The macro indicator crypto investors should watch: Jesse Eckel

Transcript

GM good morning welcome to the milk Road show The Daily crypto show where we take Market Alpha from the rich and redistribute it to the DJ Nation I'm your host Jay Hamilton it's Tuesday April the 1st and everyone wants to know a few things right now where and when is the bottom how long will this pain last for what tokens if any should you be buying right now should you be buying right now should you be selling well to answer all these questions in a very simple way with a great framework is our friend Jesse eeko back on the show again and really excited to dive in but before we do tomorrow everybody Wednesday we're going live with the bit wise boys I'm talking about Matt Hogan and Ryan r m

back on the show Live on YouTube at 12:05 PM Eastern show up if you guys want to ask them any questions going to be a great episode today's episode is brought to you by moonay trade crypto fast free and on your terms when I say free I mean free with certain fees there's always Network fees in the background but moonpay has got great low fees so you to check them out also coin shift powering top crypto treasuries with their yield bearing stable coin CS usdl Jesse welcome back to the milk Road show it is great to be back great to have you my man great to have you always always always a pleasure okay uh I got to ask the the simple question which I know there's not a simple answer to but uh where is the bottom have have we hit

the bottom is there more pain to come what's your thought okay that that's a really difficult question because try and time the bottom is really difficult I think maybe to understand where the bottom is you got to understand like why we're selling off and kind of the bigger picture and so what I've been paying a lot of attention to we were talking about before this is macro I've been diving deep into uh the macro picture right now because macro is in the driver's seat a lot of people probably commented on your videos on your podcast different things being acting or asking about maybe token or that token and um right now what I've been paying attention to is not any individual token because individual tokens it doesn't matter right now right right now you

know it's not because your favorite project isn't marketing enough or isn't you know doing enough releases or whatever that it's going down it's going down because of one reason and that's macro macro is in the driver's seat right now and it's causing everything to sell office not just crypto you have stocks like just across the board everything is plummeting and the reason everything is plummeting right now is there's a lot of fear around two things one is tariffs and the other is inflation and they kind of relate in uh in in ways and then I I guess vaguely you could say a third reason is there's been a huge liquidity retraction event uh because the government has stopped spending as much and they stopped hiring as much and so you you got a ton of liquidity coming out of the system you

have all this fear around tariffs and then you have all this fear around inflation coming back and kind of resurging and that kind of plays into the Tariff thing and so so that's caused this market-wide Panic huge selloff and I saw this chart where was like Market sentiment or Market fear by times and this is like the second highest period of Market fear and I think the other time was like the 2008 recession or something so there's just a huge amount of fear that's causing everything to sell off right now and so as far as the bottom as as far as when we hit the bottom the answer is when we get clarity when we get clarity to clear up the current un uncertainty and so lot of this fear is based around uncertainty around tariffs Trump brings Trump brings a lot of uncertainty I mean that guy

just all over the that's what he wants he loves it he does love it but it's not great for markets and so um that has caused that has caused people when they're uncertain what do they do they sell and they wait and so all these people are taking their Capital onto the sidelines you saw Warren Buffett do this you saw just a lot of big names do this and they're just waiting they're waiting to see what's going to happen and when we get that Clarity when we get that certainty that that's when they're going to deploy that Capital back into the market that's a great point because it there is nothing something I think that all investors have to remember and there's just a simple lesson here which is there's nothing wrong with selling and waiting on the sidelines absolutely nothing wrong with that it's very often

I think a lot of us feel like oh but if I sell I'm gonna I'm gonna miss the next pump but the truth is in in a market like we're in right now of uncertainty you might miss the next pump but you also might miss the next dump and the when we do get certainty it's not like it's going to explode the next day right like you know we you will see the signs coming and you'll have an opportunity to reenter um now I'm not saying you need to go sell everything uh let's let's dive into these three different areas um tariffs uh inflation and maybe like that'll lead into a bit of talk about the fed and what they're up to and then maybe more like step back and look at Global liquidity um not just

the us but beyond that as well uh let's start with tariffs tomorrow is a Liberation day as Trump uh has labeled it in his marketing genius uh always coming up with these taglines and just yeah capturing attention better than than anybody um what are your what are your thoughts on on tariffs what is what's the outcome of all this like where does this all go you know obviously tariffs are not good for not good for markets not good for inflation uh what what should thoughts so tariffs are complicated as far as are they good or they not good for inflation if you actually go back to Trump's first term when he did tariffs now granted these were a lot smaller tariffs they weren't as intense as what we're doing right now

but when he did tariffs as far as like The Wider Market inflation and a lot of people get confused about this I'm talking about like wider Market inflation there was no meaningful change in The Wider Market inflation there was changes in certain sectors so like washing machines dryers different things like that went up but as a whole it wasn't super impact Act full as far as inflation goes and that's because you had a lot of uh the the producers and and the and the people on on the manufacturing side eating up those costs the question is will they do the same thing this time around uh we have a lot broader tariffs it's a lot more intense and and you could go into all the kind of nuances nuances of that as far as how that's going to break down probably the answer is that it's going to be kind of

shared across uh you're going to have um manufacturers that going to share some of the cost you're going to have uh consumers that going to share some of the cost and it's going to be split they're going to have to find a dynamic where people still want to buy stuff and um but but then you get into all kinds of other Dynamics right so if like there's something that they could say there's a tariff on like India for like a bottle of water or whatever and you could buy that same bottle of water from I don't know Taiwan or something and uh you know so like consumers could also change their spending habits and different things like that um we for the like purposes of the markets we don't need to jump into all the nuances of tariffs uh is as far as that goes you

just really need to understand that in the worst case scenario with tariffs you're talking about a one-time hike in inflation a one-time increase in inflation which is very different from what the the fed's worried about so when the fed's measuring inflation it's year over year inflation and what you're talking about with this is a one-time increase in inflation and so there's uh meaningful there there's definitely an outcome where the FED just like doesn't care about it they just kind of look through it because it's not like it's going to increase by see if Trump does a 5% tariff on a country country it's not like every year you're going to get 5% inflation from that tariff you get it one time and then it's done and there's a lot of nuances to it um tariffs are more a a fear thing right now an uncertainty thing and that's really

where it's dictating the market is people just don't know what they don't know they they don't know what to expect and there's just a lot of drama around it and there's a lot of opinions like a lot of people say no this going to be horrible for inflation one time event and then other people say you know it's not going to impact at all um and and nobody really knows and because of all this uncertainty they just kind of sit on the sidelines uh and and I think maybe more meaningful is is less about inflation with the tariffs that's a piece of it um but it's more about recession so like are we going to see a recession because of the tariffs and I would also argue that I don't think that really matters either and the reason I don't think that that matters either is

because right now it's not like it's not like it you know 10 years ago where the Fed was sitting at 0% rates the fed's sitting really really healthy when it comes to rates and so if we get any sort of recession kind of indicators the FED has a lot of room to cut like they could cut a ton and then they could do QE and so as far as like a recess it's it's almost I don't want to say it's bullish but it kind of Almost Is bullish if we start getting recessionary like indicators because that just means the fed's going to cut we're going to get QE and we're fine and so when when you keep going so so as far as inflation as far as um what the the fed's doing uh the the way the reason inflation kind of plays into it is because I think the FED would

be a lot looser right now kind of seeing what's happening with freezing government hiring and spending I think they'd kind of preemptively be cutting if inflation wasn't a big deal but because inflation prints have been coming in a little bit hotter they're just really worried to cut and so maybe the maybe the bearish scenario is the Fed Waits too long to cut they like get too scared they're they choose in action and they don't cut but again long give it a long enough time Horizon and it just turns bullish like it's not like we're not in that tight of a situation it's just there's a lot of uncertainty there's a lot of fear but there's there's a response to every single thing where people are like oh recession okay fed Cuts rates um inflation right now the the fed's already giving like a two-year Target for like Hey we're going

to get inflation down to under 2% but we're going to do it by 2027 what they said during the last fed meeting um so you know like again a lot of uncertainty a lot of fear right now but I think actually if you look at the longer term picture it's extremely bullish they we're going the right direction we're just in this like weird bumpy patch yeah and I want to just highlight what you said about the fed's belief about tariffs impact on inflation because this is really important to understand is they see it as transitory inflation one-time inflation as you said which really is key because if if if J pal and the FEDS did not see it that way then they wouldn't be able to cut rates

because they would say hey tariffs are going to increase inflation and our job is to keep inflation low and so like then we don't have as much wiggle room as cutting rate on cutting rates but if they're saying hey we don't think tariffs are a risk to inflation in the long term as you said in the next several years so then that then that gives they're basically saying to us if we need to we will cut rates and as you said they might if they feel if this the grow right now we're in a grow scare I would say we're not in a recession yet like we're still early but we're we're heading in a dangerous Direction but they have so much R they have 425 bips like that they could I I'm not saying they're going to go to zero interest

rates but like they could they could they could and they made a what you're saying at the last fed meeting they made a big deal about it they said Hey listen things look bad we're going to cut like they made a bigger deal than I've seen in the last few meetings they were like if if things look bad we are going to cut and the whole reason they're doing that is kind of like forward guidance they want to tell the markets hey don't freak out stop selling off if we need to we're going to cut ideal outcome is actually they don't have to cut markets stop selling off because when the market sell off that's a liquidity retraction event as well it's like you're you're uh erasing liquidity from existence and so that can actually cause recession the stock market selling off too much and so

they want to balance this thing of like we don't want to cut because we don't want to you know spur inflation uh while also kind of guiding people saying hey if we need to we will cut it's this they're in this weird tricky kind of situation let's be honest everything in crypto comes with fees but here's a nice surprise moonay balance doesn't take a cut you heard that right no moonay fees when you buy or sell crypto with your moonpay balance top up with dollars pounds or Euros then you're ready to trade instantly whenever the market moves and if you change your mind withdraw your cash no moon pay fee there either simple fast ready when you are check it out at milkroom moonpay disclaimer Network and ecosystem fees [Music]

apply meet CS usdl the stable coin built for institutions and Dows don't just hold basic stable coins earn yield all without compromising security backed by regulated real world assets and secured with institutional grade risk management by our friends at steakhous Financial put your treasury cash to work earning native yield and protocol rewards built by the team behind coin shift which is trusted to manage over 1 billion in business treasuries on chain including a gitcoin and hundreds of institutions cycs usdl is gaining traction at milk.com coin okay

uh let's I want to talk about you've been putting out a lot of content about macro recently fantastic content everybody you should go watch Jesse's videos we'll link to it in the show notes uh and when you look into macro it's very difficult to understand what matters most in macro and to have a a framework I would love to get your a all your research all everything that you're putting out what is the thing that is most standing out to you the most whether it be the credit cycle what's the thing that like you you feel like not many people know and especially in crypto investors that you want them

to understand that'll help them understand where you think macro is headed where are now where it's headed okay uh it's kind of a complicated overall setup but I I guess if you look at if I was if I were to pick a single indicator right now to like really keep an eye on it' probably be dollar strength um if you're looking at Dollar strength especially look at Trump's first term uh 2017 2017 so so if you look at every year 2013 2017 2021 all the really bullish years you you have very specific Catalyst for like why the market took off in 2013 you had abundant liquidity you had um a like really cheap credit and then you had dollar strength wasn't falling but it was really low it was like 86 or in the 80s or some somewhere around there in

2017 you didn't really have like abundant liquidity like you did in 21 2021 and 2013 but you did have two things you had really cheap credit and you had dollar strength falling off a cliff and what we saw in 2017 was during the first part of Trump's term uh dollar strength Rose just like it did this time and then around April of 2017 dollar strength fell off a cliff uh which potentially we could see that happen as well this term especially when you consider um dollar strength falling is like something everyone wants so like China really wants to see dollar every other country on the planet wants to see dollar strength fall um for for various reasons it allows them to stimulate and do like more irresponsible things with their own currency which they really need to do um irresponsible things well yeah like China wants to do a bunch of

stimmy but they can't do it if like they're going to do that and then a bunch of their capital is going to flow into you know the dollar and um and Trump wants it too Trump wants to do this whole manufacturing thing like bringing back manufacturing to the to us but um you know to in in order to be competitive you don't want a super strong dollar to do that so he would like dollar strength to go down too it really everyone wants dollar strength to go down um maybe the only one would be maybe Jerome Pal doesn't it because there is a an aspect of inflation where if Dollar strength's Rising that that crushes inflation where dollar strength's falling uh that makes inflation like more less manageable to deal with but I don't think it's going to be a huge problem but um as far as

that goes dollar strength falling was a huge indicator of what like preceded the 2017 Bull Run so if you're if you're looking for something that would be it um maybe the other thing to really keep an eye on would be Scott besset uh came out on the all-in Pod and he laid out this really really specific framework for what the Trump Administration is wanting to do and it kind of spells out like their exact road map you can listen to a lot of podcast and hear you know what people speculate they're going to do or you just listen to what they're saying they're going to do which they've been pretty consistent about just like hey we're going to do this thing and then they do it and uh what he's saying is kind of like a phase one phase two plan phase one is that liquidity retraction

event where they're like cutting spending they're cutting cutting hiring uh and that pulls liquidity from the market um and they kind of consider that false liquidity because it's like government liquidity that's pumping up the markets keeping everything afloat but they don't feel like that's healthy uh which is true um and they want to move that to the private markets they they feel like hey if we want liquidity pumping in the markets we want that from private businesses uh not the US government doing that and so uh phase two of their plan is where they introduce uh deregulation and and other policies to increase Credit in the private financial markets uh so we so they can stimulate that way so the idea is like freeing Banks up to lend uh more so that people can borrow more so we can create credit that way and one of their

biggest tools to do this is something called the supplementary leverage ratio the SR and the SLR is uh basically allowing Banks to buy more bonds uh and hold those on their balance sheet uh than they are able to today and so that it solves two problems for one right now the 10-year uh rate has been really really high so I said we need cheap credit uh that that's stopping us from having cheap credit that's also stopping everyone from buying a house all kinds of bad stuff and so they want that tenure down really bad and so Banks being able to buy bonds would push uh treasuries would would push down that tenure uh allow cheaper credit borrowing plus deregulation allows cheaper credit borrowing so you get that kind of formula in that mix and then you get recipe for an absolute

insane bull market so that that's really what you're looking for are you worried about a recession like when you listen to Scott bessent and his plan and what he's talking about there is obviously a fear that they miss right or they mess up like they're not saying they want a recession but when you push when you make large structural monetary regime changes as they are policy changes as they are right now right you don't know the downstream effects of it exactly and there can be I mean not only is there uncertainty like it can push us in the wrong direction as it is currently are you worried about a recession I think right now you everyone feels like we're getting pushed in the

wrong direction but if you actually look at the data you look at the the kind of picture a lot of it's fear a lot of it's just fear and uncertainty that's really what's causing a lot of the selloff is fear and uncertainty because we're doing something new some the people don't like don't know what's going to be the outcome a lot of people are selling off just waiting to see what happens and it's causing other people to sell off to wait to see what happens and um but but again we mentioned before like recessionary data starts hitting right for for one I've heard that um and I haven't looked into this myself so maybe I don't know but I've heard from some really smart people that a lot of the recessionary data we're seeing uh is just from like people front running tariffs so they're like importing a

bunch of uh a bunch of the stuff that they're going to need to import in the future like early and that's sending off these weird alarm Bells uh with some of these like recessionary data points that is showing people hey um we might be heading into a recession but really it's Terri front running uh but anyway even if we were heading into a recession like let's say like hey the whole thing is going to break down because there is an element of like when you stop spending you stop government hiring that is liquidity retraction so that can cause recession uh there's no doubt about that that piece uh but as we mentioned the FED has a ton of room to cut and so it's really if you think we're going to go into a really bad recession it's going to be horrible you're basically saying

you think the fed's not going to cut and they're just going to sit on their hands and like let us collapse um which which I don't think that's going to happen I think the FED when uh when motivated will cut faster and uh than most people expect uh if that data starts coming in really bad uh but if the data doesn't come in bad and you know they don't need to cut then I guess they won't but then we're not having a recession so um yes you could have it but there's a really clear answer it's like it's like um it's like hey could our my house catch on fire yes uh but it it'd be in a time when it's like hey you're surrounded by a lake and there's like you know two firefighters next door with firet trucks and it's like yes it can catch on fire

but as soon as that the first Flames comes in you're basically betting on those firemen not putting out that fire because they want your house to burn down or something yeah which no no firemen would do that I don't I don't think they would be very bad firemen if that was the case and and and Jerome Powell doesn't want to go out in his last term in a bad way like he he wants to end well um what about the credits cycle can you can you explain the credit cycle and where we're at without it being a 20 minute answer you could go watch Jesse's full 20 minute video on this but can you give us the tldr yeah basically we we go through different periods of like um credit abundance credit contraction it's like a normal

kind of Psych psychology kind of thing like when you have abundant credit people take out abundant credit think about if uh you give a you know college student access to a credit card with really low cheap rates they might Max that out um but then that gets really unhealthy for the credit card company so maybe they increase their rates and now the credit that you know that guy can't afford it and now he's paying off all his debt or whatever that's maybe kind of like a really loose analogy to the credit cycle is that we have periods of booms and busts uh within the credit cycle and uh during the periods of booms um that's a really good time typically to invest because when people could take out cheap credit um they typically do and that like that that's liquidity creation so when you take out credit

you're creating money out of thin air it's a form of liquidity creation and that Finds Its ways into the market that pumps the markets up and so um knowing kind of the the credit cycle varies in time length so it's it's never quite the same in time length but it always follows a very specific order of like uh basically an expansion period retraction period usually like some sort of collapse uh like 2008 um you know you could say uh 2020 that that kind of whole thing um and right now the question is where are we currently in the credit cycle um and that is kind of difficult because right now we could be in one of two places you could look at what we've just gone through uh over the past couple years as like the the beginning of um or or you could look at

what happened in 2021 as like an expansion period and then look at 2022 as a contraction period or you can look at 2021 as an expansion period that goes into 2022 2023 2024 and now we're in a contraction period it's sort of like a glass half full class half empty kind of scenario where knowing which one depends on the way you look at it I lean towards that 2022 was definitely a contraction period the FED raised rates faster than ever before in history and I don't know how you could not see that as like a credit Contra a massive credit contraction and so in that case we're about to head into an expansion period of the credit cycle uh which would be really really good for risk assets as a whole okay so everything seems bullish like it's

it's so it's this is it's so funny it's so hard to um I don't know like see through the see the forest through the trees right now when you know we're saying tariffs yeah short-term uncertainty long-term not maybe maybe not a big deal right and and I know tff is a tough one because I know it like it's uh psychologically it leads to it's very um uh like uh it almost like stabs you in in in the gut with like o like nobody nobody really feels good about about tariffs so remove your Psychology from a from a second but tariffs un short-term uncertainty long-term no big deal um inflation uh relatively under control more than I think that more than

the sentiment would say and and a Fed who's not not overly concerned about it right now and feels like they can get to where they need to get to in a few years um liquidity if we're early in a credit cycle or ending the contraction period and going into expansion also very bullish the dollar US dollar coming down it's just like all these macro things seem to be moving in the right direction so what what's the scenarios map it out for me the way you think about it like give me the scenarios for I don't know what time frame you're thinking about whe you want to think about in months or whether you want to think in a year uh walk me through how what are the different scenarios and probabilities of

how you think this year could play out so I I really when I look at the full picture and then if you dive into you mentioned all the bullish things about macro then if you dive into crypto it's literally never been better is never been better it is like the most bullish it is the things people have dreamed of for the last decade uh like if you were to describe where we are right now with like trafi adopting you know the US government like insanely favorable all these regulations coming in that are going to be like insanely favorable to crypto you would think we were just like skyrocketing like everything would be just going to you know to the moon and so like everything across the board does look bullish really the I guess if you were boil all down it comes to that uncertainty piece because if you like

even before the election remember we were selling off hard before the election and that was because of uncertainty people were fearful if Trump got elected this would happen people were fearful if you uh Harris got elected this would happen and so everyone you know was was fearful but the reality is maybe there would have slightly varied in outcomes um but once that election date passed whoever got elected you would have had a rally of some sort because the uncertainty would have cleared up we been like okay we definitely got Harris definitely got Trump um and maybe the degrees of those rallies would have been different I think people definitely felt Trump was more bullish because some of his policy stances and and Harris was more bearish but regardless you would have had some sort of rally because the uncertainty turned into a certainty people at least

knew what to expect remember the last couple years we've had the most hostile SEC and all this kind of stuff and yet we've been skyrocketing so it's it's not like we couldn't survive in that environment before so of course we could have continued to survive in that and maybe harassment a bunch of stimulus and all kinds of stuff so people would have found a way to be bullish and the markets would have pumped so right now we have uncertainty around tariffs and inflation but Liberation day is tomorrow and you know what that means uh that means that uh you know tariffs have a resolution of some sort and you know we might spend the next month bickering back and forth where you know maybe this country is negotiating this or that country or whatever and maybe Trump's threatening this threatening that but I I think we're heading towards

a resolution and some clarity which means once we pass that resolution we should have some sort of Market move up um and even if we don't like let's say Trump just is pure chaos for the next four years guess what that's he was like that the first four years and I think it was even more Amplified because like the media like just it was it was they loved it they they had so many stories to run and they would amplify those stories and make them as the most intense as they could and but people got over it we had a crazy bull market in 2017 people just kind of get used to it becomes a status quo so even if he that didn't end it would become the status quo people get used to it and we'd have some sort of certainty so really we're waiting for

that UNC that uncertainty to turn and certainty then the market I think will hit and will do good and so really I'm looking at like the second half of the year so second half of the year I feel like it's insanely bullish um if we had World War III obviously wouldn't be or some sort of like Black Swan like that obviously wouldn't be outside of that I don't know how you don't see it as like just mind-numbingly insanely bullish uh second half of the year do you think we we end higher than we are what's I mean give me give me any predictions you got you got any predictions for I think we end higher than we are right now as far as Bitcoin so I think for sure bit bitcoin's going to end higher than it is

right now I feel like that's that's a cat's in the bag for that one as far as like everything else I I do feel like sentiment been really low on like the the alts right um but I think that's been around like if you remember how it started was SEC was coming out coming off hard on the alts um and all that switch now SEC is great uh we got some like regulation coming into place like we can actually add things um you know you're talking about Robin Hood and you know we're talking about a little bit about tokenization and kind of things uh I I listen to a whole pot on tokenization where they're talk if you think of tokenization it's just like an ETF it's like an ETF but like uh Global markets and so they want to take everything and tokenize it like every

stock everything imagine like right now we have treasuries tokenized via stable coins and people love it like globally people are like wow I have something to put my money into imagine if they could put that into Tesla or Microsoft or Apple they're going to want to do that too and then imagine taking private companies and tokenizing that and so we're going to get this whole wave of tokenization and and all this kind of stuff and I think that's going to really sober up the markets and and get them refocused on like value and utility and technology and so I I think it's going to be bullish for those things too things like ethereum things like I think the alts that people want to see go up and I think it's going to be more bearish for memes because Capital goes where it's treated best and uh people

were there was a lot of uncertainty around alts and with and that uncertainty is becoming a certainty so I think again it's going to be bullish for those as well so yeah I think we're going to end the year higher across the board I think that right now it's like Peak fear and it just don't see how it gets worse with without like China declaring if something like that happens yeah Run for the hills but without that happening I just don't see how it gets worse what's your what's your bitcoin price prediction for the end of the year uh my exact bitcoin price prediction is $169,000 that's like that's where I think we're going joke you had to pick 169 no so I didn't even pick that um I was picking between 160 and 170 uh but then I like I I made this whole little

like macro model where I took in all these data points and uh it's this whole long thing but basically uh I spent like 15 hour days for for like weeks weekends all kind of stuff building out this thing and it spit out the number 169,000 and it's been like eerily consistent around like 169,000 and if you look if you look out there you'll see there's a lot of weird models that will spit out kind of That 160 to $180,000 range so um you know maybe maybe it's nothing maybe there's something to it but yeah that's where I'm sticking with that okay and and your belief in uh in alts because I agree Bitcoin feels it feels like the the most obvious trade right now that I've I've ever seen in in a in a risk

adjusted way right of course there's risk with it you know not fincial advice do your own research and all that uh but it does feel like hey and maybe look maybe our timing's off maybe maybe it's not the end of the year maybe it's you know q1 Q2 2026 but it it feels like a given within the next few years that it's going to get to that double maybe even triple like the the range that I feel pretty good about is the like 160 to 250 and there's there's there sort of two camps there's a bunch of people in that like 160 180 camp and then there's the next level up which is like the 240 230 250 Camp um what about what about also you mentioned this shift from uh

pumpamentals to fundamentals are you focused more on fundamental based alts do you think that's where we go do you think meme coins have a comeback do you think AI has a comeback AI for sure has a comeback because AI is insane and every six months you have a massive advancement so as soon as the markets are pumping you know like people are gonna find a way to tie AI to their coin and it's going to pump based on people's imaginations you're always G to have that kind of sector of crypto I I think you're going to get away from mem coins because every memec coin is the exact same thing and it's just why trade memec coins when you could trade this thing that's like at least trying to do something right uh the reason the reason they didn't do that before is because we

had this like these VC launches that were just super dumb everyone hates it everyone wants to be able to buy their token at like a million market cap and ride that thing to a billion and so we got to get back there uh but there's lot of tokens that are just sitting really low remember when salana sold off like it was the end of the world for salana went down to eight bucks but that ended up being the greatest gift possible to salana because then it could run up from $8 to you know 200 plus and so maybe the selloff with the alts is the greatest gift ever for some of these things not not all of them for sure some of them are just garbage but for some of these ones that are actually building and they got solid teams and they're actually doing something maybe it's a great gift

where now it's going to be able to run up and you're we talking about credit Cycles the most bullish cycle possible for crypto right now is the demographic cycle the demographic cycle is the most insanely bullish like if you want if you want to be pilled on crypto like why is crypto going to go up only to hundred trillion dollar plus market cap over the next two decades it's demographic cycles and that's because right now everyone buying cryptos like the younger generation everyone older older people do not buy crypto period maybe they have maybe some of them like they're like extreme in their generation have like a Bitcoin ETF like that's it um it's all younger people but younger people are broke they have literally no money they're they're like so poor it hurts and the older people are just like

sitting on trillion literally trillions of dollars um it's something like 70 trillion worth yeah worth of wealth that's going to transfer from the older generation to the younger over the next 15 or 10 to 20 years 10 to 20 years uh old people die eventually that money gets inherited by the younger generation and you know for a fact they're going to use it to buy bigcoin they're going to buy eth they're going to buy their favorite altcoins they're going to buy some meme coins they're going to buy a house they're going to buy a car you know they're going to spend on a lot things but definitely some of that's going to crypto because that's what they invest in today and they're going to be pumped about that when they have some money I I mean I know friends right now if they inherited a million dollars some

of that's going into crypto they're going to go buy their favorite bags and so crypto is like an up only in my opinion an up only Market on the longterm Horizon if you look at demographic cycles and that is the most bullish thing possible so yeah but but not not for is is it is it up only for everything like that is the that's the shift that I feel like we're in now is this this shift from you can buy anything in a bull market when the bull market comes back and let's say it comes back the second half of this year which everybody is basically saying at this point uh and and let's be clear we will continue to update where we think it goes as we get

closer to the second half the year so maybe it gets pushed out or anything like that like don't come and you know yell at me on YouTube if it's not exactly the second half of this year like you know July 1st it doesn't start happening or August 1st but um when it comes back and we have another Bowl Run is it different this time is it is it the same everything goes up and you can just buy any memec coin or any altcoin and hey everything's going to Bal or is it different well not any memec coin because memec coins are all the same there's like Millions when people talk about millions of new crypto tokens that's all mcoins like you cannot print millions of new businesses that's not possible when you have a real

business that takes a lot of work that takes like Talent uh you you can't print those things you can print millions of meme coins a day so the like 99.999999% of crypto tokens are mem coins they're printed out of thin air that have zero value so like how how you distinguish in that market I don't know and and that's where like people are going to lose their shirt if they try to jump into that but when you talk about like these people building real businesses uh and in real technology and products and you know cryptography and all that kind of stuff um those those aren't going away and they have a a filtering mechanism they're a real business there's uh scarcity there there there's uh you know you can't print them out of thin air and so I think you're going to see a lot of those do really

well will it be all of them of course not even in 2021 when we had this like you know liquidity cannon not all tokens did good there was like swap there was like I don't know how many swaps like a millions of swaps millions of forks and projects they didn't all do good A lot of them didn't do good most of them didn't do good it was just like the main ones the the ones that were really providing value that people like front and center those ones did really good and I think if you're looking at a a project and you're like hey this is a real team they're building something real they have potential to actually make money and revenue I think there's a high high chance that that project's going to do well um especially if you think that thing's going to be around

for the next 10 years then there's a really high chance that that thing's going to be a lot higher if you're looking at a project that's like Hey we're a deck like Unis swap we've done nothing different we just have like we're you know uh burrito swap or something like that um you know odds are that thing's not going to exist in five years so that that's kind of the framework that I would look at it but also keeping in mind that like the longer the time goes on the more competitive it's going to get you're you are going to get companies like real amazing robotics companies and all kinds of stuff privatizing in like tokenizing to tokenizing their like private shares and that's going to be competing with these other ones and so it's going to become more and more intense as time goes on which is going to be so healthy

uh but the end result is 10 years down the line maybe you know the next big robotics company it's a startup you and I are able to invest in it like a million market cap 5 million market cap and it's just through tokenization it's going to be amazing and that's the kind of stuff that we're gambling on in crypto and there's very few of the products in the crypto space maybe like 5% are actually just like crypto specific applications the majority of them are just like companies you know global companies doing stuff I I've I've got to ask because you're the uh you're you're you're always the guy I think about that finds these fundamental based companies early in crypto like the the the micro stocks of crypto the micro caps like I'm not

talking about the mem coins I'm talking about like legitimate businesses that are being built by legitimate Founders uh any that you that you like right now any that you uh are paying attention to there there's a lot I like but there's right now I'm not buying anything so I'm I'm holding positions but I'm building up cash on the side and just holding it one it's for like mentally like just having cash on the side just makes it so you can just sit through this and you feel great uh but two until that uncertainty becomes clear I think like trying to buy the dip is just like and this is what I've been doing for past couple months it's just been like a a horrible idea like you want to wait for like things to kind of clear up in the direction to be clear uh before you do

that and you might miss the like pico bottom but you're going to do really well in the long term doing that so so right now like I said because macro is in the driver's seat I'm not buying anything I'm sitting keep my capital on the sidelines and I keep an eye I do have positions that I'm like waiting to get back in but it'll be something I like look at when that time comes when when the time comes to jump back in the markets I'll be looking in each thing individually I will say the trick is here's like the the secret trick is not to look at what these tokens been doing for the last couple months every token's been selling off the chart looks horrible for everything look at what they did in November look at what they did when Trump uh won the election did

they pump hard or did they not because those are probably the tokens that will do really really well when liquidity comes back um with the exception of like uh maybe you know momentary narratives right so like AI agents where like a momentary narrative that'll probably shift uh but look at like the longer term things if they pumped hard during that that's a good sign that they're they're going to do well when that uh momentum comes back if when everything else was pumping they weren't pumping or they were dumping probably should get out of that position cuz is probably not going to do good next time it pumps either you you make a great point about the importance of psychology and keeping being able to stay calm through this like when we get into these choppy

markets and it's not technically a bare Market but a lot of it certainly feels like a bare market right now right and that's definitely the sentiment would say that it's a bare Market uh and when you go through that what happens is the worst thing you can do is just like leave right like a lot of people and you and I were talking about this before we started recording a lot of people are just leaving they're just out right they're just they're done they're tired and why why are you done why are you tired because you're Overexposed because you have no cash on the sides because you're not able to sleep at night that's exhausting you're stressed and you're over it and like I get it right like if you are in that position you probably do need a break you know touch grass is you

know the line that everybody says but it's true but I think you nailed it when you said right now is a time to really focus on that do what you need to do to your portfolio to allow yourself to sleep at night to allow yourself to be able to get through this you know it it's maybe it's a month maybe we've got six months of range bound sideways action and we go we go maybe eth goes down to 1,200 right like that that's a real possibility and and if if that scares the out of you then then you know take a deep breath get do some reallocation your portfolio I'm not saying need to go sell everything or anything like that but

look at the things you don't have high conviction in and get into some cash and get to a point where you you feel comfortable and you feel like you're okay and you're not sweating every time you open your wallet and your portfolio and and it it'll it really it'll allow you to make it through this which is like the most important thing is like I just I I know and I see it I know you see it too in your community I see so many people just leaving right now and I'm like oh my God you're leaving at the worst time like you're going a year from now and I know a year feels like forever but it's not right like it's a short time frame so yeah just hang on everybody you're on to something there because with the Tariff with the

Liberation day uh or liquidation day I guess we'll see happening this we happing this week true um there's there's a chance that like the Bottom's somewhere in the next two weeks uh I'm not saying for sure because you really got to watch it close but if you look at everything like as far as uncertainty becoming certainty there's definitely a chance that that happens in the next two weeks and then from there we start turning things around because again majority of this is fear-based we did not just enter World War III we do not have a pandemic raging around the world all of it is people are afraid of tariffs because we haven't had tariffs in a long time and they don't know what's going to happen but if you break it down it's really not that like there's just no way to cut it where it's

like this is as devastating as people are making out to be this is not the 2008 financial crisis this is not the second worst time in you know history for the markets like there's just nothing there's nothing insanely bearish about the current setup um it to match what the market is feeling so you you have to expect that there's going to be some sort of reversion at some point once people realize like hey wow um maybe it's not as bad as we think it is wow the FED has a lot of room to cut um I think there is some there's some recency bias around inflation where inflation went out of control in 2020 due to very in 2021 due to very specific things like we printed more money than ever in history we had all these supply chain issues I mean it just it made

sense but now people feel like anytime you know something bad happens inflation is going to Skyrocket out of control but it's like no it doesn't usually do that that was just like a weird time in history and so I I think all these things together just people are have kind of lost their minds a little bit I think there's going to be some clarity and kind of like a a come to Jesus moment in the markets where everyone's going to finally be like you know what wait a minute uh this ain't that bad and you know you're going to see that kind of reversion back up yeah yeah and and also I think April historically is a tough month because it's tax season too right so you can I I think I I I am expecting more pain to come in the next in the short term that is my you know

you get tax season coming up a lot of people wait to do the last their taxes last minute they realize they don't have money to pay their taxes and then they sell their assets right and a lot of that often will be crypto and so I we'll we'll see we'll see but I I'm I am I am tactically bearish right now in the short term as we wait to get this certainty figured out and get through this next stage I would say with the the tax thing I feel like man if a lot of people probably already sold for that just think about this like who who sitting in the market who like hasn't sold already that's going to sell and like the people that are like yeah it's probably a lot of people are down in their positions they're not going to have to sell for taxes they're they're

broke they didn't make any money I don't know I think you know usually it's sell you know sell and May and go away right that's like the saying and um I maybe maybe max pay this this cycle is uh you know may is one of the most bullish months into June like I don't know that that's where I say there's a lot of there's a lot of like lack of clarity which is why I'm sitting in cash if I really thought for sure the bottom was in the next two weeks i' I'd be going all in I'm just saying there's a possibility um but yeah I wouldn't discount that possibility of this somehow a summer rally we have had it before in 2020 we had a summer rally and it was intense so I don't know you got you kind of gotta be on your toes you

got kind of watch everything and just know it's that Clarity that uncertainty becoming certainty is going to be the key ingredient in for a for the next leg of the market rally yeah yeah and I think you said you got to be on your toes money is made in moments like this in Market like people most people do the opposite they get they get really involved in markets when it's bull season and everything's going crazy which is the worst time to be buying and the worst time to be involved and then they leave in bears and and bearish Vibes and they miss out on these opportunities like really you know and I know your portfolio did very well in the last few years because you were here in

2023 and you started accumulating you started buying and you saw that the was coming like that's when like now is the time to lock in but most people they they miss that because the sentiment really their psychology and their sentiment kills them so don't leave guys just hang on and the biggest gains for crypto are often in really short time periods if you look at like it was down only until November of last year and then look at like how short of a time period the market just went crazy like Bitcoin ran up like none other everything else was running up it was like a really short time period like it would have been really easy to have missed that runup by just like waiting a a couple extra weeks you know what I mean like uh because then by December it was kind of down only after the FED

meeting so um yeah you know you definitely don't want to miss that I think there's a lot more downside risk from here than upside or sorry yeah there's a lot more upside risk from here from downside as in uh you know I'd rather be in the markets than not from this point forward personally um I just also think it's good if you already have exposure to the markets to also be building cash POS cash position on the side because that's going to help you right out the storm Jesse wonderful fabulous thank you so much for joining us today and breaking it all down in such simple terms for us truly appreciate you showing up thanks thanks for having me on this may I'm gonna be in Toronto my home City for consensus and I would love to meet you guys there we've teamed up with the

consensus team I'm G to be live doing some podcasts and shows on stage at consensus doing some interviews I'm going to be there with a bunch of the milk Road team and consensus is offering milk Road listeners a discount on your tickets you can get them $350 off hit the link in the show notes get your ticket today let me know if you're coming we'd love to meet you guys we're gonna have a milk Road meet up uh Kyle's going to be there a bunch of other team members love to see you guys there hopefully will meet you at cones Toronto as always if you liked today's episode please hit subscribe and make sure you follow us so you don't miss out on the next one there's also a link in the description to our free 5 minute daily

newsletter where we simplify crypto for you while making you laugh and if you're willing to step up your crypto investing game we're going to also leave a link for milk Road Pro you get access to our portfolio where you can see exactly what we are buying this is your number one resource to help you invest successfully in crypto one final note this show is for educational purposes only and nothing we say is financial advice investing in crypto or any asset is risky and you should never invest more than you can afford to lose thanks so much for listening in my friends have a wicked awesome day