# Crypto Volatility Squeeze and Macro Liquidity Shifts

**Podcast:** The Milk Road Show
**Published:** 2026-08-24

## Transcript

See, the market doesn't necessarily move or react to things that are priced in, but it does move or react to things that happen that aren't priced in.
What's up, everybody?
It's LG Ducet here, and welcome to the Milk Road Show, the daily crypto show that asked about the Bitcoin bottom so many times that I think we actually missed it.
Today is August 24th, 2026.
What a difference a week makes.
Just seven days ago, I was asking John the exact same questions I've been asking him every Monday for like six months.
When the hell is crypto going to bottom?
It kind of looks like it did without us noticing.
We are up, ladies and gentlemen.
And although we are nowhere near all-time highs, it turns out that John's core investing philosophy has held true.
Buying fear is a good deal at any price.
He always says that.
If you're new here...
Every Monday, we sit down to flip the mic on the best crypto podcast host in the game to ask him his thoughts on the market, the macro, and of course, his portfolio allocation.
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God, I've been talking for two minutes.
Nobody wants to hear from me.
People want it.
People want the victory lap from John.
Although, did you say I told you so?
I don't know.
I don't think that thing has been too much of a violent move, John.
I don't really do victory laps.
I told you so.
I'm happy with the price action we've seen.
I mean, look, I wrote a lot about it.
I mean, this is a big reason why I wrote the essay, right?
Was because everybody comes for the pumps and the price action and like all the attention that that brings.
But the point of writing the essay was to say like, hey, there is a much bigger underlying thesis happening on Ethereum and in crypto overall.
And don't miss that just looking at the numbers in the pump.
So, yeah, like I'm happy with the price action.
But to me, that's the that's like a footnote to the main story, which is why I wrote.
Mm hmm.
Mm hmm.
John, like we it's amazing the timing of our shows, because, you know, again, I feel like since like March, I don't know when we started doing these Monday episodes together, but we've talked through everything that's happened.
You know, it feels like we've really we've really held hands through the Iran war and through the and it's still going on through the Clarity Act up and down.
And it felt like last week there was some there was some energy brewing, but it was kind of hard to call that any kind of signal.
But then.
You know, you wake up Wednesday and cancer has been cured, apparently, which and then and then hidden below that was Trump saying hyperliquid.
Right.
And now that almost feels like old news because, you know, that was only a pump.
Maybe Bitcoin go to like six from 64 to 69 in that day.
Now we're at 79 trying to break on 80.
Man, is this is this the kind of violent swing we expected when we were talking about all that volatility being built up?
Right.
Not only did we talk about that, you talked about that with a lot of the guests on the show.
Okay, so I'm going to break down a little bit of what I was seeing set up for this and what triggered it.
But I was flagging to our pro community for a long time, hey, Bitcoin's volatility is at historically low levels.
In 94% of Bitcoin's history, it had been trading with more volatility than it was prior to this short squeeze that we saw.
So the volatility had dropped like well, well below anything in Bitcoin's history.
It was an extreme amount of just dead.
price action.
There was very little volume, very little attention, very little activity.
At the same time, open interest had been climbing.
In other words, there was more capital speculating basically on more downside.
This is like a similar but inverse thing to what happened on October 10th.
There was a ton of open interest and dropping volume, but everybody was betting that there was going to be this squeeze higher, that we were going to go to over 150K, maybe beyond that.
And so what happened in this situation was volatility dropped, volume dropped, a lot of speculation came in, and then there were these exogenous shocks.
See, the market doesn't necessarily move or react to things that are priced in, but it does move or react to things that happen that aren't priced in.
So like the market right now is very much betting against the Clarity Act passing.
If it does pass, that could be another major bullish catalyst because the market is positioned for it to fail.
The market was not positioned for Scott Besson to come out and say, I'm going to start shortening the duration of the Treasury's curve by doing increased buybacks of long-duration assets and the repurchase program of issuing shorter duration, buying back longer duration.
And then nobody was prepared for Trump to step up to a microphone in the White House and say hyperliquid.
All of this created this situation where there was this sudden catalyst of attention and speculation on the future appreciation of these assets at a time when there was a huge amount of shorts in place.
And so we saw, I think it was over $4 billion of liquidation, largest single dollar move for a weekly candle in Bitcoin's history, $500 billion, half a trillion dollars of market cap added to the crypto market cap overall in a matter of a couple of days.
And this is the biggest thing, LG, the price action is holding.
We haven't.
like cratered back down immediately.
In other words, sellers did not step in to dump their bags.
We've seen actually spot volumes pick up an increase to support this across ETFs, across the spot volume markets on Bitcoin, on Ethereum, on everything else.
So it seems like this move is, you know, the shorts just got wrecked.
Bears just got slaughtered.
And it seems to be holding.
I'm not sure where we go from here.
Like you said, we're testing this 80K resistance level.
There's a huge sell wall there from certain players in the market taking profits.
But it's not clear yet if we'll break that or come down.
I think either way, you're looking for what happens next from here.
You're looking for a flip of 82, 83K into support because that would put us over the bull market support band.
That would put us into a technical bull market on Bitcoin.
Or you're looking for a higher low, meaning if we get rejected at 80K and come down, we want to see bulls step in and support at 74K, at 71K, somewhere in there, 70K.
before we go back and retrace the whole move.
And then that would be confirmation of a bullish uptrend.
And I think that's bullish for Bitcoin here.
But yeah, just absolutely unprecedented price action.
And it comes from the fact that everybody, and I've been saying this on this channel, on these episodes for months, this asset class, crypto asset class has been the least...
the one that's gotten the least attention, the least amount of comprehension, and the least amount of capital speculation and investment activity of any kind.
And it's been poised for a major move like this for a long time.
And we'd been calling for that for so long, we kind of just like thought it was never going to happen until October.
And that's what the market does.
It catches everybody by surprise.
And that's how you've seen this massive pump up.
So yeah, it's just, it's a really exciting time to be in crypto.
It has been before this, it will be after this.
But yeah, this price action is really historic and it's just an incredible market event to witness happen.
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Is the bottom in?
Did we touch that bottom whatever day it was in like late June or July 2nd?
I think it was.
I don't know what day it was.
Yeah, something around there.
I think it was.
We hit 58K in May.
We hit 60K just barely through 60K in February.
So this is the debate that's going to happen now.
If the bottom is in, we haven't confirmed that yet.
Honestly, we just need more time, more price action.
I don't have a crystal ball, but what I'm telling you is that...
If we don't make a new lower low here, and that seems to be what's happening.
The indicator you would look at to see, is this going to hold?
The indicator to watch is, is spot volume coming in to pick up and buy this and support this dip?
Right now, it is.
Right now, that bid is holding.
That may not last forever.
That market may turn.
I don't know if that's going to hold.
We may see a bullish trend continue for a while, and we might see another dip in September, October.
Who knows, right?
I can't tell you for sure.
However...
If this does hold, that's a huge change because that means that the bottom is in, the bottom is behind us.
The bottom in May, I believe it was, would then just be a retest of the initial bottom that was put in in February.
So you could argue Bitcoin, I mean, people won't, but.
you could make an argument that Bitcoin bottomed in February.
And that would be a huge change to what the market had been expecting.
The four-year cycle theory gets reevaluated.
There's a whole, like Bob Lucas, who's the guy who was like one of the original proponents of the four-year cycle thesis, came in off the beach on his vacation to check the markets because of how much this changed market structure for Bitcoin here.
This is a huge, huge candle.
So again, none of this is confirmed.
We're watching to learn here.
And this is something I've been trying to say to our audience this whole time.
I end every episode with stay safe, stay educated, stay bullish.
You invest with your capital, but you also invest in your education.
This cycle, crypto has behaved much differently than prior cycles.
There's a huge opportunity here for education, for understanding, for learning from the information the market is continuing to give us.
That helps update your investment thesis.
It helps make you a smarter investor and it'll pay off in future cycles, future investing environments that you find yourself into in this asset class and others because you'll understand more of what drives these dynamics, what drives market behavior.
and how you want to position your capital accordingly.
So this is a great time to be investing in education and just paying attention to the information we're getting from the market because it's surprising everybody, even the experts.
And nobody has seen anything like this before.
And it's a good time to be listening to Milk Road too, John.
Podcast is popping off with John at the helm.
So a big shout out to you.
You took over.
Listen, I just mean to shout out this part.
Okay, I have a few things to say and a few things to ask you.
I have a lot to say today and to ask.
First of all, just to talk about bottoming.
From the price right now, which is $79,400, to go back to the lowest low, which was July 1st, where we put in almost broke below 57, we need to drop another 27%, which does not seem like a lot in a sense considering what happened after 10-10 in a short amount of time.
So it's not impossible.
That being said, it does seem unlikely.
And I know one of your favorites, Ben Cowan, yesterday tweeted about how the bottom may have been in, and he was the one.
saying like, wait, wait, wait until we see it.
On that, and again, this is just my retail brain observing here.
September is historically weak.
People always say that.
People, especially we have seven days left this month, people always like to say September is weak.
It's a midterm year, blah, blah, blah.
So there's all these factors.
So it's definitely a wait and see.
And what I've learned is crypto is that it can go up just as quickly as it can go down.
So I'm cautious.
I do want to ask you in a minute about...
what the strategy is from here, because you are still sitting on a big pile of cash in your Milkrowed Pro portfolio.
And I'd ask you every week about when are you going to deploy that into more Ether, Bitcoin, or into alts?
And I feel like you're probably in the same boat as maybe me and a lot of other people listening.
It's like, did I miss my chance to get in at historical lows for these things?
And that's a big question for everybody to tackle in the next couple of weeks.
I have one more joke thing to say, though, before we get to real questions, is that A month and a half ago, two months ago, we joked about how I am the top signal for a podcast.
And as you guys who've been listening to the show for years may recall, there was a completely different person who started the show and used to host it.
He's still around.
He's still our boss, Jay Hamilton.
And he led this podcast through the last bull.
And then we decided to do a little switcheroo.
I kind of came in off Milk Road DGEN and came into this.
And John and I started splitting hosting duties with me doing the bulk of it, starting literally the first week of October.
days before 1010.
And then I was your bear market buddy.
And we decided to make our AI stocks podcast full-time late June.
So the end of June, I think it was like June 26th, was my last show that I hosted here other than these Monday shows with you.
And again, people are like, why is LG still talking?
It was the last show I hosted with you.
And no, I still host shows with you, but it was the last interview I did for the show.
And so far, that has been the top on Micron.
and a couple days off the bottom for Bitcoin.
So when I become the host of a show, run away from that industry or sector, okay?
So I'm going to ride AI stocks here as they dip.
They look terrible today.
I'll be on that for a while.
And then I'm sure we'll start a new podcast that I'll be at the helm.
And whatever that is, Pokemon cards, I don't know what, just run away.
Thank you for your sacrifice, LG.
It's what I do.
You know, it's like when your starter blows up, you know, in the first inning or whatever, and then I come in, you know, and I'm just the innings eater in the middle.
And then the team catches up and then we bring in a closer, which is you, to actually win the game.
You know, so I'm just the emergency guy.
I want to go back to your question about what to do with cash.
Thank you.
I do have a pretty sizable cash position.
I think a lot of members of our community are asking me questions about this.
By the way, I'm getting peppered with questions now.
The Discord is lighting up.
I answer one question.
I get a follow up immediately from someone else.
Whenever I post something like a research note, update about the price action, I'm trying to do that like pretty often here because it's moving a lot.
And as things unfold, people want to know what's going on.
But every time I post something, I'm getting like five or six different comments.
So I'm going through as fast as I can and as often as I can to try to stay up with the community on this because there's so much happening in the alt space is going crazy.
But OK, so what I'm thinking with my cash position, I have a really large concentration in Bitcoin and Ethereum.
And by the way, I'll say this again because this is important, too.
Before you get into a situation like this, it helps if you've already accumulated your positions.
You're not.
caught off sides when a move like this happens.
You need to be in the market and holding, and there's an opportunity cost for holding an asset that's in a bear market.
But the way you get paid off is when that asset rips out of its bear market, you catch all of that move, and that's the compensation that you get for that.
So I always buy when there's extreme fear on Bitcoin.
I like to say buying fear is a good deal at any price, because if you believe in the asset long term, which I do on Bitcoin and Ethereum.
then, okay, everybody's panic selling today.
I know that it might dip more and I have to be aware of that and okay with that, but I just keep buying on the way down.
Suddenly I look like a genius on the way back up and there will be a way back up at some point, right?
So I've looked like an idiot kind of for the last eight months, but now I've lapped several people.
I'm the top performing Milk Road Pro analyst for several months now.
I think going back six months here.
Okay, I'm getting lost in the weeds here.
The point is this, I bought on the way down so I have a position in the majors that I want.
Now I still have a cash position and people are asking me a lot, what am I doing to deploy with it?
Here's what I would tell you.
Right now where we are, this move on Bitcoin could still just be a bear market retest of bear market resistance.
So because we haven't broken 82K, which is the 50-week moving average, and flipped that into support, technically, on a technical basis, on the technicals on the chart.
We haven't seen the bulls take full control of this market yet.
So the risk to buying at $82K or $83K, if we get like a weekly or two weeks of weekly candles above $82K, the risk of Bitcoin going down again drops a lot, and the likelihood is then to the upside that we'll see continuation of price action into the $90K or to $100K.
So you have more confidence to deploy capital at that point.
At 79K, right now while we're having this conversation, Bitcoin is trying to break through 80K and it's bumping its head on that resistance.
Until we get through there, it's not confirmed yet, so it's risky deploying into this – buying into resistance here, right?
I'm kind of waiting for one of two things to happen.
I'm waiting for that 82, 83K to take positions and alts, or I'm waiting for a lower high – or a higher low.
Sorry, a higher low, meaning we get rejected off of 80K.
We don't break through this resistance.
And then we come down and find support from the bulls at 74, at 71, somewhere in that range.
I think that might be what happens in the short term.
I do think we'll see kind of like a return to the low 70s here from Bitcoin at some point.
I don't know when, but that would be the dip to buy, I think, if you're sitting in capital.
So I don't think there's any reason right now, if you miss this huge move, to go chasing this pump until it confirms we're in a bull market.
But, you know, give it a minute to cool, let some smoke clear.
And then if we get a dip into the low 70s again, that's when I would move with size because that might be the only dip you get.
This might just get away from us here.
So that's kind of I have never felt so much FOMO for Bitcoin and Ethereum when they're down 60 percent from all time highs or whatever they're at.
I don't know.
It's 40 percent now.
But I'm saying, you know what I mean?
It's like that's what's so funny, right?
Is that a lot of people, a lot of people were buying in the hundreds, ETH and the 4Ks.
Right.
And then still now this move.
is making you rethink it.
This move was so violent, John, that, and so unexpected to be this quick that it's really making a lot of us like, like a short-term question what you've been doing this whole time.
And should you just empty your clip right into this?
And it's just a few days.
But I think, I think this is, it's funny.
It's, it's positive news.
You have liquidations.
to the upside, which we've only had liquidations to the downside for months, 1010 largest liquidation ever.
This is also one of the largest liquidations ever, but for shorts.
And yet it's painful in some way.
And it keeps you up at night that you stared at Bitcoin at 58 and 60 and 61 and 63.
Listen to you talk for hours, didn't do anything.
You know, like I'm just saying that it's like I forgot how painful crypto could be to the upside as well to the downside.
And it's amazing how quickly you're reminded of that feeling.
Crypto has a way of finding the max pain for everybody, even when it's doing something positive.
What I will say about this is this is a very real thing.
I think sometimes you want to manage your capital to manage your emotions.
So what I mean by that is if you feel like you are under allocated, if you were DCAing and thought you had much longer to buy and now you have a whole bunch of capital that's not in the market, something to do to help kind of control those emotions is take five or 10% of whatever capital you kind of want to put into the market and get a little bit of exposure.
Not because that'll get your whole position in, but because that'll help calm some of those emotions.
And that'll help you come up with a plan for the rest of the capital that makes you feel a little bit more comfortable.
But I think there are a lot of people who are feeling that way.
The other thing too is the mania and alts has been out of control.
Like XRP went from $1 to $1.50 in like two days.
So like the volume on these things has been wild.
Every alt on the board has moved a huge amount.
And people are also wondering like, oh my God, what alts do I get?
I'm missing all of this.
And like, there's just FOMO everywhere.
So I would tell anybody who's like looking at Bitcoin or anything else.
These are really under-owned assets.
Nobody owns any ETH, nobody owns any Bitcoin, and they're two of the best assets in the market.
If you need to get a small position just to help calm your own emotions so you can think more clearly about the rest of your capital, don't stop yourself from doing that because it might be worth the investment of just take 5% of whatever you want, get a little bit of the positions you're looking at, and then just think a little bit more clearly about it from there.
But yeah, man, the FOMO is intense.
And the other thing too, this is not limited to retail.
Institutions have been feeling this for a long time, but now retail is feeling it because of this price movement.
But the breathless breakneck speed that institutions have been moving it to get into digital assets, to move products and services to market in this asset class has been relentless.
And I'm sure this is going to cause...
just as much panic on their side as on the retail side.
So everybody's feeling FOMO right now.
Try to use that to try to quell that if it's a problem for you and then try to use that to your advantage where you can in your portfolio and take advantage of that because the market's coming to you now if you're in crypto.
So it's a good time.
Good time to exercise that patience as well, I think.
And like you're saying, you feel that FOMO maybe allocate a little bit if you have anything left too, if you had something left.
Maybe a lot of people would.
Just being more patient than we were and actually buying the whole time.
John, I do want to talk about this essay.
You put on another fantastic essay, absolutely lighting up X over the weekend.
Another wartime Ethereum essay, kind of like the follow-up to your last one.
Both about ETH and also just generally about digital assets and about crypto overall.
Your main message for the last few weeks or last few months was if you're an AI, pivot to crypto.
Very obvious for the last seven days, but we need to zoom out to be fair.
Why should somebody's next dollar go into crypto rather than AI at this point?
Because I think AI, for the most part, those trades, the easy money on those trades is pretty well played out.
I think everybody has figured out memory and micron are important.
I think everybody knows that this is going to be a huge thing.
I think a ton of capital is allocated to it.
And so I just feel like it's one of those things where it's like, I'm not saying short AI.
I'm not saying that the trade won't continue to work.
I'm not saying that there won't still be performance there.
And I'm not saying that S&P won't get to 8,000, right?
All of this is going to continue to play out.
But it's just like, what is going to be the scale of that move and the speed of it?
Because I think a lot of these trades in the AI space right now.
are going through a period of digestion, of cooling, of sideways chop.
There may be some pullbacks in some of these things.
And that's just part of market dynamics, right?
Like it doesn't matter how strong the fundamental thesis is.
At some point, there's only so much capital to go around.
And I think the reason I've been saying if you're an AI pivot to crypto is exactly for the reason that nobody, there's been very little volume, very little speculation, very little attention on the digital assets space in the whole industry overall.
At the same time, the fundamentals have never been stronger and they're accelerating, not declining.
So that's been something I've been trying to pound the table on because crypto is the opportunity where you can get ahead of the next big move in the market as opposed to chasing a move that's already played out that everybody, every investor everywhere has already figured out and allocated to.
So that's a little bit of the thesis there.
But I think Jordy Vischer is a great example of this.
Jordy was buying Micron at like $100 all the way down to $60.
And then, you know, that ballooned to like almost a thousand.
It's digesting now, but like there's huge, huge run up in Micron.
Now, Jordy is pounding the table on Bitcoin and Ethereum and saying this is where the next trade is.
This digital scarcity thesis makes a lot of sense.
I wrote about this extensively in the article.
And the reason I wanted to write another wartime Ethereum article about this was exactly for this reason of like, don't just look at the pump.
Don't just come chasing the numbers on the screen and the green candles, although that feels good and it's fun.
And, you know, we're here to make money.
I'm not saying anybody should not be here to make money, but understanding the bigger thesis at play in digital assets is much more valuable, I think, than the short term pump.
And so I talked a lot about this huge super cycle and tokenization that Vlad Tenev talked about and wrote an article about.
And then I also talked about the rise of agentic commerce, agentic AI or agentic finance and how that's accelerating and already becoming a huge market and on pace to become, you know.
100x from where it is and how that drives volume value to digital assets like Ethereum and that ecosystem overall.
And people need to kind of understand these things because...
trillions of dollars of capital, trillions of new agentic users, it kind of like overwhelms the mind.
And it's a little bit like hard for people to contextualize what that actually means and how big of a change that is to the marketplace.
So I wanted to write a little bit about that and help people understand why now is a good time to be pivoting back to crypto from wherever you are and to just educate yourself about the space and come up with a thesis that makes sense for you.
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How much of this, how much of your thesis depends on Scott Besant and this increased liquidity?
Like what if this liquidity doesn't materialize?
I think that there's a very low chance that the liquidity won't materialize.
In a press conference this weekend, President Trump threatened to use the U.S.
military against the bond market if necessary.
And I don't know what that means, but I can tell you this.
It means liquidity is coming, baby.
So that's going to happen.
Scott Besson is speaking at 2 p.m.
this afternoon.
There's going to be announcements there.
Kevin Warsh is talking Friday at the Jackson Hole Economic Policy Symposium that the central banks do every year.
I'm expecting – this is generally what I'm expecting because this is what's been signaled.
Warsh has his task forces at the Fed to reevaluate the Fed's reaction function and justify them holding rates constant until they're able to work themselves around to a rate cut, not a rate hike, which is still not fully priced in I don't think.
And Scott Besson has signaled that he's willing to spend money out of the TGA, the Treasury General account, which has I think around $900 billion of capital in it right now.
to support the bond market and add liquidity and he's doubling his long-dated repurchasing agreements as i already said which shortens the duration of the u.s's outstanding debt and effectively increases the liquidity in the markets whether or not he's actually doing a capital injection isn't what's important it's important that the policy signal the structural direction is that the federal reserve is going to give us lower cost of borrowing because that's what lower interest rates means it makes capital cheaper and the The Treasury Department, Scott Besson, is signaling that he's going to be providing that liquidity to the markets.
They're doing this through the bond markets, but really the end result is that the marginal dollar is able to go seek risk and support the bull run in the equities markets and in the risk asset markets.
And you're also going to see the debasement trade come back, and gold and Bitcoin have both responded in that way as well.
So I think generally speaking, there's not – They're not going to suddenly change their minds, like, never mind, we want to crash the markets before midterms.
I think this is going to continue this bull run, extend it into 2027.
It's going to be supportive for all markets.
But I do think that Bitcoin, crypto, Ethereum specifically, are poised to benefit from all of these factors, from the additional liquidity, from the lower cost of borrowing, from the rise of tokenization and the proliferation of agentic finance.
All of that creates a nexus of value around the Ethereum network and the Ethereum asset.
and crypto generally right there's gonna be lots of beta to this trade and and lots of performance in other places in crypto it's not just all going to be on ethereum solana will do well bitcoin will do well on down the list but that's sort of the the perfect storm that i'm seeing here and that's some of what i wanted to spell out because you know everybody will pay attention when this giant green candle comes back and so that's kind of what i wanted to communicate of like hey this is what you should actually know not just number go up you know we win moon you know John, one question I want to ask you about this too, and naturally you're a massive ETH bull and I think you have the biggest ETH bull coming on the show this week.
I'm going to let you announce that a little bit later, but there is no bigger one than the guest you've managed to secure for the show.
How does ETH perform against Bitcoin?
Right.
And that's something.
And your guest coming up posted a chart this weekend as well, showing me like, listen, we're due to break out out of a 10 year downtrend of ETH versus Bitcoin.
Ever since my time in the space, people have been like the flipping is coming of ETH is going to flip Bitcoin, which last cycle, John.
was majorly disappointing.
It did not, we couldn't even, we barely, ETH barely just top ticked a little bit above all time highs and really, whereas Bitcoin went, you know, almost two X off all time highs.
So what is the case this time?
And you've already explained it, but I think it's always good revisiting it.
How, what makes you so confident that ETH is finally ready for its moment here?
On this whole ETH-BTC ratio chart and this whole flipping conversation, I and I think a lot of other investors in the digital asset space have kind of learned that it's best to not pound the table too hard on this.
I'm not going to sit here dogmatically and tell you that Ethereum is going to flip Bitcoin this cycle or anything like that is going to happen.
However, there are distinct value drivers for ETH as an asset versus Bitcoin as an asset.
And I think that's appreciable, right?
Like the important thing is to just understand that not all digital assets are created equal.
Not all of them have the same kind of tokenomics.
Not all of them have the same revenue drivers or value drivers.
So there's much different qualities that every digital asset has.
And there's distinctives between them.
And there's reason to think, this may not be what plays out, but there's reason to think that Ethereum's strong value drivers may cause it to perform stronger than Bitcoin's here.
Like I said, the tokenization, stablecoins, agentic finance, all of those are happening in smart contract platform ecosystems.
The lion's share of all of those still is on Ethereum and has continued to be on Ethereum.
So it's still holding that dominance there.
But what I would say is on that ETH BTC chart, It's been in a downtrend for 10 years.
Ethereum has broken out of that downtrend, but there could be a while before that starts to resolve into a sustained change in dynamic there.
It could be a false breakout.
We could retest the downtrend before we continue higher.
So I'm not like, you know.
running around screaming, oh my gosh, ETH is going to flip Bitcoin.
It's happening this week.
But I think that there has been a lot of attention on the fact that that downtrend has been broken and the distinct value drivers to Ethereum seem very strong right now.
So there might be a period of strong performance from Ethereum relative to the rest of the digital asset class.
And it's got attention.
It's worth monitoring too, because that would be a big change.
If Ethereum does start to lead in performance over Bitcoin, that's a huge change in market dynamics in the crypto space overall.
And it's something to be mindful of and pay attention to regardless of which assets you do or don't like in the crypto space.
It would be a huge change.
How much does the...
And this could be a question that maybe more the DGENs are asking, but also people who use exchanges are asking too.
How do the...
And this is not really an L2, L1 debate.
Question.
This is more a institutional L2 question for you that one of the biggest pieces of news, I guess, or one of the biggest attention grabbers of the last two months has been Robinhood launching its own chain.
Right.
And like you already mentioned, Vlad Tenev has come out and is very supportive.
Even yet there's an interview that dropped last night.
He's he literally acknowledged it.
He's acknowledging the trenches that are happening on his chain.
Something like Brian Armstrong.
has really struggled to do properly.
And this, again, this is not a DGEN question.
What I'm asking though is, we're setting up almost for a little war in the trenches between the base and the Robin Hood chain.
Ink from Kraken is starting to get some rumors around it.
Is this...
Does that, I'm assuming that this is all really good for Ethereum, right?
That you're seeing a lot of major exchanges, things that people really use actively, and even Robinhood still launching its own chain, that that must be a really positive signal for Ethereum outside of all the institutional side as well.
Something that people really misunderstand about this is that, yes, both Robinhood and Coinbase are building on Ethereum.
Yes, they brought millions of new users into crypto and into Ethereum specifically.
But the fact that they are the center of culture, the center of the economic activity, means that Ethereum stands to capture the second and third order effects of this, which means that as human beings start to do more transactions on chain, as more...
assets come on chain, they are going to come to Ethereum.
And so the rise of tokenization is going to bring more capital, more assets, more stablecoin demand, more users, and then more AI users.
And then that goes from a few million users that have been onboarded by Robinhood and Coin, I mean, a few million, like there's 30 million in each, right?
There's a lot of users, right?
There's millions of people using Ethereum now because of Coinbase and Robinhood, but the AI agents that those people create to trade for them, to conduct commerce and economic activity on their behalf will also be through some of these platforms.
And that's also going to be on Ethereum as well.
And so I think this is just like...
One of the trade-offs that Ethereum made strategically, which is to capture the overall market share of tokenization, stablecoins, and AI payments and agentic finance and keep that center of gravity in the Ethereum ecosystem because it's going to accelerate and grow.
So in the short term.
Ethereum is only charging a few thousand dollars to Robinhood to run the Robinhood chain and to conduct all this trenching and all this stuff that's happening on Robinhood on ETH and to get the security from ETH.
However, the tradeoff is that now Ethereum becomes the base layer, the global… globally trusted neutral settlement layer for all of this next century of finance, potentially.
And that's a pretty good deal.
So that's kind of how you look at these things and evaluate who's winning now versus later, what's the trade-offs on all these things.
I think it's just all exciting.
It's all prototypes right now.
It's all happening slowly and developing.
But I'm having the CEO of Wallet Connect on, and she talks a lot about how to reduce friction for human users for this.
93% of the volume that they're seeing is still on Ethereum mainnet.
So the strategy is working.
Like I just, but in the short term, it's like, oh, Robinhood's just, you know, having all the fun and making all the money and it's not going back to ETH.
It is all coming to ETH.
And that is, I think, lost on a lot of people.
Oh yeah, absolutely.
And even something like Base, which we don't hear too much about anymore, it still has $6 billion in TVL, right?
So not nothing and something that you would expect to grow if you're going to go into a major institutional.
or not a retail run as well, because that they change the Coinbase app into being the base app, right?
So they give you access to all those apps and clearly something that Robinhood sees a lot of potential in with having their own chain.
And you could argue that Robinhood was calling this pivot AI to crypto thing months ago by launching their own chain, right?
I think, but no, but really, why would you do that in the middle of the bear market?
Like when everybody, when AI stocks are ripping at the all time high, it literally launched end of June.
Right.
So clearly something that Vlad Tenev and his team were aware of.
John, I want to kind of zoom back out to our earlier conversation.
And this is something you kind of mentioned in your essay as well, or kind of touched on a few times.
Many of us caught off guard by such a violent move in the crypto markets in the last five, six days.
You mentioned the four year cycle.
It's something that's going to be really hard to put to bed one way or another because we are going to keep talking about that at least for the next five weeks until there is this one-year bear market confirmation or not, if there is another one.
Let's say it is the end of the four-year cycle.
Let's say we bottomed on July 1st.
And like you said, the true bottom or the real bottom maybe was in February.
What replaces it?
Because that has been our only...
true structure in crypto forever.
So what comes after that?
What kind of cyclicality do we have after that, if any?
This is a huge question you just asked me at the end of this episode.
I could talk for an hour and a half about this one thing right here.
Maybe that's next week's topic.
Maybe we could cover that next Monday and maybe you can just allude to it here.
I'll try to give you the short version on this.
I think that...
Unfortunately, the only way you're going to have confidence on answering some of these questions is in hindsight.
So like when when, you know, in February, when somebody asked me, like, does this mean the four year cycle is over?
When are you going to finally admit that the four year cycle thesis was correct?
I was like, give me a year to get some price action on this, because like, it's impossible to tell what is going to play out here.
If we see this year end with Bitcoin over 100K.
Then the question is, did we start a new bull market or did we see a lengthening of the prior bull market?
And, you know, to your question, what is the driver of this?
I would say it's the same thing.
I would say if you look at the ISM, if you look at the gold copper ratio, the ISM PMI manufacturing survey, these are historical indicators of accelerating economic activity of the accelerating business cycle.
That hasn't happened.
It's been delayed until recently.
So we've seen seven months now.
of rising ISM PMI surveys and the gold copper ratio moving in the right direction.
So it's a sign that the economic acceleration that was supposed to come on that four year cadence got delayed and extended because of the treasury changing how they're refinancing things.
I'm talking a lot about a lot of macro things here, but the gist of it is.
The drivers of the crypto four-year cycle have not changed.
The timing of them have shifted.
And a lot of people thought that the crypto four-year cycle was tied to the halving cycle.
It just happened to line up with these macro cycles that have actually been driving all of this.
And so what it might do is it might confirm that.
You know, in analysis, there's something called spurious correlation, meaning that two things can appear to be moving together, but they're not impacting each other.
It's just like a coincidence.
So it's a mistake to assume that correlation holds because it's just, you know, an illusion in the charts.
But what this might do if this plays out, right, is it might show that, okay, the calendar isn't what's driving Bitcoin.
The halving cycle isn't what's driving Bitcoin's price.
It's really the larger macroeconomic landscape and the liquidity factors and business conditions around that – business cycle conditions rather – around that that are driving whether or not capital is seeking exposure to Bitcoin for one thesis or another, one reason or another.
But it's just – again, it gets back to the same question.
I think it's an opportunity to learn because there's – different analysts are going to have different answers to this question as we get towards the end of the year.
Look, if Bitcoin goes back down to $55K in October.
Fine.
Maybe it all just worked out exactly right, and maybe the 40-cycle works exactly.
But if Bitcoin is closer to 100K by October, November, or over 100K by the end of the year, which, again, we're sitting at 80K right now.
It's not an insane – it's not out of the realm of possibility today.
It could look crazy tomorrow, but today it looks like it could be possible.
So that changes a lot of analysis for me, for other people, and that's something I'm really interested in because… Seeing the whole industry have to reevaluate some of these major prior assumptions would be a great opportunity to learn and something I'd be really excited about.
But the four-year cycle thing has always been something that's bothered me because… I've been like pounding the table on the, like the bull run is going to continue.
And then we got the bull run and the alt season, but it just was in the equities markets, not in crypto.
Now it seems like it might be coming back.
Anyway, I could ramp, like I said, I could talk about this for an hour because there's just so much that goes into answering this kind of a question.
But the gist of it is that I think the macro conditions that drive all markets are also driving the Bitcoin valuation.
And I think this might be something that.
gives people a different kind of understanding of crypto valuations and the drivers of this market going forward.
And that's an exciting thing.
So I'm really curious to see how this plays out.
This is going to be a really exciting second half of the year and Q4.
So I'm really looking forward to this.
Last question for you.
What's the price of Bitcoin in a week today when we're recording the same episode?
Oh, this is how you do me.
Oh, man.
Bitcoin in a week.
Look, it looks bullish.
I'm going to say we're going to be over 82K.
If I had to call right now a coin toss between we break the bull market or we don't, break back into a bull market or we don't, it looks like we're going for it.
So I'm going to say that the FOMO wins and we go back into a technical bull market.
I don't know if we hold, but I think we could get over 82K.
Beautiful.
Okay.
Well, we'll see how that holds out over a week.
And again, not financial advice.
And I'll say it again.
Listen, guys, John is still sitting on a huge pile of cash.
Let's check in on your cash because your cash is actually, it's going to be less now.
So percentage wise, it was 30%.
Now it's 21% because the rest of your holdings have grown immensely.
John's portfolio is up like 20, 25% this week alone.
If you want to check out what is in there and also most importantly, you want to get access to John, ask him any questions that you want.
See his updates in Milk Road Pro, which he posts very often.
He was very active this weekend with thoughts about Bitcoin and ETH and a lot of other stuff.
That is all Milk Road Pro and the price is going up tomorrow night.
at midnight eastern so get in at this price it'll never be this price again uh and if you lock it in you have it forever so good for you if you want to get in before it goes up 60 john thank you for your thoughts uh always a pleasure to chat and uh we'll see you next week at 82k man thank you lg i'll talk to you soon thanks for listening to milk road if you enjoyed the show make sure you like and subscribe and if you're struggling to find winners in the market that's exactly what milk road pro is built for our analysts have called some of the biggest winners early and pro lets you see what they're buying next every trade they make, and the research behind every position.
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