Coinbase's Q4 crypto survey: is the bull run over? with David Duong

Transcript

the biggest opportunity and the biggest risk is both on the macro side uh right now. Getting it right, I think, is the name of the game. GMGM, good morning and welcome to the Milk Road Show, the daily crypto show that turns complex finance into something your group chat might actually listen to. I'm your host LG Ducat joined by Jay Hamilton and today is Thursday, October 16th, 2025. Today's guest is David Dwong, head of institutional research at Coinbase. And we're going to discuss obviously everything that's happening in the market. The market may move a few percentage points while we are talking because we're recording this a few hours before you are listening to it. We're also going to discuss their latest charting crypto report from from Coinbase telling us what people are

bullish on in Q4 and beyond, especially institutional buyers versus non-institutional buyers. And we will maybe quickly circle back on the nukes from this past week, but honestly, I think we're all pretty keen to just look to the future, maybe talk about Bitcoin versus gold and anything else that might be on this man's mind. And before we start, today's episode is brought to you by Nexo, the platform that grows your crypto without locking it away and figure markets. Grow your cash like a bank. No lockups, just real returns. Woo! Let's get him out here. David, what's up, man?

>> Hey, LG. Hey, Jay. >> Uh, okay. Quick thoughts. just don't look at the chart, but you can look at the chart right now if you want. How do you feel? >> It's tough because I've came into this month being very optimistic and I thought that we were going to see uh you know the next four to six weeks being fairly clear for uh to to take risk and obviously the events of last Friday even today I think we're challenging that premise. I do think positioning is a lot clearer. I still think the macro environment is favorable. We can talk about it, but I think that, you know, the question is, do people actually still have cash on the sidelines? Has the leverage kind of flush out? Like, does it mean that people can't participate in here? I think those are

all open questions at the moment. >> When you say people, do you mean who do you mean? Do you mean like the the DATs? Because I saw that uh somebody I think maybe Espat was raising another 76 million or something today to to put into that. Are you talking about DATs or you talking about uh quasi retail people like me and Jay? What do you mean? >> Good question. I mean, I do think that probably DATs are included in this, but I was mainly thinking about a lot of like their the retail traders. And when I say retail traders, I mean, keep in mind that I think there are a lot of retail traders out there who are trading in the same size as institutional players. So, like I'm thinking about like those massive market players in here who are trading like eight figures uh and and got got flushed out uh over

the weekend, you know, like I'm thinking about those kind of guys. Are they going to be back in this market? Do they want to? I feel like that's actually contributing to the move we're seeing today because maybe I guess we could call them whales, whatever. Like I think some of those whales are probably too shy. Maybe they're closing positions uh trying to actually take some profit off the table after the events of last weekend. That could be what's happening here. has the market I mean in your experience has has have those types of wallets or players or whatever you call them obviously everybody can be wrong but could they be wrong twice right cuz that's my question is like okay that flushed out but all signs point to like listen this is a dip you got to get into how do how how do you think they're

going to navigate that can they should they return to the table will they return to the table and would that be smart >> I mean there's going to be a level for that buyer that's the bottom online. That's just at least the rule in all markets. And I think that we will see that happen. It's just that for right now like that flash crash is still very present on people's minds. So I think that that causes a lot of psychological biases in terms of like hey maybe like I already had a good run. If I compare it like not to like the last two weeks but maybe to the last like few months like I I might you know hopefully if I I survived then I I would have been doing well. So I think that that's probably contributing to some of this move. Like

I I do think that there's still cash sitting on the sidelines. I think a lot of institutions were probably fine because this is more of an altcoin driven kind of reaction and I think that probably contributed to it. I know you guys have talked like ad nauseium about like the causes to all this kind of stuff but I mean like you got to keep in mind that it wasn't just a catalyst right it was it was the macro catalyst sure of like you know tariff announcements on China etc but it was like the thin liquidity it was the excessive leverage it was a lot of cross margining and people not understanding aggregate positions like the idea of convexity is still like it's a nebulous concept for us in traditional fin or from traditional finance like the idea of like price convexity is like it's

It's not intuitive. It's It's really hard to kind of get a grasp on, but then you add that to like altcoins, thin altcoin liquidity, liquidity on a weekend, like all this stuff makes it super tough for people to kind of conceptualize what's really happening here. >> Yeah, absolutely. And I think >> because >> Oh, got I the the last time you were on the show, David, you were you were so bullish and and you're not the only one that was so bullish coming into Q4. Uh, and the thing, do you think V-shaped recovery here and risk on comes back and that bullish sentiment that you had a month ago could continue through Q4 or are you more are you are you thinking not

V-shaped recovery and we might drag on for a little bit and a little bit unsure of how Q4 will go? >> I'm a lot more unsure about how Q4 can go. I I'll be honest like I'm not sure how long it's going to take the markets to recover here. I do think it will but doing it in such a short time frame like i.e. within Q4 given the magnitude of the event we witnessed I think that's tough. I think generally these things take at least months to kind of recover. I do think within a few months we could definitely be back to where we are.

Yeah. I mean like two things. Number one, this wasn't actually from from the price action perspective, probably this wasn't as bad as I would have imagined. I.e. like if you told me $19 billion or more got liquidated, I would have thought prices would have been a little bit lower than where we are today. Instead, the market recovered fairly quickly. I think that like, you know, there's a lot of reasons for that. Um, but certainly I think to get this positive sentiment that the market had to kind of drive us to new all-time highs, which is what I thought would be happening over the course of October, I think that's going to be really difficult. All right. Do

>> you agree with our our bet our bet for pro that we're going to hit new all-time highs for ETH by the end of the year? >> Would you make that bet? >> Is that is that the LG? I don't know. That's that that our bet our bet our bet for Milk Road is that uh ETH hits new all-time highs by the end of the year. You agree, disagree? >> I I will probably have to plead the fifth on that one, but I think it's going to be a lot more difficult right now. And that kind of goes back to what LG was asking about the dats because >> Mhm.

>> Yeah. I mean like it's it's hard to get good data on this, but I imagine that, you know, given the price performance we've seen through the weekend and up till now, it does seem like a lot of cash has gone towards defending the price levels, which makes me question how much more cash is sitting with some of those entities to actually take this to the next level. Like if it hadn't been for this event, I would have said like, "Yeah, for sure. I think your thesis is absolutely right." But because I don't know now how much free capital is actually available now because we've spent that some of that to just to protect what we've had. There's not enough to go in for like new cash to to bring us to like higher levels.

>> David, what would what would what would turn that perspective around? Like what would what would change that for you outside of a you know Trump says we're all good again? Like how how could you what what would it take in the next I mean Maybe not a couple days, but a couple weeks for you to say like 100% ETH is going to is going to go. Other than price starting to go, you know, ETH going back to 4,400 and being on a clear march up outside of like TA, what would it take for you to say confidently that ETH would hit all-time high this year? >> So, it's not all bad. I mean, like I I hate to come on here and just be like, "Oh man, this guy's like doom and gloom." And you guys know I'm not like I've I came on here like last month and

said like, "Oh, it was all it's going to like go great." I do think that like one silver lining to all this is that when I talk to a lot of institutional clients, it doesn't seem like they suffered a lot of pain here. There's still opportunities, I think, from their angle to actually buy things cheaper here. And I think that some of them are probably going to be shy. I think they're going to say like, "Okay, I do want to buy, but I'm looking for the right opportunity. I'm looking for all this clear out. I don't want to catch a falling knife. And that's completely valid. I think that the many are going to say like, you know, like I just don't want the risk that there's going to be another like uh capitulation lower. But if this is indeed like kind of the bottom and you know, like it's somewhat

shallow, but it's fine, then like I think this could be the opportunity for many of them to kind of come in. And also I do know that there's a lot of institutions who are even like on boarding for the first time because they haven't like lost their uh their taste for crypto. Like I think that like they weren't involved in the first wave uh of the rally and they think that this is still an opportunity because honestly there's not that much stuff out in the world or I mean there is stuff to invest in but like there's just not as many like asset classes and other things. This is why gold's so like expensive right now because it's tough getting into like other assets. So I think that there's still going to be opportunity for those institutional players. If that's the case, then I think that that

thesis that you kind of mentioned could still be valid. >> Let's look at uh this report here that you did put out. And I do want to note I just noticed before I pulled it up and this is avail this will be available on the uh I guess like Coinbase institutional site, right? like on the on the site that you guys kind of manage. It should be available a little bit later today if you guys want to check it out. Um, but this you you guys kick off this report which is massive and full of like really great nuggets and and you do call out polymarket in here which I love to see. Um, but I you you kick off with this survey of I think 120 global investors both on the institutional and non-institutional side. Um, I do want to point out before we look at it that this is between

September 17th and October 3rd. So before the black swan >> before the black swan. It's still good. you got to publish yet. Obviously be curious to see how those outlooks change, but I think, you know, I think we always preach zooming out and I think in this case we're in a very small microcosm hopefully of like this little trade war thing uh that hopefully clears and that you know these outlooks haven't changed too much out of this report. Um I can I can kick off really quickly and just tell you what what stood out to me at least of this um of this actual survey part and then David I'd love to hear from you uh what out of the whole report we should be really looking at and what stood out to you. Um institutional buyers right off the bat are uh more convinced 45% versus

non-institutional 27% that we are at the late bull market. So that's very interesting. Um almost as many of both sides of in investors are holding and decreasing versus the ones that are increasing are lower. So that that is interesting. uh you know kind of saying we're saying that there is still some appetite right but not not as much as there was and that uh what else did we have and that oh and this is actually I found this interesting this chart right here that um institutional investors are are way more bullish on uh large cap tokens excluding Bitcoin versus non-institutional buyers which to me is very is is kind of interesting. I would have assumed it was kind of the reverse.

Uh so I'd love to know also how you how you kind of uh classify both these types of of buyers and also that institutional buyers were most concerned in in changes to uh liquidity. I think that was in here maybe on the next slide. So yeah, so that was great. I mean this I I love reading this kind of data. David, anything in the survey that really stood out to you that we should be looking at? >> Yeah, so this is the first time where we've actually ran this survey and we're going to include it quarterly in this report. So look forward to that because I think then we're going to have more historical data to actually do comparisons as well. But to your point, I mean, we conducted the survey right before uh the you know the the crypto crash last Friday and you know like I've

been doing research for 20 years now and it's always hard to conduct these surveys because you have that possibility of kind of these market events happening around the same time which could completely distort the results especially so in crypto. But what is interesting is that among our survey respondents and I like the fact that we actually got it was actually an accident that we actually got both institutions and non-institutions to respond to the survey because we were really targeting just institutions and we were split down the middle like it was it was almost like 65 65 somewhere around there in terms of like the uh the respondents on both institutions and non-institution side. the the direction mostly stayed the same across these questions but where it varied was

actually the magnitude and what I mean by that is like if you look at the first like response for example in terms of like where are we in this cycle that first question >> that's right >> like it was really interesting to see that 45% of institutions said that we are late bull market cycle now that said uh the other half plus actually still thought we were in a bull cycle and they were like earlier stage like accumulation a bull market but the majority still thought that you know we were later in the cycle than many non-institutions think. In fact if anything the non-institutions were kind of divided across the accumulation midbull market and late bull market

phases. So it is interesting that even though everyone's positive, it's like where we are in that cycle, it's actually very varied uh among these two between these two groups. I think that when you talk about where do people put their money and this is kind of where the next charts on you know like are they in Bitcoin are they in large cap names are they in like small cap names like it's interesting to see the two different results side by side because for the most part no one's disputing Bitcoin like I thought that there would actually be more push back coming from non-institutions because I think that they are more into the altcoin side of things that's a better place to capture or beta and alpha. Uh but no, I think

mostly most of they're they're like yeah, it's everyone's like pretty like sanguin about what's going on with Bitcoin. But when we talk about the large cap names and small cap names, and I think this goes into what has happened over the last few days because I was just saying that institutions really weren't in those altcoin names where the leverage flush actually happened. They have capital. They have cash actually on the sidelines. actually had a question here, but we couldn't publish it because we I I I think the data itself just isn't strong enough to warranty yet. Maybe in the next quarter asking how much cash do you guys actually sit on right now and we're gaining like a myriad of responses, but like a lot of the institutional investors number one do have cash on the sidelines. Number two, like they're they were

predominantly in those large cap tokens, Bitcoin ETH Soul etc. um and they are fairly skeptical about small cap altcoins whereas non-institutions somewhat but for the most part like I would say like there's a big dichotomy with their positioning in small cap altcoins being a lot greater than what we're seeing from institutions. >> Who are the non-institutions here? Can you uh just give us an idea of who this type of investor is? Yeah, we threw that category in there because we were trying to like it honestly we wrestled with this for like way longer than we should have. I'll I'll just put it there. I'm

not going to put a time on it, but like we were trying to like how do we define the non-institutions because they're the retail but not quite retail. Retail's in there, but we have like what we have kind of collectively phrased the proumer category uh which we call it kind of like professional traders who are not in part of an institution but they're charging. They're they're they're trading like large size, you know, like on a month they could be trading like a hund00 million dollars. They're not like they're not small by any means. Like they rival some of the like largest like hedge funds that are out there or cryptonative hedge funds I should say.

So yeah, like I would say like those are all people who we categorize as non- institutions. So they are savvy traders. They are not people who are just being like I fell out of bed. I'm going to buy some Bitcoin. No, they're they're like smart people who are really active in this space. Um, but I mean it's not just that there's some kind of like collective who I might term retail traders in that as well or high netw worth folks. Um, so I I I think that's kind of how we separate the two. >> If long meetings and judgmental bankers are your thing, Nexo is probably not.

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returns up to 9% APY. It's the first real world asset borrow lend pool built for everyone, not just institutions. Ready to lend like a bank and get more than the 5% A is offering you? Download the Figure Markets app today and get 9% on your idol funds. go to milroad.comfiguremarkets. >> That's great. Um David, before I wanted to just give a bit more um time to this report because you guys I mean it's a lot of effort and you guys put out such great stuff outside of the survey you mentioned there's a lot of great stuff in here about uh RWA. You mentioned in here this is actually my favorite my favorite page of the whole report is that you've got RWA which I want to ask you about. I want to understand what private credit is as like the huge bump

like the huge portion here. Uh, and also just get your general thoughts on there because this is an insane insane chart for the last four years. Uh, and I also want to ask you about poly markets, something that, you know, as a bit more of a DGEN kind of person, I'm I'm more into, but let's talk RWA first. Um, give me your outlook here and and I want to know what private credit is on this chart. >> Yeah. You know, like part of this is also me thinking about what we're going to see in 2026 because I've got to put out the crypto market outlook for 2026 like >> another one to two months. Uh, so I'm also thinking like what are the big themes here? real world assets and tokenization obviously are a big part of that. Um I think most people are thinking about tokenization with the

perspective of like tokenized equities. But you know like you're right to point out that even though real world assets over the last year year and a half you know a lot of people have been focused on tokenizing say money market funds or tokenizing bonds like private credit actually has seen probably the most significant growth and actually they represent one of the biggest categories of the real world assets theme and this has been happening for some time. This isn't a new thing. This happened through 2023 through 2024 and it makes sense why because private credit if you're in the trady space it is super like you know you have zero transparency in terms of

like how the stuff is priced how much like the the marktomarket value of this stuff is going and one of the ways you're seeing that dynamic being changed is through using blockchain technology because now that we're putting on blockchain. Now we're putting it like we're you know uh having it available to people through like to the tokenization of these of this asset class. I think that now increasingly people understand okay got it like previously like I had this in my portfolio and by the way it grew like tremendously over the course of the pandemic and other periods but like you know like it's illquid. I don't know what the value of it is between

like one day to the next. I probably only have a good sense of it every six months or so. Now you see it on chain and you have a lot of access to that data. And so this is the way like crypto is starting to change to change tradfi whereas previously I think trady was more skeptical about the the use cases for crypto. >> Okay. And then quickly I want to know poly markets specifically like there's a lot of other growing sectors in crypto. Why did you call out prediction markets here and specifically that? >> So I think prediction markets are going to be a very big theme for crypto. Uh I mean in the next few months but also like into next year as well. In fact I think that poly market if anything is

going to see a lot more competition. And I mean, if we roll it back to, I don't know, like November of last year, like there were so many people who were calling for the premature death of like prediction markets, they're like, "Ah, this stuff isn't going to last past the elections because that's all people are using it for." And we said, "No, that's not the case. There's so much other stuff that's going on with prediction markets." Uh, you know, besides sports, besides other things. I mean, like, we see it now. Like I see people all the time citing poly market for hey where do we think monetary policy is going to go in like the with the Fed or the ECB or with China like this is the go-to now for a lot of people and it provides for the most part pretty accurate results in

terms of what the questions are like and what the results are and people's ability to kind of predict this kind of stuff. I think that too some of the rule changes we're seeing on betting markets as a whole u away from prediction markets so you know things like draft kings or other stuff I think because of the way people's people are going to be able to like net off their profits and losses going forward I think many are going to start turning to prediction markets which are exempt from some of those uh issues so I think if anything this is going to grow so like if we you know fast forward from November of last year when we did see that you know peak and then kind of dip like things are really starting to come back in terms of both the volumes as well as the TVL for

prediction markets. >> Who's the who are the participants on on prediction markets, right? Because that TVL that chart we're seeing a TVL of almost what 200 we're climbing back up to 200 million maybe more by now, right? What's what's the uh who in your opinion or maybe you don't have any knowledge on this like who who's driving that TVL, right? Like who's actually putting that much money into these things? cuz I go on Poly Market and I see certain markets at like you know $10 million trading volume and I'm just wondering like who who is that? Who's doing that? I don't it's not I don't know if it's retail.

>> No, I mean you're right like definitely there's retail participation in here but there are whales who are participating in these markets now too in a way that I mean it's very reminiscent of like of crypto 2017. Uh there there's definitely a cohort of people who are just like trading in and out of this stuff like all day and increasingly they have actually like some some decent size on there and I think that that's something that they're going to need to reckon with like guys like Koshi and Poly Market because they're going to say like okay how do you still make these fair markets? Uh because right now like it's a pretty pretty ingenious kind of like business model they have with the way these derivative contracts are kind of set up. uh but they don't want it to to

have too much skew to them due to the participation of like large players. >> Do you do you participate at all, David? Have you have you been tempted to go over to Poly Market, put anything down, especially with your knowledge base? I feel like you could do well. >> I'm so tempted. But you would think that, right? Like the thing is like like your knowledge base like I don't think actually it it translates like I definitely don't think I I I it translates well. Like I would think that I'm like, "Oh yeah, I know what's going to happen with the Fed or this or that." But like it's a different dynamic that like that you're trading on when you're doing this stuff. And this is also like partly the English language too. Like the way the the questions are structured like they are set up in such a way that

like and I think that people are realizing this. It's it's expensive lessons for some but they're just like oh right like English is a is a messy language and the way you structure this question like it could be like this answer or that you know so like that's there's so much involved here. so much controversy, but it is I I will say I've always been bullish on poly markets because it is it is a front runner of news, right? When you see something spike, you don't know why. Like even a couple months ago, I had another guest point out that CZ uh his odds of getting pardoned had suddenly started creeping up and nobody knew why, right? And then you have part of last Friday's uh news dump was that that may happen as well, right? So there's there's a lot of funny things that you can get there and most

and one that's most relevant to what we're talking about today is this chart. What what what will get to 5K first? Gold or ETH? David, what do you think? Gold is catching up to ETH. It is not past ETH yet. It's still at 41% gold. Uh this is a good segue because we did want to talk about gold versus BTC. But David, what do you make of this chart? What what what odds would you take gold or ETH to 5K first? Yeah, it's such an interesting chart because gold I mean like Bitcoin and gold obviously like that's the way most people think about it because you know obviously Bitcoin has that that that narrative of like digital gold and you know all that kind of stuff and we don't need to go into it because I'm sure the listeners are wellversed in this at this point but

like ETH is such a different asset uh you know like it has store value elements to it but typically when I think of ETH it's a transactional asset that I need to like as for my gas and for other things. So like you know like I need it because that's my access to the onchain world and like I think of it from the perspective of like TVL on these lending borrowing platforms all that kind of stuff. It's been growing. I think that the problem with ETH from a fundamental perspective right now is that also the dynamics around ETH are changing so substantively because now we have Grayscale with their staking ETH ETF. So now there's more participants on the validator side of things coming from

these like you know ETF issuers these like these bigger institutions they're not the only one DATs are trying to differentiate themselves by actually staking ETH and other stuff but the exec oh man like the exec has like not gone down it it went up because of kiln and we understand the dynamics around that because they were basically taking off validators and re putting them back or at least giving that back and I think some of that got gets rest So we are seeing that on the entry side of things is counterbalancing it but that's not all of it right I mean there besides kiln there are other people exiting off the validator side of stuff and I think that the dynamics around that have complicated the situation for Ethereum I don't think short term but longer term

thinking about validators thinking about the liquidity sleeve that some of these ETF issuers are going to need to be able to redeem some of that ETH I mean like it is a very very different asset now than it was like two years ago and even like a few months ago. Like things are much more complex at this point. Whereas golden narrative is super easy like hey what's the independence of the central bank going to look like if you know like politicalization of the Fed continues like what's going to happen to like uh the world order if we're getting 100% tariffs on China from the US or other things. Like I think that like people see it as an easy buy, especially in an easing cycle. So I think that you know

for a non-answer I would tell you that I think that I have no edge on this because there's such different assets and the drivers are so different. >> Oh, you can that's that's the fun of polymarket is you can bet on it anyways. Uh but that's good insight too and and I the only thing I'll add to that too David is that it's funny because I think if you went back in time a couple months you'd or even six months you'd probably make almost an opposite argument and it's just all about momentum as well right that it's like as the DATs were coming in being announced that it's like there's a huge catalyst for ETH and um gold was probably still so far below what it is now but clearly looks like it's got that rocket but feel like those things can can change so quickly. But

maybe we'll come back we'll come back to that in a bit. And you did point out in your previous report as well last week that that uh exit queue for ETH was getting pretty massive. It's in one of these charts as well. Um is there is there anything from this report and you guys did point out and this this came out on the day of the nuke uh and it's largely about the basement trade. You guys did point out that um that markets were vulnerable uh to to headlines or macro disappointment which is kind of a funny thing to put out. Is there is there anything like in in your outlook for that uh e like exit queue um that has changed for you in the last couple months? It's kind of a convoluted question, but I'm also thinking back to your last appearance on the show uh

where you were talking alt season. So, I think anything outside of Bitcoin for you like is there going forward and I think that's a large theme of this episode. Is there is there is there any kind of I guess like bright light that you can shine for us or anything they can tell us outside of those you know kind of nasty execute numbers uh or general kind of sentiment today that that can give us a bit of hope. >> Yeah. And I hope I'm not like coming off as in like I'm I'm very bearish on ETH because I'm not. Uh I I all admission I'm a bag holder of ETH. I've been so for a very long time. Um and I still think the prospects are good. And in fact, like I'm looking at like how much ETH is flowing off exchanges and how much of that activity is actually going

into the ecosystem and it's going the positive direction, which means I mean like for anyone who doesn't who doesn't think about it this way, I mean like when you see ETH kind of coming off these exchanges, that's less ETH to kind of sell, which I think should alleviate some of that selling pressure. And we know where some of that ETH is going. Some of that's going to the DATs. Again, I think that, you know, if I had full transparency on like how much cash they're actually sitting on and how much more they can buy, I think I could give you a more fair answer, but I do think that there's probably going to be some opportunities for them to kind of to pick up some ETH. Uh I don't know if it's going to go into year end. And again, like we saw that MNAV compression

for a lot of those ETH dats, uh which has kind of distorted things as well. I don't think all of that, by the way, is just purely due to the ETH supply they're holding. Some of that's pure financial engineering as well. Uh, in part because I think that, you know, like they saw their floats on the equity share side of things increase or maybe they wanted to have a control decrease like to an M1 MNAV to like make themselves look more attractive for additional buyers. It's unclear. Uh but I would say that right now like ETH's fundamental prospects I think look decent and I say that cautiously because it does look like uh they're like you know lending borrowing markets on

Ethereum like the actual like you know uh transaction numbers the TVL numbers all look okay but we have seen prior to this that there was some like TVL contraction when I'm measuring just like the net change rather than the absolute figures. So, you know, this is something that we have to kind of look at on a tick-bytick basis because it is changing rapidly day-to-day. >> Can we zoom out for a second, David? uh because what I see is that we all understand that that crypto is a macro asset class and we all saw that very clearly with

the catalyst last week and the impact that tariffs or any macro shock can have to crypto. Now obviously there was other structural reasons why we had this level of liquidations but what I see is I I it's very clear that nobody knows what's going to happen short term because there's so many concerns around the trade war and what happens with China and Trump but it feels like to me that that will get resolved. That's the direction that I see that going in. And so, and even if that doesn't get resolved, I think that they'll both spin it in a way that we figured out what we wanted to figure out and they'll pitch it to their each of their constituents and we'll move forward and we'll move past it is the way I see it in the in the the more I don't know how long that

takes, but I would guess by the end of the quarter. What I also see is more rate cuts likely coming, better fiscal stimulus coming from China and and from the US. They just said that QT is likely going to be ending soon, which we know, we all knew was going to be coming. Doesn't mean QE starts right away, but the setup still looks bullish to me when I look into 2026. I don't know the timing, I think, is the thing I can say. I don't know when that setup comes back and we go back risk on, but I still feel like we're in a bull market and I still feel like we have risk on to go in this bull market. Would you what's what's your take when you think longer term for 2026 or the rest of the cycle?

>> Yeah. And I don't know if this resonates with your listeners, but it looks a lot more to me like 1996 to 1999. And I think that means that we actually have more length to uh this current macro environment, the the the positive we're in. And you know like you know our survey data like it's interesting because when we ask clients like what they think the biggest risks are I think that like the biggest opportunity and the biggest risk is both on the macro side uh right now getting it right I think is the name of the game but it's tough because of all the things you mentioned because we have tariffs and other things that are kind of like you know making uh making it more challenging any like than it normally would be because under normal conditions if you're seeing that we are at uh

easing cycle and it's not just the US like this is happening globally. I mean there are pockets where there are rate hikes. Um but you know like those are exceptions to the rule. Like for the most part we're seeing cuts everywhere and I would say that it's very difficult and and under those conditions to actually see markets actually weaken like those are places like whenever the market turns down like that's generally because you see central banks hiking rates. it's because stimulus is being taken out of the market because liquidity is being taken out of the market. That's not what's happening here. Uh I think that if anything there are places where if anything liquidity should be increasing into year end and

very likely at least into the early part of 2026 as well. So I think that there is time for the market to continue to mature and for like the the rally at least in the crypto markets to really come back. Um, again though, because of the tempor temporary hiccup we've seen, it's just like it's hard to pinpoint like what the exact timeline is going to look like for this. So, do we get a bull run? Like, do we is is there going to be that 3 to six month period that we've all been waiting for that we really have not seen? Yes, we saw it last Q4. We saw a great three-month period, but it was

pretty short-lived. You know, we really haven't had the typical euphoric bull run that we often get in cycles. Do we do we get that or do you think it's a possibility that we actually don't get that this time around? This is where it's so funny because if you talk to people in Tradfi, people who are doing like US equities or other asset classes, they've just been like, "Oh, this has been a crazy run." like this like we like we've done so well and like we're not sure whether it's going to last. And this is like the the conversation that they have when you talk to crypto. They're just like, "Oh man, we've done so badly." Oh guys, like are we ever going to see like an alltime high? Like like you know gold's at you know 4,300. How come Bitcoin's not at

165? which would be the the equival and it's like we've done pretty well. I'll be honest. Like if you look at year like just the price action alone. If you knew nothing else about what was going on in crypto and you just looked at a price chart of Bitcoin, you probably be like outside of the last two weeks, you probably would have said like, "Yeah, this has been going pretty well, guys. You hit like 125, 126." Like I mean, this is this is actually pretty amazing. But it you're right, it's been stops and starts and it's been like talking about deleveraging events. It's been talking about weird like you know oracle like collateral uh measurement kind of mechanisms and all this kind of stuff. I mean like it it has been in a weird

uncomfortable rally. I mean, like we've I've said it before anyway, like I think that this has been probably one of the most unloved rallies that we've seen in crypto in quite some time. In part because I thought that the participation was very low. And I still think that's the case, which I still think means that there is cash sitting on the sidelines. But the best advertisement for crypto typically is the price. And if you don't have big players cuz they've been washed out who are helping to kind of participate in that market, will we still see those other players wanting being incentivized to want to play in here? And that's what I don't think we know right now.

>> People just want that big multiplier. I think that that's the sentiment driver, right? It's like we've hit I don't think we've even hit a 2x from the last time all last cycle high on Bitcoin. Maybe just barely, right? >> Oh, yeah. I mean like you work so hard in trady to like get just 20% return like 20% return be like out outstanding your hedge fund making 20% you're like wow what are you doing right uh you know like and this year you know the S&P if you did nothing else if you just put money like in April right after the like uh you know liberation day announcement and then you held it up to now you would have been up 25 30% and you would have said like that's a good year in crypto it's just like you didn't make a 3x multiple like what's going on like you

are growing poorly like so it's just that that disparity in perspectives. It's funny, too, because if you look at some of the other large caps, something like Salana was the bottom was like $8 in the in the bear. Like, if you bought it anytime below $50, like you're you would have been laughing at the highs even today, right? Be up 4x. So, it is funny that perspective. Go ahead, Jay. >> If it I know you've been talking a lot about the debasement trade and we've also been talking a lot about it on the show recently. It feels to me like just going back to one thing you just said there, which is that if if Bitcoin caught up to where gold is today, Bitcoin would be priced at 165K. And everybody and a lot of people are saying

exactly what you're saying. And okay, it feels to me like as we go into Q4, we're in that season where everybody is reviewing their finances, thinking about where they're at. They're having meetings with their broker, and everyone's going to be talking about what's the big trade this year. And to me, there's two big trades. If even if you're not for non-crypto people, right, for like just like the typical investor, typical trader is going to be are you in the debasement trade, which is going to be are you in gold or Bitcoin? And so I could really see Bitcoin catching up to gold in this quarter because I think that there's going to be a lot of conversation about the debasement trade and everybody, the whole world is finally going to clue in to the the endless printing of money that every

government's doing. And then I also think that as you head into the rest of the year, there's going to be people looking for thinking, hey, where's where's the where's the edge? Where's the opportunity? And they're going to look at assuming we get in back into risk on. Actually, I don't know if we're going to get back into risk on. I just think when I really zoom out, Bitcoin just how could it not do well in this in this quarter is kind of my view. It would it would it would shock me if we didn't. I feel like, you know, we've had Matt Hogan last week said 200k Bitcoin at the end of the year. Arthur Hayes said 250. You got to take Arthur Hayes with a grain of salt because he's always going to be a mad chiller. But the I I don't think these guys are and and

they'll admit that like, you know, these are predictions and like it's difficult to say, but I don't think directionally they're wrong. Like I really think Bitcoin is set up to do well for the rest of the year and end the year higher. Like 150 plus feels realistic. So I don't know what your thought is on the debasement trade. >> Yeah, I'm I agree with you. First of all, I think that directionally I have no doubt about Bitcoin. Like I think like my confidence level on that above probably all the other tokens is super high. And it's been that case for a while. Like so back in May of this year, I actually changed my view of the

debasement trade and my view of where I see DD dollarization as a trend actually going because probably when I two years ago now, I think I I wrote it for like the 2024 uh crypto outlook that we published, I actually said that dolization was going to be a multi-year trend. It was going to be a multigenerational trend. And so like it's not going to be a decade. it's going to take like, you know, a few decades before we really see it. And I kind of turned back on that and I and I wrote in May of this year that I think that if anything, the debasement trade is going to start catching on in part because we are seeing, you know, and this was, you know, post tariffs. This

is oppos the the place of the United States and the place of the dollar in the world has changed so fundamentally that it's very hard to go back now. like just even like a few things for example if you are a foreign holder of uh US assets whether that's equities bonds whatever and these are people like insurance companies pension funds all abroad they hold somewhere around like $34 trillion worth of these assets like 34 trillion with a t a lot about half of that over the last 15 years was either unhedged or underhedged so like they were just basically like going like nope we're keeping it we're is keeping a dollar

dollar exposure. We want that because we expect the dollar is going to continue going up. Now, what you were seeing is that on a weekly basis, those same entities are selling dollars indiscriminately. They're just kind of like going like out the door. Nope, we don't want those dollars. And part of it's political, part of it's just like if you're a country that's been targeted uh by some of the tariffs or other places, you're like, how do I justify it if I'm like a large sovereign wealth fund for example to have dollar assets and not just dollar assets because maybe people are like I want the exposure that these US companies have, but like you're not hedging the dollar like how do I how do I justify that to like my shareholders to like my board to other people. So, I think that we have seen

that be a fundamental change in the perception of the dollars, but there's short-term effects that I think we need to be aware of because I wrote in that paper you showed earlier that debasement versus momentum that I'm like, you know, a week ago at least, like you saw that consensus like short dollar trade kind of hitting a zenith and I was like, well, all that's going to come off and it did for a short period of time. We're now back to like we dollar view again. But like you know like those things create these kind of like vomits in the market because once it comes to consensus it's not really the debasement trade people are playing anymore. People were really just playing the momentum trade and it was happening in short-term kind of fits and starts. Longterm though I have no doubt this is a long-term

trend. The debasement trade is going to be the trade over the next decade or so. And that really kind of puts gold and Bitcoin in the crosshairs. >> What a statement, man. Holy God, Jay, we got to do more debasement content, man. I think that that's a statement like that from David is like warrants enough for us to to dive a lot more into that. You're saying that that's like the trade of the decade for the next 10 years. Um, gentlemen, I think it's been a great conversation. I think we could wrap up here. Uh, you know, as the price of Bitcoin is way lower than it was when we started talking, but that's that's just how it goes these days on on being in crypto, but I think we we need to zoom out. Um, David, honestly, the insight has been awesome. Um, and and and very

encouraging, but also very realistic. So, uh, you know, it's been great to chat. Jay, any final notes before we wrap out? >> No, thanks so much for joining us in, David. Great to see you. >> This was wonderful. Thanks, guys. We're sending Kyle Reedhead, our head of research, to the UK's largest web 3 summit. I'm talking about Zebu Live happening October 21st and 22nd in London. Want to join? Use our code milk to get 20% off your tickets. Hit the link in the show notes and say hi to Kyle for us. 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

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