#690 The Bitcoin Bulls Are Running Through 60k! w/ Will Clemente

Will Clemente is the Lead Insights Analyst at Blockware. He has quickly become one of my favorite writers on all things bitcoin, including deep dives on various onchain analytics. In this conversation, we discuss the Bitcoin back at 60K, The fundamentals, on-chain metrics, what happened in the past week, and what the on-chain data is telling us to be prepared for moving forward. ======================= If you haven’t started building your crypto portfolio on Okcoin, there’s no better time. They’re one of the fastest growing global exchanges around and they have some promotions happening right now to help even more people be part of the future of finance. If you have an account already, you can split $100 in BTC with a friend when you invite them to sign up for Okcoin if they buy $100 of crypto in the first month. The more friends who sign up and buy, the more BTC you get. And I always recommend dollar-cost averaging as a way for investors to have more control over their average price when building their portfolio. Now you can automate dollar-cost averaging with completely fee-free daily, weekly, or monthly recurring buys on Okcoin until November 1. That’s no fees at all on your purchases until the holidays. Get started on the web or on their new super easy-to-use app at okcoin.com/pomp ======================= Gemini is a leading regulated cryptocurrency exchange, wallet, and custodian that makes it simple and secure to buy, sell, store, and earn bitcoin, ether, and over 40 other cryptocurrencies. Offering industry-leading security, insurance and uptime, Gemini is the go-to trusted platform for beginner and sophisticated investors alike. Open a free account in under 3 minutes at gemini.com/pomp and get $20 of bitcoin after you trade $100 or more within 30 days. ======================= AppSumo is the leading digital marketplace for entrepreneurs, and a great way to get your product in front of 1M+ entrepreneurs, founders, and small businesses. AppSumo is giving away their entire $1 million Black Friday marketing budget to creators. If you have an ebook, online course, template, or any other digital product — this is for you. List your product on AppSumo between September 15th - November 17th and the first 400 offers to go live will receive $1,000, the next 2,000 to list a product and go live get $250. And everyone who lists gets entered to be one of 10 lucky winners of $10k! Go to AppSumo.com/pomp to list your product today and cash in on this amazing deal.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Will Clemente is the Lead Insights Analyst at Blockware. He has quickly become one of my favorite writers on all things Bitcoin, including deep dives on various on-chain analytics. In this conversation, we discuss the Bitcoin fundamentals, the on-chain metrics, what happened this past week, and what the on-chain data is telling us to be prepared for moving forward. I really hope that you enjoy this conversation with Will, as I always do. Before we get into this episode, though, I want to quickly talk about our sponsors. First up is AppSumo. AppSumo is the leading digital marketplace for entrepreneurs and a great way to get your product in front of one-plus million entrepreneurs, founders, and small

• 0:47Anthony Pompliano?

  businesses. AppSumo is giving away their entire $1 million Black Friday marketing budget to creators. If you have an ebook, an online course, a template, or any other digital product, this is for you. You can list your product on AppSumo between September 15th and November 17th, and the first 400 offers to go live will receive $1,000. The next 2,000 to list a product and go live get 250 bucks, and everyone who lists gets entered to be one of the 10 lucky winners of $10,000. Go to appsumo.com/pomp to list your product today and cash in on this amazing deal. Again, appsumo.com/pomp, or you can click on the link in the description as well. Appsumo.com/pomp.

• 1:29Anthony Pompliano?

  Next up is Gemini. They're a regulated cryptocurrency exchange wallet and custodian. Some might say they're actually an industry-leading regulated cryptocurrency exchange wallet and custodian. That makes it simple and secure to buy, sell, store, and earn Bitcoin, Ether, and over 40 other cryptocurrencies. They offer an industry-leading security, insurance, and uptime. Gemini is the go-to trusted platform for beginner and sophisticated investors like. You can open a free account in under 3 minutes at gemini.com/pomp and get $20 of Bitcoin after you trade $100 or more within the first 30 days. Again, takes 3 minutes when you go to gemini.com/pomp and you'll get $20 US dollars of Bitcoin after you trade. $100 or more within 30 days.

• 2:13Anthony Pompliano?

  Gemini.com/pomp. What are you waiting for? Let's go. Last but not least is OKCOIN. If you haven't started to build your crypto portfolio at OKCOIN, there's no better time. They're one of the fastest growing global exchanges around, and they have some promotions happening right now to help even more people start being a part of the future of finance. If you have an account already, you can split $100 in Bitcoin with a friend when you invite them to sign up for OKCOIN. If they buy 100 bucks of crypto in the first month, you invite them, they buy $100 of crypto, you both split a free $100 from OKCOIN. The more friends who sign up and buy, the more Bitcoin you get. And I always recommend dollar cost averaging as a way for investors to have more control over their average price when building their portfolio.

• 2:58Anthony Pompliano?

  Now you can automate dollar cost averaging with completely fee-free daily, weekly, or monthly recurring buys on OKCOIN until November 1st. That's right, those automatic dollar cost averaging purchases are completely free of fees, whether you're doing it daily, weekly, or monthly, until November 1st. That's no fees at all on your purchases until the holidays. Get started on the web or on their super easy to use app at OKCOIN.com/pomp. Again, OKCOIN.com/pomp. All right, let's get this episode with Will. I hope you guys enjoy this one.

• 3:32Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 3:55Anthony Pompliano?

  How good does it feel that all summer long you were telling people, "Supply squeeze, supply squeeze, supply squeeze", and whether they believed you or not, the supply squeeze is underway?

• 4:05Anthony Pompliano?

  It feels pretty good. You know, I'm not right 100% of the time, but I'm glad that the

• 4:10Speaker 03

  My thesis is working out so far.

• 4:12Anthony Pompliano?

  I I am I'm glad as well. Let's uh let's jump into uh some of the metrics that you have this week. So the first thing that we've got is the UTXO realized price distribution. Explain what this is and what you're seeing in the actual metrics.

• 4:25Speaker 03

  Yeah, so this is basically just like on-chain volume. So you're looking at the amount of supply that was last moved at each denominated uh time. I mean, uh, price cohort, as you can see in the bottom. Um, and what I'm just trying to show here is that only 0.68% of Bitcoin's supply has last moved above where we currently are, which means that there's very little overhead supply, AKA resistance, um, above where we are currently. So we're kind of, as I titled the newsletter this week, we're on the edge. Um, you know, we we have this very small amount of supply above us. Uh, but of course, once we break, you know, above all-time highs, we'll have no supply above us.

• 5:03Anthony Pompliano?

  Okay, and so the idea is, once we break to that 64,000, then we go into this price discovery and it's likely to appreciate pretty quickly there. Uh, Sopra, you've got the seven-day moving average. We've been talking about Sopra all summer. And now we saw that bounce uh like a week or two ago off of uh one. And so it looks like we've just got a continuation of that trend right now.

• 5:24Speaker 03

  Yeah, exactly. Um, nothing's really changed from last week. Just, you know, you're watching to make sure we stay above that one threshold. Um, and then possibly coming back down, retesting it on some kind of correction. So, uh, just keep an eye on it over, you know, over the next week or so before we meet again. Um, we could just continue to see more upside as we did towards the end of last year, but you know, we'll take it day to day.

• 5:45Anthony Pompliano?

  Okay, and then the futures term structure, we haven't done this before, so explain what this is.

• 5:50Speaker 03

  Right, so what you're looking at here is the futures curve on all the major um derivative platforms. So you have Binance, Bybit, Derbit, FTX, Huobi, and um OKX. And so aside from Huobi, what you see is that the futures curve is actually in contango right now, which means that, um, first of all, that it slopes positively, but each uh each contract going out further on the curve is higher than the previous. Um, and so this kind of leads us to our next chart in terms of why is this important? The reason is because you can capture the spread between spot and futures in this non-directional way through something called what's traditionally called a cash and carry trade where you're selling the futures contract and you're buying spot and then you hold that

• 6:34Speaker 03

  position till expiry and then you capture that yield. And so earlier this year, we saw, we saw a really large basis spread between, between spot and futures, got all the way up to about forty-five percent at the very peak, you know, earlier this year. But heading into the summer, we dropped down, I think we briefly flipped negative on the basis, but we were hovering right about, right above, you know, zero percent. So now, now we're back above to, I think, right around fourteen percent, you know, fourteen point one eight percent. And so right now, you know, on an annualized basis, you can, you can sell the three-month future, buy spot, hold that out till expiry, and then capture, you know, the fourteen point one eight percent

• 7:19Speaker 03

  annualized yield. And so if you start to see this move higher, what that means is that you're, you're inadvertently drawing more, you're incentivizing capital to flow into spot because, as we mentioned, they have to sell the futures contract, but they're also buying the underlying spot Bitcoin, which of course is what is driving up market price. And so if this starts to go higher, then you'll have that incentive for more capital to flow into spot. Another thing is the, you know, we're talking about like a futures ETF, right? And that's, that's primarily going to be based on, on the CME. And so where this kind of gets interesting is earlier this year, all of the, you know, the majority of, of the, the curve, you know, the, when we're talking

• 8:03Speaker 03

  about like forty, forty-five percent, that was all on these overseas exchanges versus CME was really lagging behind. And so if you start to get that CME curve bid up, that kind of opens up the, you know, US capital that was kind of locked out of this trade earlier this year, although they were participating in the grayscale arbitrage, but they were locked out of this particular trade because they can't, you know, use like Binance or Darebit due to regulatory reasons. So I think the futures ETF could, could be interesting in that sense. But yeah, nonetheless, looking at, looking at the overall basis over the next couple of weeks to see, you know, does that start to move higher? Because that's going to incentivize- It's more capital to come into spot.

• 8:43Anthony Pompliano?

  Got it. And then when we look at the futures open interest margin, explain what the slight difference with the margin is.

• 8:50Speaker 03

  Right. So, you know, when you hold a futures position or a futures contract, right, you have to margin it somehow. So you have to either collateralize it with, you know, Bitcoin or other crypto, like you can do that on like FTX and I think Binance as well, although I've never used Binance, I can't confirm that. And then you can also collateralize it with stable coins, right? And so the difference here is you're starting to see this big drawdown in the percentage of the futures open interest that's collateralized by crypto. And so what that means is more and more, more and more of these contracts are collateralized with stable coins, particularly mostly Tether. And so what this means is that you have less convexity to the downside, which means that, you know, if,

• 9:34Speaker 03

  if everyone is long, right, and price starts moving higher and you're collateralized with Bitcoin, well, your collateral is increasing in tandem with the actual P and L of your trade, right? But as soon as it starts to go against you, and by the way, as that's happening, you can increase your leverage as your collateral is increasing in value. But once the market starts to reverse as what we saw in May, because there was a large percentage of of the open interest that was collateralized with crypto. Well, there's this huge convexity when it starts to go the other way, because now not only is your P and L decreasing, but also how collateralized you are is also decreasing. So your margin is decreasing. And so seeing it goes, it goes the opposite way with with the with the cash margin futures, so or stablecoin margin futures.

• 10:20Speaker 03

  Because, you know, you're more apt to a short squeeze, because usually like if you're margining with BTC, you have this inadvertent hedge. If you're short and the trade starts going against you, because, you know, because your collateral itself is increasing in value via the BTC you're that you're collateralizing the contract with. Even though, you know, the trade is going against you. So if you're collateralized with with non crypto margin, then you're more susceptible to getting short squeezed or getting squeezed out of your trade, I should just say. But once we get above all time highs, I would suspect that you probably start to see this this start to creep back up as more people look to collateralize with BTC because they're bullish on BTC.

• 11:02Speaker 03

  But yeah, for now, for now, we're in a good spot in the sense that, you know, the lower we go, the the, you know, less convexity. That we're set up for to the downside.

• 11:11Anthony Pompliano?

  Got it. And then we've got this relative transfer volume breakdown by size. What is this?

• 11:16Speaker 03

  So we're just looking at all the transfer volume on any given day. And then we're looking at in different subsets, the, the size of the transaction. So we have zero to $1,000, $1,000 to $10,000, 10 to 100K, all the way out to $10 million plus. And what you see is throughout 2020, you saw a larger portion of, of volume being taken up by these larger transactions. But really, over the last month, we've seen this big spike and sustained, you know, prolonged like higher, higher portion of, of overall volume taken up by these large transactions. So when you look at like $10 million plus transactions, they actually reached as high as 84% of volume at some point last month, I think it was like two or three weeks ago.

• 12:01Speaker 03

  But they're, they're sustaining a large portion of volume, which to me is suggesting either A exchanges are, are using batching more. But primarily, I think, I think the reason here is probably OTC transactions. So, you know, large, large capital that are whales that are active in the market. And, and then that also is reflected by like the next chart where we're looking at all of our entities data. So as we talked about since the end of July, we've seen really large buyers enter the market, especially the whales. So the buyers over a thousand or the entities above 1,000 BTC. And then we filter out for exchanges and, and known entities like grayscale and purpose, the purpose ETF, QBTC. And so you've seen them like consistently buying up until about a month ago.

• 12:44Speaker 03

  And then you've started to slowly see them trim their holdings. But what I didn't actually include this last week, and so I felt like it was, it was right to kind of give an update on this. I actually wasn't looking at 100 to 1,000 cohort in, in confluence with the above 1,000. And what you see is that the 100 to 1K guys have actually offset the selling or the profit taking that we've seen from these above 1,000 BTC entities. So, you know, your point is, I'm just trying to make is that you're seeing large, in, in general, you're seeing really large buyers or, or activity from, from whales in the market.

• 13:22Anthony Pompliano?

  Got it. And then when we see the transaction activity, I remember at one point, the big thing that you said, hey, look, if I was a bear, my argument would basically hang on the fact that transaction volume is down. And that was like the one thing that you wanted to see pick back up. And it looks like it is picking up.

• 13:38Speaker 03

  Yeah, in a couple of different measures, the one I threw in here was the number of active entities. So we're clustering together addresses and then we're looking at, you know, which ones are active and which ones are dormant. And so you run a 14 day moving average over it to kind of smooth it out. You have this chart that we're looking at. And so in tandem with, we talked about how volume is predominantly, you know, large transactions. And then also you look at things like Google search trends, Coinbase app downloads. I think, I think it's a fair assessment that retail hasn't really entered back into the market yet. Although we are starting to see, as, as you can see here on the bottom right, we are starting to see this transactional activity. Start to pick up a little bit, which resembles, you know, the, the early, you know, phase of a, of a bull market.

• 14:22Speaker 03

  So we're just keeping an eye on this. I think, you know, this in confluence with some of the other things we mentioned. You know, is a good way to kind of get a, get a sentiment check on is, you know, are the speculative market participants that come with a bull run starting to enter?

• 14:37Anthony Pompliano?

  All right. And then we've got the supply shock ratios and I saw you tweet this last night and I literally just got a smirk on my face. And I said, Will has been all over this chart and this is like the money chart. So explain to everyone again, what is the supply shock ratios and what is the chart showing?

• 14:51Speaker 03

  Right. Yeah. I mean, this is probably like, if I had to, you know, use one chart or, or I would all, all would also use the liquid supply shock ratio. But this one from a macro sense is just, you know, it really speaks for itself because you're taking a ratio of all the supply held by long-term holders to short-term holders and you're running, you know, you're taking a comparison of those. And so whenever the long-term guys lock up a, a certain portion of supply, you start to get this supply shock or supply squeeze effect in the market. And then one thing, one thing that's important to note is, well, first of all, we're, we're at an all time high in this, like by far, if you look in the top right. But also in the, you know, over the next probably month or so, I mean, this isn't for sure, but I would suspect you'll start to see them

• 15:35Speaker 03

  trim their holdings and we'll keep an eye on this for sure. But, you know, in, into strength, you see the long-term guys start to sell. Like they don't perfectly tend the top, but they slowly sell into strength and then they accumulate into weakness. And so as we start to move higher, you know, with, with, you know, major, other major, you know, bull rallies that, that Bitcoins had, you just naturally are going to see those long-term guys start to distribute their coins. So don't take that as an Absolute red flag, um, because I think now at this point that, you know, they've locked up this large purchase supply and this is what seems like what happens. Uh, every time the ratio gets in the top, you know, part of the, um, the little green, uh, highlighted zone I put there.

• 16:15Speaker 03

  You know, they lock up a certain amount of supply, you know, as the marginal demand keeps stepping in, the only way they're able to acquire new coins is to start beating the price up because the float is so low. And then once that starts to build up the momentum, it's already kind of taken a leg of its own. And then the long-term guys can start to sell into that, into that rally. But I think we, we've now kind of initiated that demand, obviously, um, you know, the confirmation will be like above all-time highs to say that that's absolutely, you know, the case, but, um, yeah, I think like at this point, we're, we're getting ready to, you know, have an exciting remainder of, of the quarter as we've been talking about, you know, since summer. So it's been really cool. I remember we first started following this, the ratio was below the green box and we've just been on this for, for weeks now. So,

• 17:00Speaker 03

  uh, yeah, I mean, this is from a macro sense, this is probably the, the, you know, m- most bullish chart, I guess you could say.

• 17:08Anthony Pompliano?

  So what, what's really interesting about this is in prior, uh, bull markets, if we pull the chart up one more time, what you can see is that it kind of tops out in the green zone, right? So if you go all the way back to, I think it's, uh, 2015 in, uh, eight or, uh, 17 into 18, and then in, uh, 2020, you can just see that it kind of ends up running up into the green zone and then coming back down. This is way higher than it's been previously. Do you think that that indicates as the price increases, it will be more volatile? It'll be kind of like an even more breathtaking move? Or should we not read into almost like the severity of how much further, uh, we've gone past that green zone than in prior, uh, bull markets?

• 17:48Speaker 03

  Yeah, I, I think that stands out to me. And then also the base of which, um, at the bottom of, you know, well, at the bottom of the ratio, but at the, you know, net distribution zone from earlier this year, around 50, 60K, um, you'll see that, that the base that the long-term holders had to build off of was much higher than that of, of, you know, at, at the end of 2017. So, yeah, I think it just kind of goes to show you this behavioral shift in the market.

• 18:11Speaker 03

  Market. Also, like, if you if you plot out the liquid supply shock ratio, and over time, I think this one makes makes the point I'm about to make like really clear is it over time, it's in this descending channel in the first half of Bitcoins is existence, it spent that in in the bottom half of the channel and kind of the latter half in the in the upper part. And then after COVID of last year, which I don't think is a coincidence, you started to see it break out above that channel. And it's now kind of floating in in no man's land where we've never really seen it before. And so, yeah, I think you know, you're you're seeing this behavioral shift in the market of people are just holding their Bitcoin for the long term. And and I think this is, you know, pairing pairing the two of these charts together. I think I think you could reasonably make that argument.

• 18:57Anthony Pompliano?

  All right. And then talk to us about the miners. You've got one more chart here showing what's going on with them.

• 19:03Speaker 03

  Yeah, so you just have hash and then minor balances. And then we're looking at revenue per hash in USD terms. So as hash comes back online, of course, you have more competition for the same block reward, right? And so the revenue, you know, in BTC terms is going to go down, right? But in USD terms, because Bitcoin's price has been going up, we are actually at, you know, pretty high levels in terms of of revenue per hash in in USD terms, near where we were earlier this year, and substantially higher than than we were, you know, at the beginning of the Chinese kind of mining exodus, if you will. So, you know, that's the that's the green and blue chart. And then, I'm sorry, the the orange and blue chart. And then the green one is just minor balances. You see a little uptick this week, and it's nothing like substantial that's going to move the market or anything.

• 19:49Speaker 03

  But just to keep an eye on what miners are doing, you're not, you know, seeing any big trend changes or anything, just slight accumulation this week.

• 19:58Anthony Pompliano?

  Got it. Joe, John, what questions you guys got? Well, what's going on, legend?

• 20:04Anthony Pompliano?

  So my question would be around, there's, there's a lot of talk around the ETF, right? Both futures and and spot whenever that would happen. But we've seen some of the numbers on the goal on gold ETF. It had about gold had about a trillion dollar market cap before the ETF was approved, and now it's around 11 trillion. So is that kind of the impact that you think it could have on Bitcoin specifically? Or are there other factors that you're looking at also?

• 20:24Speaker 03

  Well, first of all, a spot ETF would definitely be preferable. To a futures ETF, I'm questionable how much liquidity that the futures ETF will take on initially. Just because I think people naturally will be a bit skeptical about new products entering the market. And then if you have multiple ETFs getting approved, then I think people are going to kind of feel out the different products to see which one they they find most advantageous for them. So I think it'll, it'll, I mean, this is kind of a cop out answer, but I think you'll have to see the, the, you know, initial reaction from the market in terms of, you know, are, are, are these products getting really large volume or not? A futures ETF is the, the bull case for Bitcoin is that, you know, it's bidding out, as we mentioned earlier,

• 21:09Speaker 03

  it's bidding out the CME curve, you can now take part in that cash and carry trade, it draws capital into spot. But I would much, I would much rather have a, a spot ETF for sure.

• 21:18Anthony Pompliano?

  John? Yeah, well, what's going on? Happy Friday. Um, what metrics are you looking at going into this ETF and in this later stage in the bull market? What, what are you looking at? Obviously, I feel like hatch rate isn't as important as some of the other metrics? Or just what's your thinking process?

• 21:34Speaker 03

  Yeah, um, so a couple of things, like first of all, we're going to look at, well, in the short term, you're asking about like ETF. I think one of the, one of the, the best, I guess, sources would be the two guys on Twitter. Eric, I don't know how to pronounce his last name and the other guy, sorry, I don't remember your name.

• 21:53Anthony Pompliano?

  James Safree. The two ETF experts are kind of analysts at Bloomberg.

• 22:00Speaker 03

  Yeah, there you go. Yeah, like I've, I've been watching them pretty much because I don't know too much about it. And, you know, how, how ETF approval works or any of that. But also I've been watching like the, the CME, we talked about the basis, that's got bid up pretty aggressively over the last month. And so I suspect at least a good portion of that is probably people speculating or perhaps knowing that an ETF is going to get approved. So those have been, those have been like the two just main sources I've been looking at. I don't think I know any more than like the average guy. In that sense, um, yeah, like as we, as we get more, you know, further into the, into the bull market, uh, I'll watch, be watching several things. So first of all, you know, I have these top models, um, you know, those will be a, a good gauge of, you know, how overheated maybe we are.

• 22:44Speaker 03

  Um, also we have different on-chain ratios, like market cap to thermo cap, um, M V R V, uh, which is the market value to realize value and the Z scored version of that. Uh, we've realized hodl, uh, ratio. Um, I mean, there's, there's several different, um, on-chain metrics that we can look at to kind of, um, you know, get a, get a kind of gauge of, of, you know, how historically overheated we are relative to the investor behavior going on chain. Um, and then lastly, of course, I'll be looking at things like my, my local supply shock ratio and then also, um, you know, the exchange balances. Like I think that was one big, one big red flag, um, right before that big May dump. We had the largest day of, uh, exchange inflows ever. And so of

• 23:26Speaker 03

  course, you know, if something like that happens, um, I'll be on it. But yeah, some, some of the, some of those different things.

• 23:32Anthony Pompliano?

  Uh, just so everyone knows that it is now official, the Valkyrie Bitcoin Futures ETF was just approved. They actually got the, uh, notice from, uh, the, uh, reg- regulators. So when you think about this, Will, what, what's your guess on what happens over the weekend as people are waiting for that thing to, uh, start trading on Monday? You think people are just spot buying, uh, kind of trying to front run it or something else?

• 23:55Speaker 03

  I, I don't know. Um, how is the market react? I haven't even looked at the.

• 23:58Anthony Pompliano?

  It literally just happened like two seconds ago. Uh, people are all tweeting it right now. Bitcoin is sitting just, uh, basically at $60,000. So not really reacting yet. I'm assuming it'll take a couple of minutes for, uh, for everyone to figure it out. That's where on the best business, uh, show you get breaking news like that. But my guess is, and, and part of this is, we don't know the answer, but I do wonder how many people are going to try to front run this that don't already own Bitcoin, right? Like, are there really institutions that were waiting there saying, hey, I'm going to wait for the ETF to get approved and between it getting approved and it start trading, then I'm going to go buy spot Bitcoin. Like if you wanted to buy Bitcoin, you probably were just going to already go and buy it. So I just don't know how much like real size is going to be able to go do that now.

• 24:39Speaker 03

  I don't know. I've, I've been wondering, is this kind of like a sell the news event just because the market has gotten so overhyped on an ETF. Um, and I think in a lot of people's minds, it's. Almost been like a definite thing. So I think you could maybe make an argument that it's been priced in, but obviously we'll, we'll see over the weekend. Like my, my big thing is like, as, as we touched on like a couple of minutes ago, it's just, well, we'll see how the initial reaction to these products are. Just because like, you know, if there's multiple that are getting approved potentially, right? I mean, if, if you're an active manager, you're going to want to kind of feel out and see how each different product is for you and, and see which one that you feel comfortable with. And then also, you know, which one has the most liquidity and all those kinds of things. So,

• 25:21Speaker 03

  I, you know, I, I think, I think, you know, to an extent, um, you know, I, I think there is a, a potential bear case to be made that maybe we have like a sell the news event. But I don't know, man, I, I don't know any more than, than you. We'll see over the weekend.

• 25:34Anthony Pompliano?

  Yeah, no, definitely. And, and I guess part of this too is as we watch, uh, kind of the access open, I think your point in the beginning around the Bitcoin futures ETF versus a Bitcoin spot ETF, uh, is people are going to be getting the exposure via the future market. There, it is not necessarily the spot market. So there may be, uh, kind of an increase in, uh, demand for Bitcoin. And therefore that 85% of Bitcoin circulating supply that's being held by strong hands over the last 90 days, uh, definitely plays into the supply squeeze. But if this was a Bitcoin spot ETF, we, it would just go absolutely bananas because people would be coming in, trying to actually buy the spot Bitcoin. There's just not enough there. And so you would really expect to see kind of rocket fuel to Bitcoin, right?

• 26:16Speaker 03

  Yeah, I think that's fair assessment.

• 26:18Anthony Pompliano?

  Yeah. All right. So as you kind of think through, uh, the end of the year, what's your price prediction? Anything changed to, uh, to what you're looking at?

• 26:26Speaker 03

  I mean, same, same as we've been talking about for, for months now, but, uh, you know, the, the top model sits at like 111K. Willie Wu has a top model that's like at 193K, but mine's a bit more conservative. But of course as price, it's based on mean reversion and then also the, um, kind of the, uh, cost basis of investors based on realized cap. And so you'll, you'll, you'll start to see that slope up if price does as well. Uh, but for now that sits at like 112K.

• 26:55Anthony Pompliano?

  Why is yours, uh, more conservative?

• 26:58Speaker 03

  It's just a different way of, of calculating it. So Willie's takes the all time moving average or, or all time moving cap of Bitcoin and then multiplies it by, I think 37 or 36 and a half. And then mine is, mine is looking at delta. So you're looking at the difference between realized cap and the average cap. And then you're multiplying that is arbitrary number. And this is the one we looked at like two weeks ago, and I just said it's a random number. I picked the seven and a half, multiply it by that. You've been able to catch some, some tops. Just as you've been able to clip the, the, the like macro bottoms. So yeah, I, I like Delta cap as like a conservative way to, to look at kind of mean reversion.

• 27:39Speaker 03

  And then also your, your, because you have average cap, which is where I'm saying the mean reversion is coming from. And then realized cap is where the cost, the cost basis of investors is coming from, so.

• 27:49Anthony Pompliano?

  Got it. And then in terms of time series, so a lot of folks look back in 2017 and right in the heart of December was the top of that bull market. It also happened to be, I think, like the day after futures were approved to actually start trading. But do you think that the bull market runs through the end of this year? Or do you think it will actually carry into Q1 of next year?

• 28:12Speaker 03

  I wouldn't be surprised if it, if it carries out to Q1 of next year because of some of the, the supply dynamics and how long that those have taken historically to kind of play out. And also like anecdotally hearing about some people that may be sticking their neck out of the woods. I, I don't know how long that period of perhaps announcements, announcements will come, right? Like, I don't know if that's just like a chain thing of they all kind of come in, you know, sequentially, like week after week after week. And then we just blow off top or, you know, do we get one like every month or so? And I don't know, I think there's a couple of different factors that make it really difficult to, to look at the timing.

• 28:49Speaker 03

  But in terms of like some of the investor behaviors, we know kind of what to look for in terms of gauging, you know, how, how close we are to getting to these overheated zones.

• 28:59Anthony Pompliano?

  Got it. One of the things I'm really interested in, and frankly, nobody knows the answer, but I think is fascinating is that as the price continues to go up, you're going to see the success of MicroStrategy Square, Tesla, all of the Bitcoin miners, their balance sheets are going to expand. People are going to say, hey, that's an interesting idea that I cannot have cash sitting in my balance sheet that's actually losing its purchasing power, but I can protect and appreciate my purchasing power by putting a portion of that balance sheet in Bitcoin. And so I do wonder how many publicly traded companies are at least heavily considering, if not actually going to do it before the end of the year. And we have earning seasons coming up, right? And so during earning season, we get two or three of these announcements, you could really see a number of different forces all working together to push Bitcoin significantly

• 29:43Anthony Pompliano?

  higher than some of the models, right? You've won, you got five plus percent inflation. So people just naturally are looking for kind of a safe haven. You then got ETFs getting approved. And then all of a sudden, you get a couple of these additional shocks, whether you get a Brazil, you know, making Bitcoin legal tender, you get a couple more publicly traded companies putting on their balance sheet, that just considerably drives the demand. And again, you know, we will see those strong hands sell into the into the bull market. But right now, you know, I think the last time we saw 85% not moving in 90 days was in what, October of 2020, right before we went up 5, 600%?

• 30:17Speaker 03

  Yeah. Yeah, I mean, we'll have to see, like, as far as, as far as like, you know, does, does everything change because of macro? I mean, I think the only way that we'll know is to kind of see it unfold. I do think at some point, we probably diverge from these historical four-year cycles and whether that starts to happen now or not, I don't know. But, you know, I wouldn't be surprised if we did, just because where, you know, where people are calling for, you know, a bear market, we've been seeing, you know, resemblances of early bull market behaviors over the last couple of months. And, you know, if that's true, then yeah, perhaps we probably extend out until Q1 and into the spring of next year.

• 30:59Anthony Pompliano?

  All right. Sounds good. Thank you, Will. All right, guys. Take it easy. Later, buddy.