Bull or Bear? What the Charts Are Saying | Ledger from Up Only

Co-Founder, CMO of Flip, and Co-Host of Up Only, Brian Krogsgard—aka—Ledger joins David and Ryan to discuss WTF is happening. Are we in a Bull or Bear market? What are the charts telling us? With the Ukraine & Russian War—ripple effects from said war—inflation at an all-time high, stocks down, commodities, and crypto being all over the place...there's a lot to unpack. Where do experts go to find answers? The charts. ------ 📣 OPOLIS | Sign Up to Get 1000 $WORK and 1000 $BANK https://bankless.cc/Opolis ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ BANKLESS SPONSOR TOOLS: ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum 🍵 MATCHA | SMART ORDER ROUTING https://bankless.cc/Matcha 🚀 SLINGSHOT | LAYER 2 SOCIAL TRADING https://bankless.cc/Slingshot 🏦 GEMINI | TURN FIAT INTO CRYPTO https://bankless.cc/Gemini 🦁 BRAVE | THE BROWSER NATIVE WALLET https://bankless.cc/Brave 🦄 UNISWAP | DECENTRALIZED FUNDING https://bankless.cc/UniGrants ------ Timestamps: 0:00 Intro 7:15 Exciting Times? 17:50 Charty Charts 24:00 200-Week Moving Average 32:20 Will the ETH Merge Change Anything? 39:15 200-Week Moving Average Cont. 43:40 ETH/BTC Indicator 46:24 Alt L1 Ecosystem 51:03 How Bad Could it Get? 54:30 Potential Supercycle? 1:01:40 Macro 1:17:27 What’s in Ledger’s Portfolio 1:21:44 Advice From Ledger ------ Resources: Ledger's Twitter: https://twitter.com/ledgerstatus Up Only: https://twitter.com/UpOnlyTV ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures

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

• 0:15Ryan Sean Adams?

  Hey Bankless Nation, welcome to another episode of State of the Nation. This is the episode where we talk about something topical, something top of mind. I think this week, the topical, top of mind thing is the market specifically.

• 0:29David Hoffman?

  What kind of market are we in?

• 0:30Ryan Sean Adams?

  Yeah, bear or bull market, that's what people want to know. And in order to figure that out, of course, fundamentally, look, crypto is in a 10, 20, multi-decade-long secular bull cycle. So if you ask someone like David or myself, bear market, bull market, we'll be like, ah, I mean, crypto is always in a bull market, right? Kind of. And yet, there are some, you know, local bear and bull types of seasons as well that we have to talk through. So David, who did we bring on and what are we going to cover in this episode?

• 1:02David Hoffman?

  Yeah, we are bringing on returning guest Ledger. His real name's Brian, but everyone calls him Ledger, co-host of the Up Only Podcast as well as the Ledger Cast Podcast. So a fellow podcaster, and it's always a treat to bring on fellow content producers because they know how to make good content. But Ryan, a skill that you and I both completely lack is the ability to look at a chart and actually interpret it. Like, I can draw lines, it's like, oh, well, there's a line here and there's a line here, but that's about as far as I can go. And so when it comes time to actually zoom out and look at the state of the charts, because charts do matter, we need some extra help. So we're bringing on Ledger from LedgerCast/UpOnly to help us walk through both the crypto charts. We'll start with Bitcoin, Ether, ETH BTC, some alt-layer ones, but then we'll also talk

• 1:47David Hoffman?

  about macro, because macro markets and commodity markets are also interesting right now. So, looking at the state of the charts today on the State of the Nation.

• 1:56Ryan Sean Adams?

  And we're hopeful by the end of this episode, you'll have a good sense of what kind of market we're in right now. Is this a bear market? Is this a bull market? And what are the charts telling us the future is going to look like? So that's the goal for this episode. Stay tuned for that. David, before we get in, we got to talk about our friends at Opulus. So Opulus is a DAO that provides healthcare benefits for the self-sovereign employee. The self-sovereign employee is someone who is kind of a contractor. They're in the Web3 space. They're not tied down to their existing employer, but they're working for crypto projects. And we think that this is going to be a new way the workforce is shaped into the future.

• 2:40Ryan Sean Adams?

  A lot of people, before they dive into Web3, are faced with this issue. Maybe they're in their corporate job, at least in the US. How do you get health insurance if you're working for a group of DAOs or crypto projects? Like, how does that work if you're trying to be a self-sovereign employee? And that's what Opulus provides. They provide you health insurance, payroll, benefits, dental, vision. They can even pay you in crypto. They can help take care of your taxes as well. It's like you get all of those corporate benefits, except you get the freedom. You're no longer a wage slave, and you can engage in the crypto economy as a self-sovereign employee. So Opulus is a fantastic service for all of these things.

• 3:22Ryan Sean Adams?

  David, there's also a special deal going on, a bonus for members of the Bankless Nation. If you are a, you know, if you sign up before some certain date, is it May 1st?

• 3:34David Hoffman?

  May 1st, yeah. May 1st, you get 1,000 work tokens, which is the Opulus DAO token, and 1,000 bank tokens, which is the Bankless DAO token. Because Opulus, it actually serves a lot of the Bankless DAO members, and they are using this service themselves to work at Bankless DAO and all the other DAOs that they work at. And so Opulus is basically a collective. The larger it grows, the more leverage it has to get better rates with healthcare and other services. So when you join the Opulus DAO, the Opulus DAO gets stronger. So there's a link in the show notes where you can sign up with Opulus to get your payroll, your taxes, your healthcare, and all the other services that they offer, so you can continue to be a self-sovereign worker.

• 4:13Ryan Sean Adams?

  All right, David, we're gonna get into the episode in just a minute, but before we do, I gotta ask you the question I start these episodes with every time, which is what is the state of the nation today?

• 4:22David Hoffman?

  Ryan, we are charting a path because the fog of war right now is thick. Not only is there actually a war going on, which is making the markets confused, but just the crypto markets seem to be coming to an inflection point. The three to four month bearish trend is seemingly colliding with the two to three year long bullish trend. One of these things is gonna have to win, and we need to chart a path into this chaotic future because the markets are chaotic right now. And I'm looking forward to talking with Ledger, the chartographer, if you will, to help us navigate through these murky times.

• 5:00Ryan Sean Adams?

  That's awesome. And so when we get back, we're gonna hand Ledger the reins. Literally, he's gonna be driving some of the charts that we're back to explore while we look at Bitcoin price, where we look at ETH charts and price, and alternative layer ones, as well as the larger global macro markets. And these commodity prices have been going crazy recently, and we wanna know what that means for the future as well. So guys, we will be right back with Ledger, but before we do, we wanna thank the sponsors that made this episode possible.

• 5:29David Hoffman?

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• 6:13David Hoffman?

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• 6:58David Hoffman?

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• 7:38David Hoffman?

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• 7:50Ryan Sean Adams?

  Hey guys, we are back where we're trying to figure out the future. Are we in a bull market? We in a bear market? We have the perfect guest with us to help. Wanted to introduce you to Ledger. You know him. He's been on the show before. He also is a co-host of Up Only and Ledger Podcast, both fantastic podcasts in and of themselves. He's also a chartographer, as David said, and he's a friend of the Bankless Show. Ledger, it's great to have you on. How you doing?

• 8:15Speaker 02

  I'm doing great. Thanks for having me. I don't actually know what a chartographer is, but I do stare at charts most of the day.

• 8:21Ryan Sean Adams?

  That's what you are.

• 8:22David Hoffman?

  It's a word that I made up. It's a combination of charter and cartographer as somebody who writes maps.

• 8:26Ryan Sean Adams?

  It's just brilliant, David. It's just like...

• 8:28David Hoffman?

  I think so. I think it's brilliant.

• 8:30Ryan Sean Adams?

  Okay, so like, I want to ask you, Ledger. So like, you stare at charts a lot. Just high level, is this like an exciting time for you, like secretly, or is this not very exciting to see this kind of action in the charts?

• 8:45Speaker 02

  No, this is not very exciting in terms of, from a crypto sense. Like, it's just like a liquidity drain is what it looks like mostly. There, some of the legacy stuff is exciting just because there's volatility. Most traders want volatility in order to find profitable setups because they really need a trend one direction or the other. And what we've been doing in crypto markets is just compressing. So volatility has reduced, even though at the same time, interestingly, we've been, you know, like, options markets and stuff have been pricing for expected increased volatility. So you feel like you're pushing this spring together that you know is going to rebound back out,

• 9:29Speaker 02

  but it hadn't done it yet. So it's just this constant state of tension that's quite frustrating, honestly, whether you're an investor with some uncertainty about whether you're going to make it or not, or if you're a trader just looking for a setup and, you know, every time you think, hey, this is the move, then it ends up not being the move. So it can be very frustrating as a crypto trader when those markets are compressing like that.

• 9:55David Hoffman?

  You mentioned the liquidity drain, and I've heard from a couple other people just how there seems to be less and less active traders at the moment, and more and more just a percentage of like algo bots, kind of indicating that there's like just less life in the charts, just less action to trade on, and things are just kind of settling out rather than actually having like actionable things that the charts can, you know, lean into, giving traders options to make trades. So like, how would you describe the trading environment over the last like three months or so?

• 10:27Speaker 02

  Yeah, I mean, reduced volatility is going to be a pretty natural, or I'm sorry, reduced volume is going to be a pretty natural outcome with compression in the market. So I know y'all were both around as we compressed through 2018. It was lower and lower volume. So naturally, more and more people just get kind of fed up with it or stop participating and you end up with, you know, your, your market makers, people, institutional people that are always going to be there on both sides of the market, waiting for the move to participate and, and they're trying to eke out, you know, a little bit of profit here or there. And it eventually sets up for this high volatility moment. And back then, we broke down from 6K and went to 3K and volume exploded.

• 11:12Speaker 02

  And, and that can, same thing happens to the, to the upside too. It was, I think, the big moment, at least in my mind, when we got true confirmation of the bull market that we spent over a year in. In October of 2020, we broke up from nine and 10K and that 10K to whatever on Bitcoin, you know, most people were like, yeah, there's no way we're stopping at 20K, not after this many years, like in pain, you know, like none of the people that would sell, would sell there. They're all, everybody knows what's next. What's next is price expiration. So then you had, you know, months of increasing volume as the price marked up.

• 11:55Speaker 02

  And then as you start compressing again, the, you know, interest in the market gets less and less, and then you wait for that next high volatility moment. So that's a cyclical nature of pretty much any market. There are times, especially in more mature markets, where you can have longer periods where volume continues to decline and the price continues to go up. It doesn't have to have like more and more retail people or more and more, you know, velocity to keep the market going. There's more of a passive, strong bid. Like if you think of the S and P 500, you've got the top most profitable companies in the world. You've got passive investments every month by everyone with a retirement account. That's just kind of a perpetual, not high volume, not high.

• 12:36Speaker 02

  High emotion activity that's putting dollars into that market. So those types of markets sometimes can be lower volume and progressively maintain that trend. Emerging markets, which all of crypto is basically an emerging market or smaller markets. They're not going to be that way as much like they're going to be kind of nothing going on and then everything going on. So that's just what you tend to run into. And what we've run into in crypto is we had kind of two peaks, right? You know, like everybody got excited. Bitcoin and ETH got pretty high in spring of 2021 or so. And then again, late summer, early fall of 2021.

• 13:19Speaker 02

  And those were the highs and it was a little different depending on what coin you were looking at. And then you could find a bull market somewhere and whatever altcoin or layer one trade was moving. But if you look at Bitcoin and Ethereum, pretty much you had these two big moments in 2021. And other than that, like a lot of people just didn't make very much money in 2021. If that's all they did, you know, like you had to really get down into the weeds to make a bunch of money. Most of the money was made really before they heard about it. So the latest participants are the, the last, you know, the last ones in. And it's harder for them to be profitable. We've all been there. Most of us buy crypto for the first time, like pretty close to the top and have to earn our stripes for a few years before we make any money.

• 14:00Speaker 02

  And that's kind of the season we're in again is, you know, people are earning their stripes right now. And, you know, some of us who have now been in it a while too, like we're trying to, you know, remind ourselves like it's not necessarily up only all the time, even if it's a fun name for a podcast and mantra. So you gotta be in it for the tech every now and then, you know?

• 14:21Ryan Sean Adams?

  So, so, so Elijah, in it for the tech, these words like compression, these words like liquidity drain. You know, last time we had you on, I think we were talking about charts was where there's kind of a dip in, in like beginning of summer last year. And we're kind of talking about, hey, you know, divine the future for us. We talked about charts a little bit. But I feel like you didn't use words like liquidity drain then, and you didn't use words. Like compression, then you're using those words now. And you actually, you know, brought up another season that I think may maybe many people listening remember, but certainly David and myself listened, which is 2018. Okay. And that definitely felt like a liquidity drain to me.

• 15:05Ryan Sean Adams?

  It was just like, the market would drop 50%. And then before you could catch your breath and it's like, it's over. Okay. It's gotten the pain's gotta be, it drops another 50%. And this happened again and again and again and again. Are you thinking the setup right now? Does this feel similar to March? Or, you know, 2018 in general? Or are you a bit where you were like in the beginning of summer last year where you're like, oh, it's uncertain? Could, could go one direction or another? I mean, you weren't using these terms though. Is this more like 2018 to you or is this, is this something else?

• 15:45Speaker 02

  Can I depress you a little bit?

• 15:47Ryan Sean Adams?

  Yeah.

• 15:48David Hoffman?

  For the record, I'm the bearish one. Ryan's still bullish, but I'm the bear.

• 15:52Speaker 02

  I think it's fine to always be bullish with a long enough lens. And especially if you're taking stuff off at some points, you know, like taking profit, pay yourself a little bit. Put a gigantic punk in your living room, you know? Whatever fits for you.

• 16:08Speaker 02

  You know, I think those are important concepts that are going to enable you to sustain the times where you're not just constantly getting this dopamine drip of new profits, you know?

• 16:21Speaker 02

  And I think most of us want to maintain some degree of exposure to crypto markets. It just doesn't necessarily mean you have to have a hundred percent of your net worth in like, maybe it's 10% or maybe it's 50% or whatever. Like whatever you're comfortable with. I think the same mantra should exist most of the time that like. Not, you know, once you've been in a long time, not necessarily don't put in what you can't lose. I think it maybe turns into more of, um, don't, don't forget to take out what you're unwilling to lose. Right? Like if you make your first million or your first 10,000 or a hundred thousand, whatever that number is, you want to pay off your credit card debt or your student loans or your house or, you know, enough for retirement. And if you can secure those dreams and those goals, you should secure those goals to the best of your ability.

• 17:06Speaker 02

  And then maintain exposure so that you have continuous upside beyond that, or at least maintain an attention span beyond that. And I think after you have a period where you went through the full upswing of the market, right? Where you, you get to watch Ethereum go from a hundred dollars to forty eight hundred dollars. Like, that's a big move, you know? And maybe your, maybe your price cost average was four hundred dollars, but still like four hundred dollars to over four thousand is a, is a nice move. It's a life-changing move if you have any skin in the game. The reality now is, and I can share it, can I share screen yet?

• 17:46David Hoffman?

  Yeah, yeah, yeah.

• 17:49Speaker 02

  This is the part that's depressing. Okay. The reality is that relative to 2018, if you go to the absolute Pico top in 2017 and you go out to the very bottom, we spent almost exactly a year, if you go like fifty two, fifty two weeks to the literal bottom. If you do the same.

• 18:11David Hoffman?

  At 2017, 2018, the top took fifty two weeks to go to the bottom.

• 18:15Speaker 02

  Yes, it took exactly a year to go to the bottom. Um, and from a time perspective, we've actually basically passed that from Bitcoin. I, I know we made a higher high here. I don't think that's quite fair in Bitcoin terms. To me, it really felt like the top of the cycle for Bitcoin, because even here it was underperforming a lot of altcoins, you know? And, you know, your primary exposure, if it's in majors or whatever, it's been fifty two weeks since that high in April 2021. Or it's been, or we're almost, we're almost up to it next month, roughly tax week. That's fun. So we're actually really close to that same period of time, which felt,

• 18:59Speaker 02

  for me, this felt like a very long time, you know? This time around, I've actually been a little more entertained, so I don't know if it's the same thing. I don't know if that means we're going to have a longer cycle of sideways. But what I do know is that after that euphoric blow off top, it took a long time to repair.

• 19:18Speaker 02

  You know, Bitcoin moved up quite a bit, but overall, this move wasn't as impressive as you would have seen in other markets. Like if you look at like a Solana or, you know, the Layer One trader, even Ethereum, if we go over to that chart, the, if we take it out of log, the higher high after that, that first top, we went from 3,900, it was a little bit better of a, of a high after that, right? 4,800. And then the first move out in terms of multiples was better than Bitcoins as well. Like Ethereum, this gets a little messy. Ethereum gained quite a lot of strength relative to Bitcoin throughout the cycle, but there's no questioning that this is now perilous, you know?

• 20:02Speaker 02

  Like this is not, this is not what you want to see. Like you have a breakout, but then you only spend three weeks or whatever in price expiration, and then you just bleed out. And then when you do consolidate, you do it kind of below all the same important levels. So it leads you to this position where you could have a move up, but like, where do you actually say, now I'm bullish for more price expiration? And basically, you have to go quite a ways up to have that confidence, you know? And when you start to see like, okay, well, where do I think this can move down? And putting into the linear puts this in perspective sometimes, because that's the percentage, right? When you, that you lose, you know, unfortunately, a lot of us know what our net worth is

• 20:47Speaker 02

  at the all time high or whatever. So if you go peak to trough, it's 55%, a 55% correction in Ethereum from that high to the, to the low. And this has to repair itself quite a bit. I think it's just going to take time. I guess that's my point there. And so to get back to that, that timing angle, the 52 weeks that I had highlighted of the prior chart to where we're almost at now.

• 21:14Speaker 02

  Yet it feels like we're more in this range. You know what I mean? It doesn't feel like we've had this like truly painful type of consolidation that could take even longer. And I think what no one wants to hear and my friend Crypto Don Alt, if y'all know him, he's a excellent kind of patient trader is what I would call him. He legitimately thinks this could take a really long time, like two years of that. And as crypto matures and takes longer to kind of work its way through things, it would be very painful, I think, for many participants in the market if we spent multiple years essentially letting everything catch up and letting it breathe.

• 21:57Speaker 02

  And I don't think it's that surprising because despite the price having corrected, this is going to bring some fundamental components to my personal, not fundamental, it's going to bring some personal experience components to it. People that are doing contracting work with me or people that are like, you know, they're they're Uber driver or, you know, they work at a restaurant. I was walking past the coffee shop the other day and like I just heard the word Bitcoin out of like five feet away from me. Everybody's talking about crypto. And honestly, I feel like there's a little bit too much attention on the market at the moment, despite price not being there alongside it. And that that worries me from from that

• 22:41Speaker 02

  perspective. And I think when you have those scenarios, it just sometimes it takes a long time to repair itself and get back to a place where there's like a value trade, if you will. And it's not, if a trade is really, really crowded, it's probably not going to work very well because the as people start jumping off the bus, they're going to be jumping off the bus too soon. You need people to be jumping on the bus while it's already moving. And I don't think we're in that place. I think too many people are essentially bag holding crypto because they got involved. That's great from an adoption perspective, but it's not necessarily great from a price acceleration perspective, because who's your who's your marginal buyer, right? Like, who's the person that's bringing?

• 23:23Speaker 02

  Money in, the institutions are here, the retail folks are here. Really, the only thing we're missing is like nation states buying in size or people automatically being able to buy in their retirement accounts. For certain, those are big changes that would would change this a lot, but in the meantime, I think it's got to get a lot more boring first before you can get enough people kind of out of the market or underexposed or whatever to to kind of catch that next wave of big upside.

• 23:54David Hoffman?

  There's a, there's a couple of dynamics that I want to ask about. And so I'll kind of start, start from the beginning. You mentioned how in 2018, it took 52 weeks to go from the top of 2018 to the bottom. The like, basically at the end of that year. And you said that we're almost there, we're almost at 52 weeks from the first high that Bitcoin set, but I'm very cognizant that like a significant amount of the downside happened in the last four weeks of 2018. And like, that's kind of how many weeks that we have ahead of us. Now, of course, history never repeats itself, but it does rhyme. But if it did repeat itself, it would be bad, starting like almost this or next week. And the other thing I'm cognizant about is how far away we are from what I believe that is the 200 week moving average in the green line.

• 24:40David Hoffman?

  Yeah. And so like, there's a lot of distance between where we are right now in the 200 week moving average. And in the last four weeks of 2018 is when crypto prices went from meaningfully above the 200 moving week moving average to touching the 200 week moving average. This is where Bitcoin, I think, went from like six, 7,000 to $6,000 and then it got cut in half to like $3,000 inside of, inside of four weeks. How fearful are you that we rapidly approach the 200 week moving average? That's, that's the first question. And then the second question about like retail and people talking about Bitcoin on the street and just like all of that excitement around crypto.

• 25:22David Hoffman?

  How do you square that with just like general mainstream adoption? Because that is the goal of crypto. Like, we want everyone to be talking about crypto regardless of what the prices are. So, so two questions for you, like, how relevant is the 200 week moving average right now? And also how relevant is just the fact that some of the conversations that people are having about crypto is just a symptom of adoption?

• 25:42Speaker 02

  Yeah, so let's start with the 200 week moving average. I love it because it's basically been the only thing that has perfectly on a weekly closing candle basis. Predicted the end of bear markets. So you ask if I would be fearful that we go there. No, I'd be freaking excited. Like if if I manage to like maintain buying power and we're at the 200 week, like that's the one place on the chart. Where if I bought, if I go all in at that point and then I'm wrong and I lose. Then, oh, well, you know what, you know, like I that's that was the most high conviction bet that I could possibly make in crypto. And there's zero chance I'm the only person looking at that, which is the benefit of most TA in the first place, right?

• 26:25Speaker 02

  Like you want to look at the other things that other people are looking at because those are the metrics that we've decided. That's this kind of memetic element of any market, you know, that we look at price to earnings or price to sales and legacy markets. We look at these fundamental say, well, why do we look at those things? Well, in TA, you look at the 200 week moving average, that's your, that's your like true 200 day, 200 week. That's, that's the biggest kind of trend following component. That everybody's just going to look at, just accept it. You don't have to know exactly why anybody cares, just it only matters that everybody cares. So if we went to $20,000 on Bitcoin next week, I'd be ecstatic, right?

• 27:06Speaker 02

  Because hopefully I will have managed my risk well enough, have buying power and I buy the crap out of that level. The more painful area is hovering where a 50% drop. Is what it takes to actually hit it and you're just like waiting for it to catch up, you know? And I think that's, that's where this like pain trade of this constant chop. And you know, I, I like to just, you know, draw on charts sometimes. So if you're just like drawing, would it surprise you if you did something like that, you know? And I don't think most people would be too surprised, but that's what gets you into your two year kind of reaccumulation. But the, the beautiful thing about something like that.

• 27:51Speaker 02

  Is these 200 day or 200 week moving averages are going to just work their way up, right? Because the price is still above them. Therefore, as you knock off these old weeks and add these new weeks, that 200 week moving average keeps going up, even though the price stays flat. And it's essentially giving you a time weighted value that it's okay to buy Bitcoin with some support. This is, this is your like launchpad into multi six-figure Bitcoin, right? Is you have a two or three year accumulation, like where you're tapping into that ceiling price, you know, you're, you're making some kind of higher low and then you're, you're tapping 50 or 60 K on the, on the top side until the people that are just like, woo, I got out at

• 28:35Speaker 02

  break even, or I got out and made my life changing money. I didn't lose it all. I didn't bail at 30K. I'm good. Like you reaccumulate to newer, newer people, newer stakeholders who are willing to, you know, absorb Bitcoin in the 30 Ks and then later in the 40 Ks. And then it's pressing the 50 Ks. And then you boom, you look for that, that breakout to the top side. And that's what we did here, right? This was kind of the opposite, or this was kind of the same thing with a COVID panic in the middle, right? But like, this was the, you know, over exaggerated short squeeze, but you know, then it was kind of the synthetic nine to 10 K resistance that when we broke above it,

• 29:16Speaker 02

  no way I'm selling at 20 K. And we could do the same thing from highs and have this compression into 50 or 60 K. Who's selling? Who's selling above 60 K after a two or three year consolidation in crypto markets? It will still be an area of investment and technology that's exciting. And then you get price expiration in it. No way, man. Everybody's going to want a double or a triple or whatever out of that. And that's when you get your 100 K, 150 K, 200 K Bitcoin move. But you know, it's unfortunate that it might take until 2023 or, or longer to actually realize that.

• 29:54Ryan Sean Adams?

  So Ledger, for people who can't see that the two, the 200 week for, for Bitcoin is around 20K, what is the 200 week for ETH right now?

• 30:03Speaker 02

  Um, let's see. I don't know off the top of my head, lower. It's about a thousand.

• 30:08David Hoffman?

  Oh, God.

• 30:09Speaker 02

  About a thousand. Well, then that's where you'd be excited for ETH too. You'd be like,

• 30:13David Hoffman?

  I don't think. Buy of the century. Yeah.

• 30:15Speaker 02

  Yeah, that'd be the buy of the century. So I think, you know, in markets that are newer, now back here, I was very excited, right? Because this was, this was any new market. March 2020 was when the, uh, at least on, in terms of being listed on Coinbase, that was the 200 week anniversary for Ethereum being on Coinbase. So the, the number did, did not even exist then. Like in reality, it existed on some market back here, but it was on, it was on Coinbase pretty early as a token.

• 30:46Speaker 02

  So when it broke above that, I was very excited. Um, and yeah, any of these faster moving markets, it's, it's going to show the potential downside. Uh, just to freak you out. Um, you know, if you imagined, where might it be? I don't know which, uh, what's the closest moving average on a weekly basis for Solana? But, um, here's the hundred week because there is no 200 week yet, at least from a Solana on FTX point of view. And it's at $56. Um, so your lifetime moving average on, on Solana is probably somewhere down like 30 or $40. And it went to 250. So that's a long way down as a mean reversion trade.

• 31:26Speaker 02

  That's all any of this means is it's a mean reversion trade that you're trying to figure out like, how much time has it taken to kind of normalize this price? And in a trending market, all you're doing is bouncing kind of off of your faster moving averages, the price that you've normalized more quickly. So that's kind of what this 20 week, we talked about this last time. Whereas like the 20 week is always a great support, but it's not like necessarily something you're gonna. Put like a line in the sand and say, go in with my net worth. That's what this is.

• 32:01Speaker 02

  In these faster moving markets, that's more of a, maybe this isn't what I expected it to be and I need to risk off a little bit. And looking back at it, even though 3600 was not the top, it's a thousand dollars off the top. It's still pretty darn good in terms of a place to have risked off versus where we are today.

• 32:19Ryan Sean Adams?

  When you're looking at the charts like this, and I know I want to get back to David's second question, one second, but as long as we have the ETH chart up, when you're looking at the charts like this, do any of the fundamentals like catalysts matter, right? So like we have, we have the merge happening, right? Reduction of ETH issuance by like 90%. Let's say that happens in the summer. Let's say that happens in June, something like that. Does that, let's say we are in the sideways, kind of more secular bearish 2018 time period. Does that actually have any effect on, on the markets or is that sort of a, you know, a non, does that not matter when you're in a bearish season?

• 33:03Speaker 02

  It may not matter in the price for the short term. But when the move actually happens, it's going to matter a lot, right? Cause people will pick up on the narrative as soon as the price starts to support it.

• 33:16Speaker 02

  Now, for those of us who kind of understand what happens in the supply and demand side of tokens, Bitcoin and Ethereum. Ethereum's are truly incredible because even we've, we've had deflationary, you know, parts of pieces of time, like a whole day that's deflationary or something like that. Even with the kind of double issuance between proof of work and proof of stake. So once proof of work goes offline, the merge happens, we're fully proof of stake. The chances that Ethereum is actually net deflationary, deflationary consistently. I think the probability of that's quite high. And when you add something that has significant utility with the compute network of Ethereum

• 33:58Speaker 02

  and you add this, you know, credit to y'all, the ultrasound money meme, you put all, you put that together and it absolutely matters because forever, what did people love to troll Ethereum about? They're like, well, what's the supply? You tell me. And, and, you know, they use that as their justification for why it does not have this inherent value, because it does not have this known emission schedule or whatever, like, like Bitcoin does. And, you know, Bitcoiners are going to have to question themselves if they have less utility and it's mildly inflationary instead of, instead of deflationary regularly. And, and they're going to have to lean on, okay, well, what do we have?

• 34:42Speaker 02

  And what they have is this deterministic nature of the emission schedule. Whereas the Ethereum emission schedule is more variable, right? It's that, but that, is that really a big thing to hold on to? Otherwise, you're just sending and receiving Bitcoins very, very slowly.

• 35:02Speaker 02

  So yeah, I think it'll very much matter. And if I shoot to the future, I said, you know, maybe that, that's your ideal scenario, right? That, that multi-year consolidation with higher lows, equal highs, end up with some kind of chart pattern that everybody will talk about the ascending triangle on Bitcoin. It's going to 150, 200K. Ethereum is going to like 20K when that happens. Like I, I will for sure be pumped about like the potential, you know, 10X or so in Ethereum off whatever the lows are. Because I think Ethereum's potential to go to a five-figure asset, that my conviction in that trade is very high. My conviction in Bitcoin being worth half a million dollars is not as high.

• 35:49Speaker 02

  And that's the kind of equivalent move that's required, right?

• 35:52Ryan Sean Adams?

  But you also think when this happens, as much of a fundamental catalyst as this will be at some point in the future, you know, people shouldn't expect if we're in a bear market, an immediate market reaction to this. So the merge is deployed and you're not expecting 20K like the following month or the month before. Is that something you would trade into? Or are you more focused on kind of the TA in the charts rather than the fundamentals at this point?

• 36:21Speaker 02

  I love to focus. I think you're just, you're for some reason skipping valuable information if you forget the fundamentals and only use the technicals, or vice versa. I think they're very valuable when used in concert. And you can certainly look at the, there are great traders that all they look at is the fundamentals, like what are the supply and demand concepts in the market? You know, like if you're, I know we'll get on macro later, but like if you're drilling for oil, it's like, do we have enough people drilling for enough oil to meet the demand in the market? If not, number go up. If we do, then number stays the same, or maybe it goes down if demand lessens, et cetera, et cetera. The same thing's going to happen in crypto as

• 37:05Speaker 02

  we create these metrics for what's happening with tokens. Are there fewer tokens coming on the market? Are there more people that are using these networks? And in Ethereum's case, by using them also burning the underlying token as the gas, the fee to use the network to maintain, you know, the efficiency of those blocks, like you have to pay to use it.

• 37:35Speaker 02

  Do layer one transactions go down because of layer two? I've expressed before that I don't think that's going to occur. I think layer two will create just as much or more demand on layer one itself, even though it'll make crypto much more accessible to more people. So what you create there is potentially an extreme onboarding event where you make crypto more accessible on-chain to more people via native layer twos to specific Applications or specific application layers. And at the same time, it's built on the security model of layer one. And everything settles back to layer one and certain whales or whatnot are going to always use layer one.

• 38:13Speaker 02

  So layer one is not going to be less used, but your, your person that can't afford a $20 or a $50 or a $100 transaction on layer one. They can afford a 20 cent transaction on layer two. Or I don't remember which layer two is a sponsor of the bankless podcast.

• 38:30David Hoffman?

  Many of them.

• 38:33Speaker 02

  Arbitrum optimism, pick your poison. You know, like that, that's going to be a huge deal. And I think some people think that layer one will somehow have less usage because layer two takes off. I don't think that could be any more wrong. You add that fundamentally to all these technical things. Add it to the fact that the supply emissions are going to go down. Add it to the fact that so much Ethereum is getting locked away to be staked for that extra yield. This is all very, very good for the long-term prospects of Ethereum. So to your point earlier, right? I think you just continue to be bullish in the long, long term. Just don't have those regrets in the short term, you know?

• 39:15David Hoffman?

  Well, Ledger, you're definitely speaking our language with the bullishness of Ethereum in the long term. But I actually want to ask you the same question I already asked you earlier, but from a different perspective of how fearful should we be that we're so far away from the 200 week moving average? And you said, well, you'd be excited if we saw the 200 week moving average. Could you buy, you'd, you know, back up the truck? But what it takes the perspective of somebody that came into the crypto market in the crypto industry in the last like six to eight months. And they did what everyone does when they get into the crypto markets, the first, you know, few moments of their lives. And they get irrationally bullish and they just dump their net worth in at the top. And now they're in pain because we're almost 50% down off the top.

• 39:56David Hoffman?

  Like I guess I'm trying to ask you, what's the probability of us actually touching the 200 week moving average? Going back into my question of just like, is the, is the general adoption of crypto in 2022 going to help us stay away from the 200 week moving average? Or is the 200 week moving average like an inevitability?

• 40:16Speaker 02

  It's always an inevitability at some point because it's an average of the prior 200 weeks of trading. So at some point, you know, things that mean revert do mean revert like they they are an average of price over time. The the higher timeframe, the longer the moving average, the less often that it'll actually hit. But if you go look at the, you know, S and P 500 over decades and or whatnot, eventually they do mean revert back to whatever those averages are. So we'll get there. I don't necessarily think if we have a long term sideways, it's not a certainty that Ethereum has to hit it, or that that signals the exact end of the market,

• 40:58Speaker 02

  bull market, or whatever. It's just a it is a guidepost. It is not like an exact formula for for what to do. But I do know for me, it would give me confidence that at a bare minimum at that point, I'd be happy telling my family just dollar cost average and quit looking at it. You know, just, just DC and already tell them this, honestly, when people ask me, I'm like, look, if it's more than 50% down, DCA, don't put in more than you can lose. Don't look at it for 10 years. And like, if I fail at that, then, oh, well, they can blame me in 10 years. But I'm pretty sure my conviction in the market, if they're doing it with Ethereum

• 41:38Speaker 02

  and Bitcoin, they'll be pretty happy. And and I have confidence in the overall technology on that long of a timeframe and with that level of dollar cost average. For the more tactical trader, the person maybe like, I hope you're out there, the person that said, hey, I saw enough stuff in the market that made me nervous. I pieced out with half my portfolio at 4K. I'm like licking my chops to get back in. So like, when do I get back in that tactical person, if they see this kind of capitulation with down, they need to be a buyer if they want that long term exposure. And that would be a fantastic place to do it from. If we do this kind of forever sideways, that 200 week will move up to like

• 42:19Speaker 02

  1800 or something. That would be ideal, in my opinion. You know, you remember that one on in 2017, it was moving up to 3100 and then it broke down. Here, we'll just go to it. So in that scenario,

• 42:33Speaker 02

  When the market topped, the 200 week moving average was at 1281. When it actually hit the 200 week, the 200 week was at 3150. So it more than doubled where the price, where the 200 week moving average was between when it topped and when it actually hit it. So if you were to say in Ethereum terms, um, you know, 4,800, it was down here at, at 850 or 875, it, what if it's here when it actually hits it, you know? And let's do some squiggles, cause why not? Like you do this long-term type of thing and then, you know, something happens, some exogenous event and it's like, oh crap, Ethereum's dead.

• 43:15Speaker 02

  You know, minus 50% in, in two weeks or something like that similar scenario. And it goes back down to this, um, this prior level, you're 16, 1800 and ta-da, that's where your 200 week moving average has moved to. This, this is not me trying to predict this, this is what will happen, but you know, like eventually it'll hit it and, um, and yeah, like if it does, I'm buying it. That's really all there is to it.

• 43:41David Hoffman?

  Can we take a look at the ETH BTC ratio? Cause Ryan and I use this on the weekly roll up, kind of just to gauge, we use this as like our bull market indicator as in when Ether is going down versus Bitcoin is indication of a, of a bear market. If it's going up versus Bitcoin is indication of a, of a bull market. Do you agree with that indicator from the ratio? And what, what are you seeing in the ratio chart?

• 44:01Speaker 02

  Yeah, I think depending on kind of your lens, um, you should be very happy if you're an Ethereum person, uh, with the performance of Ethereum relative to Bitcoin, essentially since the market bottomed, right? So this is the prior bear market bottom and then it slowly went up on a relative basis and then it quickly went up on a relative basis. And now it's back to kind of this difficult to trade range. Now I've tried to trade it, trust me. I definitely have, um, most of this time it's, it's not been worth it. I truly do think this kind of point one, uh, ETH to BTC, maybe even the point one four, that's when you get into flipping territory.

• 44:42Speaker 02

  Like these seem like potential magnets to me from those prior levels. Back when we were in the bear market, I was much more like, okay, this point oh five five is my line in the sand. Uh, we blew straight through it and then used it as support. And again, if we've lost levels, I would look at point oh five five as a support again. This is a very hard pattern to trade or chart level to trade. When we kind of went into this 0.08 territory on the third time, you expect that to break. And then it did, but then it failed to break out. That's always brutal. So when you do something like that, it just, it needs time. So I have no problem holding Ethereum relative to Bitcoin.

• 45:23Speaker 02

  Honestly, I kind of in active trading accounts, I tend to just kind of bounce back and forth. Depending on what I like the individual setup of that of better. Or like maybe kind of the macro landscape, right? Like, I don't think, even though we may think Ethereum is a good store of value. I don't know that the market as a whole, especially maybe hedge funds or people that are looking at much more than just crypto. If they're going to see Ethereum as the same level of kind of a safe store of value. You say, hey, I think cash is trash, but I want to hold something that's kind of safe. They might hold Bitcoin instead of Ethereum during that time.

• 46:00Speaker 02

  Certainly Bitcoin instead of like, I don't know, Solana or AVAX or Luna or like the, you know, the layer one trade or, or certainly DeFi. My God, DeFi has gotten absolutely crushed.

• 46:13Speaker 02

  So yeah, I think in periods, you can maybe think of it like the S and P 500 for Bitcoin and the NASDAQ for Ethereum. Kind of in a relational sense. So, yeah.

• 46:24David Hoffman?

  And then one last question before we turn to some macro related topics. Some altcoins, there's, we talked about Solana, there's Avalanche, there's Sol, there's Luna. How are, how is the alt L1 ecosystem doing as a whole?

• 46:41Speaker 02

  Poorly.

• 46:43David Hoffman?

  How, can you gauge how, how, can you gauge that for us?

• 46:47Speaker 02

  Yeah, so I think from a pure price perspective, it's, we priced in perfection, basically, right? Like we priced in, all of these are going to do things way better than Ethereum. And today, Polygon is like down, like just completely down. Solana has gone down. You know, every, every single one of these has had their, their issues, whether it's a layer one or a layer two. Or like a side chain version of a layer two. And they're priced in a manner to where that's not really acceptable. I think some of these have truly innovative technology that's really interesting.

• 47:27Speaker 02

  I think in particular, Solana, I think, has the capacity to build that and they have some interesting ideas. I think Atom actually has really interesting technology, the whole kind of multi-chain cosmos ecosystem, whatever, you know, however that's structured would make sense. But that doesn't necessarily mean it's going to reflect perfectly in the price. I had this line drawn like, just because it's, like I said, I like to squiggle. And I, I think that these just, when, when something was at 50 cents on public markets in mid 2020,

• 48:07Speaker 02

  that does not necessarily mean that like $250 is the right price when it, or that $83 is a value because it's 60 or 70% down off of the highs. There is nothing to say if the market continues to have downside on Bitcoin and Ethereum, to say if Solana won't go to $50 or $30. Now, Solana in that scenario may very well have its Ethereum at $85 setup, right? Like a generational buy opportunity. I don't know which of these is going to become like the big builder and, and do what Ethereum did, right?

• 48:46Speaker 02

  And have this massive explosion of developer activity that just forces things to improve because of the number of brains participating in the ecosystem versus the ones that are going to do like what EOS did, where it was like kind of a house of cards, but had a $4 billion in it.

• 49:10Speaker 02

  But it didn't really matter because nobody wanted to build on it. And, uh, yeah, I'm not, I'm not sure. I just know when, when you're looking at truly unique time, we have not had many times in the last several decades like this in the rest of the market. It makes speculating on this stuff really, really hard, really, really hard. And hedge funds and whatnot, people that have a cost basis of under a dollar, under $2 or under $5. They're at many, many multiples in profit. And so they can continue to sell Solana and make tens of millions or hundreds of millions or billions of dollars. Meanwhile, you're down 50%. They don't care. They just keep selling as they keep unlocking. But if that's what they intend

• 49:55Speaker 02

  to do, right? If they're locking in their win. Whereas the distribution amongst Ethereum holders and whatnot. Sure, there are many people that are in great profit on Ethereum still, but it's reaching more and more, you know, kind of new hands, new participants, and I feel like can sustain its current pricing a little better than a lot of these layer one trades, which went 100x or like 1,000x. I mean, Luna, I can't even comprehend how much it went up. The percentage on it was absolutely insane. Yeah, it was 30 cents at the end of 2020. So this is post DeFi summer, whatever. So say you went all in Luna and it's at 30 cents,

• 50:37Speaker 02

  and now you've ridden it to 90, $100. Like, wow. Even, yeah, even if this has done what it's done, I'm not buying this. There's no chance I'm buying this. I do not care. I do not care what it does from here. I will not buy it. I will not buy someone else's, hmm, 32,000% win.

• 51:02Speaker 02

  It's not happening.

• 51:04Ryan Sean Adams?

  So Ledger, if I'm hearing you correct, you're kind of teeing us up for some difficult weeks, difficult months ahead, you know, potentially. So potentially a repeat of, you know, 2018, 2019, maybe a little bit longer of sideways and, you know, downward type action. Of course, people who were there remember that time where ETH lost 95%. Other, like, alternative layer ones, the EOSes of the world, for example, lost 99%, some even higher than 99%, some rebounded, some didn't. Bitcoin, I don't know how much that went down. It's like 85%, something like that, between 85 and 90%. Do you think if we get

• 51:43Ryan Sean Adams?

  a repeat of 2018, 2019, are we talking about those types of peak to troughs from all time highs, like 85% to 95% to, you know, for some coins upwards of 99%?

• 52:00Speaker 02

  Uh, yes. I was looking at comp the other day. I think we can all agree. Compound is a fantastic product. Um, you know, compound and Ave, I think, really led the way in terms of on-chain lending. That did not prevent them during a bull market or mostly bull market from going down 90% off the top.

• 52:23Speaker 02

  I mean, that's just absolutely brutal. And it's because as, as the price goes up, no, but like, everybody only cares that the price goes up. As the price goes down, people start asking questions about the fundamentals or like, what's the purpose of the token? Or how's value accrual occur and all this stuff? And, um, what we've seen is literally a complete retrace from DeFi summer. And we all know how, you know, fun and exciting DeFi summer stuff was. Most of these DeFi charts have fully retraced it on a dollar basis. So on an, on an ETH relative basis, because DeFi summer ETH was four to 600 bucks, right? Like in, in that 2020 summer, that is brutal. So on ETH relative basis, you just got crushed being in these things.

• 53:06Ryan Sean Adams?

  Can you pull up the comp ETH chart?

• 53:08Speaker 02

  Uh, yeah, I think I have it right here.

• 53:10David Hoffman?

  Oh, whoa.

• 53:12Speaker 02

  Stop. Yeah.

• 53:14David Hoffman?

  Look.

• 53:16Speaker 02

  So, you know, for every, every precious Ethereum that you had, you lost 95% uh, since August 2020, which was the, like, this got listed at the, at the peak of DeFi summer. So.

• 53:30Ryan Sean Adams?

  But, but you're saying this pain is just getting started, though?

• 53:33Speaker 02

  No, no, no. I, I think these things, you know how there's always a, there's always a bull market somewhere, maybe a relative bull market. I don't know when you start hitting a fair price, right, on some of these DeFi tokens where if we kind of know exactly what makes Ethereum fundamentally valuable, when do we figure out what makes the tokens built on top of Ethereum fundamentally more valuable than Ethereum? Right? Like, that's a really difficult thing. Now, I think many of them are valuable relative to the dollar, but that's not saying much if you could think the denominator is worthless in the long run, right? So this is the downside of a deflationary economy, right? Like, what do you, what, why do

• 54:15Speaker 02

  you want to put money to work if you can just hold the money? And that prevents productivity in the market. If you're like, man, if I would have just held Ethereum in my cold storage, I would have done way better than going and deploying.

• 54:30Ryan Sean Adams?

  It's so funny. It's so funny, because the narrative was the, literally the opposite 18 months ago, which is like, why do we need ETH as an asset when we have DeFi? I can own Bitcoin and DeFi and be okay. Why do we need exposure to ETH? Exactly. Okay, so we do want to ask about macro things, you know, in just a minute, but just to tie this conversation, this part of the conversation off on crypto. Okay, so what about the super cycle, man? Like, what's the potential that you might be calling this wrong, do you think, Ledger? That rather than a repeat of 18, 2018, 2019, actually, this is kind of like a dip, and maybe we go sideways

• 55:10Ryan Sean Adams?

  for a while, but we're still in kind of a, we're not going to repeat the absolute cliff of 2018, 2019, that we, you know, see some rocky months, and if COVID stuff, Ukraine war, you know, then the merge happens, let's say, and then price starts to repair, and like, we're back, baby. It's, it's full on super cycle again. Do you think that is a possibility? And how do you weight that as a, as a possibility?

• 55:40Speaker 02

  If we, if we consolidate without like significant lows, we don't go back into the mid 20Ks or something, that, to me, this type of chart is the super cycle occurring.

• 55:52Ryan Sean Adams?

  Yes.

• 55:53Speaker 02

  You need, this is what I would call reaccumulation, right? Like, you didn't really break down so badly that everything, everybody stopped caring about it.

• 56:02Ryan Sean Adams?

  No companies have any layoffs, etc.

• 56:05Speaker 02

  Yeah, Bitcoin mining is profitable today, and it's very profitable. You know, obviously, operating an Ethereum node is quite profitable. Like, participating in the ecosystem is very profitable. What you would consider not a super cycle, if y'all recall, the last time uranium went crazy was, I think, 2011 or something. It took, there was a 10 year bear market, and people just shut stuff down. And the reason was because the price of uranium was so cheap, they couldn't actually afford to operate uranium production. That's not a super cycle, right? That's like full bear market. Last time Bitcoin miners had to shut down because Bitcoin mining was more expensive than the Bitcoin

• 56:49Speaker 02

  that they got as a reward. That is not a super cycle. If you go through a supposed bear market and all of the activity within the market maintains profitability and maintains this component of productive work, then that that is kind of the super cycle to me. And if your max drawdown is like 60% and not 83%, which is what it was, Ryan, to your point with Bitcoin, while Ethereum's was 95%, you have smaller and smaller kind of overall drawdowns. That this is supportive of a super cycle. I I think like, honestly, if we made new all time highs before like the end of summer 2022

• 57:33Speaker 02

  in Bitcoin and Ethereum, that would be stunning, like stunning.

• 57:39Ryan Sean Adams?

  That would make you a believer in the in the super cycle?

• 57:42Speaker 02

  I think I'm a believer now. I think it's very possible that this sideways outcome is the outcome.

• 57:47Ryan Sean Adams?

  Okay, so how do you weight these possibilities? One is the sideways super cycle. The other is like 2018, 2019. What what kind of probability do you do you assign to both right now?

• 57:59Speaker 02

  Well, because the in that scenario, we the market dropped a whole lot really, really quick. In this scenario, it was two weeks of down. Like this, this whole move right here, basically to the first trip to 30K was in two weeks. And then we fully repaired it. And then it's it's been, it's just been different.

• 58:23Speaker 02

  And and the the move up was different as well, like from all time high to top was like a 3X. Whereas the time before that, it was a 20X. All that is signs of greater maturity in the market. In this scenario, Bitcoin went from 5K to 20K in four or five weeks. Those are the things that you don't expect in the super cycle. So we're already showing those signs of the super cycle.

• 58:50Speaker 02

  A lot of people think we need this capitulation that it means we lose 50% in two weeks. Now, can it happen? Yes, but even when COVID hit, like the degree that which we repaired that quickly was truly incredible. And maybe that was the start of the super cycle, right? The Bitcoin recover, there was $20 million of bid on BitMEX at the very, very bottom. And, you know, like, that was the beginning of the super cycle. And, and now it is just a much more mature market.

• 59:21Speaker 02

  I can't predict the future. We will be impacted by the macro and maybe we can transition into that. But if the economy hits recessionary period, then we will go down a lot more. If the economy does not, and the economy maintains some degree of workability, doesn't have to be perfect, but workability. Then I think that the likelihood is we go sideways, work a lot of people out of the market and then eventually have a breakup.

• 59:49Ryan Sean Adams?

  All right, guys, well, that's where I think the macro comes into play. And we're going to talk about the macro, global markets, gold, various commodities, what they're doing, equities, that sort of thing. Oil with Ledger when we get back. But before we do, we want to thank the sponsors that made this episode possible.

• 1:00:06David Hoffman?

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• 1:02:22David Hoffman?

  All right, guys, we are back talking about macro this time, which is the external force to the crypto markets. Whether or not we have a super cycle may or may not be determined on what happens in the macro. And Ledger, you've got up the US dollar index, the DXY. Why is this chart significant? What does this, what does the DXY tell us about how it relates to crypto?

• 1:02:43Speaker 02

  Yeah, so my favorite thing about the dollar index is that basically the two biggest runs we had of bull markets in crypto occurred while the Dixie was melting down. So and it's kind of eerie in terms of when you look at it, December 2016, as Bitcoin started price exploration out of 1200 after that really nascent first bubble that it had in 2013, 2014. And look where, look where the Dixie bottomed, January 2018. All of us from that generation are going to know exactly how that correlates.

• 1:03:19Speaker 02

  And then, you know, with COVID, it had this crazy, you know, dump and then, and then palm in March 2020, and then it had this double bottom, January 2021 and May 2021, which coincides pretty nicely with where Bitcoin especially struggled. And Bitcoin is still kind of king in my mind in terms of what's going on and crypto strength, right? There's cycles of relative strength, Bitcoin, altcoins, whatever. You can't ignore this trend and this trend and the fact that crypto went nuts as the Dixie went down. So now we've had, however, many months this is, a lot, almost a year

• 1:04:02Speaker 02

  of the dollar recovering really well. So what I want to be on the lookout for is when does this start ranging back down? Because I will have a high confidence trade and hopefully it'll co-align with some of those things we discussed, those things earlier, that's a probability nature of if, you know, hopefully this happens or maybe this happens. But if we can start to align these things with some other concepts, then that would be indicative that crypto is ready to move positively. And we see an up move in Bitcoin, Ethereum, whether that happens here or here or here or here or here, I don't really know. I'm not a, I'm not a wizard. I just get to watch the chart and then to try to make smart decisions off of that.

• 1:04:46Speaker 02

  But I'm certainly going to keep an eye on the strength of the, the dollar index, which is a basket of currencies. So as those weaken, crypto strengthens, that shouldn't be too complicated for us to understand.

• 1:05:00David Hoffman?

  Can you, I'm confused as to why the, this is just me just being naive, but why the US dollar currency index is going up at the same time that we're having inflation conversations? Like, isn't the value of the dollar going down?

• 1:05:14Speaker 02

  There's a preference for liquidity in general when you have massive uncertainty in markets. So I think that's partly like Russian trade stuff and the war and people trying to get, you know, foreign reserves back into the dollar, assets that have been in other risk, risk type of assets back into the dollar. I don't, I don't think it affects the underlying fact that we're seeing seven to eight percent sustained inflation. And keep in mind, this is a relative index. So, um, you know, just because you're the, the best shitcoin doesn't make you not a shitcoin.

• 1:05:55Ryan Sean Adams?

  It's relative to other fiat currencies, right?

• 1:05:58Speaker 02

  Yeah. And if you, if you go look at, this is a basket of fiat currencies, the dollar index is a very complicated thing, the Dixie itself. But like, you can go look at like, you know, the USD relative to the euro or relative to the Russian ruble. You know, everybody was posting those charts when Russian ruin down 40% in a day or whatever, as the war started.

• 1:06:17Speaker 02

  I would love to see, now I'm going next level on you here, um, in terms of the 200 whatever, like the, this is a 200 month thing. So, you know, if we ranged back down to that, that would be nice. And if we think the denominator is worthless and that fiat currencies in general are weak, then, you know, send it down, send, get it down back to 80 something. And that would certainly coincide with bullish price action for, um, for crypto.

• 1:06:45David Hoffman?

  I think the, the other thing that we're definitely tied to, and we tend to be tied to, I think during sideways slash bear markets is just the general equities markets, the S and P Q Q Q. Uh, and the S and P has had a pretty significant retracement. Uh, and so my mind is mixed between two things where, uh-oh, the S and P is in a bear market. Well, if that's, if they're in a bear market, we're definitely in a bear market, but also that's our, that's like three big red candles and three big monthly candles out of the S and P. How much more can it go down? Ledger, where do you find yourselves on, on this side of the equation? Oh, what side of the equation?

• 1:07:19Speaker 02

  Yeah, I hate having to provide this kind of probabilistic comparison. Because you know, you're saying, well, it's going to either go up or down, definitely going to the right.

• 1:07:30Speaker 02

  But if you if you look historically, typically for a regular run of the mill dip, you're kind of getting into end of dip territory, right? So if the world's not ending, if this is not World War III, let's say inflation does back off just a little bit. Who knows what that thing could be? You could see an area where the S and P says, all right, we've had three months and a 10, 15, whatever percent drawdown, I think the NASDAQ's gone down 20 something percent.

• 1:08:02Speaker 02

  It's okay for for stuff to bounce now for a little while. Maybe go sideways itself, kind of like what we talked about with crypto.

• 1:08:12Speaker 02

  But we're not going to have like new paradigm recessionary model, right? This is 2001, this is 2008. And this is one of my favorites, right? When Ryan, we were talking about those fast moving averages, this, let me just look how cleanly this, the all this uncertainty, all this uncertainty. And then we live in these recessions well below those fast moving averages.

• 1:08:37Speaker 02

  COVID, we spent one month like in total panic. I call I call this kind of like the rebound or the rubber band recession because of how fast we like operated out of it in terms of what the central banks did and printed money and supported all these assets. Maybe all of that's going to come home to roost and we go down and now go to those magic 200 week moving averages. You got a long way you can go there on the S and P.

• 1:09:00Speaker 02

  Treating this the same as crypto, though, is a little bit dangerous. Like there's real value here. The

• 1:09:09Speaker 02

  in a different, in a different, in a different way, you know, like these are companies that have key financials that you can look at and you can look at things like, you know, price to earnings Coinbase, even Coinbase, right? Like a growth, a supposed growth stock, their price to earnings is 11 right now, which is like pretty much value territory. When you start looking at their expected yields and stuff, and that's a a growth stock, you go look at some of the other stuff in the market, it gets even more severe in terms of what the value looks like. Unless it's a value trap and you say these ideas of the sustained earning potential is not what we think it is. And we got a lot more pain in front of us. And if that's the case, then it's going to be a dark world. And that's your scenario where we go a

• 1:09:54Speaker 02

  lot lower in crypto. That said, I, I, I think that these markets are really due for some kind of upwards rebound, especially when you get into like the NASDAQ, which yeah, it had a 22% correction so far.

• 1:10:09Ryan Sean Adams?

  Wow.

• 1:10:10Speaker 02

  Yeah, it's a 22% correction after it went up 147% from COVID lows, you know, COVID lows to the highs 147%. You go to some of these individual equities names and it's, it's kind of insane what happened on the, on the high end. One of the ones that I've always enjoyed looking at is Shopify, which went to like 1700. It went to 500, 1700 to 500. You think your crypto bags are painful. This is supposed to be like something that's relatively safe, a long-term about, you know, equities play that you think is like, yeah, this is going to be great. Or you go look at ARC and ARC went from $157 to $51. So a two thirds correction.

• 1:10:55Ryan Sean Adams?

  ETF.

• 1:10:56Speaker 02

  Which is an ETF. This is, this is, you know, all of Kathy's best ideas.

• 1:11:03Ryan Sean Adams?

  Very heavy tech weighted ETF.

• 1:11:05Speaker 02

  Yeah, it's very tech weighted, you know, EVs and crypto, but it went up 391% off COVID lows. So what's crazy is that these have completely retraced their COVID moves, right? This is pre-COVID, COVID low, and then this is now. So it is actually ARC is cheaper than pre-COVID.

• 1:11:29Speaker 02

  Which is kind of stunning. So these to me start to become again the scenario of like, well, maybe you just dollar cost average and freaking wait. If if you want to have some exposure to equities, that's not, you know, not crypto. This is a little bit more of an indirect play. And maybe you can do some stuff to try to hedge your way out of that. Like, we seem to be having these kind of new, what you would call like a secular bull market in some of the commodities trades, energy. So like oil and stuff was basically at record lows in terms of its composure within the S and P 500, like 8% after peaking at something like, I don't remember, 25, 28, 30%.

• 1:12:15Speaker 02

  So in terms of the number of companies from the energy sector that were in the S and P 500, that number went down by like two thirds over the years. And classic meme is you go from negative oil prices to infinity oil prices. We just are living in the meme constantly, right? Almost made it to all time highs. Honestly, it wouldn't surprise me if obviously this chills out. This is actually quite a bearish reversal candle for oil, which for the world is probably a good thing. But it wouldn't surprise me if we're kind of in a new era of expensive oil as producers just are not producing enough. And we're assuming, oh, there's going to be so much less demand because of all these EVs. But meanwhile, you have developing countries that

• 1:13:00Speaker 02

  are increasing their oil appetites. And the increase in EVs and stuff in developed countries is just not enough to make up for that underlying appetite. But meanwhile, there's also not an appetite for, you know, new wells and things. So you can create something where, yes, 100 years from now, our dependence on oil should be significantly less. But over the coming 20 years, we're probably going to need as much oil as we need today. But we're investing in it much less because it's not something that people look upon very nicely. So I think you could have an era of higher commodities prices. And maybe value are these growth stocks come back in line a bit and people start looking

• 1:13:42Speaker 02

  for what are value producing, you know, equities and there's a rotation of some sort from the things that don't have revenue, don't have profits, don't have dividends and people, investors banked on the number going up and it moves into, hey, we want a four or five or six percent annual dividend yield and sideways or slightly up is okay. What you hit when you do this where prices really don't go up that much in terms of the stock market or whatever, but inflation is this sustained higher period is you hit stagflation. And I actually think in this probabilistic outcome scenario, that would be a painful,

• 1:14:22Speaker 02

  but in my mind, probably the most high probability outcome where we do, I just think it's going to be so hard for us to actually get inflation under control. We don't have a lot of capacity to raise rates. So you don't have these levers from a central bank perspective to pull to have much control. So you, you can't lower rates very much. The alternative is to provide direct stimulus to the economy. There's less and less appetite for doing that after we just printed money and gave it to people for years. And, you know, you fracture decision making capacities within governments, then you have to have a crisis to print money or whatever. At that point, I think we could create a scenario where we have high inflation

• 1:15:02Speaker 02

  and low asset prices and we hit a stagflationary period, which again coincides with this multi year sideways potential, both in stock markets and crypto.

• 1:15:12Ryan Sean Adams?

  But, but do you think Ledger, this is why I'm curious how your, your, your macro mental model sort of feeds the crypto prices we were talking about, either sort of the sideways super cycle or a bear market. So you would give higher weight to the probability of like stagflation, which is inflationary dollar plus, plus recession, basically. And you think that could be persistent and, you know, we might get something close to like the 1970s or something like this. And if that's the case, then you think that a bear market is more likely in crypto than, than the sideways super cycle play. Is that the case?

• 1:15:54Speaker 02

  Yeah, kinda. I can't remember the ticker for the Japanese market right now, but or how to spell it. But the I guess the Nikkei or whatever, it didn't make an all time high for like 22 years. So Japan had actual stagflation. And, you know, can you imagine the outrage of passive investors if they're putting money into a market for 20 years and still can't make new all time highs in the market? They would be pretty upset. So it would be very interesting, not necessarily great, but certainly interesting. Maybe it's a stock picker's dream or like

• 1:16:35Speaker 02

  individual asset class in the X. Thank you, chat. You know, and that that's an asset 100.

• 1:16:46Speaker 02

  Sorry, I tried. I think I certainly think that's a potential outcome. I don't know exactly what that plays out, what how it how it looks in terms of what's bullish. A bunch of random stuff had had bull markets in those days, you know, like, I think that's when silver went absolutely nuts. It went to it did like a 20x in value during during those years. And there's like all these, there's always a bull market somewhere. We'll find something to look at and something to invest in. I hope crypto is one of those things as an emerging technology that it kind of shows up even in a stagflationary environment that people see like here's potential in this emerging technology that's going to take over the world. Yeah, I don't know. It's going to be a tricky one.

• 1:17:29Ryan Sean Adams?

  I'm curious about you yourself. So we were just talking about equities. We talked a little bit about commodities, you know, tech stocks, this sort of thing. Do you hold these in your portfolio? Do you trade these? Or are you like, just like, crypto is enough for me?

• 1:17:42Speaker 02

  No, definitely. Yeah, definitely.

• 1:17:47Speaker 02

  I will say it was a higher, not to flex, but it was, it was a higher percentage of my portfolio. Like, you know, my wife's retirement account and like my IR, I call it my DGN IRA. So it started pretty small and then I was just kind of aggressive with it over the years. So then it became reasonable, but it all paled kind of in comparison to what crypto did. So my, I do invest in gold or, or stocks and other things in those. So like in my wife's 401k as an example, I think it's like in 30% gold miners and you know, then kind of a mix of, you know, value stocks and cash and maybe a little bit of S and P 500 or something.

• 1:18:30Ryan Sean Adams?

  I mean, I'm curious, like, what, so why do you do that? Is it just to kind of keep life interesting or do you, do you think that this provides more diversification?

• 1:18:38Speaker 02

  It keeps me on my toes.

• 1:18:40Ryan Sean Adams?

  Okay. It's like myself personally, I'm just like more of the barbell strategy where I'm like, I don't really want to hold equities at all stocks, much if, if any. My, I want my risk on asset class to be crypto. And then if we're in a risk off mode, I'd rather just have dollars like, right? And then like keep my powder dry for a time where I can buy back in crypto. So it's just like, I want ultra safe type assets. And then I want like the ultra risky crypto type assets. And like for me, there's no real room for, for equities in between, but that's also because I don't really pay attention to like equities in the, in the stock market. What's your balance like?

• 1:19:21Speaker 02

  I think, I think it gives me some ability to have interest in those markets. And I do think, so those are long-term things that I don't plan to touch for another 30 or 40 years or whatever, whenever you start liquidating retirement accounts. So I think even though I, you know, they're real money, but they're not like super duper life-changing money over 30 years. If I'm active with them, they can actually, I think, become life-changing money in those later years and in a much more passive way. It's not like trading every day. It's maybe trading every week or every quarter or something. Except for my IRA, I'm kind of crazy on that one. But in terms of active investments, I mostly agree with you. What I've done a lot more of lately

• 1:20:03Speaker 02

  is primary is crypto exposure. And then a big secondary where I have tried to diversify is being more interested in real estate because I actually think that fits potentially in this safer investment, not going to go down, you know, 85% like Bitcoin did in 2017. If it goes down 20%, though, and I still earn yield on it, if I'm not like highly levered in commercial real estate or something, then, you know, it might be an extra few thousand dollars of rent for my family as kind of a backdrop. And in the 20 or 30 year term, I'm pretty confident in that market still existing if I'm investing in my town and whatnot. And I also get to make a difference. So most of my like, active investment would be

• 1:20:49Speaker 02

  a little bit of private placement, mostly crypto liquid markets, and then like real estate type stuff outside of dabbling in retirement accounts with these kind of what I call boring assets. Now, sometimes even in those, and especially like in the IRA, thankfully, every now and then, if I'm really, really, really bullish on crypto, I can throw it into subpar products like GDXJ or

• 1:21:15David Hoffman?

  Why not, right?

• 1:21:16Speaker 02

  And just let it let it YOLO for a little while. But, you know, I think it keeps me on my toes to look at all markets and makes me hungry for more information. I'm obviously, I'm LARPing on most of this macro stuff. Like, I'm 30 something years old. I'm just, I'm a guy like everybody else, trying to learn over time, investing my own book. I guess that'd have that going for me. It's not somebody else's money. But I'm trying to learn and all I'm doing today is sharing the things that I've tried to learn over the years.

• 1:21:46David Hoffman?

  Well, Ledger, that is why we call, or I call you the chartographer, because you are again guiding our way through many, many, many different charts and trying to draw connections between all of them. And that's what we enjoy doing here at Bankless. So since we can't know the future, and since we don't know if it's a super cycle or a 2018 capitulation, what advice do you have for people just to keep their head on their shoulders? How do they not get chopped up over the next three weeks to six months until like some conviction comes back into the market? Like, how do we maintain sanity here?

• 1:22:20Speaker 02

  I think you, there's a couple of places you can make a lot of money. One is if you have this massive kind of capitulation style WIC and then you make 40, 50% in a day. That's one way is if you like manage to catch that just right. But honestly, you make even more money in the follow on when things are truly confirmed. So to your point, Ryan, like you could be dollars, you know, you could be based in dollars. But then when you have confirmation of the trend, you go a little further out on the risk curve and you make up for whatever of the early trend that you missed heavily by the later trend. You know, the Luna's 30,000% or your Maddox, which to this day, David, like your, your DM

• 1:23:01Speaker 02

  gives me physical pain of when you told me I should buy it and I did, and then I sold it like a penny later.

• 1:23:09David Hoffman?

  For context, I DM'd Ledger to just, I only DM'd the word matic at 15 cents or something like that.

• 1:23:16Speaker 02

  I think it was 11.

• 1:23:19Speaker 02

  And I sold it basically at break even as it went to like 12 and back to 11. And I was like, no, I'm out. And then it went to $2.

• 1:23:28Speaker 02

  So yeah, like you get further out on the risk curve where it's like, we're not having this conversation of are we in a bull market or not? You're saying it's a bull market, baby, let's go. Like what are we, what are we aping today? Like in those markets, you keep your head in terms of like maintain liquidity. Don't buy outright scams, be satisfied with a 100% move or 500% move. You're not trying to buy Shiba Inu. Like you can still find ways to lose money in those environments by buying the top of a Shiba Inu instead of buying the middle of a matic move. But you can make a lot of money down the risk curve once the trend is known. Like you know where things are going.

• 1:24:13Speaker 02

  So I think you can just be patient and wait for it. And I gotta give a shout out to crypto cred on that to keep me stable sometimes. You do not have to buy the absolute bottom. You do not have to be fully exposed at the perfect time. You can just, you can take your time, be in what cred says. Often as a position of control so that you have options. If you leave yourself into a place where you're leveraged and it's going against you and you do not have options, you're facing liquidation or ruin rather than being in a place where you you can sell for a slight loss or you can buy with confidence. That's the place you want to be in. You don't want to be in a place where you're forced out of the market because that's the only way you're not going to make it in the long term in the long term.

• 1:24:57Ryan Sean Adams?

  A lot of good advice toward the end there, Ledger. We appreciate it, especially people who are first cyclers, I think, are looking at some of these moves and and panicking a little bit. And they're also hearing what you said and and maybe, you know, panicking a little bit. But having options, keeping a cool head on your shoulders, realizing that time in the market beats timing the market is the way to go. So we appreciate you reminding us of that. So thanks for joining Bankless.

• 1:25:26Speaker 02

  Thanks for having me. And just as a side note, like, I was exposed to the market. I was very, very bullish when Bitcoin was 4K. I don't know what my net worth was between Bitcoin being 4K and Bitcoin being 10K. I just know it didn't go up near as much in that timeframe as when it went up in this timeframe. So just as proof of buying at bottom, and I know for a fact, like David and I have talked about this, and it was similar for you and for most people, like, you do not have to buy the bottom. Take your time, have fun. Don't lose it all.

• 1:25:57Ryan Sean Adams?

  That's it. Take your time, have fun, don't lose it all. Guys, of course, none of this has been financial advice. All crypto is risky. Bitcoin, ETH, they're all risky. We always tell you at the end of the show, so is DeFi. You could lose what you put in. But we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the Bankless journey. Thanks a lot.

• 1:26:19Ryan Sean Adams?

  Hey, we hope you enjoyed the video. If you did, head over to Bankless HQ right now to develop your crypto investing skills and learn how to free yourself from banks and gain your financial independence. We recommend joining our daily newsletter, podcast, and community as a Bankless premium subscriber to get the most out of your Bankless experience. You'll get

• 1:26:40David Hoffman?

  Access to our market analysis, our alpha leaks, and exclusive content, and even the Bankless token for airdrops, raffles, and unlocks. If you're interested in crypto, the Bankless community is where you want to be. Click the link in the description to become a Bankless premium subscriber today. Also, don't forget to subscribe to the channel for in-depth interviews with industry leaders, Ask Me Anythings, and weekly rollups, where we summarize the week in crypto and other fantastic content. Thanks everyone for watching and being on the journey as we build out the Bankless nation.