WEBVTT - Bitcoin’s Crash Was No Accident — Here’s What Comes Next 0:00:00.040 --> 0:00:02.640 Bitcoin's price is crashing right now, and everybody wants to 0:00:02.680 --> 0:00:06.840 know the same two answers, why it happened and what 0:00:06.920 --> 0:00:10.160 happens next. But the reasons that most people they're throwing 0:00:10.200 --> 0:00:13.040 around they're just wrong. And if you don't understand what 0:00:13.160 --> 0:00:15.600 actually happened and why, then you're not going to be 0:00:15.600 --> 0:00:18.880 able to see what's about to change. More importantly, what 0:00:18.960 --> 0:00:22.279 comes next, because once you see the real cause behind 0:00:22.280 --> 0:00:25.520 this move, the entire crash suddenly makes a lot more sense. 0:00:25.560 --> 0:00:28.320 So today we're going to break down why is the 0:00:28.360 --> 0:00:33.159 price falling, who is selling, what broke, when will it end, 0:00:33.479 --> 0:00:36.280 and what you should be doing about it now, whether 0:00:36.280 --> 0:00:38.400 you're a long term investor a short term investor, we're 0:00:38.400 --> 0:00:40.519 going to answer that now. Look, I've been building I've 0:00:40.520 --> 0:00:43.519 been selling tech companies for decades. I invest in bitcoin startups. 0:00:43.640 --> 0:00:45.920 I hope run a public trade a bitcoin treasury company. 0:00:46.159 --> 0:00:49.720 This is the same data that we're using internally, all right, 0:00:49.760 --> 0:00:52.600 So let's just start with the obvious. Bitcoin's price is 0:00:52.640 --> 0:00:55.400 crashing now at the time of this recording, probably going 0:00:55.440 --> 0:00:56.920 to change by the time you watch this, but we're 0:00:56.920 --> 0:01:00.160 at about eighty five thousand. It's about thirty two two 0:01:00.200 --> 0:01:02.640 percent off of its previous all time high that was 0:01:02.680 --> 0:01:06.000 set back in October thirteenth, and everybody's looking around. They're 0:01:06.040 --> 0:01:09.360 all trying to figure out, like, what the heck just happened, 0:01:09.440 --> 0:01:13.000 and of course, more importantly, what comes next. But the 0:01:13.080 --> 0:01:15.640 problem is that most of the explanations out there that 0:01:15.680 --> 0:01:19.560 you're seeing maybe online on Twitter whatever, they're guesses, right, 0:01:19.600 --> 0:01:23.600 they're headlines, it's whatever narrative. People grab whatever they can 0:01:23.600 --> 0:01:26.639 find the quickest, and none of it actually matches the data. 0:01:27.080 --> 0:01:30.000 But before we go anywhere, before we talk about the seller, 0:01:30.360 --> 0:01:33.040 before we talk about the micro structure, we talk before 0:01:33.040 --> 0:01:35.080 we talk about the timing of the moves, we have 0:01:35.200 --> 0:01:37.959 to set the right frame right. This is when I 0:01:38.000 --> 0:01:40.520 always go back and I listen to good old uncle 0:01:40.560 --> 0:01:43.520 Warren Buffett, the Oracle of Omaha, because he has all 0:01:43.560 --> 0:01:46.920 these little lines, these little sayings, ones that I think 0:01:46.959 --> 0:01:50.360 about a lot, especially when markets start acting very emotional 0:01:50.480 --> 0:01:52.760 like right now, And he has a really famous one. 0:01:52.800 --> 0:01:55.320 He said, quote, if you're not willing to own something 0:01:55.360 --> 0:01:58.320 for ten years, don't even think about owning it for 0:01:58.520 --> 0:02:01.840 ten minutes in quote. And of course the other one 0:02:02.000 --> 0:02:05.000 everybody quotes all the time is price is what you 0:02:05.120 --> 0:02:07.760 pay value is what you get. But the one I 0:02:07.840 --> 0:02:10.760 think fits this moment right now, the best, the most 0:02:10.800 --> 0:02:13.440 perfect one for this moment is in the short run, 0:02:13.800 --> 0:02:17.000 markets are a voting machine. In the long run, they're 0:02:17.040 --> 0:02:19.600 a weighing machine. Now, if you've been around these cycles 0:02:19.639 --> 0:02:22.600 long enough, you know exactly what he's talking about, right 0:02:22.840 --> 0:02:26.360 because right now, the voting machine, it's in full panic mode. 0:02:26.440 --> 0:02:29.119 Bitcoin again, it's down thirty five percent. It's a big move, 0:02:29.520 --> 0:02:32.160 but really, when you look at the bigger picture, it's 0:02:32.200 --> 0:02:35.680 not unusual for bitcoin. In fact, it's the third drop 0:02:35.840 --> 0:02:39.079 of this size in just this current cycle, and we've 0:02:39.080 --> 0:02:43.120 seen dozens of these previous cycles. But what is unusual 0:02:43.360 --> 0:02:46.560 is the sentiment this time that, like this drop right now, 0:02:46.680 --> 0:02:50.480 this must mean something is fundamentally wrong. So let's walk 0:02:50.520 --> 0:02:52.960 through this very carefully and take a look, like, let's 0:02:53.040 --> 0:02:55.720 lay out the framework. Let's lay out the evidence so 0:02:55.760 --> 0:02:58.239 we can understand what's going on, because once you line 0:02:58.320 --> 0:03:01.880 up all the facts becomes really clear that the long 0:03:02.000 --> 0:03:05.040 term picture, it hasn't changed at all, and really the 0:03:05.040 --> 0:03:08.600 fundamentals have actually never looked better. Now, before we get 0:03:08.639 --> 0:03:11.320 to the fundamentals, let's stay on Buffett just for one 0:03:11.360 --> 0:03:15.360 more second, because understanding how he thinks how he became 0:03:15.400 --> 0:03:18.040 one of the wealthiest men in the world is something 0:03:18.080 --> 0:03:19.799 that we should all learn from. And I know he's 0:03:19.800 --> 0:03:21.959 not a big bitcoin fan, but we can still learn 0:03:22.000 --> 0:03:25.800 from him. Now, Buffett never buys something and then sits 0:03:25.840 --> 0:03:28.200 there staring at the price. Every day. He said over 0:03:28.280 --> 0:03:31.040 and over he doesn't care what the price does today 0:03:31.280 --> 0:03:34.200 or tomorrow because he's not buying the ticker, right, He's 0:03:34.240 --> 0:03:37.480 not buying the price. He's buying the business. And if 0:03:37.520 --> 0:03:40.680 the business is getting stronger and the price is falling, 0:03:41.040 --> 0:03:44.200 then he doesn't panic. He just buys more. Okay, So 0:03:44.240 --> 0:03:47.040 before we get emotional about you know, the red candles, 0:03:47.280 --> 0:03:49.440 before we get emotion about the headlines, what we want 0:03:49.440 --> 0:03:51.240 to do is we want to do exactly what Warren 0:03:51.240 --> 0:03:53.680 Buffett would do. If we want to zoom out, just 0:03:53.760 --> 0:03:55.880 ignore the noise for a second and let's get to 0:03:55.920 --> 0:03:59.280 the facts because the facts they paint a very different, 0:03:59.320 --> 0:04:02.680 a completely different picture than the emotions do. Okay, So 0:04:02.880 --> 0:04:05.160 now that we've got the right frame of mind, let's 0:04:05.160 --> 0:04:07.960 go straight into the first big question. Why is the 0:04:07.960 --> 0:04:10.280 price falling? Like what happened? Now, before we get into 0:04:10.280 --> 0:04:12.920 the market, makers and the force selling and all that. 0:04:13.240 --> 0:04:15.720 We have to start with something way bigger than bitcoin, 0:04:15.880 --> 0:04:19.560 something that affects every asset on Earth, and it's liquidity. 0:04:19.880 --> 0:04:23.640 Because when liquidity disappears, it doesn't matter how strong the 0:04:23.640 --> 0:04:26.840 fundamentals are, it doesn't matter how much demand there is. 0:04:27.240 --> 0:04:30.440 Everything gets hit. And that's exactly what's been happening over 0:04:30.480 --> 0:04:34.080 the last six eight weeks. Now. The first thing most 0:04:34.080 --> 0:04:36.800 people missed is that the US government went through the 0:04:36.920 --> 0:04:40.680 longest shut down in American history forty three days. And 0:04:40.680 --> 0:04:45.200 when the government shuts down, spending freezes. The Treasury General 0:04:45.279 --> 0:04:49.000 Account the TGA, it's the government's checking account, swells up, 0:04:49.240 --> 0:04:52.360 and all that money that swells into it comes out 0:04:52.360 --> 0:04:55.799 of the system. And of course, every time the TGA jumps, 0:04:56.000 --> 0:04:59.120 you see risk assets start to pull back because the 0:04:59.160 --> 0:05:02.880 liquidity is getting rained from the exact places the markets 0:05:02.920 --> 0:05:05.280 rely on for the day to day funding. Now, on 0:05:05.320 --> 0:05:08.880 top of that, but a reserve, they're still running QT, 0:05:09.240 --> 0:05:13.040 or quantitative tightening. So while the shutdown froze fiscal spending, 0:05:13.480 --> 0:05:16.080 QT was pulling reserves out of the banking system, And 0:05:16.120 --> 0:05:18.520 if you watch the bank reserve levels, you can see 0:05:18.520 --> 0:05:21.680 the floor getting hit pretty quickly. Now this isn't a guess, right, 0:05:21.680 --> 0:05:23.839 it's all in the data. Reserves fell back to the 0:05:23.880 --> 0:05:27.320 same danger zone we reached in twenty nineteen, right before 0:05:27.360 --> 0:05:30.480 the repo market blew out. And while that's happening, the 0:05:30.520 --> 0:05:34.640 reverse repo facility it's basically empty, which is another major 0:05:34.720 --> 0:05:38.160 signal that the system is getting tight. Now. The reverse 0:05:38.160 --> 0:05:41.360 repo dropping to near zero means money market funds have 0:05:41.520 --> 0:05:46.719 nowhere to park excess cash. Because no excess cash, overnight 0:05:46.760 --> 0:05:50.200 borrowing costs between banks have been creeping higher and higher 0:05:50.200 --> 0:05:53.760 and higher for weeks. Dealers are pulling back. Risk leverage 0:05:53.800 --> 0:05:57.160 is coming down across the board. So when all this happens, 0:05:57.560 --> 0:06:01.479 you get a temporary I say, where a liquidity vacuum. 0:06:01.680 --> 0:06:04.839 Right now, this hits everything. It's just that Bitcoin reacts 0:06:04.839 --> 0:06:07.320 to this the fastest. Okay, So before we even get 0:06:07.320 --> 0:06:10.680 to the trigger, we already see the liquidity environment. That 0:06:10.800 --> 0:06:14.000 explains why every risk asset's been under pressure lately. Now, 0:06:14.120 --> 0:06:16.359 if you don't understand that, you're gonna end up blaming 0:06:16.400 --> 0:06:19.320 the headlines instead of looking at the money flows that 0:06:19.440 --> 0:06:22.359 actually move market. Okay, but now that we understand liquidity, 0:06:22.760 --> 0:06:25.640 and that alone explain explains a lot, right, we have 0:06:25.680 --> 0:06:28.280 to get into the part that almost nobody understands. This 0:06:28.320 --> 0:06:30.560 is where things get a little bit weird, because the 0:06:30.600 --> 0:06:32.880 price action that we've been seeing the last few weeks 0:06:33.440 --> 0:06:36.479 doesn't look like fear right, it doesn't actually look like 0:06:36.640 --> 0:06:40.080 normal selling pressure. It looks like something broke. And the 0:06:40.160 --> 0:06:44.839 date everything changed was October tenth, ten ten. Remember that day. 0:06:45.120 --> 0:06:47.839 That's the day President Trump sent out the tweet he 0:06:47.960 --> 0:06:49.640 said that he was going to put one hundred percent 0:06:49.640 --> 0:06:52.240 tariffs on China, and then it triggered one of the 0:06:52.360 --> 0:06:57.040 largest liquidation events in crypto's history. Almost twenty billion dollars 0:06:57.080 --> 0:07:00.120 in leverage positions were wiped out in less than twenty 0:07:00.120 --> 0:07:03.400 four hours. Now that's not normal, right. Bitcoin didn't drop 0:07:03.480 --> 0:07:07.040 fifty percent. The ETFs didn't like give back all, you know, 0:07:07.080 --> 0:07:10.840 give all the redemptions back. There wasn't some major macro shock, 0:07:11.200 --> 0:07:14.200 but the size of the forced liquidations was bigger than 0:07:14.240 --> 0:07:16.480 what we saw in some of the twenty twenty two candles. 0:07:16.760 --> 0:07:20.480 Now here's the key. When liquidations get that big, it's 0:07:20.480 --> 0:07:24.640 not just traders losing money. Market makers took this too, right. 0:07:24.800 --> 0:07:27.360 These are the firms that provide the liquidity that lift 0:07:27.360 --> 0:07:30.320 the books that stabilize the volatility, and when they get 0:07:30.360 --> 0:07:35.080 blindsided when their hedges get liquidated, and when exchanges use 0:07:35.280 --> 0:07:40.040 ADL to force closer positions at horrible prices, they don't 0:07:40.080 --> 0:07:42.880 just get hurt. They pull back right, they reduce risk. 0:07:43.000 --> 0:07:46.360 They have to shrink their inventory, they quote smaller sizes, 0:07:46.640 --> 0:07:48.840 and that starts to leave holes in the market structure. 0:07:48.840 --> 0:07:52.320 And that's exactly what we saw on ten ten. Now 0:07:52.560 --> 0:07:54.600 we can take a look at Finance for example, they 0:07:54.600 --> 0:07:58.920 had one of its largest forced liquidation clusters ever Wintermute 0:07:59.000 --> 0:08:03.320 Ceo public Is Finances ADL system malfunctioned and hit them 0:08:03.320 --> 0:08:07.240 with fills that quote make no sense. Now. Then right 0:08:07.240 --> 0:08:10.160 after that we saw the collapse of Stream Finance. It 0:08:10.160 --> 0:08:13.640 was a two hundred million dollar Delta neutral fund. They 0:08:13.680 --> 0:08:17.080 lost around ninety three million and went bankrupt. Now that's 0:08:17.080 --> 0:08:20.360 a fund that wasn't supposed to lose money, but their 0:08:20.360 --> 0:08:24.120 hedges they got caught in the same ADL chain reaction. Now, 0:08:24.120 --> 0:08:27.480 when you put all that together, a major liquidation event 0:08:28.080 --> 0:08:31.680 ADL kicking in a large fund blowing up, you end 0:08:31.800 --> 0:08:34.680 up with exactly what we've been seeing ever since. And 0:08:34.679 --> 0:08:37.360 it gets even more strange. Than that for almost two 0:08:37.360 --> 0:08:41.320 weeks straight. Now, someone's been selling bitcoin every single morning 0:08:41.360 --> 0:08:45.160 at nine thirty am Eastern time, the exact moment the 0:08:45.240 --> 0:08:48.000 US stock market opens, the same pattern, the same time 0:08:48.040 --> 0:08:51.720 and the same pressure. This isn't retail panic, right. Retail 0:08:51.720 --> 0:08:54.280 doesn't wake up and then dump bitcoin at the opening 0:08:54.280 --> 0:08:57.240 bill on Wall Street with that kind of precision. Right, 0:08:57.400 --> 0:09:00.040 this looks like has to be a mandated seller. And 0:09:00.120 --> 0:09:03.040 this is a fund that's unwinding. It's a market maker 0:09:03.080 --> 0:09:07.000 that's de risking their portfolio. Somebody's closing a position because 0:09:07.480 --> 0:09:10.120 they have to, not because they want to. And the 0:09:10.160 --> 0:09:13.240 technicals back all this up. Right, We just hit the 0:09:13.280 --> 0:09:17.400 lowest daily mac D reading in bitcoin's history, lower than 0:09:17.440 --> 0:09:20.880 the COVID crash, lower than the FTX collapse, and yet 0:09:21.320 --> 0:09:24.480 the price is only down thirty three percent, Right, I'd 0:09:24.520 --> 0:09:27.959 be impossible in a healthy market. RSI hit twenty one 0:09:28.080 --> 0:09:32.120 on the daily. That only happens during true capitulation events. 0:09:32.160 --> 0:09:36.360 But there's no capitulation this time. The price action is 0:09:36.480 --> 0:09:39.560 all pressure. It's no panic, right, that's the tail that 0:09:39.559 --> 0:09:42.440 we're looking at. This is one or maybe more forced 0:09:42.480 --> 0:09:46.760 actors unwinding through a broken microstructure. The ten ten event, 0:09:47.440 --> 0:09:50.280 it damaged liquidy. Now the seller that we're seeing is 0:09:50.320 --> 0:09:54.360 basically dragging their inventory through the weekend market. All right, 0:09:54.400 --> 0:09:56.920 So now you understand the liquidity was low and then 0:09:57.000 --> 0:09:59.880 the ten ten event was the trigger that sent the 0:10:00.200 --> 0:10:02.800 cascading down. Right, But then we need to zoom back 0:10:02.800 --> 0:10:04.280 out for a second. We have to look at the 0:10:04.320 --> 0:10:07.400 fundamentals because this is the part that really matters, at 0:10:07.440 --> 0:10:10.760 least to me. Right, price, it moves around, sometimes it 0:10:10.760 --> 0:10:13.160 moves around pretty violently, But if you care about the 0:10:13.280 --> 0:10:15.840 long term outcome, and of course that's what Buffett always 0:10:15.840 --> 0:10:18.520 tells us to look at. If I look at then 0:10:18.840 --> 0:10:22.200 what actually matters is whether the asset you're holding is 0:10:22.240 --> 0:10:26.520 fundamentally getting weaker or stronger. So while everybody's panicking about 0:10:26.559 --> 0:10:30.319 the price, you know, dropping thirty thirty five percent, fundamentals, 0:10:30.720 --> 0:10:33.240 they've been doing the exact opposite. As a matter of fact, 0:10:33.400 --> 0:10:36.880 they've been getting stronger in ways we've literally never seen before. 0:10:37.160 --> 0:10:39.760 Let's start with a couple of them, like institutional adoption, 0:10:40.080 --> 0:10:43.360 because that's changed more in the last two years than 0:10:43.400 --> 0:10:47.079 in the previous ten spot Bitcoin ETFs finally launched in January. 0:10:47.360 --> 0:10:50.640 What most people don't realize is that these ETFs created 0:10:50.720 --> 0:10:54.600 permanent pipelines from traditional financial institutions into bitcoin. I mean, 0:10:54.679 --> 0:10:59.720 we're talking pensions, downmends, insurance companies, We're talking about boring money, 0:11:00.160 --> 0:11:02.960 loan money. Right. This is the exact opposite of the 0:11:03.040 --> 0:11:05.960 leverage traders that blew up on ten ten. Then we 0:11:06.000 --> 0:11:08.080 have the credit side, which is something I've been talking 0:11:08.120 --> 0:11:10.000 about for a really long time. I mean, we have 0:11:10.200 --> 0:11:13.520 JP Morgan, one of the largest banks in the country, 0:11:13.520 --> 0:11:16.960 in the world, is now accepting bitcoin as collateral for 0:11:17.040 --> 0:11:20.400 institutional loans. I mean that's a massive milestone because it 0:11:20.440 --> 0:11:23.240 means bitcoin has crossed the line from being just an 0:11:23.280 --> 0:11:25.760 asset that you can speculate with to actually be in 0:11:25.800 --> 0:11:28.680 an asset you can borrow again. Now, once Wall Street 0:11:28.720 --> 0:11:32.920 starts accepting something as collateral, then it enters the credit system. 0:11:33.080 --> 0:11:38.239 Once it enters the credit system, demand becomes structural, not cyclical. 0:11:38.559 --> 0:11:42.319 And it's not just JP Morgan. The FHFA, which regulates 0:11:42.320 --> 0:11:45.640 Fannie Mae Freddy Mack. They announced this year that mortgage 0:11:45.679 --> 0:11:49.440 underwriters are allowed to consider bitcoin holdings when evaluating a 0:11:49.480 --> 0:11:53.360 borrowers financial strength. Think about that for a second. For decades, 0:11:53.440 --> 0:11:57.280 bitcoin was treated like some fringe internal asset. Now it's 0:11:57.280 --> 0:12:00.240 something that helps you qualify for mortgage. I mean that's 0:12:00.280 --> 0:12:03.559 a massive shift. It's a regulatory shift, which is even 0:12:03.640 --> 0:12:06.880 more important. And custody has gone fully institutional as well. 0:12:07.160 --> 0:12:11.240 Fidelity City, US Bank Corps, Standard Charter, they're all running 0:12:11.320 --> 0:12:15.720 regulated bitcoin custody operations now. And the important point is 0:12:15.720 --> 0:12:19.319 that when institutions buy bitcoin and custody with firms like that, 0:12:19.720 --> 0:12:23.720 those coins they disappear from the liquid float for years. 0:12:23.720 --> 0:12:26.800 Maybe right, they're not trading on binance, they're not part 0:12:26.840 --> 0:12:30.360 of this noise. They're effectively locked away in deep dark, 0:12:30.400 --> 0:12:34.160 cold storage. Bitcoin mining investment it hasn't slowed down at all. 0:12:34.240 --> 0:12:36.480 Hash rate hit and new all time high this year. 0:12:36.679 --> 0:12:39.360 It means the network is more secure than it's ever been. 0:12:39.720 --> 0:12:42.319 And when you see miners investing one hundreds of millions 0:12:42.360 --> 0:12:46.320 of dollars into hardware energy contracts, tells you one thing. 0:12:46.840 --> 0:12:49.720 They're not worried about short term price moves. And then 0:12:50.200 --> 0:12:53.480 got sovereign adoption starting to accelerate. The US now holds 0:12:53.520 --> 0:12:56.760 over two hundred thousand bitcoin between seized assets and strategic 0:12:56.800 --> 0:13:01.040 reserve discussions. Now multiple states are exploring bitcoin treasury allocations. 0:13:01.320 --> 0:13:06.040 Other countries are openly studying strategic bitcoin reserves. Now this 0:13:06.440 --> 0:13:09.600 part is still pretty early, but the direction, it's undeniable. 0:13:10.000 --> 0:13:14.240 So when you stack all this up, institutions are accumulating bitcoin, 0:13:14.400 --> 0:13:18.800 entering the credit system, mortgage underwriting guidelines, changing regulated custody, 0:13:18.840 --> 0:13:22.560 exploding minor security at all time high sovereign interest building. 0:13:23.080 --> 0:13:25.560 Then you compare to the price dropping thirty five percent, 0:13:26.040 --> 0:13:29.760 becomes really obvious what's happening here? Right? This is exactly 0:13:29.800 --> 0:13:32.600 the kind of setup that long term investors wait for 0:13:32.800 --> 0:13:35.640 when the weighing machine hasn't caught up to the voting 0:13:35.720 --> 0:13:39.400 machine yet, or what I like to call the mismatch multiplier, 0:13:39.679 --> 0:13:43.439 how far off of reality is to perception the mismatch. 0:13:43.760 --> 0:13:47.200 The greater the multiplier, the better the opportunity. Okay, so 0:13:47.600 --> 0:13:50.440 now we understand why the price is falling, we understand 0:13:50.520 --> 0:13:53.520 who's doing the selling. So then the next question for 0:13:53.640 --> 0:13:56.560 us is when does this all in? Because if all 0:13:56.600 --> 0:13:58.920 you see is the chart going down, it's easy to 0:13:58.960 --> 0:14:02.040 assume it means something's fundamentally broken. But when you strip 0:14:02.080 --> 0:14:04.560 out the emotion and you just look at the structure, 0:14:04.920 --> 0:14:08.800 the timeline for how these events resolve is actually pretty clear. 0:14:09.000 --> 0:14:14.160 You see, for sellers always have one defining characteristic. They 0:14:14.240 --> 0:14:16.920 run out. They don't get to choose the price, they 0:14:16.920 --> 0:14:19.560 don't get to choose the timing. They don't get to 0:14:19.680 --> 0:14:23.680 wait for better entry, right. They unwind until their mandates complete. 0:14:23.840 --> 0:14:26.040 That's it. And when you have a seller like this, 0:14:26.240 --> 0:14:29.280 someone selling at the exact same time every single day 0:14:29.680 --> 0:14:33.600 through thin liquidity into damage markets without reacting to price, 0:14:33.960 --> 0:14:38.080 the end is determined by the inventory they hold. The 0:14:38.200 --> 0:14:40.320 think is is that once they run out of bitcoin, 0:14:40.800 --> 0:14:44.200 the pressure disappears instantly. Now we've seen this before March 0:14:44.240 --> 0:14:48.560 twenty twenty, May twenty twenty one, the FTX aftermath, even 0:14:48.640 --> 0:14:50.960 all the way back to Mount Cox in twenty fourteen. 0:14:51.480 --> 0:14:55.640 When it stops, you get these violent snapbacks. They seem 0:14:55.720 --> 0:14:58.600 to make no sense to almost anybody who wasn't paying 0:14:58.640 --> 0:15:02.000 attention to the un line structure. And there's a second 0:15:02.040 --> 0:15:05.920 piece to all of this. Liquidity turns fast. The same 0:15:05.920 --> 0:15:08.760 way liquidity was drained over the last six eight weeks, 0:15:08.920 --> 0:15:11.880 it comes back just as quickly. The government shut down, 0:15:12.040 --> 0:15:15.160 it's over, the TGA's full, it's finally ready to start 0:15:15.200 --> 0:15:19.120 spending again. The Fed ends QT on December first, bank 0:15:19.160 --> 0:15:22.160 reserve stabilized as soon as that flow stops. So the 0:15:22.240 --> 0:15:25.320 question is then when does it It ends when two 0:15:25.360 --> 0:15:29.560 things converge, seller exhaustion and liquidity returning, and we're getting 0:15:29.560 --> 0:15:32.080 close to both. Okay, So now that we've walked through 0:15:32.120 --> 0:15:35.400 the actual cause this move, right, next question is what 0:15:35.480 --> 0:15:39.320 should you be doing about now? The answer it depends. 0:15:39.440 --> 0:15:42.440 It depends on your time frame, because how I think 0:15:42.440 --> 0:15:46.120 about bitcoin personally very different of how I manage positions 0:15:46.160 --> 0:15:49.640 inside my fund. Now. For me as an individual, bitcoin's 0:15:49.640 --> 0:15:51.640 a long term asset, right, so I don't care what 0:15:51.680 --> 0:15:52.960 it does in a week. I don't care what it 0:15:52.960 --> 0:15:54.880 does in a quarter. I don't even care what it 0:15:54.920 --> 0:15:58.280 does over a year. I buy it because I understand 0:15:58.320 --> 0:16:00.960 the network. I understand the adoption curve, I understand the 0:16:01.000 --> 0:16:04.800 monetary structure, I understand the long arc of where this 0:16:04.920 --> 0:16:08.160 is going on that timeline. A move like this doesn't 0:16:08.240 --> 0:16:11.440 change anything, right, These are liquidity pockets. None of it 0:16:11.520 --> 0:16:15.240 touches the actual fundamentals. If anything, this is the kind 0:16:15.240 --> 0:16:17.800 of opportunity that long term investors like me wait for. 0:16:17.920 --> 0:16:20.080 But on the other hand, I also manage capital for 0:16:20.200 --> 0:16:24.280 investors who don't have that luxury right. They care about quarters, 0:16:24.440 --> 0:16:26.600 They look at things on an annual basis. They want 0:16:26.640 --> 0:16:29.920 to see annual returns, they care about draw downs. So 0:16:30.000 --> 0:16:34.040 inside the Bitcoin Opportunity Fund, we hedge, we use options, 0:16:34.200 --> 0:16:37.960 We take tactical positions to manage volatility, because that's part 0:16:38.000 --> 0:16:40.280 of the mandate. We're not trying to trade in and 0:16:40.320 --> 0:16:43.440 out of it. We stay long, but we manage liquidity 0:16:43.440 --> 0:16:47.360 on the downside. So you're managing short term liquidity. If 0:16:47.400 --> 0:16:51.080 you have bills, if you have obligations, you have redemption windows, 0:16:51.520 --> 0:16:54.080 then you have to think differently. You can't ride out 0:16:54.120 --> 0:16:57.600 every structural shock, and for some people that means diversifying 0:16:57.600 --> 0:17:02.000 into assets outside of bitcoin that produce shield things with 0:17:02.120 --> 0:17:05.800 more stable cash flows, fixed income opportunities. Now there's nothing 0:17:05.840 --> 0:17:09.000 wrong with that. It just depends on what you're optimizing for. 0:17:09.200 --> 0:17:12.480 So if you're thinking long term, nothing's changed. If you 0:17:12.520 --> 0:17:15.760 need short term liquidity, had you diversify, and if you 0:17:15.800 --> 0:17:18.639 fall somewhere in the middle, well you probably already know 0:17:18.680 --> 0:17:22.080 which side you lean toward. The key is matching your strategy, 0:17:22.400 --> 0:17:25.560 your time frame, not to the headlines. Okay, so to 0:17:25.600 --> 0:17:28.159 wrap all this up, bring it back to where we started. 0:17:28.280 --> 0:17:31.119 Let's go back to Buffett, right, He always said that again, 0:17:31.200 --> 0:17:33.760 the market is a voting machine in the short term 0:17:33.840 --> 0:17:36.880 and a wane machine in the long term. So when 0:17:36.920 --> 0:17:40.200 you strip out all the noise, pick out the liquidations, 0:17:40.240 --> 0:17:43.480 the broken market structure, the liquidity vacuum, what we're left 0:17:43.520 --> 0:17:48.320 with is still the same asset, same adoption curve, same fundamentals, 0:17:48.520 --> 0:17:50.800 the same long term story. And if you look at 0:17:50.840 --> 0:17:54.560 it through that lens, this move isn't the market wane bitcoin. 0:17:54.880 --> 0:18:00.920 It's the market voting under pressure, reflexive mechanical by flows, 0:18:01.320 --> 0:18:05.239 not fundamentals. The weighing machine hasn't even stepped on the 0:18:05.400 --> 0:18:08.800 scale yet. So if you're long term like me, stay 0:18:08.840 --> 0:18:12.239 long term, nor the voting machine, ignore the noise, use 0:18:12.280 --> 0:18:14.679 these opportunities to buy bitcoin at a discount. And if 0:18:14.720 --> 0:18:17.399 you're more short term like we are inside the fund, 0:18:17.720 --> 0:18:20.720 then manage your risk the way short term investors have to. 0:18:21.240 --> 0:18:25.399 But don't confuse a broken seller in a broken market 0:18:25.600 --> 0:18:28.320 with a broken asset, because that's not what the data 0:18:28.440 --> 0:18:30.719 shows us. Buffett would look at it like this and 0:18:30.760 --> 0:18:33.320 say the same thing he always says. If the long 0:18:33.440 --> 0:18:36.840 term economics are getting stronger while the price is falling, 0:18:37.160 --> 0:18:41.120 then you're looking at opportunity wearing a disguise. That's exactly 0:18:41.119 --> 0:18:43.359 where bitcoin is right now. Now, if you want to 0:18:43.359 --> 0:18:45.880 see the actual data behind all of this, I put 0:18:45.920 --> 0:18:48.840 together a free report with the top nine charts I'm 0:18:48.840 --> 0:18:51.160 watching right now. These are the same charts I use 0:18:51.280 --> 0:18:53.639 inside my research, the same ones I rely on to 0:18:53.680 --> 0:18:56.120 separate noise from signal. Then, if you want it, I'm 0:18:56.119 --> 0:18:58.080 going to leave a link down below, so grab it. 0:18:58.160 --> 0:19:00.600 Study it compared to what we walk through today. It's 0:19:00.640 --> 0:19:02.560 completely free. It's my gift to you. It's gonna give 0:19:02.600 --> 0:19:05.879 you more clarity than scrolling through Twitter. That's what I 0:19:05.920 --> 0:19:06.800 got to your success.