in the markets that could be a catalyst that breaks us to the upside? Like what what are your thoughts around that?

Because it seems like there are more near-term bullish catalysts than bearish catalysts. >> Yes, I think if if those things go through, if we see peace in the Middle East, if we see uh Clarity Act, that those are good things. I I would expect the market to react positively to these things. um for me to get like really bullish again, I would have to see signs that okay, we've we've actually hit hit a bottom or some sort of confirmation in that and then everything else that I would look for like for the start of a a new a new cycle. So I think those are strong, you know, catalysts like shortterm, but like is the Clarity Act, you know, okay, let's say that gets passed, does that create new users on chain immediately? Does that create

demand for DeFi loans? Does that create right does that do anything to liquidity conditions in the market? Right? Those are good things and that will start people building in the space and and that gets us closer to everybody having a a phone that has a crypto wallet on it. Maybe we get, you know, stable coins integrated into payroll solutions after all of this. Like those are the things that I'm bullish about, not necessarily like a catalyst, you know, to to take us to all-time highs. >> Gotcha. Okay. It may be positive, but it's not really tied to your long-term thesis here.

>> The way we build wealth is changing. Stocks, savings accounts, real estate, that playbook is getting rewritten in real time. Nexo is the platform built for what's next. It's an all-in-one digital wealth platform where you can earn interest on your crypto. Borrow against it without selling and trade a wide range of assets all in one place with 24/7 support and institutional grade security. Oh, and by the way, Nexo is back in the US with new US clients getting 30 days of Wealth Club premier access. That means elevated interest rates, lower borrowing costs, and crypto cash back on trades. Benefits usually reserved for loyalty program members.

Get started at milkroad.com/nexo. >> Uh, Michael, I think something a lot of people are wondering right now is what you're doing with your portfolio um and what they should do with theirs. Uh, obviously I know you have a pay wall in front of yours, so you don't have to share too much if you're not comfortable, but I know that you started to buy Bitcoin or I believe you started to buy Bitcoin when it got down to 65K because you said that was in the the fair value range. Um, have you made any major changes to the portfolio since then? Like what is your positioning like right now? Are you still cash heavy? Where are you on this right now? >> Yeah, so 60 we we we kind of said 65k is kind of top of the fair value range. I do think that there the probability

points to us like getting into the 50s at some point and I've been setting my portfolio up to align you know to that outcome. I'm still I'm still long obviously always want to be long but want to be waiting towards cash when I think that's that's appropriate. So we are still pretty heavy on cash and I would say like the the where I'm at right now is I'm like we've done a ton of work already you know over the last six months on analyzing various networks, various projects. I find it much easier to do that in a bare market when sort of the some of the some of the froth has come out of the market. We can really see what what's real. So, we've kind of we're in a a spot where we know exactly what we want to buy. We've got an idea of what those prices that we

want to pay for those are. And I'm kind of just letting time do its thing right now. And um like you said, you know, we share all this, you know, transparently and with with our pro members. And the goal is just to, you know, be as transparent as possible and align our incentives, you know, with with our audience. So >> if Bitcoin does run up to 90K, are you just going to sit and watch it? >> So if it goes to 90K, like I said, I would be looking for uh some sort of high time frame close on that. So weekly at least a weekly or or multiple weekly closes possibly a monthly close for me to say okay this is something has changed or there's other catalysts you know if we come out with a big uh spending bill you know for the war you

know the Trump administr administration requested I think $ 1.5 trillion or there's like very clear forward guidance from the Fed that liquidity is coming like those things I'd have to see some of these things line up for me to to change my mind But that's another important thing. Like we will change our mind if if if that if that's what happens. But I'm sort of forcing I think I have to I have to be forced out of that position by those types of events. So >> right, the market has to prove it to you. And I think there's a lot of wisdom in just what you said like waiting for the confirmation because there's lots of wiggles on the chart that that you know kind of reverse quickly especially in this environment. Um Michael, I know you have another report coming out from the DeFi report soon I believe this week.

Could you give us a little taste about what you're writing about, what you're planning to talk about in your next report? Yeah. So, we write uh a weekly report that covers uh really cycle awareness, KPIs, and we get into details on how we're managing our portfolio. So, this week we're going through, you know, I think what's interesting right now, we are starting to get I think a little bit more of this bull bear battle um is is starting to play out. So, we're we're kind of taking some of these themes we've talked about this week, sharing a bunch of charts that go through the ecosystem to get people an idea of the data that I'm looking at and and why I'm saying, you know, we're in a riskoff market. So, we're going to go through that through some of that. We have a lot of cycle KPIs that we look at as they

get hit and then we have an idea of what the forward-looking returns are, you know, one, two, three years out. So, we we share some of that data based on what those those numbers look like right now. And then on Fridays, we share a free report. Uh we're going to be covering the Salana ecosystem with a with a Q1 update on Friday as well. >> There's going to be a lot of alpha in that to look forward to, I'm sure. Michael, thank you so much for coming on the Milk Road Show. I think this is a really uncertain time, very volatile time in a lot of markets. So, people really appreciate your insight and just like you said, stepping through some of the probabilities of of which way things could move, how to play it if it does.

Where can we send people to find more of you and your work online? >> Yeah, so people can go to uh the d5port.io. Um, we are doing a one one month free right now. So, if you go to the d5port.iofriends, you can sign up for that. I'm on uh I'm on Twitter uh just do it and you can follow some of the research there as well. >> Is it friends rens or or spelled? >> It's it's uh standard friends. Standard friends. >> Okay. Well, be a friend of the show. Yeah. No, that would have been good. You're a friend of the Milk Road Show. You're welcome back anytime. I look forward to talking to you again soon.

Thanks Mike. >> Thanks, Sean. Appreciate it. >> Thank you all for joining us. I hope you all learned something today. So until next time, stay safe, stay educated, stay bullish, and we will see you all on the next episode of the Milkro Show. Thanks for being here, everybody. Bye. Want insights on what's moving crypto markets and how we're trading each event? Subscribe to our channel and join the Milkro Daily and Pro Newsletters and start investing like the top 1%. This show is for educational purposes only. Nothing we say is financial advice. Investing is risky. Never invest more than you can afford to lose.