# Gamma Dynamics and Institutional DeFi Integration

**Podcast:** The Milk Road Show
**Published:** 2026-02-27

## Transcript

If you're seeing the Bitcoin prices start to kind of pick up again, those hedgers are actually gonna be forced to buy more.
It accelerates a trend.
Well, what's up, everybody?
It's LG DuZet here, and welcome to the Milk Road Show, the daily crypto show that desperately needs a weekend out after one hell of a week in crypto, just like every other week these days.
Today is February 27th, 2026.
We are ending the week not far from where we started, but there are always new ways to look at the price action, notably from a technical standpoint.
Today we're joined by a good friend of the show, David Duong, head of institutional research at Coinbase, to break down what gamma levels can actually tell us about Bitcoin and what narratives are currently part of the market.
Today's episode is brought to you by Warbucks, the easiest way to trade crypto and some turn crypto tax chaos into confidence.
David, welcome back to the show, man.
Hey, thanks for having me.
We haven't chatted in six weeks, since January 16th.
And the news from that day, David, is that the Clarity Act was supposed to pass and it didn't.
And that is a lifetime ago in crypto, man.
It is so long ago.
How have you been faring uh in this in this wicked Q1 environment?
I mean, it's tough.
I will say that I came into the year pretty optimistic.
I mean, I was I said I was quote unquote cautiously optimistic.
And I didn't think that the emphasis was going to be on the cautious side.
I was hoping that it was gonna be in the optimistic side because I thought liquidity was good, macro setup was good, and then we got this year, and it's been tough.
I mean, I I did revise my forecast.
I had downgraded down to neutral, but you know, I'm I'm still watching and waiting to see what's gonna come back in Q2.
Mm-hmm.
Yeah, it has it has not been pretty, and um we'll be into March in just a few days, and hopefully we get one decent month out of the quarter at least.
But hard to predict at this point, honestly.
It's it's it's it's it's it's not easy.
Um, you guys have written a really great piece, uh, just released last week on the I think on Coinbase Institutional, discussing uh gamma levels, and we'll pull it up in just a second.
But I'd love before you tell us about this, David, please start from a one-on-one perspective.
What what are gamma levels when you're looking at something like Bitcoin?
Yeah, I I want to emphasize that people shouldn't be scared off when they're thinking about options and gamma because I think when I say these things, people's eyes glaze over and they're like, I don't even want to like talk about it because then you're talking about Greeks and other stuff.
And it's really not complicated.
If it was more complicated than that, I I wouldn't be doing it.
So, what is gamma?
So there's a couple of like option metrics that people look at.
Uh, and like I said, they're called the Greeks, and you know, it really just kind of measures the option prices sensitivity to different things.
So if we're talking about Delta, like, for example, how is the option price, the price of the option, related to the change in the spot price, for example?
Well, gamma basically just measures how quickly that price sensitivity changes to the change in the spot price.
And what I mean by that is, you know, if you know, like the spot price, i.e., let's say Bitcoin price is moving quickly, either up or down, well, it affects the way the option is priced.
So, how big a gap is there between that and how quickly is that moving?
That's that's all we're trying to like look at.
How we dig into it though is well, how does this affect the behavior around the people, the players in this?
How does a dealer have to do when gamma is in one side are like the other side?
You know, that's what is key to kind of figuring out what ultimately will settle down for prices either accelerating to the upside or downside.
So, so how would you use something like this in an analysis standpoint?
Like I is it only for options traders or are you just using options data to inform what's potentially going to happen?
Both.
I mean for sure if you're an options player, then this matters to you and you care because oftentimes you need to be paying attention to this because this could mean the difference between being profitable or not.
But even if you are you know agnostic to the options prices themselves, I would say that it's important from just a layman's perspective to kind of know what's going on because this tells you whether the spot price, the Bitcoin price itself could actually break out or potentially break down like i breaks out to the upside or breaks down like lower like then where it currently stands or whether it's going to be like accelerated because let's say there's a short gallon position sitting below a certain level and that will force the uh dealer to actually be you know selling more Bitcoin hedge themselves or they could actually keep the prices pinned, uh, which we kind of see right now because there's a lot of long gamma positioning on the upside, which will probably mean that that prices are not going to be able to like break above that, uh, because every time you get that, then the dealer is like gonna have to take the opposite position.
So I think that these are the the reasons why it's important to know what's happening on the option side, what's happening on the gamma side.
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Got it.
Okay, so you would use this how exactly in terms of looking at price action?
Like, is it something that's a bit more into the future or something that's like a today kind of thing?
It's important from the perspective of like, is this gonna accelerate the trend or change the trend?
Basically, that's what it comes down to.
Right.
Because, and you know, we'll we'll go into like step by step, but like let's say there's uh a short gamma position.
Well, what does it mean to have a short gamma position?
It means that typically the dealer, like the person who actually sells you the uh the options, you know, like they might like not like they they maybe sold more options than they actually have available.
It doesn't matter whether it's a put or a call or whatever, but effectively, if they're short gamma, well, they need to actually hedge themselves.
So potentially, like let's say, like right now we're seeing a lot of short gamble positions uh within the 60,000, 70,000 level, which means that anytime we're in that 60,000, 70,000 zone, like if prices continue to drop, you know, it doesn't even need to drop quickly.
Let's just say it just drops.
Well, maybe they need to actually continue to sell the Bitcoin to hedge their exposure, which means it kind of accelerates that downside.
But equally, like, let's say right now on the chart, we're seeing that they're a long gamma around the 85,000 and 90,000 level, which means that it makes it really hard to kind of break above 85 to 90,000 because anytime they kind of get to that level, they're like, Well, I need to hedge myself again.
I need to protect my position, which means that unfortunately I'm gonna need to actually sell Bitcoin anytime it breaks above and gets gets to around those levels.
So it really kind of pays to know what they're doing, because you might say to yourself, man, like whoever is coming in and buying a ton of like uh of Bitcoin, let's say it's like a dad or whomever, like, why isn't this move doing more for the price action?
Why isn't like Bitcoin rallying more?
And it could be that you have someone like a dealer on the option side of things that could be selling Bitcoin to offset that exposure.
So it's kind of keeping prices capped or you know, like even like moving the trend even a little bit lower than where you would expect it to be.
How much how much of the market is this when it comes to these these types of moves, these types of options?
It's definitely grown uh over the last few months, definitely after the events of 1010.
Uh, you know, we see open interest on options actually outpacing the perps market.
Typically, like you see like them pretty much in line with each other.
And also like volumes for perps often like outpaces uh options by a huge margin.
But people keep positions open for whatever reason, right?
Like they want to either protect themselves or maybe they're looking for a risk reversal, they're trying to like kind of capture a change in the trend.
So they'll do that.
I will say that you know what we saw over those last few months has been that open interest has kind of climbed and people have been putting defensive puts on.
And you can kind of see that from the option skew, for example.
But more recently, uh, and you know, things are changing day by day, but we did see that people instead of just putting out protective puts on there, they went outright on, you know, buying bear spreads and other things, meaning that they were kind of trying to take a position on Bitcoin actually weakening instead.
Um, but like I said, things are changing, uh, people are constantly rebalancing.
So, you know, like that news could actually be different by tomorrow.
Right.
Okay.
So what with the gamma levels you're looking at now, and you kind of you you kind of peppered this through your explanation.
What can you tell us about the levels that we're currently at and the levels we have been at, like you were saying in the 80s and 90s?
What what what would you what could happen from here to even based on wherever we go?
So I would say about a week ago, and this things have haven't changed so much, but the way it's structured has has somewhat changed.
We saw like this concentration of high negative gamma.
And you know, like things are still kind of pocketed around that 60 to 70 K kind of range for that negative gamma.
It is somewhat more spread out now than where it was previously, but it still means that the market could destabilize because those dealers uh who are hedging, you know, they tend to buy when the price is rising and they are selling when the price falls because of the way their like setup is structured.
So given that we're in this kind of negative gamma region, I would say that the dominant hedging behavior right now, it tends to amplify the trend.
So if we're going down, unfortunately, those hedgers are actually going to be forced to actually, you know, sell more uh when the price is kind of kind of falling.
And you know, like if they're selling into that weakness, you know, like I would think that like you could easily see that you know, like this could could create pressure that people uh doesn't don't really want.
If you were gonna say it in traditional finance parlance, you would say that negative gamma is raising the value of convexity.
And you know, like I think that as a result, if you are trying to say, like, oh man, like Bitcoin's dropping here, I should be buying that support, well, maybe it might not always be the best choice, uh, because you really need to know, like, well, what are these guys doing?
Right.
Yeah, I think I think that that maybe would have been helpful when we were meandering down through the 80s a few weeks back, uh, and then and then took a quick trip through the 70s and almost all through the entire 60s and in a very in a very quick short period of time.
Maybe that helps kind of explain that.
Do you think, uh, David, then that if we were to dip back below like a 60k, which is seemed to be like the resistance even this this past week and a few weeks back on February 5th, which had that another, you know, pretty big dip of a day.
Does this would could we look at gamma levels as a way to tell us maybe where we would land as the next resistance level at below 60k?
It's important, it's not the only factor.
And keep in mind that I'm only talking about one side of the trade.
I mean, it really works on both sides.
If that negative gamma that we're talking about, equally, if you're seeing the Bitcoin prices start to kind of pick up again, those hedgers are actually gonna be forced to buy more.
It accelerates a trend.
It accelerates trends on both sides of that equation when you're on the negative gamma.
So, like if it starts breaking above that, and I think we've been seeing it over the last two days, if it starts capturing 65, 67, 70 again, then those same dealers are gonna say, like, well, crap, I gotta catch up.
I'm gonna actually need to buy more Bitcoin.
And it could also accelerate the trend to the upside.
The point is though, like you kind of you don't know what the exact this isn't the catalyst in and of itself.
So when we're really thinking about like, oh, well, what are the price levels we should be looking at?
Then you really need to kind of fall back on, well, what are the pivot points that really matter here?
Like how much volume is traded on each of those prices that we see.
And only systematically kind of going through that, can we kind of determine, well, this is a price that matters.
This is a price that we can kind of ignore, you know, and then you can kind of say, like, maybe 60k is important, but maybe 50K is or is not, you know, like I think that's how you want to look at those things.
Seems like something for a bit more of an advanced uh trader to be looking at.
But I think always helpful for us to learn this type of stuff.
Um, especially in, you know, bear markets, a good time to learn.
It's a good time to learn about uh new metrics and things that that affect the market, whether whether we'll use them or not.
Uh David, I want to zoom out a little bit to uh let's talk about narratives.
You're giving us a very technical look at actual like on-chain metrics and things that uh clearly have effect on the price action.
But you know, we are we are a bit more of a news show and we we want to talk about the juicy, uh more uh tabloid-y kind of stuff.
Um one of the big narratives that's emerged, man, since uh since we spoke, and again, it's only been six weeks, but we've seen this clear shift across the entire market from um uh you know what's going on with the Clarity Act and the fundamentals are there, but the price action isn't, to well, now there's a SAS pocalypse and AI, everybody's gonna get fired from their SaaS jobs.
And we saw that this morning, a block laying off 40% of their staff, adding to that narrative, the citrini piece from earlier this week.
All this stuff happening.
And one of the big things that's been part of that is that crypto is being lumped in with software, which I think took a lot of crypto people by by a bit of a shock that that would just be thrown in with the uh sales forces and the adobes of the world.
What's your take on that?
Is it is is crypto just gonna be lumped in with software from here and just trade like a software stock?
It can't be.
Well, I don't think people understand the point of that.
Like, I mean, like there are certainly some correlation that has picked up over the last few weeks.
But, you know, I've I've said it before, and I'll say it again: correlation isn't causation.
Obviously, I didn't make up that phrase, like that exists for a reason.
And I think that a lot of investors don't, you know, always remember that, you know, like tech multiples matter because they're subject to the way liquidity is affected.
By the way, so is Bitcoin.
It responds to those same exact liquidity conditions.
So I think that when you're seeing constraints on liquidity, certainly it starts to impact both of those asset classes, not necessarily equally, but you know, like this is why it started to converge.
And there's certain things that were happening.
Obviously, there's a lot of stuff going on in the news that you kind of mentioned.
There's what's gonna happen with, you know, they now we have the Supreme Court decision on tariffs.
Is that money gonna flow back to the economy?
What's gonna happen during tax season?
Are people gonna feel richer?
Because, you know, we forgot, but the one big beautiful bill act happened uh in July, I believe, 2025, and taxes uh were theoretically cut, but we didn't see that immediately.
We should see that in the tax returns that are coming in March and April, at least if you're in the US.
So, I mean, these things I think could matter for liquidity and actually see a recovery for us.
I mean, like, we still I think need some endogenous factors to kind of be more supportive on the crypto side of things.
If that's where market structure comes in.
And I'm not talking about the bill, I'm talking about the market structure of like the market makers that we had from 1010 that uh really went through a really testing period for them.
And I think that matters more to me than just seeing like, hey, why isn't like software earnings diverging from Bitcoin?
Like there's it's you know, the historical relationship uh between the two.
I mean, A, like it's not very strong for most of its history, but B, also like when it is, it's it's been like a handful of times.
Like if you can count it on like one hand, statistically, that's probably not significant.
Like you really need to see like a real kind of relationship form for these things before you can kind of say, oh yeah, like this this is important and we should be paying attention to it.
If it's not, I'm just more like, well, it's it's great to kind of like notice, but it doesn't tell me anything that's repeatable that I can rely on and trade.
Do you did you buy into this uh Jane Street price suppression thing from this past week?
We've talked about it a few times on the show, so people should know what I mean.
Yeah, I saw it.
Um, I mean, like, I I think that there's some really good takes out there in crypto Twitter land that I I won't bear that I won't repeat myself.
It's seductive because at least it would give us a real narrative to kind of draw on because we know that, you know, if this probably started with some of the market makers, um, you know, like probably it's not just the events of 1010, but also the events of 2.5 and others that have kind of been extrapolated from that.
So I think that there's a good rationale behind why this might be happening.
Uh, but I think there's other things at play too.
You know, we saw the block fills thing last week, for example, which are putting like uh Bitcoin miners in the spotlight in terms of like whether like there are loans there that that could be at issue.
I I don't know, you know, to be honest with you.
It's just i I think people are looking for where the bodies in the water are floating.
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That's uh and that's that's the that's the um repetitive term right is like when one of these bodies gonna float up and I think as soon as this whole Jane Street uh lawsuit happened which is related to to four years ago it was a Terra Luna thing um I think people were like really keen to finally pin it on somebody right and I think it's that's just kind of part of being in the the crypto rumor mills that you we just we're just so keen to find anything that can explain why nobody wants our crypto at this current time right and I like the word you use seductive.
Yes I think that's a great way to describe narratives in crypto I've never thought about it that way it's very seductive to to have a reason like that.
Um well I I want to do I I want to flip back real quick um I want to spend some spend a bit of time speaking and talk about terrorists and data but very quickly uh David we've talked about this a few times and and I think you had it as part of your 2026 predictions, I believe, or part of it, uh crypto and AI, right?
And uh obviously that I feel like this this is the story to follow across crypto for a while, and it will continue to be.
Um, and that in this Satrini piece, which really became the big news of the week outside of Jane Street, the main positive is that all these agents, this agentic economy, they're gonna use crypto as their payments, uh, as their way of transacting with each other.
I'm assuming you agree, but I'd love to get kind of like your up-to-date uh uh point of view on that.
Yeah, I mean, even over the last few weeks, you know, you saw the launch of ERC 8004 on Ethereum mainnet.
And just within three days, I think they got something like, you know, 22,000, 23,000 subscriptions.
And I think that, you know, it shows that there is a real market isn't the right word.
Like there's, you know, a real shot at seeing this machine to machine kind of economy.
And we had X402 uh and Q4 of last year, for example.
This is kind of an extension of that.
But like increasingly, we're seeing that there is the potential for this marketplace to grow where you know, AI agents are just transacting purely with other AI agents, and it's gonna be in the form of microtransactions or other things.
I mean, like theoretically, this is the way it should work, right?
Like people listen to your podcast, and yes, you have sponsors and others, but really, like they should everyone who's listening should be paying in a little bit, like, you know, who knows what that should be, like whether that's like 25 cents to a dollar or whatever, but like that's where these kind of like microtransactions kind of kind of chip in.
There's content all over the internet in that form.
And I think that this is kind of where AI agents to AI agents are gonna start kind of developing.
But, you know, I like the idea of ERC 8004 because it dealt with all these trends, like these issues that I never even thought about in terms of the verification and like kind of having uh ways to you know basically have a FICO score for AI agents, for example, so that they do something malevolent, like they would actually be penalized for it instead of just kind of being like, well, burn that, create a new AI agent, you know, like, well, no, like you want to be able to trust AI agents need to trust other AI agents, which is a kind of a novel concept when you think about it, like, you know, just just like I need to trust you, you need to trust me, like the bank needs to be able to be sure that I'm gonna pay them back, like, you know, like they're we we're gonna need the same kind of system.
Um, so you're seeing these kind of this infrastructure being developed right now.
And I do think that, you know, this this kind of goes away from the centrini piece a little bit because I think that kind of delves into like what I think is happening in the the broader economy right now.
Uh, but ultimately my my view of the future is that like this stuff is becoming like super relevant.
And maybe for Ethereum, you know, we'll see that instead of just being a pure ledger of technological transactions, it's gonna be the economy where AI agents are gonna be transacting with each other.
And is that is that something I just transitioned to talking about institutions here, David?
Is that something that the institutional um bit or even the institutional base of people that are getting into crypto, all these companies that are slowly, you know, starting to believe in crypto?
You got Larry Fink saying every asset is gonna be tokenized at some point.
Is this how does this how does that affect that?
How is it part of that conversation?
The part where there's gonna be an agentic economy that's that's that's that's layered on top, or that's the core piece of it.
Well, I think that for now, like uh, you know, you're seeing BlackRock making these incremental steps into the space.
It was heavily on tokenization.
It still is, as you kind of mentioned.
But don't forget about the Uniswap deal that they're also kind of getting on top of.
And they're not the only ones.
We also saw Apollo make a headline that they actually have a deal full with with Morpho, and they're uh, you know, gonna acquire up to like I think 90 million Morph tokens over the next four years.
I don't think they're required to, but they they could.
And you know, I think for now, like it's more about for BlackRock, okay, we want to like have this uh our Biddle money market product tradable on Uniswap.
And I think that they're using like the Uniswap's request for quote model, uh, so it's not purely about like, oh, we're we're we're buying unitokens and all this kind of stuff, which I think was the initial uh kind of miscommunication that a lot of people kind of had when they saw the media headline.
Uh, but you know, they want to be able to like just like allow people, anyone to kind of swap and like, you know, have these these whitelisted institutional participants trade biddle directly on chain uh for USDC or other stable coins, and there's gonna be instantaneous settlement.
So I think that that's gonna be the first step, like human actors trying to do these kinds of things.
But I think over time they're gonna realize, well, hold on.
Like, if we're like, you know, talking about instantaneous settlement, for example, and you know, like I'm thinking further ahead to like what about the purpose market, what about derivatives, what about other things?
Because you know, these things I I don't think people appreciate it fully, are gonna transform how traditional finance does business, like how collateral is held, like the efficiency gains because your loan to value ratio on many of these things in TradFi are like 50% or sub that right now.
Like just purely by going to instantaneous element, that's gonna climb to like 75%, 80%.
It's already happening, by the way.
We're going away from T plus two.
We're now in T plus one.
Soon we're gonna be at T plus zero, soon we're gonna be at like T plus one hour and it's gonna be done.
Like, think about what that means.
Like, not just like, okay, now my loan to value ratio is at 75%, but I'm also my turnover rate is gonna be massive because I'm just churning through this stuff.
Our efficiency gains are gonna be like two to three X uh pretty soon.
So I think that like in that world, we're gonna need something that kind of keeps up.
It's gonna be AI agents, it's gonna be these actors that are not gonna be human in nature.
It's not me being pressing a button, it's gonna be these things operating in our behalf.
Thank you for that explainer, and thank you for that perspective on the AI side.
We're gonna jump away from it for a second.
Um, you've written about dats 2.0, right?
And we've had you on the show in the past.
And I think even your last appearance, we we we discussed how the dats were at the at a very low MNAV, maybe attractive for buyers, but how I think you've made the case that the next wave of that will be slightly different than what we've seen so far.
And is this is this kind of institutional move with BlackRock buying uni, Apollo uh getting into more food?
Is that kind of what you meant?
Is this what you envisioned in terms of potentially what you would call a DAT 2.0?
That was not what I envisioned.
Uh I think that it's interesting because it's definitely forming part of the story right now.
And maybe this is the incremental step to get us towards that.
Because my initial thesis was just that dats as pure accumulation vehicles, you know, it didn't surprise me to see it kind of falling below like MNAV, in part because if we're talking about DATs, I mean, like structurally, the the difficulty is that oftentimes you're raising money when crypto is doing well, but that means that you kind of violate a core principle of markets, which is you want to buy low and sell high.
Well, if you're a dat, you really can't if you're just a pure accumulation vehicle because you know, like I'm accumulating because my stock's doing well, and that's where I have the capital.
I can't just sit on that forever because if you know my my shareholders expect me to be using that to buy ETH or buy Bitcoin or buy whatever, you know, which means that like you got the money when you know the prices were high, you're probably buying when prices were high, means your cost bases are probably a little bit higher than you would like.
Um, and that creates just these structural challenges for the DATs.
And I would say that like what I envisioned was well, there's gonna be a point in time where they can be a lot more flexible with that, where they become like a Cargill or a Traffagora and they're actually trading the block space because it's valuable, because you have a BlackRock, because you have an Apollo, whomever, who actually are transacting these real assets on chain, you know, tokenized equities or stable coins or whatever.
But like the blockchain is valuable because it's helping facilitate that transaction.
That infrastructure needs to be traded.
Uh so in my data 2.0 model, I thought that they would be trading this like block space being commodity, just like Cargill or Traffagora trade soft commodities, for example.
And you would be dealing with duration, you'd be dealing with like hedging and and kind of uh responding to this in a way that you don't see a lot of dats doing today.
So I think that this is an intermediary step to kind of get us to that future.
Okay.
So what would be the next step then?
Like what what what would what do you think is gonna happen next in terms of this kind of move?
Oh man, I don't know.
Like, why don't you tell me, no?
Let me give you the whole thing.
You're the head of institutional investment research, whatever you call it.
Like you're you're at the center of this, man.
I'm just I'm just asking the questions.
No, I'm kidding.
Uh yeah, you know, I think that like, you know, I could see very clearly where this is gonna be going.
But I also, I gotta be honest, I'm not sure what the full time frame is gonna be.
I don't necessarily think it's gonna be in the next three months.
Maybe not even in the next six months.
It'll take a year to like a year and a half out, but it's gonna be starting now.
Like, this is why I think the theme is worth mentioning because we're going to be seeing these intermediary steps.
Uh, like I said, you know, like Bitcoin, uh, I'm sorry, Bitcoin, BlackRock saying, like, hey, we're gonna go uh in on you know, like DEXs and other things.
We want to be on chain and we want to be able to like uh to market to that clientele, Apollo.
I mean, like that headline, I think matters, not just because of what they're doing with Morpho, and and you know, like I think it's gonna be massive in terms of the borrow lend kind of markets for these things.
Uh, but it's because look, look at the name.
It's Apollo, like, you know, like these are not small guys who are involved in this stuff.
These are like massive trad fi players that see the opportunity and are kind of like dropping in on it.
So I don't think it's a far cry to say, hey, you know what?
Maybe some of the same players are gonna say, well, you know, like why not actually start controlling on that end as well?
We need to be involved in actually trading the block space too.
So I think that that ultimately is where these uh kind of these markers are gonna come into place.
I don't know when that's gonna happen, but I think they're already saying to themselves, is my guess, hey, you know what?
Like, this is kind of where we need to be involved.
Let's start talking about how to actually trade this stuff.
Mm-hmm.
Mm-hmm.
That's a I mean, sounds like a pretty big win to for uh for DeFi so far and and going forward with this kind of uh attention and and uh utilization, I guess, from these big institutions.
Yeah, I think if it wasn't for the fact that markets, you know, let's be fair, after 1010 had been affected by, you know, like the challenges with ADLs and other things with the market makers, I would say that we would be like massively up right now on the back of these headlines.
We just can't because, you know, unfortunately, I would say, like I said, market structure just hasn't been fully rebuilt, leverage is still poor, things are incrementally getting better, but probably not fast enough for people to kind of like catch up to the headlines and say, like, well, this is where I want to be a buyer.
Right.
I'm gonna pause there for a second.
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I've got one final kind of narrative question for you, David.
And maybe we've talked about this before, but we've talked about this a few times on the show and uh in recent weeks.
And it's the idea that um we've actually been in a crypto winter for longer, longer than we think.
There's been a bear market not starting on 1010 or roughly in October, but dating back over a year at this point.
Um, maybe starting around the inauguration, uh, the terrorist drawdown, and that's the only thing that has kind of bucked that trend or made it seem that we weren't was the dat bid, right?
That it's like if you didn't have this kind of more artificial uh effect on the market, right?
That it's it's these companies going and buying these things, not the market just being the market, that way we would have been in a drawdown much earlier and would, and that as a result, the narrative is now that we are due to come out of that a lot faster, a lot sooner than most people are predicting, where you have a usual one-year bear market window.
So that would put us coming out in September, October.
And again, this is just technical stuff, but that then the end of that bear market is very close if you look at that different perspective.
I mean, it's always kind of hard to know the contrapositive to say that we are in a bear market when Bitcoin was making new all-time highs in July and October 9th.
I mean, I I don't know.
Uh, I do think that you know, we're probably looking at uh, you know, a much better kind of situation come Q2, in part because I think the macro setup is still very good.
You know, when I, you know, I'm been a student of markets for the better part of 20 years now, and I used to do emergent markets, and then I moved into crypto.
One thing I will tell you is that like markets rarely dire on their own.
Like this is kind of a strange kind of setup where you're seeing Bitcoin not doing well, but it's not just Bitcoin, you know, it's tech stocks, it's, you know, precious metals had kind of a hit before they recovered.
It's a lot of things that are happening uh at the same time.
And this is unusual because what usually ends bull markets?
Well, it's usually the Fed, right?
Or some central bank.
Uh, it's usually a central bank kind of coming in and actually hiking rates or, you know, expanding, like, you know, uh reducing their balance sheet or something.
But like, I mean, that's why there's a saying on Wall Street, which is like, you know, markets don't die on their own, they get slaughtered by the Fed.
And you know, this has happened in almost every, actually, I think it has happened every bear market.
That's how it's got started.
I mean, we definitely saw it in 2022, for example, and it hurt our space.
But this time around, like, I still see that there's the opportunity for the Federal Reserve to kind of cut rates further.
Uh, we're talking about the Centrini article, for example, but that's precisely where like when we get a headline like Jack Dorsey's headline today, like it does kind of put in my mind that, you know, more and more white-collar workers are getting cut, and this is impacting labor.
But the companies are doing better than ever, which is probably why there's this disparity between like why equity names are doing well, but like uh your average consumer doesn't want to spend because those, you know, middle office or middle work uh middle management jobs are getting lost.
So we're in a very strange dynamic now where the Fed needs to respond to that because then one of their mandates is labor.
It's not just inflation, but everyone only wants to part to the fact that inflation's above target.
Um, when the reality is like it was dominant, like their mandate was dominated by labor.
So I do think that those things matter and that's kind of why I'm looking at this and saying like we should still be doing better than what we're doing right now.
But there are internal dynamics which are affecting us on the crypto side of things.
That for me matters more than kind of just looking at pure cycle plays and kind of saying like well we peak cycle or maybe let's bear cycles already been around for a lot longer.
It's like you know like what matters to me more is well fundamentally how have things kind of progressed over the course of the last six months to a year.
And like I said, like I don't know what it would have been like without the DATs.
I don't know what it would have been like without those ETF flows.
But the fact of the matter is we do have them we need to kind of respect that that is a part of our system now and that there are real pockets of demand that I think are still absorbing supply.
Maybe they got lost for a little while, but I could see them absolutely coming back in the next phase of the cycle.
Very well said well thank you David.
Thank you for your thoughts as usual.
Great to see you again, and I'm sure we'll see you again soon, man.
Absolutely.
Thank you so much.
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