# Crypto Market Cycles and Institutional Adoption Analysis

**Podcast:** The Milk Road Show
**Published:** 2026-04-15

## Transcript

Could even get to 90K and 90K is like the short-term holder cost basis.
That's another important level.
It wouldn't be crazy at all to me to have another 40% move down after that.
And then now you're down into those deep value zones that we said we we haven't reached just yet.
You know, you get to 85K and have a pretty standard 35% correction, you're back down to 57, 58k or so.
That seems very reasonable.
Bitcoin is over 75K, but is it going to hold?
Are the Bears going to win this battle?
Are the Bulls going to take us to new highs?
What is all going to happen?
When is this range finally going to break down?
Hello and welcome to the Milk Road Show, the podcast that knows that whoever Satoshi Nakamoto is, he probably never thought that Bitcoin would be used to pay tolls in the Strait of Hormuz.
I'm your host, John Gillen.
Today is Tuesday, April 14th.
And today we are joined by Michael Nadow.
Michael is the founder of the DeFi Report, an industry-leading research and data advisory firm focused on decentralized finance.
He's also a frequent guest of the Milk Road show and one of the best analysts in all of crypto.
Michael is going to break down what's going on right now and give us a lot of alpha in this episode.
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And without further ado, welcome back to the Milk Road show.
Michael Nada, how are you?
Great to be here, John.
Doing great yourself?
I'm doing really well.
I'm excited to talk to you today.
A lot of people I think have questions for you and for crypto focused analysts right now.
I want to start with the thing that's on everybody's minds.
Bitcoin, as I said, recently broke 75K on expectations of a peace deal in Iran.
Uh, but that hasn't happened yet.
The market still seems to be front-running that move.
Just give me an update generally on your thoughts on crypto here.
What are you watching for in these markets right now?
Yeah, so uh so much going on.
The the a lot of a lot of news out there related to the war.
And I think everyone's like really, really anchored to that.
Um, and we can get into kind of how I'm how I'm thinking about that.
But what I do is really try to follow a process that is really disciplined and really anchored to our understanding of cycles and how cycles work.
And this is really rooted in our understanding of you know traditional market cycles.
I've actually got a book here, uh, Mastering the Market Cycle, Howard Marks.
And, you know, we've basically adapted our understanding of how cycles work to crypto.
Um, and so I kind of thought that everything I would expect to see in a typical bull market had played out, you know, going back to like early 23 through October.
So we kind of had turned risk off back then, and we're now clearly in a sort of reset mode for the crypto markets, in my view.
We're about six months into the current the current bear market.
Um we've had sort of two periods where there's sort of like this bull versus bear battle.
I think the last time I was on the show was during the first battle uh when we were kind of ranging between 84k and 97k or so.
The Bears won that battle, and we we we saw a leg down.
We've now been trading in the next channel, which is 62 to I think where are we around 76 or so uh today.
So we've been in this lower channel.
Now we have another setup here where bulls versus bears, who's gonna win this one?
Um, and we can kind of get into you know what I'm thinking and how this could play out from here.
But that's kind of the overall structure, and I think where we're sitting right now.
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Great.
I think that's a great framing.
I do want to ask about this range because uh you you've pointed this out for a while.
And I think most people have been paying attention have noticed that for I think around 70 days, over two months anyway, uh, Bitcoin has been bouncing between this 62, 65k, 76k level.
And we seem to be near the top of that range right now.
It seems like the bulls are thinking we're gonna break to the upside.
So let's start with the the bull side of this case and this, you know, this battle you've described between the bulls and the bears.
Let's start with the bull case.
What do you think the bulls have going for them to say that we're gonna break out of this range and move higher here?
Give me your view on that.
Yeah, so you know, and I guess we should have maybe we can can we assume for this discussion that the bull view is that we've already bottomed and that we're sort of moving into a new a new market structure.
If we assume that's the case, I think there's there's some arguments to be made for this.
And a few of them would be, you know, everyone's focused on the war right now.
And what's interesting to me is that Bitcoin actually bottomed before the war started.
So we came down to you know 62K or so uh very early in February.
And the war didn't start till you know late in February.
And Bitcoin's been in a range moving upward through this whole time, even rising um through a lot of volatility and through a lot of um you know volatility in the traditional markets during that period.
So I think if you are bullish, you could say, well, the market has already looked through that, right?
We like in uh oil prices are went up to 115 or so.
We've we've come off a little bit.
The market is processing this.
We can look through you know, geopolitical conflict.
And that looks that looks clean.
I think that has to be your view.
If you're you're you think we've bottomed.
The other thing is when we had the uh second correction that took us down to the low 60s, we did come into what I would call you know fair value uh territory for Bitcoin.
We we were calling for 65K or so back in October.
We we came into that zone, and some of these KPIs that we track to really kind of understand where we're at in the cycle, some of those were hit, at least the sort of upper range of those were were hit.
So I think that's another sort of check mark.
If you want to say, you know, we we're potentially going into another expansion here.
We've seen, you know, if you if you follow the fear and greed index, that has you know been quite uh depleted uh over the last few months.
And you know, you could sort of look at that and say, well, we can only go up uh from from here, right?
We've been in a very sort of an extreme fear uh zone for a while.
We know that you know crypto VCs are sort of in reset mode right now, and that's typically what you would what you would see in a in a bear market to the extent that VCs can start raising capital, start pushing that capital back into the markets, you know, maybe that's the the beginning of the of the next cycle.
Um, and then something that's you know, I know a lot of people are pointing at right now that's different this cycle, but I do think warrants um paying attention to is what MicroStrategy has been doing and their ability to raise capital for the first time in a bear market.
Uh, we haven't seen this, uh we didn't see this in the last uh bear market.
MicroStrategy was really not buying at the lows uh that has changed you know quite significantly in this cycle through this new STRC product that they have um and to my count they've already made uh 7.6 billion dollars of Bitcoin purchases uh in 2026 um so that's that's something to pay attention to and you know if you fold that into your framework you could say well it's it's reasonable to say that maybe we won't go to these sort of deeper levels that we've seen in past bear markets.
The other thing that I think is a positive very positive sign is the performance of the ETFs.
So again this is a new thing this cycle we first bear market with ETFs and the AUM you know in Bitcoin is only down about 5% currently from the highs and we know those have been some of the most successful ETF products that have ever come into the market.
So that's another you know positive sign that there seems to be you know maybe we're not seeing like a massive inflows right now, but we're not seeing these investors that came in over the last year, you know, capitulating and trying to exit those positions.
So I think that's a that's a positive sign.
And then I think on the other side of this, if you sort of look at the traditional markets, you know, if you look at like our analyst earn analyst projections of forward-looking growth, that's like very, very positive uh right now.
So analysts are projecting 19.2% earnings growth in Q2 in this current quarter, and 21% in Q3.
So the analysts are looking at you know the largest companies in the US and saying these businesses are healthy and they're re-rating earnings at the same time.
You know, we saw uh PE ratios drop, you know, they've sort of rebounded back a little bit since we've we've we've had like, I don't know, seven or eight up days in a row now.
So the peg ratios had sort of come down where the PE ratio had dropped, but growth is rising.
That looks like a buying opportunity, kind of on the traditional market side.
And then the AI story doesn't seem to be losing any steam.
There seems to be uh really strong demand for for compute.
Uh so those are all like positive signs, I just think in the in generally in the economy.
And I think that's if I was gonna like anchor to a bold thesis, I think that would probably be the main themes that I would be looking at.
I like that comprehensive answer.
I think you covered like five or six different things in there.
Um, but I do want to kind of key in on one thing you mentioned before we move on to the bull the bear side here, um, which is like the the ETPs, the ETF products, both BlackRock and Goldman Sachs have come to market with new Bitcoin income ETFs, which I believe are using a covered call strategy to sort of strip out some volatility, pass on the income to to the buyers of those products.
It seems like an attempt to sort of mimic a little bit of what MicroStrategy is doing with their stretch product.
So it seems like these have found product market fit.
Morgan Stanley obviously went to market with their spot market uh spot Bitcoin products as well.
Recently, had their most successful ETF launches ever.
Talk to me about how this changes your thinking for the overall market structure here.
Is this already priced in, this new capital, this new institutional bull run, or do you think this changes how we're going to see micro market cycles play out from here?
I I think it's interesting to watch.
And I'm looking to see if there's if there's still gonna be demand from this from you know, kind of institutional investors at kind of this stage of what I think is kind of very late stage uh across business cycle, liquidity cycle, asset allocation cycle.
So I think I think it's interesting that these products are being rolled out right now, and we'll definitely be monitoring them.
In terms of like micro micro strategy itself, maybe just to hone in on that one a little bit.
I think the perception in the market is that these buyers, these institutional buyers are essentially just going to mop up.
If there is volatility in the markets, they're just gonna be there to cat catch all of that and mop all of that up.
I'm not sure if that's the right way to really think about this.
You know, MicroStrategy has been buying a lot of Bitcoin right now.
When they're doing that, they're not necessarily like, you know, keep catching the kip the capitulations in the market and moving the market price.
They're kind of quietly in the background, just just sort of accumulating their Bitcoin.
So I'm not sure if it's like really going to impact uh market structure if we do see more volatility and potentially another another move down.
But for me, it's like it's a very positive sign as somebody who is a long-term bull, you know, in this space and is projecting Bitcoin to go to a you know a million dollars at some point.
These are all like really awesome, you know, signs for me.
Gotcha.
Okay.
So it's a long-term bullish indicator, but you're not so sure about whether or not it matters so much in the short term here.
We'll have to see.
Uh makes a lot of sense.
Okay, let's let's go to the bear side here because I think you've been uh let's say eloquent about making that case.
What is the the bearish case that we might continue lower here?
And you know, it seems like we're 75, we're around 75k right now.
That's around 15k off of the low.
It seems like a big move to go down and make newer lows here.
What do you see being the thesis for that happening?
I think the thesis for this happening is there's a few things.
So I mentioned that like there's a lot of sort of cycle awareness KPI indicators that we look at.
These are, you know, really long-term things like realized price, which proxy for all of the um, you know, coins circle proxy for a cost basis of all the coins circulating on the network, uh, things like 200-week moving average, things like um the percentage of the network that's in profit, some of these like really important indicators that we look for uh to be hit in bear markets, a lot of them have not been hit.
So that would be sort of an anomaly to me to have a sort of bear market and a sort of a capitulation that we saw back in February that we bounced out of pretty quickly.
I mean, we went down to you know 62K or so, and it reflexively went right back up to about 70K.
So there was really not that much of an opportunity to buy it in that zone, in that sort of fair value zone for for investors.
And then what we're seeing is like people start to chase that, right?
And the same thing happened after the first capitulation down to 84.
We didn't go lower, like we kind of just grinded up from there.
And so, and for a long enough period of time where people start to flip bullish, maybe they were bearish now they're trying to chase the market so I think that's that is in play right now where you know typically when you get to like the macro low of a of a bear market you're gonna have a capitulation and you're not gonna have a reflexive move straight back back up you're gonna stay there and it's gonna get quiet and sort of everyone's gonna have to come around to you know the that that this is a crypto winter.
I don't think that has played out just yet in this cycle and so that would be you know an anomaly for me to for for that for this to be the case and like basically the bottom is in the other thing that we look at pretty closely is uh market structure in terms of cost basis of different wallet cohorts on the Bitcoin network.
So I want to understand you know how many people came into the market at like the highest prices of the last cycle and and then I want to understand at various points of the bear market how much of that has actually turned over and been sold back into you know maybe more stronger hands.
And that's a process that typically takes about a year or so to play out.
And when I look at that data, it doesn't tell me that we've sort of kind of like turned over the the market structure just yet.
So that would, again, that would be another sort of anomaly that I would be looking at.
And then, you know, I was bearish I I believed we were going into a crypto winter, regardless of this this geopolitical conflict, which which did happen.
And I think that's kind of mostly a distraction uh in particular in the crypto markets right now.
I don't think it's having that much of an impact on the crypto markets.
And if you look at global liquidity, and there's different ways to look at that, but to me, global liquidity cycle has already peaked and we're now turning over.
There's different ways to measure this.
We also look at the fiscal impulse as Bitcoin has been correlated not just with global liquidity, but actually fiscal policy in the US.
The fiscal impulse has been rolling over as well.
And so if you just think about kind of where we're at, I think we're late, we were already late stage.
And so the story of the war is not really impacting my framework so much.
And I just think there's there's a there's a uh an element of time to this that that just hasn't quite played out just yet.
And so that's kind of the uh maybe the more bearish case where you could look at some of these things and say, well, the probability probably still points to further weakness.
And the more that we sort of have these choppy periods where price is grinding up, the more and more people are sort of that maybe were bearish, are capitulating that and then sort of chasing the market.
And we'll see.
I mean, this can go on for a little while.
Um, and there's some probably some interesting price levels that we're gonna hit here pretty soon that will give us more of an indication of whether this is like a really durable, durable move.
Uh, this is the other question I wanted to ask before we unpack some of the pieces of this this bear thesis you've laid out here.
But we've been in this range for a really long time.
Do you think that they're like how long can we stay in this range before the market is kind of forced to pick a direction higher or lower?
Because 70 days going sideways is a really long time.
Like, do you have any thoughts around that of like when the decision on this battle is going to get made between the bulls and the bears?
Yeah.
Short term is really hard, hard to say.
I mean, the last phase we went through was roughly two, two months, a little over two months.
I think this one is is getting close to to the end, but um I try not to make too, you know, I'm not a trader, uh, and so I don't try to make too many predictions on short time frames, but we are 70 days in, so this has been going on for a little while.
And the the closer we get to like 80, if we get up to 80k or so, you know, I think I think an interesting level would be like 85k or so.
That's where most of the dip buying activity happened during the first uh move down, where people weren't convinced we were going into a bear market.
So there's there's a there's been quite a bit of buying at 84k early earlier in this cycle.
So that's a level that I'm I'm watching pretty closely, and we could get up there, and then I would want to see like, you know, some you know, weekly closes, maybe multi multiple weekly closes, maybe a monthly close above that level for me to kind of say, all right, something has changed here, and market structure is is moving in another direction to to sort of uh push me out of like maybe a little bit more of a bearish stance, and like just for people that kind of think about you know where how that could go is you could get up to 85k, you could even get to 90K, and 90K is like the short-term holder cost basis.
That's another important level.
It wouldn't be crazy at all to me to have another a 40% move down after that.
And then now you're down into those deep value zones that we said we we haven't reached just yet.
You know, you get to 85K and have a pretty standard 35% correction, you're back down to 57, 58k or so.
That seems very reasonable uh to me that that that it could play out that way.
Um, so we'll see.
You know, these are some of the important levels I think to keep an eye on if this this grind higher continues.
Gotcha.
So Bitcoin could go from being the sort of stable coin here in this in this range to suddenly having huge volatility again.
Yeah, and what's what's interesting is like what's interesting is you know, during bear markets, the price is actually grinding up for most of that, right?
It's like these quick moves down, and then you're grinding up, and that's what makes it just really hard, I think, psychologically on on investors.
Um, especially if you're trying to buy and then it grinds up on you, and it's easy to chase it.
So that process is almost a necessary process to chop the market up and kind of twist people up, that ultimately leads to where you're you're ultimately going, I think.
One of my favorite analysts, Ben Cowan, likes to say that bear markets make fools of bulls and bears, and for the exact reason you're describing, right?
So well, we won't go into that any further.
I want to ask another question around this.
I've heard a lot of analysts saying that there are a lot of metrics, a lot of indicators on-chain or otherwise, that we still have to hit to sort of satisfy what they'd be looking for to see a bear market bottom formed.
However, in the prior top, we kind of topped on apathy as opposed to euphoria.
And there's one website that I look at often called Coinglass that had 30 different top signals, you know, on-chain metrics, all different kinds of top indicators for Bitcoin, none of which really fired in this prior top.
Do you kind of think that that might change the bottoming process here?
In other words, so we didn't get a lot of top signals fire at the prior top.
Do you think we might not have a lot of bottom signals fire at this bottom?
Or does that not impact your analysis here?
It's possible.
It's definitely possible.
And I think, you know, what I'm trying to do as an investor here is align my portfolio with what I think the probabilities are for some of these outcomes.
And so you always want to be long.
And we were buying that capitulation back in February, but I've still got some cash on the sidelines because I think the probabilities are still pointing towards more weakness.
And my framework is to basically, like I said, be really disciplined about all this and look for the key indicators.
I don't follow those.
And it's true that a lot of the um KPIs didn't hit like extreme any of the extreme levels that we would look for, but there's still plenty of ways for me to have a pretty good understanding of like where where we're at in the cycle.
And yeah, so that's kind of kind of my framework.
I mean, I think you have to be open-minded to all the different outcomes out there.
And it's it's possible that we did bought them.
I don't want to just completely um dismiss that.
And we are in a bear market, and people should be, you know, more in a risk-on stance at this stage of a cycle.
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That's right.
I appreciate that transparency because you're totally right.
There's not certainty here.
This is all probabilities and trying to learn as we go.
And something else I think you said that's valuable is that you know, if we do bottom here, there'll be some anomalies associated with that.
And I think there's going to be a lot of anomalies in this market going forward.
So we're all going to learn as we go here.
Uh, Michael, I wanted to ask you some questions around Ethereum because I think you're one of the best analysts in the DeFi and in the ETH space.
Uh, you posted uh on X recently about net uh ETH's network dilution rate, and you were calling this the most important chart for ETH right now.
Talk to us about what a network dilution rate is.
Why is this so important for ETH?
And uh just what is this telling us about Ethereum right now?
Yeah, so we did we put out a report on it.
We do a quarterly update on Ethereum, and we put that out last week.
And this was like the probably the key chart that that I was kind of pointing people towards.
And net dilution is just the uh ETH issuance of you know, that's coming out and being paid to the supply side of the networks, being paid to the validators and the stakers.
It's kind of your security budget to run the network.
And it's just that less any ETH burned.
So it's kind of giving you an idea of what is the what is the dilution rate if you're not staking your ETH.
And what's what's pretty interesting to me uh right now for Ethereum, and I think this is a story that the Ethereum community should should start to, you know, get behind, is Ethereum had its worst quarter ever in Q1 in terms of uh real economic value.
So in terms of actual on-chain activity in terms of fees that are getting paid down to validators and stakers.
At the same time, the e-stake rate actually went to all-time highs during during Q1.
So that's interesting to me because at the same time that you know the you know, on-chain activity and actual fees being paid are at the lowest.
More people want to stake and are more people are securing the network.
So it's at its most secure level ever.
Um, and while that's playing out, the net dilution rate is at or below uh Bitcoin's inflation rate.
Uh, so that's kind of an interesting story if you're an investor, uh, because now ETH has uh a stable yield, right?
It's securing the most assets of any other blockchain, it's the number one smart contract network.
And even when the network is in this risk-off mode and there's not a lot of fee activity on there, it's still extremely secure, and that inflation rate is still below Bitcoins.
Of course, now we do have ETH staking products where institutional investors can access that staking yield through an ETF wrapper.
Um, that's sort of interesting if you're thinking about, you know, what's your what's your crypto sleeve going to look like?
Is it going to be 80-20 uh Bitcoin to ETH?
Or is there a chance that people start to look at ETH as um a store of value that has utility behind it, and then it has this token economic structure that works and there's not high inflation, and you can actually get a yield off of it.
So that to me is a pretty good story for Wall Street.
And I just think this is what ETH really needs to focus on.
What concerns me with ETH is that it's just kind of falling into like this narrative that, you know, I'm not sure this is a narrative, but I do think this is what institutional investors think about ETH, is that it's sort of like silver to gold.
And if you think about if you look at how investors allocate to ETH, you know, if you're a commodity investor and you're looking at precious metals, like you're mostly at gold.
And then you've got a little bit in some of these maybe like beta products.
And I think that's how investors think about ETH right now.
And that needs to change if ETH's gonna become the number one crypto asset, if it's going to, you know, become the, you know, it's maintain its lead as a number one smart contract network.
And so that's just, you know, maybe there's a narrative that can form around this.
You get the yield, it's really secure, it has utility, it has these features that Bitcoin doesn't have.
And hey, it also has really low inflation, um, similar to Bitcoin.
So interesting.
Okay.
So I think what I'm hearing you saying is that as digital assets evolve, mature, as institutions come into the space, there's a need for networks for assets in the digital asset space to tell a story that connects with those new investors and to attract that new capital.
That's a really interesting uh way of telling ETH story there.
Uh, I wanted to get your thoughts on something else about ETH here.
In this recent bullish period we've seen the last week or so from Bitcoin, Bitcoin's up around, I think around eight or nine percent on the seven days, somewhere in that area.
Ethereum is outperformed a little bit.
It's around 11 or 12% on the week.
Um, so is that a sign to you that the market is starting to understand that the value on Ethereum, that there's starting to be a preference in the market for Ethereum?
Is this just a momentary thing?
Like, how are you thinking about ETH's relative strength against Bitcoin here?
It's it's a good sign that it's it's it's done doing well against uh BTC right now.
In the last bull market, that was a painful period where ETH BTC was kind of just in a downward phase for a while.
We came out of that last April and it's it's it's been performing well against BTC.
I think part of this, you know, maybe part of the story here is I think something Ethereum's been very smart about is they've come out and I think been the the leading uh blockchain network on sort of quantum getting quantum ready.
And they're putting out a roadmap and and basically a process for how they're going to do that on trying to put investors at ease.
Bitcoin has struggled a little bit on this, and so there's a chance that that's you know playing a little bit of a role here.
I don't know if that's I, you know, I think historically, you know, ETH did not outperform Bitcoin in the last cycle, but it does have periods where it shows you know really strong outperformance.
If you go back to you know the June, July through September period, ETH was was also outperforming Bitcoin.
So um, to me, this this is just gonna come down to like how to how does big money perceive these two assets and how do they what becomes the standard sort of like way that you allocate to crypto as a sleeve of your portfolio?
Is it 50-50?
Uh is there a chance that actually ETH can become the number one crypto asset?
Like those are the things that get me excited.
But I think right now um it's probably a little bit more of just an anomaly.
But ETH was sold off, you know, ETH is sold off and it's it's it's having a nice little little rebound here.
Okay, so it's it's good to see, but you're not reading too much into it.
Uh Michael, one more question about something you posted on X just a couple hours before this conversation.
Uh, you shared some charts on on hype, hyperliquid, uh, which has also been performing very well among the the highest market cap crypto assets.
But you said a lot of people don't want to hear this, but this uh data on hype shows that the market was in a previously risk-on environment, not currently in a risk-on environment.
Elaborate for us a little bit what you're seeing here.
What's your take on this?
Yeah, and we've been doing these quarterly.
It's an interesting time to be looking at a lot of crypto charts.
We've been we do the quarterly updates on Ethereum, we do one on Solana.
So we we were looking at Solana this week.
Um, we have a really nice dashboard for hyperliquid as well.
And if you look at any charts across the crypto landscape right now, it's very clear we are in a risk-off uh market.
And I share the the hype charts just because hyperliquid has been, I think, the the ecosystem that everyone is sort of corralling around in this bear market for good reasons.
There's a lot of uh interesting innovation happening there.
There's a lot of stuff happening with traditional assets now being uh integrated into the the perps platform, and we've seen how investors have come around that, especially during like oil volatility.
So there's a good story with hype.
Um and those charts, if you look at our dashboard on hyperliquid, it you know, it kind of looks similar to what you see across the crypto landscape, but the charts are a little bit stronger just because hyperliquid has performed better.
Um, but it's this is it's just very clear to me where we're not in a risk-on environment.
And I think there's a coming back to the sort of cycle and how this works, like there's a very clean sequence, in my view, in terms of how you get to a risk-on market.
And that sequence tends to start with you know, global liquidity and and liquidity metrics that that either bottom or start to inflect in another direction.
Um, that kicks off basically on-chain activity and people that want to get access to uh DeFi and want to access DeFi loans.
That kicks off a race between DeFi protocols to capture those customers.
So then they will boost yields to attract customers that creates more reflexivity, creates more people coming into DeFi, and then you see media attention.
Like this is sort of like what you look for for the start of a new cycle, and all of those things are going down and to the right, not not up and to the right.
Um, so that's kind of my, you know, we're gonna share a report tomorrow that kind of goes through some of that.
You know, there's there's many ways to look at, you know, kind of where we're at in the cycle.
One way to do it is just go look, go look where the animal spirits typically are, and that gives you an idea of kind of what's happening in the market.
So okay.
Appreciate that analysis there.
Uh Michael, I think you've made uh a reputation for yourself being very data-driven, doing a lot of this analysis, and just like you said, like that's what you're reading in those charts there.
A lot of people are thinking that this market is mostly driven by headlines right now.
And I think that there are a couple of big bullish catalysts that the market feels like it's front-running, which is one, a ceasefire in the conflict, and then two, the potential passage of the clarity act.
Do you think that if these things both happen sort of like simultaneously or near one another in the markets, that could be a catalyst that breaks us to the upside?
Like, what are your thoughts around that?
Because it seems like there are more near-term bullish catalysts than bearish catalysts.
Yes, I think if if those things go through, if we see peace in the Middle East, if we see uh Clarity Act, that those are good things.
I I would expect the market to react positively to these things.
Um, for me to get like really bullish again, I would have to see signs that okay, we've we've actually hit hit a bottom or some sort of confirmation in that, and then everything else that I would look for, like for the start of a new a new cycle.
So I think those are strong, you know, catalysts like short term, but like is the Clarity act, you know, okay, let's say that gets passed.
Does that create new users on chain immediately?
Does that create demand for DeFi loans?
Does that create right?
Does that do anything to liquidity conditions in the market?
Right, those are good things, and that will start people building in the space, and and that gets us closer to everybody having a uh a phone that has a crypto wallet on it.
Maybe we get you know stable coins integrated into payroll solutions after all of this.
Like those are the things that I'm bullish about, not necessarily like a catalyst, you know, and to take us to all-time highs.
Gotcha.
Okay.
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Uh, Michael, I think something a lot of people are wondering right now is what you're doing with your portfolio and what they should do with theirs.
Uh, obviously, I know you have a paywall in front of yours, so you don't have to share too much if you're not comfortable, but I know that you started to buy Bitcoin, or I believe you but started to buy Bitcoin when it got down to 65K, because you said that was in the the fair value range.
Um, have you made any major changes to the portfolio since then?
Like what is your positioning like right now?
Are you still cash heavy?
Where are you on this right now?
Yeah, so 60, we we've we kind of said 65k is kind of top of the fair value range.
I do think that there, the probability points to us like getting into the 50s at some point, and I've been setting my portfolio up to a line, you know, to that outcome.
I'm still, I'm still long, obviously.
Always want to be long, but want to be waiting towards cash when I think that's that's appropriate.
So we are still pretty heavy on cash.
And I would say like the the where I'm at right now is I'm like, we've done a ton of work already, you know, over the last six months on analyzing various networks, various projects.
I find it much easier to do that in a bear market when sort of the some of the some of the froth has come out of the market and we can really see what what's real.
So we've kind of we're in a spot where we know exactly what we want to buy.
We've got an idea of what those prices that we want to pay for those are.
And I'm kind of just letting time do its thing right now.
And um, like you said, you know, we share all this, you know, transparently and with with our pro members.
And the goal is just to you know be as transparent as possible and align our incentives, you know, with with our audience.
So if Bitcoin does run up to 90K, are you just gonna sit and watch it?
So if it goes to 90K, like I said, I would be looking for uh some sort of high time frame close on that.
So weekly, at least a weekly or or multiple weekly closes, possibly a monthly close for me to say, okay, this is something has changed, uh, or there's other catalysts, you know, if we come out with a big uh spending bill, you know, for the war, you know, the Trump administrator administration requested what I think 1.5 trillion dollars, or there's like very clear forward guidance from the Fed that liquidity is coming, like those things, I'd have to see some of these things line up for me to change my mind.
But but that's another important thing.
Like we will change our mind if if if that if that's what happens.
But I'm sort of forcing, I I think I have to have to be forced out of that position by those types of events.
So the market has to prove it to you.
And I think there's a lot of wisdom in just what you said, like waiting for the confirmation because there's lots of wiggles on the chart that that you know kind of reverse quickly, especially in this environment.
Um, Michael, I know you have another report coming out from the DeFi report soon, I believe this week.
Could you give us a little taste about what you're writing about, what you're planning to talk about in your next report?
Yeah.
So we write uh a weekly report that covers uh really cycle awareness, KPIs, and we get into details on how we're managing our portfolio.
So this week we're going through, you know, I think what's interesting right now, we are starting to get, I think a little bit more of this bull bear battle is starting to play out.
So we're we're kind of taking some of these themes we've talked about this week, sharing a bunch of charts that go through the ecosystem to get people an idea of the data that I'm looking at and then why I'm saying, you know, we're in a risk-off market.
So we're gonna go through that through some of that.
We have a lot of cycle KPIs that we look at as they get hit, and then we have an idea of what the forward-looking returns are, you know, one, two, three years out.
So we we share some of that data based on what those those numbers look like right now.
And then on Fridays, we share a free report.
Uh, we're gonna be uh covering the Solana ecosystem with a with a Q1 update uh on Friday as well.
It's gonna be a lot of alpha in that to look forward to, I'm sure.
Michael, thank you so much for coming on the Milk Road show.
I think this is a really uncertain time, very volatile time in a lot of markets.
So people really appreciate your insight.
And just like you said, stepping through some of the probabilities of of which way things could move, how to play it if it does.
Where can we send people to find more of you and your work online?
Yeah, so people can go to uh the defireport.io.
Um, we are doing a one one month free right now.
So if you go to the defireport.io slash friends, you can sign up for that.
I'm on uh I'm on Twitter uh at just do it, and you can follow some of the research there as well.
Is it friends f R-E-N-S or or spelled in English?
It's it's uh standard friends, standard friends.
Okay.
Well, I'll be a friend of the show.
Yeah, no, that would have been good.
You're a friend of the Milk Road show.
You're welcome back anytime.
I look forward to talking to you again soon.
Thanks, Mike.
Thanks, Sean.
Appreciate it.
Thank you all for joining us.
I hope you all learned something today.
So until next time, stay safe, stay educated, stay bullish, and we will see you all on the next episode of the Milk Road show.
Thanks for being here, everybody.
Bye.
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