Where the crypto cycle stands, live from Consensus 2025

Transcript

We're coming to you live from Coindesk studio at Consensus 2025 sponsored by Moonay, the global leader in crypto payments. GM, good morning. Welcome to the Milk Road Show on Coindesk Live at Consensus. As I said, we got Kyle in the house. We are going to be talking all about what is happening in markets, what's happening in macro, and where we see the opportunity for crypto investors for the rest of this year. Now, if you are a Coindesk follower, you might not know myself and Kyle. We are the co-owners of Milk Road, a media company that produces content for crypto investors. We have a daily newsletter, podcast. If you do know us, thanks for

showing up again. Great to see you. Always good to be back. Today, we're going to discuss a few things. Should you be buying? Should you be selling or should you be holding right now? What are you doing with your crypto assets? Macro, what's going on in macro? Trump, China making some deals. Is all the macro noise over? Can we move on from that and forget about it? And then two big gainers in the past week. Ethereum catching a bid. Absolutely rocketing right now. And then Coinbase over on the equity side up 20% this week. What's happening in Ethereum? What's happening with Coinbase? We're going to touch on that and so much more. Before we jump in, if you are not subscribed to the Milk Road newsletter, I highly recommend you do. Why? Five minutes every day in your inbox. You get a laugh and you get

some great crypto investment advice. Check it out. Hit the link and subscribe today. Also, today's episode is brought to you by Letin Get Cash without selling your Bitcoin. It's also brought to you by Coin Shift, powering top crypto treasuries with their yield bearing stable coin, CSUSDL. With that, Kyle, what's up? That was a long intro with you just sitting. It's not usually like this where you're sitting beside me. Hey, you know what? It's fun. I'm glad to be with you. We're in Toronto, which is the city that Jay and I both lived in. It's actually the city Jay and I both met. Uh we met here in this city. Uh and you know what? I got to say it. It's all about the Leafs today. It's all about the Leafs. Go Leafs. Go. I know our fans, a lot of them from the US, so you probably don't

care about hockey, but we do. And we're actually going to the Leafs game tonight. So, I'm I'm excited. Game five against Florida. It's going to be a big thing. So, that's actually what's on my mind. Screw markets. I don't care. Screw markets. Screw crypto. Let's go Leafs. Okay. But I know you're not here to hear listen us talk about the Leafs or sports. So, let's talk crypto. Kai, this has been a bit of a a messy cycle and a bit of a confusing cycle for crypto investors. A lot of hope and a lot of belief coming in to Trump's inauguration. Hey, we're all going to the moon. Markets are going to go higher. Everything's going to go higher.

It's easy street, right? Well, it's not it's not easy street. So where are we? Where are we in the current market cycle in your view right now? Give us just sort of help us understand where we are so we can understand where we're going. Yeah. So at Milk Road, we for those I know there's a lot of new people listening today, but we talk a lot about and what we believe in for for our investment framework is the business cycle, the liquidity cycle. So when he's saying cycle, I believe that's what you're referring to here. Uh I know a lot of people talk about the crypto cycle, this four-year thing. We don't necessarily abide by that. Um although the four-year thing has happened I think because of the business cycle because of the liquidity cycle and so when we look at markets that's where we tend to focus

our our our thinking on um if I take us back to when Trump was inaugurated around that time we actually started to see financial conditions tighten right the dollar went really high uh oil was going high uh and so in that world financial conditions tightened liquidity was actually going down we saw a pullback in new global liquidity I'm talking about here and in that world we actually started to get a bit bearish. I know everyone was euphoric and excited in December and it was a great time because we're like, "Hey, finally the shackles are off and crypto can flourish and we probably got a little bit too excited." Um, but I think what really happened was financial conditions tightened. The business cycle actually ended up pulling back a little bit. And so we figured and we said in December, we put a thing out to our members, our

pro members at Milk Road that hey, we actually think we're probably going to see a pullback here, which we got over January, February, kind of March. Uh, then things got even worse than we expected them to. We thought maybe a 20 30% pullback uh overall in the market and I mean we did get about 30 33% or something in Bitcoin I think was the final thing something like that uh but obviously everything else got completely decimated over that time and what we sort of saw in that moment was you know what financial conditions actually started loosening around March and April so we were actually getting quite excited global liquidity started to pick back up and what we believe is that crypto sort of follows that but there's generally about a delay like three or so months right now it's not perfect to that but something around that time

frame and So around March, April, we actually started to get a little bit more bullish and then of course Liberation Day came and that ruined everything, right? And everyone was kind of caught off guard. And that was fine though. What we believed in that moment was this wasn't really anything crazy in the macro because we figured that these tariffs weren't going to stick around. It wasn't going to be as bad as it seems. We're not the doomsday type people that you heard a lot of. And and we were kind of right on that, right? Like a lot of this stuff's kind of gotten solved. So, it's not gone away, but it's gotten a lot better than what it was on April 2nd or whatever it was. Uh, and so basically what we said is, hey, once this tariff stuff gets kind of figured out, we start to go back up

again because again, financial conditions have loosened. The dollar is is way lower than it was from back in December. Oil is like below 60, right? So, the things that we needed to see on the macro side actually got cleared up, but we had that tariff scare. And so, that sort of brought sentiment to its lows, right? Everyone sold off. And so we to us we were kind of like you know what we're oversold here. This doesn't make any sense. April 8th we put out a call. We said hey we're going all in and we're buying a bunch. Uh we did that ended up being an amazing incredible move. And and I think what's happened a little bit here is sentiment just gone back to normal. So we kind of just like a mean reversion right reversion back to the mean. Plus financial conditions have loosened. The dollar is much lower.

Liquidity has continued to improve. And so I think we're actually on a path here where you know we're not just back to where we were after liberation day at least in Bitcoin and and a lot of alts. um we're actually much past that and and I think there's probably still some room to go in that. Uh and so I think we're due for a really good year here uh in my opinion. Uh again, this this assumes that what we're hearing right now in markets in terms of Trump making deals with China, making deal with, you know, Japan, with India, UK, those actually go through. I don't think we go back to zero tariff world. I think we don't stick with whatever it was 250% or whatever it was with China. I think we probably find some middle ground and it's probably somewhere around 10% on

select goods and I think overall that's probably a good thing for the US, a good thing for the economy and I think we'll go back to kind of where things were and I think the business cycle will start to pick back up. So overall I feel like things are looking really good but I've been saying that since early April when things were not so good which to be honest though that's the time you want to be saying that. Now I'm I'm not as excited. We were telling our people, hey, you want to be buying early April when everyone was scared. Right now, we're not really in. So, it was consensus that the world was ending four weeks ago, whatever it was. That's the time you want to be buying. That's the time you want to be allocating capital.

Today, it's not that anymore. Now, we're sort of like maybe 50/50. There's still your doomsday people. We're going to recession, like Trump's an idiot, like all that kind of stuff. And then you have the other 50% that's like, hey, we're back and we're good and we're so back. And so, um, in those moments, I'm not necessarily like flooding into markets at this point. I don't think anyone really should. We've obviously had a huge run over the last couple weeks. Uh but I think, you know, over time over the next six months or so, things do look pretty good and I think there's a lot a lot more room to run here in in crypto in equities in in I I love the bullishness. The only thing Kyle's more bullish on the crypto is the Leafs right now.

Uh everybody the past few months has turned into a macro expert. Like every group chat I'm in. Everybody's just all of a sudden all we're talking about is tariffs and macro and central banks and what's the Fed going to do and trying to predict things that are quite honestly very very difficult to predict next to impossible. Are we at the point now where we can stop being macro experts? Like is it over? And when I say is it over I the show goes on obviously and the politics will continue and these deals will be continue to be made and we'll be watching. But can we all can we sort of pay less attention to that in our investment strategies? If you're in crypto, I would say somewhat because

crypto is not really impacted by tariffs. If you are investing in equities, then you need to pay attention because depending on what tariffs stick around, which ones don't are going to impact certain industries and certain companies depending on where they are and where they get their products from and where they manufacture, etc. So, it's a more difficult outlook in world for us equities. Um, in crypto, not so much. That said, I think macro always matters. I think this is what happens is people forget about the macro during good times and that's what all of a sudden they get caught off guard, right? And they get caught offside. Uh I think that's what happened back in 2021, right? Everyone was so euphoric, so excited. And then it was like, hey, we're raising rates, we're doing QT, and everyone's like, bull market continues.

And it was like, well, obviously not, right? Like liquidity is about to leave everything. And so I think, look, it's not going to be as front and center as it was the last few weeks because you don't have Trump holding up a big sign uh and taxing the world uh tearing the world. I think that's kind of where we're getting uh that's alleviated. But I think it matters because if you want to know where things are going next, then I think it it really is all about macro. Crypto is a macro asset. Uh and so if you want to understand if if we're going, you know, Bitcoin is going to do well or all coins going to do well, you got to understand the business cycle. You got to understand liquidity. And so look, I as I said, I think there's room to run here. And so maybe you don't need

to pay attention to it every day. Uh but I think if you want to try to figure out when we're going to get a our next pullback or our next longer sort of bare market, uh then I think the macro is going to be the thing that tells you that. So I do think as a crypto investor, you do really want to understand macro, right? It's a key part of your toolkit in order to be a well a seasoned investor that has a a good well-rounded perspective. And as you said, I think a lot of people got caught in in December in early year thinking, not paying attention to the macro side, not looking at the financial conditions globally and then getting caught offside 100%. No matter what, you're in crypto, you're in equities, you're in gold, you just want to buy real estate, you got to

understand macro, right? It just is an integral part of of our world and economies. And so, uh, it's what moves assets, right? And so, I think it's just an important thing to to to keep an eye on and and try to wrap your head around. I know it's not easy. Macro is a very difficult, complex subject. Uh but I mean, Milk Road will help you. We're launching actually Milk Road Macro in the coming weeks. And so there's our simple version to help you guys uh keep an eye on Macro, so keep an eye on that. That'll be coming out soon. I wasn't even trying to plug us, but thanks. I got you. Thanks for plugging. That's what I'm here for. Uh okay, let's talk about ETH. We got to talk about ETH for a sec. Uh as we record, almost at $2,600. It's up 60% in the last 30 days,

50% in the last 14. just catching a bid right now. What's your take? For me, I think this is a mean reversion. It was so oversold, right? And there was so much hate. You see it on Twitter. You see it everywhere. Everyone hates it. And it doesn't really make sense the hate for it, right? Uh it's still the the place where all the biggest companies in the world decide to build on, right? It still has the most developers. Uh there's still the most activity and things going on. I know, of course, Salon is doing well and there's Sue and there's all these others that are that are coming up as well. Like I'm not saying it's like it's the only show in town, but it's still the biggest, longest standing, has the most liquidity. It's the largest by a long shot. And so like all the FUD, all the

doomsday stuff doesn't really make sense. Uh and so to me it was kind of obvious that whenever markets decide to turn that it was going to catch a bid. Did I think it was going to be that fast, that quick? Uh no, absolutely not. Um so like I think it made sense there. Am I super bullish on it going into the rest of the year? Like I think it does well, but will it outperform Salana? Will it outperform Bitcoin? Like I don't know. I honestly I don't really know yet. Typically what I see is when the ISM, so this is sort of your business cycle. When the ISM picks up above 50, that's when we typically have our alt season. In that world, ETH will do really well, right? It'll obviously other things will outperform it that are much smaller. Uh but I think in that

world it will do really well. We haven't we're actually not there yet. We've had this kind of delay in the business cycle because of tariffs, because of what Trump has done. And so I think we're at 48.7 or something like that. We were above it and so in that moment in November, December we were above it and it looked like altcoin season things were going to go crazy. Um and so we're back below. So we'll see what happens here with all this resolution and tariffs. I think it's probably going to pick back up pretty quickly and I think in that world ETH will do well. Um will it outperform Salana? Will outperform a lot of other things like I don't know. I think it's probably tough mainly because it's a $250 billion asset. It's freaking huge, right? Most of these other crypto assets are 50 billion or 20 billion or

10 billion or 1 billion, right? They're much much much smaller. And so it's a lot harder to move a$ 250 billion asset. Now, I know Bitcoin has had an incredible run over the last few years and it's a trillion or 1.5 or whatever it's at, maybe close to two trillion, but it's got people like Michael Sailor who will throw billions at it on a weekly basis, right? ETH isn't getting that right now. Uh, and I don't know if it ever will, right? Like at some point it will, I'm sure, but not today. And so I think it's just going to take a lot. Um, overall I'm bullish on ETH. I think what Ethereum is doing is the right thing. I think Ethereum is building for the future and it has the right kind of like scalability path. So I am very bullish on what they're doing. Obviously

Coinbase using them and Kraken using them, etc. So I'm excited for what Ethereum is doing. Um, but I'm is it the thing I'm most bullish on? Probably not. Yeah. But it I don't think it's a bad investment. Selling your Bitcoin should be a last resort when you need cash. That's why there's Leen, the trusted platform for Bitcoin backed loans. You can unlock cash in as little as 18 hours with no monthly interest payments and no prepayment penalties. They've issued over 9 billion in loans and never lost a single Satoshi of client funds, even during the chaos of 2022. If you're a long-term hodler, this is the move. Get liquidity without selling at milkroad.com/letin spelled L E DN.

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CYCSUSDL is gaining traction at milkro.com/coinshift. Let's let's look at one of the things that I know you are most bullish on, uh, which is Coinbase. We were just on stage with John Deacino, head of strategy of Coinbase. Uh talking not not talking so much about Coinbase, but I I want to get your takes on Coinbase also having a great run as joined the S&P 500 this week. What's your take on Coinbase and that as an investment going forward? Yeah, look, I think Coinbase is is one of the best companies that are run in crypto. Uh they've been around the longest pretty much in crypto. They've been through it all. And what really excites me about them is they're diversifying their their sort of revenue

streams and their products, right? And not only are they an exchange and and doing a lot of the like centralized stuff, they really are building at the forefront of the decentralized stuff, right? And in in the onchain world. And I think that's really exciting to have a company that's that big, has that much capital to be building both the centralized things. I mean, they just acquired Darabit, right? Another massive global centralized company for options. Uh but then they're also really pushing the limits uh with base with Coinbase wallet. They're doing some really cool things there. Um and I think they're going to do a lot to bring things onchain, right? Bring companies on chain, bring people, bring capital. Uh and I think bring bring assets onchain.

And so I think that really really excites me. Um it reminds me of the sort of like early days of like let's say Apple or Amazon or Google, right? Where they're um they're very cryptonative, right? And Apple and all them they were very internet native. And so, you know, Amazon was able to pass Walmart and do a better job of Walmart in in selling, you know, uh, you know, different commerce like whatever it was because they went all in on the internet, right? And they were able to kind of leaprog Walmart. Walmart took, I don't know, 101 15 years after Amazon to get to get online and build their online store. And so, I think, you know, yes, banks are about to start cussing assets, crypto assets and all that. But I think when you have a a crypton native company that's doing it

that's really pushing the the movement to kind of bringing the financial system onchain, when you have a company like Coinbase doing that, I just think that's super bullish long term. Um, obviously they've had an incredible run here over the last like week or so. I think they're up maybe 30%. Uh, both because of the acquisition of Darabit. Uh, two because I mean just crypto has done well. So obviously it's kind of a a caveat of that and then also um, you know, joining the S&P which I think is massive. start can get start to get some passive inflows into it. I think that's a really big deal. The other thing to remember about Coinbase, they still have like I don't know $9 billion in cash or something like that. Maybe it's even more than that today. They didn't have to put a lot of cash into Darabit. I

think they acquired them for 2.72 2.8, but it was only 700 million in cash, right? The rest was in equity. Uh and so I mean, and we just talked about the size of Ethereum, which is a $250 billion asset. Coinbase is today 65 65 billion, right? So it's still fairly small. And so I think um I think Coinbase this if you want to call it cycle or whatever this next year is going to do extremely well even though we're about to have a bunch of IPOs from other companies which might sort of eat into it. But as John was saying just on stage before we came in he's like I'm not worried about that because what we're doing here is growing the pie right and I think Kraken IPOing Circle IPOing and the list of others IPOing is only going to grow the pie of crypto.

It's going to grow its legitimacy. It's going to grow kind of the the education awareness around crypto. And so I think ultimately that feeds into and benefits Coinbase, right? So um short term I think Coinbase is going to do very well here for the rest of this this sort of bull market that we have. And I think long term I think Coinbase is again it's like these make seven companies where you can just buy this thing and buy it over the next 20 years. It's just going to continue to do well. Now that's assuming they continue to innovate, assuming they continue to execute at a high level, which they have been doing. They have an incredible team and so uh I'm extremely bullish Coinbase and absolutely love to see what they're doing. Yeah. You you put out a uh report a few weeks ago saying that you believe

Coinbase could be a trillion dollar company someday, right? Currently, many years from now. Many years. Yeah. We're a bold call though. A bold call for sure. Uh when you when you look at Coinbase, any any predictions you can give for us around market cap or price or what you think might happen in the next year? Oh, in the next year, I don't know. I don't like to do predictions. Uh in the short term, I forget what it even is at right now. Maybe 250, 260. 260. Yeah. Yeah. 260. I I mean I think look I think it's going to be one of the best performing stocks uh of and that's not even just in crypto I think in general uh of the year and so I think it's going to do multiples over the next year um which it's done also the last couple years uh but I think it's got a lot of

room to run here's a lot of capital that is ready to flow into crypto um and I think a lot of that capital which is the institutional level right the kind of tradi level a lot of them aren't going to come into these like 500 million billion dollar liquid tokens right I think that's just not the norm for them they don't really understand that. What they do understand is revenues, business models, right? They understand Coinbase's business or at least they can wrap their heads around it if they put in a little bit effort. A lot harder to wrap their heads around something like Salana or Sooie or like whatever DeFi protocol. And so I think um I think with that the the large amount of capital that's coming in, obviously that's going some to the ETFs, but I think they're going to want to go into assets outside

of just Bitcoin. And I think Coinbase is going to be the number one option for them. And so I think it's going to do really, really well here over the next little while. It brings up a very interesting question for investors right now, which is what is the better trade in the for the rest of this cycle, however long this cycle might be. I think uh and you can tell us what you rough timing, but I'm guessing you're going to say somewhere in the 6 months to 18 months is how much longer we have in this cycle. Uh what's the better trade? Is the better trade a crypto stock like a Coinbase or a Robin Hood? if you would consider Robin Hood a crypto stock because of how much crypto activity it does or is it a a major altcoin like an Ethereum or a Salon? I I

just asked you this question on stage but I want to ask it again because I think it's a very interesting question right now. I think where you need to be paying attention to right now is revenues. Who is actually driving revenues in crypto which there's not a lot of companies doing it. Okay, not a lot of uh of like protocols that are doing it, but who's bringing revenues and who's using that to buy back their their tokens or their equity, right? Coinbase is actually doing that. They have ton of revenue obviously. I think they had close to two billion in last quarter. Um and they're using that to buy back their their their shares of their company, which is fantastic, or to buy other companies. Uh and so it's very obvious what's going on there. They're generating a ton of revenues that's growing over time. And so I think that's

huge. So I think there is again as institutional capital comes in, they're going to look for revenues. And so again, it's why I'm so bullish Coinbase actually also very bullish Robin Hood. Um, but I think on the liquid token side as well, yes, I know there's meme coins that are have been going crazy and there's a lot of things that are going on there, but I think again as institutions do come down that risk curve and they want to come into to liquid tokens, they're going to be looking for which things generate revenue. And and honestly, there's not a lot in the space. The other thing to think about is there's a lot of companies in crypto that their tokens are being used as incentives. They're being used for airdrops, being used for grants. And so that's a lot of sell pressure. And so you got to remember

that tokens don't work the same as equity does, right? It's very different than investing in a stock where, you know, you actually have ownership of the company. Tokens, you basically for a lot of them, you have nothing. You might have some governance, but like ultimately does that really matter for value? Not so much. And so you got to really be careful. There's even companies out there that do have revenues, but they're not doing anything. Like Uniswap for example, and I'm a big fan of Uniswap, don't get me wrong. I just want to throw them out is look, they they're a great company. They've been, you know, one of the longest standing in the space. They have tons of users, tons of volumes, etc. But their token is essentially useless today. Now, one day it could have something, but it just it doesn't currently. And actually, the value that

Uniswap creates goes to Uniswap Labs, to the to the equity, right? To the private equity, not to the token itself. So, I think um I assume institutions will start to understand that and learn that. And what you want to look for, and a lot of this right now is in DeFi because it's been around the longest, is these guys are generating real revenue. They have real products, product market fit, real users, and they're generating, you know, tens of millions to hundreds of millions a year and they're using that some of them today to buy back their own tokens. I think that is very very powerful. If you look at an example for uh for one is Sky, right? Used to be called Maker Dow. They turned on their buyback program. I think it was in February. Um and it's been up and up and up. They didn't have any pullback during

this whole tariff um craziness because didn't matter that there weren't humans buying it. They were this protocol was just buying it on automation. it didn't matter, right? And so we saw it really do well. A has also done quite well cuz it's another one of those tokens that's buying back uh or companies that's buying back its own tokens. And so look, we haven't had a lot of companies that have done this because of the SEC. They haven't really allowed it. Uh but that's changing. That's changing pretty quickly here. And so I think we're going to start to see a lot of company or sorry, a lot of protocols change what they're doing and start to buy back. And I think that's an exciting time. So, I want to be looking at who has revenues today, who can potentially have revenues based on where things are going in the space,

and then who is buying back their token or who potentially could be buying back their own token. Uh, it's kind of like a boost, a cheat code if you want, if you will. Um, and again, there's not a lot of them in crypto. So, as institutions come in and they want to allocate capital, that's what they're going to be looking for. And so, if you can find those today, I think those are still fairly undervalued. Although they've had a good run over the last few weeks, I would say they're still overvalued versus a lot of the rest of the market. Mhm. And you're you're right. You're probably talking about 10 to 20 from that, right? Like if that it's not and you're you're really you're talking DeFi mostly, right? For now. Yeah. For now.

For now. And you're really talking Salana DeFi and Ethereum DeFi. And then we'll put stable coins. I think would fit into within DeFi, which as you bring up Sky. Obviously, we're very bullish on stable coins. A ton happening there. Um hold I want to talk about the the L1's for a second because you asked your question was really about Ethereum and Salana. Look, I think all these are going to do well. Obviously, more activity is about to come on chain than ever before because you've got Coinbase and Kraken and all these companies building. You got Robin Hood starting to bring and looks like they're going to launch maybe their own chain. It sounds like they might be launching with Arbitum or maybe Salana and they're going to bring tokenized stocks on chain, right? A lot of the um traditional assets are all moving on chain. And I think that's going to be

the next big thing over the next year or two is bringing stocks and equities on chain, bringing private credit, uh bringing dollars on chain, obviously with stable coins. And so that's going to create a lot more activity. And so I think of course that means good things for things like Ethereum and Salana. But one thing to understand, the big trend that I'm seeing right now is that apps are beginning to launch their own chains, right? And I think that's the trend we're going to see. And even apps like Coinbase, what did they do? They didn't just go and build on Ethereum, they launched their own chain on Ethereum. And Robin Hood is about to do the same thing. Kraken is doing the same thing. UniS swap, the most used app in all of crypto. What do they do? They launched UniChain, right? Athena, one of

the most used stable coin providers in crypto. They la they're launching Athena chain. And so I think this is the trend moving forward is companies, apps, they're all going to be launching their own chains like they used to launch their own smart contracts. And I think I don't know yet what that means for the L1's but I think the L1's have had their moment for the last you know I don't know six seven eight years and there's so many of them now and so many new ones that have came on the market over the last year that trade worries me now uh and I think what you want to find is apps who generate revenue buy back their own tokens and own their own block space because if you own your own block space it's another revenue stream for these apps right uh and so like ultimately

that's that's not a creative to to Ethereum because many of them are launching as L2s, but it's it's a smaller amount. And so I think again, Ethereum salon will do well longterm. Uh they'll probably do well because I think we'll have another hype cycle like we always do, right? Anytime prices go up, you get retail that comes in and they buy everyone's bags at alltime highs and so like everything will do well. Uh not everything, but things that have good activity and good adoption. Um but um the L1 trade I think is very different this time around than it was back in 2021 and and even 2017 when we had that big bull market too. Let's let's talk a little bit about uh are we going to have an altcoin season and uh let me let me preface this by saying uh the term

altcoin is a terrible term. You're literally trying to basket every non everything but Bitcoin, which is at this point I don't 10 million, 20 million, 30 million tokens with all the memecoin. I don't even know how many anymore. Right. So, are we going to maybe maybe you could enter us into this by talking about Bitcoin dominance and do you expect Bitcoin dominance to drop? Do you think that Bitcoin dominance has peaked? And then let's talk about are we going to see an altcoin season and is it going to be like in the past where everything goes up or is it more going to be just the certain sectors within crypto and we need to think differently than we have in past altcoin seasons. So I I've

gotten Bitcoin dominance wrong the last two years so I have no idea if it's top to be honest. Uh it's currently sitting I think around depending on which metric you'll get it around 65%. For those that don't know, Bitcoin dominance is just taking Bitcoin's market cap, comparing it to everything else in the space, right? Um, and so typically what happens is kind of usually about three quarters through the the bull market, Bitcoin dominance tops. It doesn't mean that Bitcoin doesn't go up anymore. It still does, but you have ETH and all the others that start to outperform. And so Bitcoin is still going up, but its dominance or its like ratio versus the rest of the market cap starts to go down. And I think it's gone down usually around to about 40 or or maybe a little bit below. I think at some point that

happens generally that happens when the business cycle picks up and sustains above 50 which I talked about earlier on the macro side of things. The reason for that this also happens in kind of tradi markets is the meg 7 or like the bigger companies lead us in bull markets in the beginning stages and then as liquidity picks up generally rates also tend to go down but not always. They didn't in 2017 but generally as financial conditions let's call it loosen and that can happen in many different ways. people get a little bit more risky and they go down the risk curve. And so that's when you start to see the smaller stocks, the riskier stocks do well. Same with crypto, right? There's that like last bit of a of a bull market where the tail end, the risky stuff starts to do really, really well. That was the 2021

that we saw uh last cycle when NFTts were crazy, the most risk of them all and the small little tokens started to do really, really well. We saw the same thing happen in 2017, right? Uh and so the question everyone's looking for and waiting for is will that happen again? we've had these like moments of altcoin season uh over the last two years and each time interestingly if you look at the ISM uh it's it's gone above 50 and when that goes above 50 we've had these like crazy moments but then the ISM's peaked back down right so we've had these kind of fake outs and so I'm assuming in the next let's say two to three months that ISM is going to pick back up and sort of like economic activity is going to pick back up again if you think about what that means

economic activity picking up that's people buying things people consuming all around in the world again, right? And when people consume, businesses do well. So what do they do? They hire a lot of people. Unemployment goes lower, not higher, right? Uh companies take out loans, they start acquiring, they start to fund research and development. And so like it's a really good time to be alive, you could say during those moments, right? But it also means because everyone has jobs, companies are doing a lot, people have extra capital, and so they want to go and allocate it down that risk curve. And so I think we'll get that at some point, probably the second half of this year. Maybe it's already started today. I don't know.

like we've obviously had a lot of moves from from altcoins. So, I I don't know exactly when that starts, but I think we'll have it. Will everything go up like we had in 2021? I don't think so. The reason is last cycle and and in 2017 as well, it was you could close your eyes and just like look at Coin Gecko and pick any token you wanted, throw 10 darts, all of them will do well. All of them outperform, you know, the the NASDAQ and the S&P 500. It was ridiculous. right now. Obviously, that doesn't happen over over a long period of time, but you had a 6-month window or whatever where you could do that and you could make multiples. It was crazy. I don't know that we'll have that again.

We'll definitely have certain assets that will do really well and they'll go up multiples and it'll be crazy. But we now have millions of tokens, right? Millions of them. Now, most of them are just meme coins. They don't actually they're not even a project tied to it. So, like certain of those will do well. Memecoins, I don't think those have gone away and we've already seen it. If you look at the metrics, those have come back like crazy. pumped up fund is is generating a ton again. Uh and so like we'll see that do well. I think Fartcoin is back above a billion and so like the dgens will always desen that casino thing that's not going away and if anything we're only getting more and more of that. Well, plus we haven't had retail come in yet really in this. I mean we did in December a little bit,

right? November, December. We did maybe early 2024 as well when the ETFs came in, but again it was just these like short bursts because then all of a sudden we had the end carry trade under unwind in 2024. So, everyone left. And then this one, we had the tariff thing, so everyone left again. So, like now we're going to have to wait until probably Bitcoin gets above all-time highs again. That's when all of a sudden headlines come out, media starts talking about it, and you get retail come back again. And that's when we go into this sort of more altcoin season craziness. But again, I think revenue generating apps will do well because even if retail, it takes them a while to come back, institutional capital's coming in today. There's no doubt in my mind. And so, I think things like Coinbase, things like Sky are probably going to do well

regardless. and and then I think you know you'll have your random meme coins and things some that will do well many of them will do absolutely nothing and so you got to be careful over there uh but if you find good apps good revenue generating things that are actually producing um you know fundamentally strong things I think those are going to do well this cycle uh because both they'll get a bid from institutions and probably from retail as well so one thing that we talk a lot about at Milk Road is not roundtpping a cycle we've had that a lot in past cycles where people have come into crypto.

They've had these, you know, big goals and big dreams. I'm going to get rich, right? This is my path to making generational wealth. And they do make quite a bit on paper, but then they don't sell and they round trip and it comes back around. As we go into what we've all done it, by the way. We've all done it. Guilty. Guilty. uh as we go into this this next part of the cycle, which I think what I'm hearing from you and and I feel the same way and I know a lot of uh the guests that I have on the show feel the same way is we are likely going to see Q3, Q4, we could see financial conditions ease, business cycle picks up and things go look good.

We go into that bullish period. How do you manage that as an investor? What are the tricks the tips and tricks you have in order to make sure that you don't roundtrip it in order to make sure that you don't make the mistakes that are common for a lot of crypto investors? Yeah, I mean first it's going to happen to everyone especially if you're new if it's your first cycle. It's almost but it's just going to happen. It's almost a guarantee you're going to happen. You kind of have to go through that. One thing I would say is it's not even that bad to to round trip. Like if you have been holding Bitcoin since last cycle, as long as you don't sell it during the bare market, then like you know you did all right. you've actually done completely fine, right? Uh and so like I

don't think it's the worst thing again if you're in the majors. If you're in something like Bitcoin, if you're in anything else, you're basically, you know, you're getting wrecked. And so again, hold a lot of your assets in in the the majors and and maybe Ethan Salana will become a major major. What are the majors? When you say the major, I mean, for now is Bitcoin is the thing. And even Bitcoin goes down a lot. Like it went down 70% uh at the end of the last bull market, but again, it came back pretty strong and you know, we're at 100 and whatever we're at today, right? So even if you bought the t the top back in 2021 and you did roundtrip it, I mean you're fine. You're up almost double. So it's really not that big a deal now. Not the same story for all the

alts, right? Most of these alts, they're not producing any value. There's nothing really there. You were just exit liquidity. And so really what you need to focus on is getting out of those. If you are going down the risk curve, you got to get out of those Bitcoin. You can hold it longterm. That's actually fine. Now what do you do here? One thing to understand is that in these markets, this happens all of the time. Think about what happened in December and November when Trump won. That wasn't even like some crazy like 2021 level bull market, but it was still craziness. And think about how euphoric everyone gets. You've got to figure out how to manage sentiment, right? Fear and greed is is the biggest thing in markets. And you've got to learn how to control your emotions. And so in those moments in December, the reason we actually said we

were bearish or getting bearish was not actually fully because of financial conditions before we noticed financial conditions was tightening. We were just like people are too euphoric. This doesn't make any sense. And so that's generally the time where you want to do you want to go against consensus, right? I talked about it earlier where earlier in April, everyone was bearish. Everyone was saying that the world was ending. That's your time to buy. Today it's half and half. You don't need to buy. You don't need to sell. You can chill. But in a few months from now or however long it takes, when we get back to that point when everyone is excited about crypto, even your mom, that is the time that you sell or at least you start to take profits again. I'm never I never get out of crypto fully. I feel naked if I do

that, right? Like I don't want to do that. Um, but anytime anyone's super excited about anything, this is not even just crypto, that's the time where you want to start to take something off the table. The other thing you got to do is just pay attention to the data, but not the data of crypto, okay? Don't look at new active users. Don't look at volumes, things like that. That's only going to go up during a bull market. And it even continues to go up when the bare market comes in, right? Because most people don't realize that we're going into a bare market. This brings you back to the beginning of our conversation. It's all about the macro. It's all about financial conditions, the business cycle. when that stuff starts to top and not when it's already topped and it's already gone down. When it looks like

it's starting to slow down, right? That's when you want to start to again begin to get out of the markets. Um, and during that time when that happens, that's when everyone will be the most bullish. So, it actually is hard to do. It is the hardest time, right? It's like trying to we we told our audience to to buy on April, I think it was 8th. We bought a bunch of Robin Hood, a bunch of Coinbase, and a few other things. And we said, "Guys, I know this is like the hardest thing to do right now, but this is the best opportunity to get. We've seen this happen over many years of being in this space. The hardest times to buy. Like my biggest opportunity was when I bought back when co the co crash. We went down 50% in one day and I was

like what just happened? Literally it felt like the world was ending and I was like I think this is the time for me to buy and I just like I loaded up and it was the best decision I ever made and and again in April so far like who knows maybe things change quick but generally that is the best time. But on the other side it's very very hard because everyone's asking about crypto. everyone's so excited. Um, and everyone's talking about how much money they're making. The moment you hear that stuff, just take something off the table no matter what. And also understand you're not going to get the exact top and you're not your goal isn't to get the exact top. What I like to do is as I see that people are getting super bullish and I start to feel that euphoric part. If you get in a cab and

your cab driver asks you about whatever token immediately you just start selling month over month, you just dollar cost average out. Again, you won't hit the perfect top. You'll start selling as prices go down and that's completely fine, right? The key is you just don't want to hold 100% as we go into another bare market. Now, one other thing I would say is I don't think we get as bad of a bare market as we've had in the past. I think at least in again in the majors, things like Bitcoin, like ETH, some of the equities, etc. And the reason I say that is I mean Coinbase now is in the S&P 500. So, like it's got kind of its floor is sort of rising as we go here. Um, and Bitcoin has ETFs that are now in, you know, pension funds, etc. And so, they always have

this kind of constant buying. And so will Bitcoin go down 70% this time? No. But will it go down 50 or 40? Like maybe. I mean like you saw Amazon go down 50% in 2022, right? Uh and a lot of the make 7 actually did. So like I don't think we're out of this crazy volatility. It's just kind of the world we live in today. Um so understand that, but I don't think it's going to be as bad as previous cycles. Now if you're in memecoins and you're in these like high-risisk stuff that don't generate revenue and don't buy back your own tokens, expect 99%. Uh like a downgoing 99%, right? Which is where if if you are going down the risk curve, you have to very consciously decide how much time you are going to allocate to these investments because as you go down the

risk curve, if you do not keep your eye on the pulse and pay attention, the risk is too great. And I think that's where a lot of people make mistakes as investors. And the thing that most investors make mistakes on is just managing risk, right? So, it's okay to go down the risk curve and buy virtuals or buy, you know, whatever. These things that don't actually have anything fundamental to it or Fartcoin or whatever. Just make sure it's a very small percent. We've made mistakes in our portfolio. We're not perfect. We get a lot of assets that we invest in and we tell our audience to invest in or our members to invest in. We get them wrong. But if they're very risky, we put 1% 2%.

And but what I always hear from our members anyway is like we say, "Hey, we think this one could catch a bid. Here's why. We're allocating 1%." They go and they put 25% of their entire net worth into this thing. And I'm like, dude, that's insane. This is like a $100 million asset. Like the thing could literally go to zero tomorrow and you're putting 25% of your net worth in. And it's funny, there's just a lot of not even just retail. Honestly, I talk to stride people all the time and they do the same thing, right? It is the reason why crypto blew up in 2022 because trady people, not retail, literally got too excited, too euphoric in that moment as I was talking about and they were overexposed to stupid things like teruna, right? And so it's not just retail does this, it's actual finance

people where it's their jobs to do this stuff. They still make those mistakes. And again, that happens during these euphoric times. Play out the rest of uh this this cycle for us. I've brought up timing a few times. Actually, before I forget, I want to mention that none of this is financial advice. I need to do that disclaimer because we've been saying buy and sell quite a bit throughout this. I'm just saying what I do. I'm not saying this is entertainment, everybody. Not financial advice. Fin investing is risky. Do your own research. Blah blah blah. all that. Disclaimer, disclaimer. Uh the rest of this cycle, what I'm hearing from you is short-term a little bit unclear. We're still on uh maybe we're not on solid footing yet, right? Could could see could see a pump, maybe could see another dip or another drawback. Unsure

right now. I mean, like short-term on the daily, who ever knows? Especially with Trump, although Trump has been tweeting to buy right now. So, generally that means stocks are going up. It's a good time to buy, right? I don't know. You just listen to him. It's the best indicator you can get uh at the moment. I I look I think financial conditions ease a lot, right? And so generally we lag that by about 3 months. Uh and so there's still a few more months left of that. So I actually think we're in a good position until let's say midsummer. Then I don't know what's going to happen from there. We'll have to kind of see what happens again with these tariff deals, the trade deals, what happens with economic activity, what happens with liquidity, what happens with the Fed. The Fed right now is not playing

ball. Um but they don't necessarily have to. So again, 2017 the Fed was raising rates and we had one of the craziest bull markets we've ever seen. Uh and so like I don't think they need to participate fully, but um things do need to change there a little bit, right? Uh and we also can see what's China going to do. Are they going to keep printing a bunch of money, which so far it looks like they are. So we'll have to kind of see and play it by ear right now. In a few months from now, we'll be able to look and see what's going on in the in in the macro. My guess is the US or Trump and the administration, they have their midterms coming up right next year. generally what they want is a good market structure during that time, right? At least up until then or close

to. And so I got a feeling that what happened here is if you asked me a year or two ago or year ago or two years ago, I was saying that probably sometime in the second half of 2025, we sort of go into a bit of a bare market. Liquidity stops. But what's crazy is the last few months we kind of put everything on pause. Now whether that was on purpose or not, I don't know. There's a lot of these like conspiracy theories of they were trying to do that. They're trying to force rates down. They're trying to extend the cycle to midterms like I have no idea. Whatever they did, it did end up doing all that right. Like as I said, the ISM should be above 50 today and it's not. So the business cycle has been put on pause for the last 4 months. So

does that mean we have a short cycle? I don't think so. Uh mainly because financial conditions have loosened. Does that mean we have a longer one? More likely. So maybe we move into 2026, Q1, Q2, I don't know. Again, this is one of those things where we don't really know what Trump and that administration is going to do yet. uh they're doing things very differently than we've seen in the past. So, we kind of it's hard to make predictions right now and so we kind of just got to play it by ear and see look at the data, right? But I imagine probably somewhere in the second half or um in the first half of 2026 is where we go into more of a bare market vibe. Um but will that be a year-long one like we had in 2022? Probably not. Um but again,

I don't know. We'll have to see what happens. What happens with inflation? And right now, inflation seems to be under control. So, it's not so much of a concern. That was the big problem in 2022. We had to raise rates like crazy because inflation was at like what 8% or something like that. We don't have that problem today, at least not yet. Again, tariffs could cause that, uh, at least in the short term, but I think, um, I'm not as concerned about inflation as a lot of other people. So, um, I don't know. We'll have to see where things go. Amazing, Kai. Fantastic sitting down with you and having a chat. Doing it in person. Usually we're on the screen in different houses. So doing it in person is so much fun. Thanks to everybody for tuning in. I hope you are having a great

day wherever you are. Make sure you're at Consensus next year. Great conference. So excited to be here. Oh man, it's been amazing. Huge. I wish I could show you guys what we're looking at over here. It's actually massive this year. Uh some great speakers. It's uh it's a great time. And you know what? We're in Toronto and the Leafs are playing and I don't know how many hours right now, but go Leafs. Go. We got some people in the crowd here. Go Leafs. Go. Look at tuning in everybody. Have yourselves a wicked awesome day. We'll see you back tomorrow on the Milk Road Show or we'll see you also on Coindesk Live. I think I'll be back on the show Friday. Yeah, have a good one. Thanks everybody.

Thanks for tuning in y'all. Appreciate your time and listening all the way to the end. Before I let you go, got to let you know about this partnership that we have with OKX where you could win up to $60,000 in cash prizes. That's onchain cash, USDT cash, the good kind, the stable coin kind. Uh why do we set up this partnership with OKX? Because they're one of the leading crypto exchanges. They're they're trusted. They've got great security. They've got tons of great features, tons of great tools. Really a great place to trade and do it in a safe way. Hit the link in the show notes. Check it out today. Thanks again for your time, y'all. Have a good one. As always, if you liked today's episode, please hit subscribe and make sure you follow us so you don't miss out

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