1 00:00:00,040 --> 00:00:02,640 Speaker 1: Bitcoin's price is crashing right now, and everybody wants to 2 00:00:02,680 --> 00:00:06,840 Speaker 1: know the same two answers, why it happened and what 3 00:00:06,920 --> 00:00:10,160 Speaker 1: happens next. But the reasons that most people they're throwing 4 00:00:10,200 --> 00:00:13,040 Speaker 1: around they're just wrong. And if you don't understand what 5 00:00:13,160 --> 00:00:15,600 Speaker 1: actually happened and why, then you're not going to be 6 00:00:15,600 --> 00:00:18,880 Speaker 1: able to see what's about to change. More importantly, what 7 00:00:18,960 --> 00:00:22,279 Speaker 1: comes next, because once you see the real cause behind 8 00:00:22,280 --> 00:00:25,520 Speaker 1: this move, the entire crash suddenly makes a lot more sense. 9 00:00:25,560 --> 00:00:28,320 Speaker 1: So today we're going to break down why is the 10 00:00:28,360 --> 00:00:33,159 Speaker 1: price falling, who is selling, what broke, when will it end, 11 00:00:33,479 --> 00:00:36,280 Speaker 1: and what you should be doing about it now, whether 12 00:00:36,280 --> 00:00:38,400 Speaker 1: you're a long term investor a short term investor, we're 13 00:00:38,400 --> 00:00:40,519 Speaker 1: going to answer that now. Look, I've been building I've 14 00:00:40,520 --> 00:00:43,519 Speaker 1: been selling tech companies for decades. I invest in bitcoin startups. 15 00:00:43,640 --> 00:00:45,920 Speaker 1: I hope run a public trade a bitcoin treasury company. 16 00:00:46,159 --> 00:00:49,720 Speaker 1: This is the same data that we're using internally, all right, 17 00:00:49,760 --> 00:00:52,600 Speaker 1: So let's just start with the obvious. Bitcoin's price is 18 00:00:52,640 --> 00:00:55,400 Speaker 1: crashing now at the time of this recording, probably going 19 00:00:55,440 --> 00:00:56,920 Speaker 1: to change by the time you watch this, but we're 20 00:00:56,920 --> 00:01:00,160 Speaker 1: at about eighty five thousand. It's about thirty two two 21 00:01:00,200 --> 00:01:02,640 Speaker 1: percent off of its previous all time high that was 22 00:01:02,680 --> 00:01:06,000 Speaker 1: set back in October thirteenth, and everybody's looking around. They're 23 00:01:06,040 --> 00:01:09,360 Speaker 1: all trying to figure out, like, what the heck just happened, 24 00:01:09,440 --> 00:01:13,000 Speaker 1: and of course, more importantly, what comes next. But the 25 00:01:13,080 --> 00:01:15,640 Speaker 1: problem is that most of the explanations out there that 26 00:01:15,680 --> 00:01:19,560 Speaker 1: you're seeing maybe online on Twitter whatever, they're guesses, right, 27 00:01:19,600 --> 00:01:23,600 Speaker 1: they're headlines, it's whatever narrative. People grab whatever they can 28 00:01:23,600 --> 00:01:26,639 Speaker 1: find the quickest, and none of it actually matches the data. 29 00:01:27,080 --> 00:01:30,000 Speaker 1: But before we go anywhere, before we talk about the seller, 30 00:01:30,360 --> 00:01:33,040 Speaker 1: before we talk about the micro structure, we talk before 31 00:01:33,040 --> 00:01:35,080 Speaker 1: we talk about the timing of the moves, we have 32 00:01:35,200 --> 00:01:37,959 Speaker 1: to set the right frame right. This is when I 33 00:01:38,000 --> 00:01:40,520 Speaker 1: always go back and I listen to good old uncle 34 00:01:40,560 --> 00:01:43,520 Speaker 1: Warren Buffett, the Oracle of Omaha, because he has all 35 00:01:43,560 --> 00:01:46,920 Speaker 1: these little lines, these little sayings, ones that I think 36 00:01:46,959 --> 00:01:50,360 Speaker 1: about a lot, especially when markets start acting very emotional 37 00:01:50,480 --> 00:01:52,760 Speaker 1: like right now, And he has a really famous one. 38 00:01:52,800 --> 00:01:55,320 Speaker 1: He said, quote, if you're not willing to own something 39 00:01:55,360 --> 00:01:58,320 Speaker 1: for ten years, don't even think about owning it for 40 00:01:58,520 --> 00:02:01,840 Speaker 1: ten minutes in quote. And of course the other one 41 00:02:02,000 --> 00:02:05,000 Speaker 1: everybody quotes all the time is price is what you 42 00:02:05,120 --> 00:02:07,760 Speaker 1: pay value is what you get. But the one I 43 00:02:07,840 --> 00:02:10,760 Speaker 1: think fits this moment right now, the best, the most 44 00:02:10,800 --> 00:02:13,440 Speaker 1: perfect one for this moment is in the short run, 45 00:02:13,800 --> 00:02:17,000 Speaker 1: markets are a voting machine. In the long run, they're 46 00:02:17,040 --> 00:02:19,600 Speaker 1: a weighing machine. Now, if you've been around these cycles 47 00:02:19,639 --> 00:02:22,600 Speaker 1: long enough, you know exactly what he's talking about, right 48 00:02:22,840 --> 00:02:26,360 Speaker 1: because right now, the voting machine, it's in full panic mode. 49 00:02:26,440 --> 00:02:29,119 Speaker 1: Bitcoin again, it's down thirty five percent. It's a big move, 50 00:02:29,520 --> 00:02:32,160 Speaker 1: but really, when you look at the bigger picture, it's 51 00:02:32,200 --> 00:02:35,680 Speaker 1: not unusual for bitcoin. In fact, it's the third drop 52 00:02:35,840 --> 00:02:39,079 Speaker 1: of this size in just this current cycle, and we've 53 00:02:39,080 --> 00:02:43,120 Speaker 1: seen dozens of these previous cycles. But what is unusual 54 00:02:43,360 --> 00:02:46,560 Speaker 1: is the sentiment this time that, like this drop right now, 55 00:02:46,680 --> 00:02:50,480 Speaker 1: this must mean something is fundamentally wrong. So let's walk 56 00:02:50,520 --> 00:02:52,960 Speaker 1: through this very carefully and take a look, like, let's 57 00:02:53,040 --> 00:02:55,720 Speaker 1: lay out the framework. Let's lay out the evidence so 58 00:02:55,760 --> 00:02:58,239 Speaker 1: we can understand what's going on, because once you line 59 00:02:58,320 --> 00:03:01,880 Speaker 1: up all the facts becomes really clear that the long 60 00:03:02,000 --> 00:03:05,040 Speaker 1: term picture, it hasn't changed at all, and really the 61 00:03:05,040 --> 00:03:08,600 Speaker 1: fundamentals have actually never looked better. Now, before we get 62 00:03:08,639 --> 00:03:11,320 Speaker 1: to the fundamentals, let's stay on Buffett just for one 63 00:03:11,360 --> 00:03:15,360 Speaker 1: more second, because understanding how he thinks how he became 64 00:03:15,400 --> 00:03:18,040 Speaker 1: one of the wealthiest men in the world is something 65 00:03:18,080 --> 00:03:19,799 Speaker 1: that we should all learn from. And I know he's 66 00:03:19,800 --> 00:03:21,959 Speaker 1: not a big bitcoin fan, but we can still learn 67 00:03:22,000 --> 00:03:25,800 Speaker 1: from him. Now, Buffett never buys something and then sits 68 00:03:25,840 --> 00:03:28,200 Speaker 1: there staring at the price. Every day. He said over 69 00:03:28,280 --> 00:03:31,040 Speaker 1: and over he doesn't care what the price does today 70 00:03:31,280 --> 00:03:34,200 Speaker 1: or tomorrow because he's not buying the ticker, right, He's 71 00:03:34,240 --> 00:03:37,480 Speaker 1: not buying the price. He's buying the business. And if 72 00:03:37,520 --> 00:03:40,680 Speaker 1: the business is getting stronger and the price is falling, 73 00:03:41,040 --> 00:03:44,200 Speaker 1: then he doesn't panic. He just buys more. Okay, So 74 00:03:44,240 --> 00:03:47,040 Speaker 1: before we get emotional about you know, the red candles, 75 00:03:47,280 --> 00:03:49,440 Speaker 1: before we get emotion about the headlines, what we want 76 00:03:49,440 --> 00:03:51,240 Speaker 1: to do is we want to do exactly what Warren 77 00:03:51,240 --> 00:03:53,680 Speaker 1: Buffett would do. If we want to zoom out, just 78 00:03:53,760 --> 00:03:55,880 Speaker 1: ignore the noise for a second and let's get to 79 00:03:55,920 --> 00:03:59,280 Speaker 1: the facts because the facts they paint a very different, 80 00:03:59,320 --> 00:04:02,680 Speaker 1: a completely different picture than the emotions do. Okay, So 81 00:04:02,880 --> 00:04:05,160 Speaker 1: now that we've got the right frame of mind, let's 82 00:04:05,160 --> 00:04:07,960 Speaker 1: go straight into the first big question. Why is the 83 00:04:07,960 --> 00:04:10,280 Speaker 1: price falling? Like what happened? Now, before we get into 84 00:04:10,280 --> 00:04:12,920 Speaker 1: the market, makers and the force selling and all that. 85 00:04:13,240 --> 00:04:15,720 Speaker 1: We have to start with something way bigger than bitcoin, 86 00:04:15,880 --> 00:04:19,560 Speaker 1: something that affects every asset on Earth, and it's liquidity. 87 00:04:19,880 --> 00:04:23,640 Speaker 1: Because when liquidity disappears, it doesn't matter how strong the 88 00:04:23,640 --> 00:04:26,840 Speaker 1: fundamentals are, it doesn't matter how much demand there is. 89 00:04:27,240 --> 00:04:30,440 Speaker 1: Everything gets hit. And that's exactly what's been happening over 90 00:04:30,480 --> 00:04:34,080 Speaker 1: the last six eight weeks. Now. The first thing most 91 00:04:34,080 --> 00:04:36,800 Speaker 1: people missed is that the US government went through the 92 00:04:36,920 --> 00:04:40,680 Speaker 1: longest shut down in American history forty three days. And 93 00:04:40,680 --> 00:04:45,200 Speaker 1: when the government shuts down, spending freezes. The Treasury General 94 00:04:45,279 --> 00:04:49,000 Speaker 1: Account the TGA, it's the government's checking account, swells up, 95 00:04:49,240 --> 00:04:52,360 Speaker 1: and all that money that swells into it comes out 96 00:04:52,360 --> 00:04:55,799 Speaker 1: of the system. And of course, every time the TGA jumps, 97 00:04:56,000 --> 00:04:59,120 Speaker 1: you see risk assets start to pull back because the 98 00:04:59,160 --> 00:05:02,880 Speaker 1: liquidity is getting rained from the exact places the markets 99 00:05:02,920 --> 00:05:05,280 Speaker 1: rely on for the day to day funding. Now, on 100 00:05:05,320 --> 00:05:08,880 Speaker 1: top of that, but a reserve, they're still running QT, 101 00:05:09,240 --> 00:05:13,040 Speaker 1: or quantitative tightening. So while the shutdown froze fiscal spending, 102 00:05:13,480 --> 00:05:16,080 Speaker 1: QT was pulling reserves out of the banking system, And 103 00:05:16,120 --> 00:05:18,520 Speaker 1: if you watch the bank reserve levels, you can see 104 00:05:18,520 --> 00:05:21,680 Speaker 1: the floor getting hit pretty quickly. Now this isn't a guess, right, 105 00:05:21,680 --> 00:05:23,839 Speaker 1: it's all in the data. Reserves fell back to the 106 00:05:23,880 --> 00:05:27,320 Speaker 1: same danger zone we reached in twenty nineteen, right before 107 00:05:27,360 --> 00:05:30,480 Speaker 1: the repo market blew out. And while that's happening, the 108 00:05:30,520 --> 00:05:34,640 Speaker 1: reverse repo facility it's basically empty, which is another major 109 00:05:34,720 --> 00:05:38,160 Speaker 1: signal that the system is getting tight. Now. The reverse 110 00:05:38,160 --> 00:05:41,360 Speaker 1: repo dropping to near zero means money market funds have 111 00:05:41,520 --> 00:05:46,719 Speaker 1: nowhere to park excess cash. Because no excess cash, overnight 112 00:05:46,760 --> 00:05:50,200 Speaker 1: borrowing costs between banks have been creeping higher and higher 113 00:05:50,200 --> 00:05:53,760 Speaker 1: and higher for weeks. Dealers are pulling back. Risk leverage 114 00:05:53,800 --> 00:05:57,160 Speaker 1: is coming down across the board. So when all this happens, 115 00:05:57,560 --> 00:06:01,479 Speaker 1: you get a temporary I say, where a liquidity vacuum. 116 00:06:01,680 --> 00:06:04,839 Speaker 1: Right now, this hits everything. It's just that Bitcoin reacts 117 00:06:04,839 --> 00:06:07,320 Speaker 1: to this the fastest. Okay, So before we even get 118 00:06:07,320 --> 00:06:10,680 Speaker 1: to the trigger, we already see the liquidity environment. That 119 00:06:10,800 --> 00:06:14,000 Speaker 1: explains why every risk asset's been under pressure lately. Now, 120 00:06:14,120 --> 00:06:16,359 Speaker 1: if you don't understand that, you're gonna end up blaming 121 00:06:16,400 --> 00:06:19,320 Speaker 1: the headlines instead of looking at the money flows that 122 00:06:19,440 --> 00:06:22,359 Speaker 1: actually move market. Okay, but now that we understand liquidity, 123 00:06:22,760 --> 00:06:25,640 Speaker 1: and that alone explain explains a lot, right, we have 124 00:06:25,680 --> 00:06:28,280 Speaker 1: to get into the part that almost nobody understands. This 125 00:06:28,320 --> 00:06:30,560 Speaker 1: is where things get a little bit weird, because the 126 00:06:30,600 --> 00:06:32,880 Speaker 1: price action that we've been seeing the last few weeks 127 00:06:33,440 --> 00:06:36,479 Speaker 1: doesn't look like fear right, it doesn't actually look like 128 00:06:36,640 --> 00:06:40,080 Speaker 1: normal selling pressure. It looks like something broke. And the 129 00:06:40,160 --> 00:06:44,839 Speaker 1: date everything changed was October tenth, ten ten. Remember that day. 130 00:06:45,120 --> 00:06:47,839 Speaker 1: That's the day President Trump sent out the tweet he 131 00:06:47,960 --> 00:06:49,640 Speaker 1: said that he was going to put one hundred percent 132 00:06:49,640 --> 00:06:52,240 Speaker 1: tariffs on China, and then it triggered one of the 133 00:06:52,360 --> 00:06:57,040 Speaker 1: largest liquidation events in crypto's history. Almost twenty billion dollars 134 00:06:57,080 --> 00:07:00,120 Speaker 1: in leverage positions were wiped out in less than twenty 135 00:07:00,120 --> 00:07:03,400 Speaker 1: four hours. Now that's not normal, right. Bitcoin didn't drop 136 00:07:03,480 --> 00:07:07,040 Speaker 1: fifty percent. The ETFs didn't like give back all, you know, 137 00:07:07,080 --> 00:07:10,840 Speaker 1: give all the redemptions back. There wasn't some major macro shock, 138 00:07:11,200 --> 00:07:14,200 Speaker 1: but the size of the forced liquidations was bigger than 139 00:07:14,240 --> 00:07:16,480 Speaker 1: what we saw in some of the twenty twenty two candles. 140 00:07:16,760 --> 00:07:20,480 Speaker 1: Now here's the key. When liquidations get that big, it's 141 00:07:20,480 --> 00:07:24,640 Speaker 1: not just traders losing money. Market makers took this too, right. 142 00:07:24,800 --> 00:07:27,360 Speaker 1: These are the firms that provide the liquidity that lift 143 00:07:27,360 --> 00:07:30,320 Speaker 1: the books that stabilize the volatility, and when they get 144 00:07:30,360 --> 00:07:35,080 Speaker 1: blindsided when their hedges get liquidated, and when exchanges use 145 00:07:35,280 --> 00:07:40,040 Speaker 1: ADL to force closer positions at horrible prices, they don't 146 00:07:40,080 --> 00:07:42,880 Speaker 1: just get hurt. They pull back right, they reduce risk. 147 00:07:43,000 --> 00:07:46,360 Speaker 1: They have to shrink their inventory, they quote smaller sizes, 148 00:07:46,640 --> 00:07:48,840 Speaker 1: and that starts to leave holes in the market structure. 149 00:07:48,840 --> 00:07:52,320 Speaker 1: And that's exactly what we saw on ten ten. Now 150 00:07:52,560 --> 00:07:54,600 Speaker 1: we can take a look at Finance for example, they 151 00:07:54,600 --> 00:07:58,920 Speaker 1: had one of its largest forced liquidation clusters ever Wintermute 152 00:07:59,000 --> 00:08:03,320 Speaker 1: Ceo public Is Finances ADL system malfunctioned and hit them 153 00:08:03,320 --> 00:08:07,240 Speaker 1: with fills that quote make no sense. Now. Then right 154 00:08:07,240 --> 00:08:10,160 Speaker 1: after that we saw the collapse of Stream Finance. It 155 00:08:10,160 --> 00:08:13,640 Speaker 1: was a two hundred million dollar Delta neutral fund. They 156 00:08:13,680 --> 00:08:17,080 Speaker 1: lost around ninety three million and went bankrupt. Now that's 157 00:08:17,080 --> 00:08:20,360 Speaker 1: a fund that wasn't supposed to lose money, but their 158 00:08:20,360 --> 00:08:24,120 Speaker 1: hedges they got caught in the same ADL chain reaction. Now, 159 00:08:24,120 --> 00:08:27,480 Speaker 1: when you put all that together, a major liquidation event 160 00:08:28,080 --> 00:08:31,680 Speaker 1: ADL kicking in a large fund blowing up, you end 161 00:08:31,800 --> 00:08:34,680 Speaker 1: up with exactly what we've been seeing ever since. And 162 00:08:34,679 --> 00:08:37,360 Speaker 1: it gets even more strange. Than that for almost two 163 00:08:37,360 --> 00:08:41,320 Speaker 1: weeks straight. Now, someone's been selling bitcoin every single morning 164 00:08:41,360 --> 00:08:45,160 Speaker 1: at nine thirty am Eastern time, the exact moment the 165 00:08:45,240 --> 00:08:48,000 Speaker 1: US stock market opens, the same pattern, the same time 166 00:08:48,040 --> 00:08:51,720 Speaker 1: and the same pressure. This isn't retail panic, right. Retail 167 00:08:51,720 --> 00:08:54,280 Speaker 1: doesn't wake up and then dump bitcoin at the opening 168 00:08:54,280 --> 00:08:57,240 Speaker 1: bill on Wall Street with that kind of precision. Right, 169 00:08:57,400 --> 00:09:00,040 Speaker 1: this looks like has to be a mandated seller. And 170 00:09:00,120 --> 00:09:03,040 Speaker 1: this is a fund that's unwinding. It's a market maker 171 00:09:03,080 --> 00:09:07,000 Speaker 1: that's de risking their portfolio. Somebody's closing a position because 172 00:09:07,480 --> 00:09:10,120 Speaker 1: they have to, not because they want to. And the 173 00:09:10,160 --> 00:09:13,240 Speaker 1: technicals back all this up. Right, We just hit the 174 00:09:13,280 --> 00:09:17,400 Speaker 1: lowest daily mac D reading in bitcoin's history, lower than 175 00:09:17,440 --> 00:09:20,880 Speaker 1: the COVID crash, lower than the FTX collapse, and yet 176 00:09:21,320 --> 00:09:24,480 Speaker 1: the price is only down thirty three percent, Right, I'd 177 00:09:24,520 --> 00:09:27,959 Speaker 1: be impossible in a healthy market. RSI hit twenty one 178 00:09:28,080 --> 00:09:32,120 Speaker 1: on the daily. That only happens during true capitulation events. 179 00:09:32,160 --> 00:09:36,360 Speaker 1: But there's no capitulation this time. The price action is 180 00:09:36,480 --> 00:09:39,560 Speaker 1: all pressure. It's no panic, right, that's the tail that 181 00:09:39,559 --> 00:09:42,440 Speaker 1: we're looking at. This is one or maybe more forced 182 00:09:42,480 --> 00:09:46,760 Speaker 1: actors unwinding through a broken microstructure. The ten ten event, 183 00:09:47,440 --> 00:09:50,280 Speaker 1: it damaged liquidy. Now the seller that we're seeing is 184 00:09:50,320 --> 00:09:54,360 Speaker 1: basically dragging their inventory through the weekend market. All right, 185 00:09:54,400 --> 00:09:56,920 Speaker 1: So now you understand the liquidity was low and then 186 00:09:57,000 --> 00:09:59,880 Speaker 1: the ten ten event was the trigger that sent the 187 00:10:00,200 --> 00:10:02,800 Speaker 1: cascading down. Right, But then we need to zoom back 188 00:10:02,800 --> 00:10:04,280 Speaker 1: out for a second. We have to look at the 189 00:10:04,320 --> 00:10:07,400 Speaker 1: fundamentals because this is the part that really matters, at 190 00:10:07,440 --> 00:10:10,760 Speaker 1: least to me. Right, price, it moves around, sometimes it 191 00:10:10,760 --> 00:10:13,160 Speaker 1: moves around pretty violently, But if you care about the 192 00:10:13,280 --> 00:10:15,840 Speaker 1: long term outcome, and of course that's what Buffett always 193 00:10:15,840 --> 00:10:18,520 Speaker 1: tells us to look at. If I look at then 194 00:10:18,840 --> 00:10:22,200 Speaker 1: what actually matters is whether the asset you're holding is 195 00:10:22,240 --> 00:10:26,520 Speaker 1: fundamentally getting weaker or stronger. So while everybody's panicking about 196 00:10:26,559 --> 00:10:30,319 Speaker 1: the price, you know, dropping thirty thirty five percent, fundamentals, 197 00:10:30,720 --> 00:10:33,240 Speaker 1: they've been doing the exact opposite. As a matter of fact, 198 00:10:33,400 --> 00:10:36,880 Speaker 1: they've been getting stronger in ways we've literally never seen before. 199 00:10:37,160 --> 00:10:39,760 Speaker 1: Let's start with a couple of them, like institutional adoption, 200 00:10:40,080 --> 00:10:43,360 Speaker 1: because that's changed more in the last two years than 201 00:10:43,400 --> 00:10:47,079 Speaker 1: in the previous ten spot Bitcoin ETFs finally launched in January. 202 00:10:47,360 --> 00:10:50,640 Speaker 1: What most people don't realize is that these ETFs created 203 00:10:50,720 --> 00:10:54,600 Speaker 1: permanent pipelines from traditional financial institutions into bitcoin. I mean, 204 00:10:54,679 --> 00:10:59,720 Speaker 1: we're talking pensions, downmends, insurance companies, We're talking about boring money, 205 00:11:00,160 --> 00:11:02,960 Speaker 1: loan money. Right. This is the exact opposite of the 206 00:11:03,040 --> 00:11:05,960 Speaker 1: leverage traders that blew up on ten ten. Then we 207 00:11:06,000 --> 00:11:08,080 Speaker 1: have the credit side, which is something I've been talking 208 00:11:08,120 --> 00:11:10,000 Speaker 1: about for a really long time. I mean, we have 209 00:11:10,200 --> 00:11:13,520 Speaker 1: JP Morgan, one of the largest banks in the country, 210 00:11:13,520 --> 00:11:16,960 Speaker 1: in the world, is now accepting bitcoin as collateral for 211 00:11:17,040 --> 00:11:20,400 Speaker 1: institutional loans. I mean that's a massive milestone because it 212 00:11:20,440 --> 00:11:23,240 Speaker 1: means bitcoin has crossed the line from being just an 213 00:11:23,280 --> 00:11:25,760 Speaker 1: asset that you can speculate with to actually be in 214 00:11:25,800 --> 00:11:28,680 Speaker 1: an asset you can borrow again. Now, once Wall Street 215 00:11:28,720 --> 00:11:32,920 Speaker 1: starts accepting something as collateral, then it enters the credit system. 216 00:11:33,080 --> 00:11:38,239 Speaker 1: Once it enters the credit system, demand becomes structural, not cyclical. 217 00:11:38,559 --> 00:11:42,319 Speaker 1: And it's not just JP Morgan. The FHFA, which regulates 218 00:11:42,320 --> 00:11:45,640 Speaker 1: Fannie Mae Freddy Mack. They announced this year that mortgage 219 00:11:45,679 --> 00:11:49,440 Speaker 1: underwriters are allowed to consider bitcoin holdings when evaluating a 220 00:11:49,480 --> 00:11:53,360 Speaker 1: borrowers financial strength. Think about that for a second. For decades, 221 00:11:53,440 --> 00:11:57,280 Speaker 1: bitcoin was treated like some fringe internal asset. Now it's 222 00:11:57,280 --> 00:12:00,240 Speaker 1: something that helps you qualify for mortgage. I mean that's 223 00:12:00,280 --> 00:12:03,559 Speaker 1: a massive shift. It's a regulatory shift, which is even 224 00:12:03,640 --> 00:12:06,880 Speaker 1: more important. And custody has gone fully institutional as well. 225 00:12:07,160 --> 00:12:11,240 Speaker 1: Fidelity City, US Bank Corps, Standard Charter, they're all running 226 00:12:11,320 --> 00:12:15,720 Speaker 1: regulated bitcoin custody operations now. And the important point is 227 00:12:15,720 --> 00:12:19,319 Speaker 1: that when institutions buy bitcoin and custody with firms like that, 228 00:12:19,720 --> 00:12:23,720 Speaker 1: those coins they disappear from the liquid float for years. 229 00:12:23,720 --> 00:12:26,800 Speaker 1: Maybe right, they're not trading on binance, they're not part 230 00:12:26,840 --> 00:12:30,360 Speaker 1: of this noise. They're effectively locked away in deep dark, 231 00:12:30,400 --> 00:12:34,160 Speaker 1: cold storage. Bitcoin mining investment it hasn't slowed down at all. 232 00:12:34,240 --> 00:12:36,480 Speaker 1: Hash rate hit and new all time high this year. 233 00:12:36,679 --> 00:12:39,360 Speaker 1: It means the network is more secure than it's ever been. 234 00:12:39,720 --> 00:12:42,319 Speaker 1: And when you see miners investing one hundreds of millions 235 00:12:42,360 --> 00:12:46,320 Speaker 1: of dollars into hardware energy contracts, tells you one thing. 236 00:12:46,840 --> 00:12:49,720 Speaker 1: They're not worried about short term price moves. And then 237 00:12:50,200 --> 00:12:53,480 Speaker 1: got sovereign adoption starting to accelerate. The US now holds 238 00:12:53,520 --> 00:12:56,760 Speaker 1: over two hundred thousand bitcoin between seized assets and strategic 239 00:12:56,800 --> 00:13:01,040 Speaker 1: reserve discussions. Now multiple states are exploring bitcoin treasury allocations. 240 00:13:01,320 --> 00:13:06,040 Speaker 1: Other countries are openly studying strategic bitcoin reserves. Now this 241 00:13:06,440 --> 00:13:09,600 Speaker 1: part is still pretty early, but the direction, it's undeniable. 242 00:13:10,000 --> 00:13:14,240 Speaker 1: So when you stack all this up, institutions are accumulating bitcoin, 243 00:13:14,400 --> 00:13:18,800 Speaker 1: entering the credit system, mortgage underwriting guidelines, changing regulated custody, 244 00:13:18,840 --> 00:13:22,560 Speaker 1: exploding minor security at all time high sovereign interest building. 245 00:13:23,080 --> 00:13:25,560 Speaker 1: Then you compare to the price dropping thirty five percent, 246 00:13:26,040 --> 00:13:29,760 Speaker 1: becomes really obvious what's happening here? Right? This is exactly 247 00:13:29,800 --> 00:13:32,600 Speaker 1: the kind of setup that long term investors wait for 248 00:13:32,800 --> 00:13:35,640 Speaker 1: when the weighing machine hasn't caught up to the voting 249 00:13:35,720 --> 00:13:39,400 Speaker 1: machine yet, or what I like to call the mismatch multiplier, 250 00:13:39,679 --> 00:13:43,439 Speaker 1: how far off of reality is to perception the mismatch. 251 00:13:43,760 --> 00:13:47,200 Speaker 1: The greater the multiplier, the better the opportunity. Okay, so 252 00:13:47,600 --> 00:13:50,440 Speaker 1: now we understand why the price is falling, we understand 253 00:13:50,520 --> 00:13:53,520 Speaker 1: who's doing the selling. So then the next question for 254 00:13:53,640 --> 00:13:56,560 Speaker 1: us is when does this all in? Because if all 255 00:13:56,600 --> 00:13:58,920 Speaker 1: you see is the chart going down, it's easy to 256 00:13:58,960 --> 00:14:02,040 Speaker 1: assume it means something's fundamentally broken. But when you strip 257 00:14:02,080 --> 00:14:04,560 Speaker 1: out the emotion and you just look at the structure, 258 00:14:04,920 --> 00:14:08,800 Speaker 1: the timeline for how these events resolve is actually pretty clear. 259 00:14:09,000 --> 00:14:14,160 Speaker 1: You see, for sellers always have one defining characteristic. They 260 00:14:14,240 --> 00:14:16,920 Speaker 1: run out. They don't get to choose the price, they 261 00:14:16,920 --> 00:14:19,560 Speaker 1: don't get to choose the timing. They don't get to 262 00:14:19,680 --> 00:14:23,680 Speaker 1: wait for better entry, right. They unwind until their mandates complete. 263 00:14:23,840 --> 00:14:26,040 Speaker 1: That's it. And when you have a seller like this, 264 00:14:26,240 --> 00:14:29,280 Speaker 1: someone selling at the exact same time every single day 265 00:14:29,680 --> 00:14:33,600 Speaker 1: through thin liquidity into damage markets without reacting to price, 266 00:14:33,960 --> 00:14:38,080 Speaker 1: the end is determined by the inventory they hold. The 267 00:14:38,200 --> 00:14:40,320 Speaker 1: think is is that once they run out of bitcoin, 268 00:14:40,800 --> 00:14:44,200 Speaker 1: the pressure disappears instantly. Now we've seen this before March 269 00:14:44,240 --> 00:14:48,560 Speaker 1: twenty twenty, May twenty twenty one, the FTX aftermath, even 270 00:14:48,640 --> 00:14:50,960 Speaker 1: all the way back to Mount Cox in twenty fourteen. 271 00:14:51,480 --> 00:14:55,640 Speaker 1: When it stops, you get these violent snapbacks. They seem 272 00:14:55,720 --> 00:14:58,600 Speaker 1: to make no sense to almost anybody who wasn't paying 273 00:14:58,640 --> 00:15:02,000 Speaker 1: attention to the un line structure. And there's a second 274 00:15:02,040 --> 00:15:05,920 Speaker 1: piece to all of this. Liquidity turns fast. The same 275 00:15:05,920 --> 00:15:08,760 Speaker 1: way liquidity was drained over the last six eight weeks, 276 00:15:08,920 --> 00:15:11,880 Speaker 1: it comes back just as quickly. The government shut down, 277 00:15:12,040 --> 00:15:15,160 Speaker 1: it's over, the TGA's full, it's finally ready to start 278 00:15:15,200 --> 00:15:19,120 Speaker 1: spending again. The Fed ends QT on December first, bank 279 00:15:19,160 --> 00:15:22,160 Speaker 1: reserve stabilized as soon as that flow stops. So the 280 00:15:22,240 --> 00:15:25,320 Speaker 1: question is then when does it It ends when two 281 00:15:25,360 --> 00:15:29,560 Speaker 1: things converge, seller exhaustion and liquidity returning, and we're getting 282 00:15:29,560 --> 00:15:32,080 Speaker 1: close to both. Okay, So now that we've walked through 283 00:15:32,120 --> 00:15:35,400 Speaker 1: the actual cause this move, right, next question is what 284 00:15:35,480 --> 00:15:39,320 Speaker 1: should you be doing about now? The answer it depends. 285 00:15:39,440 --> 00:15:42,440 Speaker 1: It depends on your time frame, because how I think 286 00:15:42,440 --> 00:15:46,120 Speaker 1: about bitcoin personally very different of how I manage positions 287 00:15:46,160 --> 00:15:49,640 Speaker 1: inside my fund. Now. For me as an individual, bitcoin's 288 00:15:49,640 --> 00:15:51,640 Speaker 1: a long term asset, right, so I don't care what 289 00:15:51,680 --> 00:15:52,960 Speaker 1: it does in a week. I don't care what it 290 00:15:52,960 --> 00:15:54,880 Speaker 1: does in a quarter. I don't even care what it 291 00:15:54,920 --> 00:15:58,280 Speaker 1: does over a year. I buy it because I understand 292 00:15:58,320 --> 00:16:00,960 Speaker 1: the network. I understand the adoption curve, I understand the 293 00:16:01,000 --> 00:16:04,800 Speaker 1: monetary structure, I understand the long arc of where this 294 00:16:04,920 --> 00:16:08,160 Speaker 1: is going on that timeline. A move like this doesn't 295 00:16:08,240 --> 00:16:11,440 Speaker 1: change anything, right, These are liquidity pockets. None of it 296 00:16:11,520 --> 00:16:15,240 Speaker 1: touches the actual fundamentals. If anything, this is the kind 297 00:16:15,240 --> 00:16:17,800 Speaker 1: of opportunity that long term investors like me wait for. 298 00:16:17,920 --> 00:16:20,080 Speaker 1: But on the other hand, I also manage capital for 299 00:16:20,200 --> 00:16:24,280 Speaker 1: investors who don't have that luxury right. They care about quarters, 300 00:16:24,440 --> 00:16:26,600 Speaker 1: They look at things on an annual basis. They want 301 00:16:26,640 --> 00:16:29,920 Speaker 1: to see annual returns, they care about draw downs. So 302 00:16:30,000 --> 00:16:34,040 Speaker 1: inside the Bitcoin Opportunity Fund, we hedge, we use options, 303 00:16:34,200 --> 00:16:37,960 Speaker 1: We take tactical positions to manage volatility, because that's part 304 00:16:38,000 --> 00:16:40,280 Speaker 1: of the mandate. We're not trying to trade in and 305 00:16:40,320 --> 00:16:43,440 Speaker 1: out of it. We stay long, but we manage liquidity 306 00:16:43,440 --> 00:16:47,360 Speaker 1: on the downside. So you're managing short term liquidity. If 307 00:16:47,400 --> 00:16:51,080 Speaker 1: you have bills, if you have obligations, you have redemption windows, 308 00:16:51,520 --> 00:16:54,080 Speaker 1: then you have to think differently. You can't ride out 309 00:16:54,120 --> 00:16:57,600 Speaker 1: every structural shock, and for some people that means diversifying 310 00:16:57,600 --> 00:17:02,000 Speaker 1: into assets outside of bitcoin that produce shield things with 311 00:17:02,120 --> 00:17:05,800 Speaker 1: more stable cash flows, fixed income opportunities. Now there's nothing 312 00:17:05,840 --> 00:17:09,000 Speaker 1: wrong with that. It just depends on what you're optimizing for. 313 00:17:09,200 --> 00:17:12,480 Speaker 1: So if you're thinking long term, nothing's changed. If you 314 00:17:12,520 --> 00:17:15,760 Speaker 1: need short term liquidity, had you diversify, and if you 315 00:17:15,800 --> 00:17:18,639 Speaker 1: fall somewhere in the middle, well you probably already know 316 00:17:18,680 --> 00:17:22,080 Speaker 1: which side you lean toward. The key is matching your strategy, 317 00:17:22,400 --> 00:17:25,560 Speaker 1: your time frame, not to the headlines. Okay, so to 318 00:17:25,600 --> 00:17:28,159 Speaker 1: wrap all this up, bring it back to where we started. 319 00:17:28,280 --> 00:17:31,119 Speaker 1: Let's go back to Buffett, right, He always said that again, 320 00:17:31,200 --> 00:17:33,760 Speaker 1: the market is a voting machine in the short term 321 00:17:33,840 --> 00:17:36,880 Speaker 1: and a wane machine in the long term. So when 322 00:17:36,920 --> 00:17:40,200 Speaker 1: you strip out all the noise, pick out the liquidations, 323 00:17:40,240 --> 00:17:43,480 Speaker 1: the broken market structure, the liquidity vacuum, what we're left 324 00:17:43,520 --> 00:17:48,320 Speaker 1: with is still the same asset, same adoption curve, same fundamentals, 325 00:17:48,520 --> 00:17:50,800 Speaker 1: the same long term story. And if you look at 326 00:17:50,840 --> 00:17:54,560 Speaker 1: it through that lens, this move isn't the market wane bitcoin. 327 00:17:54,880 --> 00:18:00,920 Speaker 1: It's the market voting under pressure, reflexive mechanical by flows, 328 00:18:01,320 --> 00:18:05,239 Speaker 1: not fundamentals. The weighing machine hasn't even stepped on the 329 00:18:05,400 --> 00:18:08,800 Speaker 1: scale yet. So if you're long term like me, stay 330 00:18:08,840 --> 00:18:12,239 Speaker 1: long term, nor the voting machine, ignore the noise, use 331 00:18:12,280 --> 00:18:14,679 Speaker 1: these opportunities to buy bitcoin at a discount. And if 332 00:18:14,720 --> 00:18:17,399 Speaker 1: you're more short term like we are inside the fund, 333 00:18:17,720 --> 00:18:20,720 Speaker 1: then manage your risk the way short term investors have to. 334 00:18:21,240 --> 00:18:25,399 Speaker 1: But don't confuse a broken seller in a broken market 335 00:18:25,600 --> 00:18:28,320 Speaker 1: with a broken asset, because that's not what the data 336 00:18:28,440 --> 00:18:30,719 Speaker 1: shows us. Buffett would look at it like this and 337 00:18:30,760 --> 00:18:33,320 Speaker 1: say the same thing he always says. If the long 338 00:18:33,440 --> 00:18:36,840 Speaker 1: term economics are getting stronger while the price is falling, 339 00:18:37,160 --> 00:18:41,120 Speaker 1: then you're looking at opportunity wearing a disguise. That's exactly 340 00:18:41,119 --> 00:18:43,359 Speaker 1: where bitcoin is right now. Now, if you want to 341 00:18:43,359 --> 00:18:45,880 Speaker 1: see the actual data behind all of this, I put 342 00:18:45,920 --> 00:18:48,840 Speaker 1: together a free report with the top nine charts I'm 343 00:18:48,840 --> 00:18:51,160 Speaker 1: watching right now. These are the same charts I use 344 00:18:51,280 --> 00:18:53,639 Speaker 1: inside my research, the same ones I rely on to 345 00:18:53,680 --> 00:18:56,120 Speaker 1: separate noise from signal. Then, if you want it, I'm 346 00:18:56,119 --> 00:18:58,080 Speaker 1: going to leave a link down below, so grab it. 347 00:18:58,160 --> 00:19:00,600 Speaker 1: Study it compared to what we walk through today. It's 348 00:19:00,640 --> 00:19:02,560 Speaker 1: completely free. It's my gift to you. It's gonna give 349 00:19:02,600 --> 00:19:05,879 Speaker 1: you more clarity than scrolling through Twitter. That's what I 350 00:19:05,920 --> 00:19:06,800 Speaker 1: got to your success.