#872 Bitcoin Price Is Primed To Take Off 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 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. WIll joins us every Friday on "The Best Business Show." To see the video with the corresponding charts that Will references throughout the interview, go to the Anthony Pompliano YouTube Channel. ======================= Today’s episode is brought to you by Coinbase Wallet, your key to the world of crypto. Crypto wasn’t made to just buy, sell, and hodl. With Coinbase Wallet, you can do so much more: Collect more NFTs, earn more with DeFi, and trade more than 4,000 tokens. Whether you’re looking to play, stake, spend, or just explore a trending new protocol — Coinbase Wallet is your key to more. Long-time HODLers already know that wallets are a must-have if you want complete control of your crypto. That’s why Coinbase Wallet makes self-custody simple, while providing the safety and security of the most trusted name in crypto. Visit http://coinbase.com/wallet to learn more. ======================= If you’re a regular listener of the podcast, I would bet that two things are true: First: You’re passionate about Web3 and protecting your personal data And two: that you’re a human. If I’m right, then congratulations! You’re entitled to all the benefits of the decentralized web. But there’s a catch: As Web3-enabled tech — like NFTs, smart contracts, and DAOs — drive more elements of our “real world” lives online, proving that you’re a person – without surrendering personal data – becomes exponentially more valuable. And exponentially more difficult. This is why Unstoppable Domains launched Humanity Check. Humanity Check proves that you’re, well, you – without revealing personal data. No matter where you go on the web, you’ll have total control over which apps you want to share data with…and which ones you don’t. Prefer to be completely clouded in mystique? No worries - Humanity Check is 100% opt in. If you want to feel alive, or at least prove you are, head to http://UnstoppableDomains.com and get your NFT domain with Humanity Check. ======================= Cryptocurrencies offer boundless potential, but how will you protect your crypto? Arculus is the next generation crypto cold storage wallet that combines the world’s strongest security protocols on the Arculus Key Card with an easy-to-use Arculus Wallet App. With over 20 years of experience developing leading-edge secure payment technologies, CompoSecure created Arculus to give you the power to protect your financial future. You can buy, store, swap, send and receive your crypto with a simple tap of your Arculus Key Card to your mobile device. Your private keys are encrypted on the Arculus Key Card and they never leave it. Stay safe from hackers with no cords; no charging; no Bluetooth. The only person accessing your crypto... is you. Buy Arculus on Amazon today. =======================

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. In this conversation, we talk about Bitcoin, the market structure, on-chain analytics, and where we go from here. I really enjoyed this weekly conversation with Will, as always, and I hope you do as well. Before we get into this episode, I want to quickly talk about our sponsors. Today's episode is brought to you by Coinbase Wallet, your key to the world of crypto. Crypto wasn't made to just buy, sell, and hold. With Coinbase Wallet, you can do so much more. Collect more NFTs, earn more with DeFi, and trade more than 4,000 tokens. Whether you're looking

• 0:46Anthony Pompliano?

  to play, stake, spend, or just explore a trending new protocol, Coinbase Wallet is your key to more. Longtime holders already know that wallets are a must-have if you want complete control of your crypto. That's why Coinbase Wallet makes self-custody simple while providing the safety and security of the most trusted name in crypto. Visit coinbase.com/wallet to learn more. Again, that's coinbase.com/wallet and learn more today. Today's episode is brought to you by Unstoppable Domains. If you're a regular listener of this podcast, I'd bet that the two things are true. First, you're passionate about Web 3 and protecting your personal data, and two, you're a human being. If I'm right, then congratulations, you're entitled to all the benefits of the decentralized web. But here's

• 1:29Anthony Pompliano?

  the catch. As Web 3-enabled technology like NFTs, smart contracts, and DAOs dive more elements of our real-world lives online, proving that you're a person without surrendering your personal data becomes exponentially more valuable and exponentially more difficult at the same time. This is why Unstoppable Domains launched Humanity Check. Humanity Check proves that you're, well, you, without revealing any of your personal data. No matter where you go on the web, you'll have total control over which apps you want to share your data with and which ones you don't. Prefer to be completely clouded and mystique? No worries, Humanity Check is 100% opt-in. If you want to feel alive, or at least prove you are, head to unstoppabledomains.com today.

• 2:10Anthony Pompliano?

  And get your NFT domain with humanity check again head on over to unstoppable domains dot com and get your NFT domain with humanity check today. Today's episode is brought to you by Arculus cryptocurrencies offer boundless potential, but how will you protect your crypto? Arculus is the next generation crypto cold storage wallet that combines the world's strongest security protocols on the Arculus key card with an easy to use Arculus wallet app with over 20 years of experience developing leading edge secure payment technologies. Compo serve created Arculus to give you the power to protect your financial future. You can buy, store, swap, send and receive your crypto with a simple tap of your Arculus key card to your mobile device. Your private keys are encrypted on the Arculus key card and they never leave it.

• 2:53Anthony Pompliano?

  Stay safe from hackers with no cords, no charging, no Bluetooth. The only person accessing your crypto is you. You can buy Arculus on Amazon today. Go check it out and see what all the hype is about. All right, let's get in this episode. I hope you guys enjoy this one.

• 3:09Speaker 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.

• 3:32Anthony Pompliano?

  All right, Bitcoin time. We have Mr. Will Clemente joining us. Will, what's going on?

• 3:39Speaker 02

  Yo, yo.

• 3:40Anthony Pompliano?

  All right, let's do a little puppy Cody. Looks like a friend for Ranger.

• 3:45Speaker 02

  Well, me turning into a dog influence, there's got to be somewhat of a bottom signal, right?

• 3:53Speaker 02

  It's, I mean, I feel like a lot of people are bears. Yeah, everyone, everyone's bored. You got people like starting to post like their workout regimens, people deleting their Twitter and I don't know, I think that's also reflected in a lot of like, you know, network activity stuff on chain or volume and you're just looking at like inter exchange stuff. I mean, I just think generally we're kind of just, you know, consolidating and in the meantime, people are kind of finding other hobbies or going to the beach.

• 4:20Anthony Pompliano?

  Yeah, I actually don't think that that's necessarily bad for for the market to have some consolidation here. One of the charts that you've got is literally the consolidation that we're watching where Bitcoin's kind of trading in this range. Is it just we need a catalyst to kind of break out of the range or what's your expectation? Do we just continue until we get to some narrowing of it?

• 4:40Speaker 02

  No, I mean, it could be a catalyst that breaks us out of it, but, you know, generally speaking, whenever you have like a failed move out of one end of the range and reclaim that tends to, you know, if you have a failed breakout to the upside, it comes back within the range. It tends to be pretty bearish. That's what kind of what happened at the end of 2021. So seeing kind of this failed breakdown, whenever it was like four or five days ago to the bottom side of the range and reclaimed. That's, you know, somewhat of a good sign, but we'll see where we break out. Should have, you know, another week or two before we get, you know, substantial move out of this kind of consolidation here. So about two months now as of this week, so.

• 5:14Anthony Pompliano?

  Yeah, I saw you tweeting about this idea of like the price distribution. I know you got the chart in terms of, there's almost like these levels as to the distribution of where Bitcoin last trades. How do you think about these levels and their importance of both, you know, kind of serving as some sort of floor for the price? But also some sort of ceiling?

• 5:35Speaker 02

  Yeah, so like, obviously, as we just looked at, it's just price, right? What this is looking at is the actual on-chain volume. So it's telling you the amount of supply that's last moved at different price levels. So like opposed to volume, that's just telling you, you know, this amount moved here, this amount moved here. This is dynamic. So, you know, if, let's say, 5% of supply last moved at 5K and then it's now moved at 20K. Then, you know, then that volume is going to move into that net other price level in this chart. So that's where the realized price aspect comes from because it's based on when coins last moved. So what you can see is basically like the, another way to visualize the consolidation that we've been in is this kind of quote unquote cluster of volume that we've seen

• 6:20Speaker 02

  between 36 to 45. And you can see like that the gray bars, the gray just means that's where we are right now. You could see we're in that really tight, you know, mid part of this kind of consolidation here.

• 6:33Anthony Pompliano?

  Yeah, it's super fascinating that we can get this data, right? I think that's the part to me that just like, yes, the, the actual individual data sets are really important, but the fact that we can see this at all times and continue to analyze, it just still blows me away, even after doing this for a while. Talk to us about the spot premium and what you're seeing from an actual price standpoint, and then how you also think that that kind of overlays with, you use quarterlies, but, but the, the difference in price, if you will, with the futures and the spot price.

• 7:03Speaker 02

  Right. So the, the first chart you'll see on the bottom, something called perpetual's basis. So this is looking at like the weighted average of all the spot exchanges measured against the weighted average of all the perpetual swaps. And so the oscillator is telling you in aggregate, you know, are, are perps trading at a premium or discount to spot? And so whenever you're in green, that means that spot is, spot is currently in a premium or perps are trading at a discount to spot, you know, it's telling the same thing. And then when we're in gray, that means that perps are trading at a premium to spot. And so generally, this is kind of a way to highlight kind of, you know, exuberance in the market, especially from the derivatives market. As you can see on the left-hand side of the screen, that's kind of that October period of 2020, leading up to that big run-up at

• 7:48Speaker 02

  the end of 2020 into early 2021. You can see that second regime and the kind of midway through last year over the summer, the kind of mini one we went through at the end of September last year, and recently, the kind of prolonged regime that we've been in for over three months now of spot kind of leading perps here.

• 8:06Anthony Pompliano?

  Yeah, it's fascinating to watch this. And so if we look at the, the next one with the quarterlies, the difference here, take a second just to explain what quarterlies are and why this is an important kind of understanding of the difference between spot and the futures.

• 8:23Speaker 02

  Sure, so I think like the, the way that most people have heard of this is like the cash and carry trade. Yep. So essentially what you're doing is you're selling the future, that's, you know, whatever, in this case, we're talking about three months out, so you're selling the three month future, buying spot and then holding that out until expiry, capturing the difference. Uh, and so that, you know, that works when, when you go out on the futures curve, it's in contango, meaning, you know, out on the term structure, each contract further out is trading at a higher price. Uh, and so in early 2021, this got to insane levels, up to like forty five percent, kind of at the, you know, peak of, of the market top. Which meant that, you know, you could do, you know, execute this trade and get annualized forty five percent, which is like absolutely insane. Like, I don't know if we'll ever reach that level of exuberance again.

• 9:08Speaker 02

  Um, partially because, you know, the market is just getting more efficient, there's more capital that's coming in, that's gonna kind of do these arbitrages. Um, and basically, you know, arbitrages are in essence just trying to capture inefficiencies in the market, right? And so I doubt we'll ever get back up to that forty five percent level unless something like absolutely insane happens, like the US central bank announces they're, they're allocating to Bitcoin or something like, you know, just like completely outlandish like that. Um, as you can see as well, like even at the end of twenty twenty one, we still didn't even nearly get to that, you know, that level of, uh, the basis.

• 9:45Speaker 02

  So, you know, this is, you know, a driver of capital into spot because as, you know, the basis pushes up, it's incentivizing people to buy spot and then sell the future. Uh, so I think that, you know, this was, mo- it was mostly the grayscale art, but this played a role in it as well. Um, and some of that capital inflow that we saw in the spot at the end of twenty twenty into the early twenty twenty one. Um, and then a bit at the end of last year, uh, but the, the kind of key thing that I want to highlight, and the reason I have the chart up, is where we are now. So if you see in the bottom right, it's just kind of bleeding down. Um, and so like pretty much throughout, you know, the, the chart history that's shown on the screen, you'll see that generally this follows price.

• 10:26Speaker 02

  Uh, but, you know, kind of strangely over the last, call it, you know, two months or so, this is just kind of bled down while prices. Kind of just been consolidating, not quite bleeding straight down like, like the basis has. So to me, this is kind of just indicating there's like a lack of exuberance, if you will, you know, from the derivatives market and that, you know, yeah, exactly that. Like, you know, essentially you're just, you're seeing less people interested in, in, you know, taking this trade, capital that's perhaps kind of like waiting out to see some decisiveness from the market and just a nice reset in general from, from the derivatives market.

• 11:01Anthony Pompliano?

  Got it. And then if we go ahead and we compare it to the actual Bitcoin price itself, it looks even more obvious, it seems like, right?

• 11:09Speaker 02

  Yeah, I think this is just another cool way. I mean, I threw this together like 10, 15 minutes ago, just like toying around in Glassnode, actually. But yeah, like when you compare the basis to price, you could see something similar, basically telling you whenever this is rising, that, you know, you're seeing the basis decline in, in relativity to the, to the Bitcoin price.

• 11:27Anthony Pompliano?

  All right. Now let's take a look at the actual on-chain metrics. Supply shock ratios. You and I have been talking about this now for almost two years going on. It feels like, it looks like we're just seeing a repeat to some degree of what we saw in the summer of last year, right? Of the, the supply shock really becoming more and more attractive. But, but what's your read on it?

• 11:49Speaker 02

  Right. So, you know, I think the biggest misconception is like for supply shock, by definition, you need low available float plus demand. And so, you know, this, this metric is really telling you kind of one side of the equation, which is the low available float. So the higher that this metric goes, the lower the available float is, or the, you know, the, the higher the qualitative aspect is of Bitcoin's float. Because by definition, when the blue line is ticking up, it's telling you that there's more supply moving to entities who have a lower tendency to sell. So, you know, people who will often talk about like the exchange balances and say that, oh, that doesn't really have any merit, which by the way is the purple line. As the purple line increases, there's more coins being taken off exchanges.

• 12:33Speaker 02

  You know, the kind of argument there is that, oh, well, people can just move coins right back onto exchanges, right? And I mean, it's, it's a valid argument. Um, you know, I, I don't fully. I agree with that, but I could I could understand the, you know, the logic that you're that you're, you know, trying to create there. Um, but you know, with a liquid supply, by definition, it's telling you the historical statistical likelihood of those coins being spent again. So it's telling you coins are moving to on-chain entities that have a lower than twenty-five percent tendency to sell their coins. So every four coins they take in, they sell um less than twenty-five percent of those coins. Uh, so seeing this uptick over the last two weeks, you know, in both of these is telling you, A, coins are moving off exchanges,

• 13:17Speaker 02

  but they're moving to entities who have a low history um of selling. A lot of those uh, you know, withdrawals have come from Coinbase in particular upon doing some kind of further digging. Um, but yeah, I mean, this is a really large divergence. I think this is the largest divergence uh going back in the charts history. Um, you know, from like twenty thirteen, twenty fourteen. Um, and you know, when you look at this in comparison to like twenty eighteen, the big difference was, you know, it looks very similar, you know, twenty eighteen looks very similar to like May on the left-hand side, like May twenty twenty-one on this chart. Um, and you saw this continually declining, declining, declining until the to the end of uh twenty eighteen and it started to reverse again.

• 13:57Speaker 02

  Uh, so that there's a very big distinction between late twenty eighteen and what we're seeing now is that, you know, this has continued to, you know, grind up or, you know, in the last two weeks, push pretty aggressively up, but generally just grinding up. Whereas, you know, in the twenty eighteen bear market, you saw this decline more and more. So to me, this is just showing you, you know, overall that more supply is getting locked up. And it's basically, you know, the analogy I like to use, which I actually stole from Lynn Alden, who does, who's been kind of dabbling in on-chain analysis. And I think she's, she's, you know, she gets it. Obviously, she's really smart. She's been saying, you know, the fuel is laid out, you just kind of need a spark for that fuel, right? And so like the further that this, you know, ticks up, that's showing you there's more and more fuel that's laying out.

• 14:38Speaker 02

  So, you know, it doesn't tell you that, uh, it just tells you that there's a higher likelihood or probability of there being some type of supply shock where that demand is kicking substantially. I think, you know, part of the reason that every single time this ticked up in twenty twenty And kind of like early to mid 2021 and like this was this and exchange balances were just like, you know, I think that was when every, you know, there was no on-chain backlash or anything. I think part of that was because like you had a steady stream of demand coming in because of the monetary backdrop. Right? So you just had like completely easy money, you know, QE infinity. And so that was generating just this constant bid. So every single time that the, you know, the float drew down, you had that other side of the equation, which was the demand.

• 15:23Speaker 02

  And so now I think we're kind of in the inverse where this, you know, the, the float is looking stronger, but that demand because of a lot of kind of the uncertainty that we're working through this month. We had the Fed hike rates this week, 25 basis points, which is really nothing compared to inflation. But nonetheless, we're kind of working through some of that uncertainty, markets kind of digesting what's going on in Ukraine and Russia. And so, yeah, I think, you know, the, the big thing though, from, from this chart is just telling you about that, the qualitative aspect of that, that float, which is one half of the equation.

• 15:55Anthony Pompliano?

  Got it. And then when we take a look at this brand new metric, I think it was David Puel and maybe Checkmate, if I remember correctly, they created this long-term holder inflation deflation ratio. You're going to have to explain to everyone what that means, but it, it's just incredible to watch. Like we're literally watching these metrics get created in real time as a number of smart folks continue to analyze the data. But what, what exactly is this metric showing?

• 16:21Speaker 02

  For sure. So this is again, as you said, created by David Puel, who's from Arg Invest, one of my good friends, and Checkmate from Glassnode. He's the lead analyst at Glassnode. So their idea was, you know, relatively straightforward. It's just, you know, we've been talking about long-term holder supply for a long time, but what they kind of decided to do was kind of obvious but genius at the same time is compare the rate of increase in long-term holder supply to Bitcoin's issuance. So it's basically telling you the pace of, you know, the, of how fast long-term holder supply is increasing, which means two things. It means A, short-term holders are aging into long-term holders. So they're aging past that threshold.

• 17:02Speaker 02

  Be considered long-term holders as well as long-term holders themselves accumulating. Um, but the two of those things combined uh lead to long-term holder supply increasing. So they're looking at the rate of increase, the, you know, the, the annualized rate and increase of long-term holder supply compared to Bitcoin's issuance, uh, and that's what that red line is here. And so as you could see, this has been a actually really strong signal. Uh, and we're at the highest that the ratio has ever been, which means that, you know, essentially the kind of deflationary aspect of long-term holders locking up supply is at an all-time high. You know, throughout all of Bitcoin's history thus far.

• 17:41Anthony Pompliano?

  Yeah, this is wild that, uh, I, I love the kind of thought process of like, we're laying the fuel and just every metric that you're showing, right? Is we're getting more and more data points that kind of confirm this idea that yes, there is going to have to be some sort of catalyst. Uh, but it's definitely, uh, laying out there. Uh, you've got market inflation rate and derivatives, uh, here as well. Um, and when you look at this, uh, it seems to be saying, you know, pretty similar thing as well. And we got kind of this flash green, uh, on this chart.

• 18:09Speaker 02

  Yeah. So I basically took the exact same methodology that I just described with checkmate and David, what they did. Uh, and then I just replaced a long-term holder supply. Instead I added in or replaced it with a supply that hasn't moved in at least a year ago. Around Glasser, it's called supply last active one year plus. Um, so it's telling you the amount of supply that hasn't, you know, moved at all in one year or more. Um, and then it's telling, it's comparing that, you know, rate of change to Bitcoin's issuance again, the same methodology we just talked about, just different metric. You know, supply last active one year ago instead of long-term holder supply. Uh, and what you see is whenever this reaches this certain threshold that kind of, I highlighted here on the screen with the blue line.

• 18:53Speaker 02

  Uh, that has kind of a four for four hit rate in terms of translating to kind of positive price action for Bitcoin over, you know, multi-month basis. Obviously a lot of these things aren't telling you what's going to happen with price in the next few days. These are things that are kind of used for, you know, uh, you know, more broader term investors and capital allocators that are, uh, you know, just looking for. Better broad entry points into allocating to BTC with longer time horizons. And so like, you know, again, this is showing something very similar, not quite, you know, at the all time high that the previous, the metric using long term older supply is. But again, it's showing you that we're getting to the substantial level of supply getting locked up. It's just a different measure of showing that same kind of dynamic that we looked at in the in the last two charts really.

• 19:37Anthony Pompliano?

  And then when we look at on chain cost basis, obviously the price is trading below that kind of on chain cost basis. What are the ramifications of that? And is it basically, we shouldn't expect to see any more kind of euphoria return to the market until we're back up over this?

• 19:55Speaker 02

  Yeah, I think that's that's a fair way to put it. You know, like, this is the metric that we kind of flipped cautious below once we broke below it at 53K. You know, that was kind of where I was like, yeah, I don't, I don't know. Like, you know, we kind of lost a lot of the momentum, a lot of strength. You know, at the end of December, and I still think for, you know, momentum, I think there's value in momentum buyers. And I, you know, until we kind of reclaim this reclaim this, I don't think we've kind of, you know, reclaimed that, you know, momentum in the market. And so for kind of momentum based market participants, this is one of the main metrics that I would kind of want to keep in mind in addition to just traditional moving averages. The psychology behind this is basically very similar to Soper.

• 20:40Speaker 02

  So essentially, it's telling you where the average cost basis by definition is of all the market participants that have been in the market for less than 155 days. And so it kind of a raging bull market, whenever you retest that cost basis. Because, you know, Bitcoin is just ripping over several month time period, people are not going to want to sell there. They're not going to want to sell at a loss in a bull market. And so people say, okay, hold on, I'm not going to panic sell. I'm just gonna, you know, wait it out for a second. And that allows the market to, some of the selling to subside, market moves back off that bend. Conversely, once you break below that, people are now underwater in aggregate, you know, shorter term market participants, newer market, newer market participants.

• 21:22Speaker 02

  I should say are underwater. And so every time you have an underside retest of that, once those market participants are underwater, the kind of thinking now changes to, oh, this thing isn't going up anymore. I want to get out. I just want to get my money out. I don't know why I bought this. I just bought it because it was going up. As soon as I get a chance to break even, I'm just going to GTFO, right? And so like every time, as you can see, for example, in, in, you know, the end of 2018, we had four or five kind of failed underside retests of this band, which is, you know, from a behavioral aspect, showing you that every time the cost basis of these newer market participants is retested, they decide that, okay, you know, I'm at break even or very close to it.

• 22:05Speaker 02

  I'm just going to jump ship and, and, you know, break even and get out of this Ponzi scheme or, you know, I'm just making something up. But, you know, the, the sentiment there is that I just, you know, I just want to get out, right? Because this thing just doesn't stop going down. And so like, that's kind of why you see it serve as resistance once it's broken below and really strong support once it's broken above. And so like currently, as you mentioned, we broke below that around 53K in the newsletter and I believe on the show as well and on my Twitter, kind of turned cautious. Once we broke below 53K, had that failed underside retest there at the end of December. And since then have kind of failed to reclaim that.

• 22:45Speaker 02

  That currently sits around 46K. So that's, you know, again, an area that I'm watching to see, you know, are we starting to kind of reclaim some of that momentum?

• 22:55Anthony Pompliano?

  Yeah, it's, um, man, it just feels like, uh, it's pretty attractive and kind of a repeat of summer 2021. Joe, John, what questions you guys got?

• 23:04Speaker 03

  Hey, well, what's going on, man?

• 23:06Speaker 02

  So brother.

• 23:06Speaker 03

  Fred in the comments, he, uh, we're trying to crowdsource some questions over here. And he just wants to know, in your mind, what is the catalyst going for? Like, what can jumpstart Bitcoin's price again? And what are you looking for?

• 23:18Speaker 02

  Yeah, sure. This is a good question. Uh, you know, I think the biggest catalyst is always the one you're least expecting. Right? Whenever, you know, whenever there's a, you know, a priorly known catalyst to the upper downside. Uh, that tends to get priced in beforehand, right? Um, and you know, when whenever something happens that no one knows is coming, then that market hat, that that information has to get priced in in the moment. Like it has to get priced in in real time. So like a good example of this would be like Tesla announcing they bought Bitcoin. Uh, I think on chain, we saw some interesting like stablecoin inflows in the days before. So I think there might've been like some insider front running, but generally the market in aggregate, you know, didn't really see that coming.

• 23:57Speaker 02

  I think. And so that's why we had like a 20% god candle on the day that Tesla announced, because the market was pricing in that information in real time. Uh, you know, versus when you have kind of, you know, like sailor announcing he's, he's gonna buy or, you know. Uh, just any kind of event that, that, you know, is, is known to the market beforehand. It's gonna have less of an impact once it finally happens, because the market's gonna, you know, price that in leading up to that. Um, so that would be kind of the biggest catalyst, I would say, is the one that we have no idea is coming. Some of the obvious ones, though, uh, for example, the El Salvador bond raised, right? That's, you know. Supposed to be about $500 million of buy pressure coming into the, into the market.

• 24:37Speaker 02

  Uh, and when Bitcoin is relatively illiquid like this, that can actually have a more substantial, you know, market impact. Another obvious one would be like a spot ETF upside surprise. Uh, I don't have any insight. You gotta get the, uh, the Bloomberg guys on to, to maybe talk about the likelihood of that. I know you had like the Valkyrie guy on last week or something. He was, I, I listened to that. It was pretty good, but, um. I don't have any insight into that, but obviously that'd be a big upside surprise. Uh, and maybe just, you know, another kind of, uh, Central American country adopting Bitcoin or, or something of that sort. Um, I mean, again, it could just be, you know, the, the kind of overall thing is just we're kind of in this like murky storm of macro uncertainty, right?

• 25:19Speaker 02

  And so like, maybe it just has to be the whole Russia-Ukraine conflict sorting itself out. Um, and you know, the Fed kind of finishing their hikes. And obviously, if they walked back, you know, tightening expectations, that would be huge. Uh, I mean, there's a few different things, but again, overall, not to repeat myself several times, but I think the biggest thing would just be, um, you know, what, what you're least expecting, you know, and, and, you know, if something comes out that no one foresaw coming, that information is going to get have to, you know, get priced in in real time.

• 25:49Speaker 03

  Gotcha.

• 25:49Speaker 04

  Will, when you're thinking about, uh, realized price and kind of new people coming into the market and what we saw in two thousand and eighteen where people begin to sell once they get to that like break even point, thinking that Bitcoin has only been above this level where it's at right now for like six percent of the days. What do you expect to see the same thing if we get back to those levels, well, fifty, sixty thousand that people are gonna, newer market participants go ahead and dump some coins and kind of break even?

• 26:16Speaker 02

  You're saying if we, if we reclaim that?

• 26:18Speaker 04

  Yeah, if we re, if we start, um, in a bull market and start going with price appreciation here and it reaches fifty, sixty thousand dollars. Do you expect new market participants to, once they break even, to jump ship?

• 26:31Speaker 02

  I mean, I think you'll always have some profit taking like in aggregate, though, their cost basis, the newer market participants' cost basis is at forty six K. Um, and so like that's, that's where that level of break and even like in aggregate is obviously like some is, some is above, some is below. That's kind of the aggregated number. Um, but of course, I mean, if we get up to fifty, sixty K, some people will, will take profit. Um, but you know, it's, it's all about, you know, is the marginal buyer outweighing the marginal seller? And so kind of, you know, this, this metric paired with some other measures of momentum, um, you know, is a good way to look at, you know, once that momentum is reclaimed, you have market participants that are stepping in basically like, you know, trend following market participants. So when you have like value market participants

• 27:15Speaker 02

  that are looking at, I don't know whether it's an on-chain metric or the number of days below moving average or just general price structure, you know, there's different ways to kind of determine what's value for BTC. Maybe just like looking at order book interest. Um, so I think you have like those value market participants and then you have momentum based market participants. And so my, I guess what I'm just trying to say here is that if we were to reclaim this, I think that you'll start to see a lot of those kind of momentum based market participants step in, not solely because of this metric. I think from some of those behavioral dynamics that we talked about, you'll probably see a decrease in aggregated spending because those market participants are now back in profit.

• 27:58Speaker 02

  But you know, there's also some other kind of confluence around 46, 47 K price structure, the yearly open, a couple of different moving averages, some of those kinds of things. So I would kind of tend to, tend to, you know, my thesis here would be that if we started to reclaim 46, 47 K, that would kind of have some of those trend based, trend following based, you know, momentum market participants kind of step back in and continue to push this higher.

• 28:25Speaker 04

  Gotcha. Makes a lot of sense.

• 28:27Anthony Pompliano?

  Will, when you start to think about looking forward, is there still a belief that like the Wall Street folks who may be treating this like a risk asset versus the retail folks who treat it more as like a reserve asset? Does that framework still apply here? And then also, how do you think about some of the more macro stuff with, you know, interest rates, Russia, Ukraine having an impact on, on those treating this as a risk asset?

• 28:50Speaker 02

  Sure. Yeah. I mean, I think first of all, like on the, on the second question, listen to guys like Luke Gorman or like Nick Carter. I'm not going to have anything more valuable than those guys. So instead of like saying anything, maybe missing some of the important points, I'll say like, turn to those guys and I'll tell you, go listen to them. Cause those are kind of the people that I've been listening to in that regard. Lynn Alden as well, obviously she's always brilliant. So listen to some of those folks as to like kind of some of those, you know, broader macro, you know, effects of kind of what's going on. To the first question, yeah, I think generally like a lot of, a lot of, you know, Wall Street, you know,-esque folks are viewing Bitcoin as kind of a, a risk on assets still.

• 29:36Speaker 02

  But at the same time, I think recently with everything going on with Russia, Ukraine, I think, you know, Bitcoin's kind of, some of the value proposition has started to shine through. Especially once you saw like Russia's reserves get essentially frozen, right? And so um I forget the guy's name. I don't want to botch it. I think it's like Zoltan from Credit Suisse. Yes. He had kind of written it in in his piece at the end, you saying, you know, this, you know, in a few years or so, he's kind of saying in a in a longer term sense, this is probably good for Bitcoin, everything that's going on. A kind of the uh, you know, the de-dollarization, if you will, um, and then B, just kind of the realization that, you know, you you shouldn't be trusting any nation or any individual entity uh to like, you know, custody anything.

• 30:17Speaker 02

  Uh, even gold, right? Like, you know, most of gold is kind of consolidated in one area, like even countries that like have gold as a reserve asset. Because it's so expensive to move around, like a lot of it is just in one location. Um, and so I think like some of these like, you know, events recently, especially with Russia, you know, some of the Canada stuff to like a lesser extent, but I think especially the stuff with Russia, it's kind of opened people's eyes to saying, you know, oh, well, you know, I understand like what the value proposition now it's censorship resistant money. You can take anywhere in your brain. Um, you know, for if you're a refugee, right? You you don't have to like smuggle gold bars in your backpack. You could just memorize 12 words and take your wealth with you anywhere on the planet. Um, and you know, no one can take it from you or seize it.

• 31:01Speaker 02

  Uh, and so I think, you know, some of these these recent events have definitely started to highlight that to an extent. I think the biggest thing though is like when when we're talking about Russia, you know, taking a Bitcoin position or something like that. You know, I think it would be illogical, but what what a lot of Bitcoiners, I guess, maybe kind of oversee and it it's just the fact that Bitcoin really isn't liquid enough right now. Excuse me, um, you know, like we're just not big enough where, you know, some kind of like massive sovereign wealth fund or, you know, central bank could step in and and take a Bitcoin position. Bitcoin is just again, not big enough for like an Amazon or an Apple. Like if they step in and take any even like a percent or 2% position,

• 31:44Speaker 02

  they're gonna like drive this thing up, right? So it's gonna take time um just for us to kind of generate the liquidity uh for these market participants to kind of get in and out. But I definitely do think, though, there's been a lot of people that have probably looked at some of these current events and started to realize, albeit, you know, again, Canada to a lesser extent, but really this Russia-Ukraine stuff. You know, whether you agree with Russia or not, you know, the facts are that, you know, the United States can really lock anyone out of the financial system in a day or two, right? And that's kind of like a rude awakening for other nations around the world.

• 32:22Speaker 02

  And so, yeah, again, I think there's definitely some eyeballs and what's going on here and people kind of realizing, having that kind of lightbulb moment, if you will, as to why, you know, we talk so much about why censorship-resistant money is so important.

• 32:37Anthony Pompliano?

  When you think about the market right now, is there any metrics that you weren't looking at three months ago that now you're paying a lot more attention to? I know that you've got kind of a pretty thorough process, just given, you know, the day job, but also just your personal interest. But like, what is the metric or two, when you wake up, you look at first outside of price or something that would be more elementary?

• 33:01Speaker 02

  Yeah, I mean, I think it really comes down to like, I'd say, three or four things, depending on like how we want to group them. Like, first of all, when I wake up, though, I'll just look at price, right? I mean, really, you could look at just scroll through your Twitter, you know, Twitter feed and gauge sentiment to see if price went up or down. Kind of like joking when I say that, but really, you know, just check price, see where price is at real quick. If there's a, you know, really large move in price, you know, I'll kind of work backwards and say, okay, well, you know, Bitcoin absolutely dumped. You know, was there some type of bad news that came out? Was it just, you know, some massive leverage worked out that maybe I had been watching out for over the last couple of days?

• 33:39Speaker 02

  And kind of, you know, look to see if there's anything interesting going on there, then kind of just move to, you know, I have a couple newsletters I'm subscribed to. Just go through kind of like general market news, just do a quick scroll through on CNBC, see if there's anything substantial and Market Watch, a couple of these different things. And then Twitter, like Twitter is honestly my main, you know. A source of information, if you will, have like, you know, several, I'm a very like, not to sound snappy, I'm just like very selective with who I follow because I like to like go through Twitter and basically have it as kind of like a Bloomberg terminal of sorts. Where I have different people I follow for different specific things. Um, and then, you know, I can go through and see all the different bits of information that I find valuable from different people that I find insightful.

• 34:24Speaker 02

  Um, and then, so like, I'll say price. Um, and then, you know, macro slash news. The other thing is obviously derivatives, uh, so I'll use like a coinalize, I use class note a little bit. Uh, and then I'll go through and kind of look at, you know, what's going on with open interest. Uh, what's going on with funding, um, you know, spot premiums, discounts. Uh, you know, anything crazy happen with quarterlies overnight? I'll go and look at order books, see if any, you know, crazy bids or asks stepped in and, uh, what's going on across the different exchanges there? And then lastly, I'll go through and look at, you know, what's going on from an on-chain perspective, but you know, obviously not a whole lot from an on-chain perspective because by definition, like we're looking at kind of these broader trends.

• 35:08Speaker 02

  Not a whole lot really changes day to day. You only really need to check on-chain like once a day. Uh, because the data updates at eight thirty, uh, EST for me, because I'm on the east coast. Um, but it updates at the same time every day. So, you know, I'll just sit there on my computer as soon as it uploads, be like, all right, go through, check everything, see if anything really changed for the day. Um, generally the main stuff that's going to change, if it will, is just like, you know, exchange balances, obviously, like a liquid supply, uh, you know, the, the, the size of different cohorts supply. Uh, some of those kinds of things, but generally like, you know, when we're talking about like these like broader oscillators or, you know, some of these kind of metrics that are

• 35:51Speaker 02

  trying to give you, you know, an edge over like a several month basis. Not a whole lot's really gonna, you know, kind of change day to day, but the derivatives, obviously, and then, and then the news, uh, those, those are kind of the two. The two things, uh, you could throw order books in there too, but you know, those are the two things that are really kind of like changing constantly throughout the day. I would say the other thing too. Is like getting a couple of really good, you know, group chats. Cause you know, I'm like 50 IQ. So I gotta be in all these group chats with all these giga brains to help me kind of get up to speed. Right. Um, and so I'm in like several different, uh, you know, group chats with traders or fund managers, et cetera.

• 36:30Speaker 02

  Uh, that, you know, I kind of just sit back. I try to, you know, add some value, not just lurk in there, but you know, really I'm kind of in there paying attention, asking questions to, to other people smarter than me. So I would say like, try to form a group of people that, um, you think are, you know, are smart and ideally smarter than you. Um, and you know, are, are, you know, as excited about the market as yourself and then just kind of, you know, build off each other. I'm like, I'm very big on the, uh, the whole like Stephen Covey, the, the, you know, uh, I'm going to completely botch this, but like the, the, the output is bigger than the sum of the parts, right? Like if you add, you know, one plus one plus one, it equals five. Right. Because you're combining each, you know, individuals, uh, you know, skill set together.

• 37:15Speaker 02

  And when you have that kind of synergy between those different parts, especially if you have like, you know, several people in a, in a, you know, telegram or discord chat, that all specialize in something different, where you bring that together and like the kind of aggregated output of the, you know, insight you're going to have into the market is much stronger than any of you are going to be able to have, you know, individually. So, those are some of the, the things I would say, but you know, again, the, uh, the, the group chats and, and just talking to smart people has really been the, the biggest thing for me. Um, podcasts, obviously, and I keep adding new stuff, but podcasts are in there too. But yeah, again, like talking to, talking to smart people is like really the biggest thing, man. And like just asking questions, you'd be surprised how many people are like,

• 37:58Speaker 02

  open-minded. I know it's easy for me to say that because I, you know, I have a, a decent sized following, but like, you know, really even when I had like, you know, two or 3000 followers, I'd reach out to all kinds of people. And just be like, hey, what do you think of this? Maybe you get ghosted like eight out of 10 times, but you know, two out of 10 times is better than zero. So, you know, just keep asking questions and just, uh, stay hungry.

• 38:21Anthony Pompliano?

  I, I think that that is the key to all of this is the learning is never done. You must pick up the, uh, pick up the work every day and keep pushing it forward, which I wish you do a great job of. How are we looking on, uh, on followers?

• 38:34Speaker 02

  It's been slowing down, man, because

• 38:36Anthony Pompliano?

  But you're almost at 600.

• 38:38Speaker 02

  Yeah, we're getting there. But I think, you know, with, again, as some of the stuff we talked about earlier, like, I think people are just kind of MIA. People are bored of the market and they're just, they're tired of, you know, keeping up with everything every day and just they're taking a break and going to the beach. So.

• 38:52Anthony Pompliano?

  It's all right. All right, buddy. Well, we'll see you next week and then also Bitcoin Conference in person. Let's go.

• 38:59Speaker 02

  Let's go. All right.

• 39:02Anthony Pompliano?

  All right, later, buddy.

• 39:03Speaker 02

  All right. See you. Thanks.

• 39:04Anthony Pompliano?

  Thanks so much for listening to today's episode. I really hope you guys enjoyed this one. Make sure you subscribe on Apple, Spotify, or your favorite podcast player. And if you're looking to try to transition to get a new job in the Bitcoin or crypto industry, we've got you covered. Head over to pompscryptocourse.com. We've developed a curriculum with the top teams across the industry. It's a three-week intensive training program with over 50 events packed into that three-week time period. Go to pompscryptocourse.com to learn more and I'll meet you guys for the next episode.