#645 Did The Bears Win This Round?! w/ Will Clemente

Will Clemente is a Finance Major at East Carolina University. He has quickly become one of my favorite writers on all things bitcoin, including deep dives on various onchain analytics. Subscribe to Will’s new email newsletter here: https://btcbywc3.substack.com/ In this conversation, we discuss the bitcoin fundamentals, on-chain metrics, miner accumulation, all-time high in an important metric, and what Will’s guess for a bull market top is. ======================= MiamiCoin, the first CityCoin, is now live! Mining began on August 3rd, and the community has already generated over $1 million of protocol contributions reserved for the City of Miami. This is a community-launched program built on Bitcoin, and it’s far more than a currency: MiamiCoin is a protocol, and a platform for innovation. So, the CityCoins team is announcing something pretty cool: MiamiCoin Makers Month is a bringing together hackers, designers, and creators who are passionate about creating apps to benefit the City of Miami. $25k in total prizes will be awarded to developers who build the winning apps. And, the winners will be announced by Ryan Hoover, founder of Product Hunt, and Bored Elon Musk, everybody’s favorite pseudonymous Twitter inventor and blockchain enthusiast. Visit MiamiMakers.co to learn more and sign up to take part. ======================= Mask Network connects mainstream social media with the new, open, decentralized Web 3.0. Through browser extensions and mobile applications, users could get a glimpse of the decentralized application world, make borderless cryptocurrency transfers, display, and trade NFT collections, and participate in DeFi projects. Visit mask.io/pomp to start exploring. ======================= Polymarket is the world’s leading information markets platform where you can trade on the most pressing global questions and see unbiased, real-time data on what the market thinks will happen – all on the blockchain. For a limited time, sign up with referral code “Pomp” to get your first trade reimbursed up to $100. Click on the link to get started: polymarket.co/pomppod

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 a finance major at East Carolina University. He has quickly become one of my favorite writers on all things Bitcoin, including deep dives in various on-chain analytics. You can subscribe to Will's new email newsletter by following him on Twitter. In this conversation, we discuss the Bitcoin fundamentals, on-chain metrics, minor accumulation, all-time high in an important metric, and what Will's guess for a bull market top is. I hope that you enjoy this conversation with Will. I really enjoy doing them every single week. Before we get into this episode, though, I want to quickly talk about our sponsors.

• 0:45Anthony Pompliano?

  First up is Stacks. Miami Coin, the first city coin, is now live. Mining began on August 3rd, and the community has already generated over $1 million of protocol contributions reserved for the city of Miami. As mining continues, these contributions are increasing every single day. The city can claim these funds at any time, and Miami Mayor Suarez has shown strong support for the project. This is big for Miami. Remember, this is a community-launched program built on top of Bitcoin, and it's far more than a currency. Miami Coin is a protocol and a platform for innovation. So the City Coins team is announcing something pretty cool. Miami Coin Makers Month is bringing together hackers, designers, and creators who are passionate about creating apps to benefit the city of Miami. They've

• 1:30Anthony Pompliano?

  got $25,000 in total prizes that will be awarded to developers who build the winning apps. And the winners will be announced by Ryan Hoover, founder of Product Hunt, and board Elon Musk, everyone's favorite pseudonymous Twitter inventor and blockchain enthusiast. You can go to miamimakers.co to learn more and sign up to take part. Again, go to miamimakers.co to learn more and sign up to take part in this remote week. miamimakers.co

• 1:58Anthony Pompliano?

  Next up is Mask Network. They're the portal to the new internet that connects mainstream web 2.0 social media with the open decentralized web 3. Through our browser extension, users can get a glimpse to the decentralized application world. You can easily share and make borderless cryptocurrency transfers, decentralized file storage, and display and trade NFTs. You can also participate in various DeFi projects and vote on governance proposals. Do everything in a web 3 way, but on top of web 2. It's an interoperability between web 2 and web 3. Go visit them at mask.io/pomp to start exploring. Again, it's a portal to a new internet that's

• 2:38Anthony Pompliano?

  built on top of web 2, but it allows you to experience the open decentralized web 3. Go visit it at mask.io/pomp to start exploring it today. Let me know what you think. You can tweet at me about it. Last but not least is Polymarket, the world's leading information markets platform, where you can trade on the most pressing global questions, all on the blockchain. You can choose from a variety of markets, like will Cardano support smart contracts by October? Will the US have more than 100,000 COVID cases before 2022? Will Trump run for president again? With over $100 million traded in its first year, Polymarket is the go-to platform to settle the biggest debates of the day. Think you know more than the market? Trade on your beliefs and earn a return if you're right. Do you want tomorrow's

• 3:23Anthony Pompliano?

  news today? Use Polymarket to see real-time data on what the market thinks will happen. No fake news, no pundits without skin in the game. So head over to polymarket.com and make an account today. For a limited time, sign up with referral code POMP to get your first trade reimbursed up to 100 bucks. That's right, if you go to polymarket.co today and you sign up using referral code POMP, they'll reimburse you your entire first trade up to 100 dollars. Go to the description and you can also click on the link at polymarket.co/pomp pod as well. Go to polymarket.co, use code POP, you get reimbursed for that first trade up to 100 bucks, no brainer. Alright, let's get into this episode with Will. I hope you guys enjoy this one.

• 4:05Speaker 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.

• 4:29Anthony Pompliano?

  Will, what's up?

• 4:30Speaker 03

  Hey guys, sorry I have myself muted. What's going on?

• 4:32Anthony Pompliano?

  Not much. How are you?

• 4:33Speaker 03

  Happy Friday. Good, good. First week of class this week, pretty much just syllabus week, so didn't do much, but hanging in there with the school stuff, but other than that, man, interesting week in Bitcoin. So we're gonna get into it.

• 4:47Anthony Pompliano?

  We're gonna get into Bitcoin, but we want a school update first. We saw a tweet where you were in class and they were teaching you about a 6040 portfolio and you were laughing. What was going on?

• 4:58Speaker 03

  It was, you know, I was cringing inside. It was tough to sit through that and you're learning about, you know, allocating your money to negative yielding bonds isn't really exciting to me. But, you know, it is what it is. At least I'm enjoying my history class.

• 5:16Anthony Pompliano?

  All right, let's jump into on-chain metrics. First up is we have the total supply held by long-term holders. What's going on here?

• 5:22Speaker 03

  Yeah, so, you know, last week and following this week, we've reached new all-time highs in the amount of Bitcoin that long-term holders possess, you know, which is obviously a really good sign because long-term holders historically kind of set the floor. You know, when you look at this as just a percentage of circulating supply, it's about 68%, 67.7% if you want to be exact. And then when you use, instead of circulating supply as the denominator, if you use adjusted supply, which is factoring out lost coins. And so just for listeners, Glassnode just uses a seven-year threshold. So over that, they consider those coins lost. And so using that as the denominator, you're looking at 84.5% of adjusted supply. But yeah,

• 6:07Speaker 03

  so point is, you know, long-term holders are buying like crazy here. Not only that, but they're also, we're also seeing the short-term holders aging past that 155-day threshold. And that's shown by hodl waves. So what you see is that in the smaller portions, the younger portions of coins. So you know, when you look at below six months, those are going down while you're starting to see a larger portion go into those, you know, three to six month, six to 12 month, one to two year cohorts. So you're starting to see not only just long-term holders buying here, but also, you know, the investors, the entities that came on the network, you know,

• 6:49Speaker 03

  you know, three to three, six months ago are now starting to age into that long-term cohort. So the combination of both of those things is why you're seeing this new all-time high.

• 6:57Anthony Pompliano?

  Got it. And so when we start thinking about the short-term holder, long-term holder percentage, we're seeing basically the exact same thing, right?

• 7:05Speaker 03

  I'm sorry, what'd you say? They kind of cut off it, dude.

• 7:07Anthony Pompliano?

  The short-term holder, long-term holder percentage is basically the exact same thing?

• 7:12Speaker 03

  Yeah, exactly. It's just, you know, looking at the, the percentage of supply held by, by long-term holders, both in terms of circulating supply and the adjusted supply.

• 7:22Anthony Pompliano?

  All right. And so we've got the realized cap hodl waves. Explain to everyone what this is and then what are you seeing in the actual numbers?

• 7:29Speaker 03

  Yeah, this is just illustrating that not only is it long-term holders that are buying, that's contributing to the, to the increase in their, in their supply, but also cohorts that are aging into that 155-day threshold. And so you can see that here with the hodl waves that, you know, the smaller, the smaller, or I should say younger cohorts are going down while the, the older ones are moving up. So you're seeing the, the aging of those coins into the upper threshold. So for example, you know, a coin in the, in the one week to one month threshold is, is not moved. So now it's moving into the one month to three month and etc. So you're starting to see strong maturation, which is a good sign. People are coming on the network, buying their coins and holding them strong.

• 8:09Anthony Pompliano?

  Spent output age bands?

• 8:12Speaker 03

  Yeah, this is just looking at different, different cohorts of age and the amount, the percentage of, of outputs that, that came from that specific cohort, if that makes sense. So what, what I have been looking for is, you know, are these long-term holders taking exit liquidity? That would be concerning to me. And we did actually get a spike up to like 18. And point seven five percent, uh, you know, that seems to kind of been a one off thing. Uh, and that, and that spike was really in, in three to five year holders and, and two to three years as well. Um, but since then that that's cooled off now that, that, you know, we're back down to three point four percent as, as of yesterday. So. Uh, it seems like so far that, that that was just, you know, a, a one off thing that some of these longer term holders were, were basically taking profits.

• 8:57Speaker 03

  But just watching this closely to see if, you know, uh, if, if this kind of becomes a trend. Um, on Tuesday I sent out a, a newsletter and, and I basically just said, hey, look, you know, I'm feeling kind of cautious here when we. Kind of this, you know, failed breakout above 50K kind of rejected there, um, that in confluence with. Seeing some coins coming out to exchanges, uh, a drop in a liquid supply. And then also some of this, uh, selling from longer term holders. Kind of taking profits on into the rally, which isn't completely unexpected. Um, I was, I was kind of suspecting we saw some, some short term, uh, you know, price correction, uh, and, and we did go down to about, you know, whatever 46, 300, but. Um, it seems like we kind of found a local bottom there. I tweeted something about that yesterday, but now today it seems like, uh.

• 9:41Speaker 03

  Jay Powell has kind of given us the juice, uh, to, to maybe start heading back upwards. Um, we're also seeing a, a tick back up in, um, both the exchange flows. So coins are moving back out of exchanges again. Um, and then also the, the liquid supply has moved back up. So, um, kind of the, the concerns that I had there and in the letter I sent out Tuesday. I've, I've kind of been alleviated.

• 10:03Anthony Pompliano?

  The entity adjusted ASOL, uh, seems to be showing a pretty rapid recovery as well, uh, last couple of days.

• 10:11Speaker 03

  Yeah, this is very similar to the spin output age bands is looking at once again, like the average age of the coins being sold. And so. What you don't want to see here is what, you know, if you look back at, uh, late 2017, early 2018. You see that big spike after all time highs when, when we started, it's a little off because it's moving average, but that, that spike really came on that, on the dead cat bounce. Which is actually a little bit to the right in the chart. Uh, but point is, you know, once again, you don't want to see everybody jump ship. It's not, you know, it's, it's completely expected to see people taking profits on the move up. Um, but you know, don't want to see everyone just sell out at once. Uh, and so, you know, you'll see all the way on the right hand of the screen, we're starting to get this move back up in ASOL, but.

• 10:51Speaker 03

  Uh, you know, kind of just monitoring this day to day, want to make sure we don't see any massive move up in that to, to. That would tell me that, you know, everybody is abandoning ship kind of like late 2017.

• 11:02Anthony Pompliano?

  Got it. And so then when we start to look at things like the futures dominance, obviously this shows how much kind of leverage is in the system or is one indicator of that? Explain what you're seeing here.

• 11:14Speaker 03

  Yeah, so most people like to look at funding to say, okay, you know, funding is positive, so price has to go down. Funding is negative, so price has to go up. Like, I think there's a little bit more nuanced than that. So like, funding is slightly positive, which in theory, you know, when you have prolonged positive funding, that tends to be a bearish thing. When you have prolonged negative funding, that tends to be a bullish thing. But that doesn't necessarily mean every time funding is positive, price is going to go down or vice versa. You know, we had like six months of prolonged positive funding towards the, you know, late last year, early this year. You know, there's several things here to kind of unpack. Like firstly, funding is, although it is slightly positive, it's nowhere near where it was earlier this year at similar price levels. Also, you know, when you look

• 11:59Speaker 03

  at what you just mentioned about the open interest dominance, this is just comparing open interest to market cap and just taking like a basic ratio of that. And so when when open interest really is insignificant compared to market cap, the odds of futures having a real effect on the price is is lower. Not to say that it's impossible that we get a squeeze, but I think the chances are a lot lower than than many people are saying. Also, that the red line that that in the chart you just had popped up, that's the the leverage ratio. So it's just looking at open interest compared to how many coins are on that specific exchange to kind of get a ballpark as to like how collateralized traders are. Both of these things are still kind of mild. So I don't think we get any crazy, you know, short or long squeezes.

• 12:44Anthony Pompliano?

  Got it. And then when we start to actually go into like net realized profit loss or realized profit, realized loss, you've got this kind of four part chart. What exactly are you looking at here? What are you seeing?

• 12:57Speaker 03

  Yeah, so in the in the top left, you have the net realized profit loss. So the difference between the two. Um, on the right and the top right, you've realized profits, bottom left, realized losses. And then bottom right is the percentage of of addresses that are in profit. So. Um, wha- what I'm looking for is, you know, like we touched on earlier, it's to be expected that you're going to see profits taken on the on the way up. That's what happens in bull markets, long-term holders distributed to strength. Um, but what I don't want to see is is the overhead supply start to come onto the market. Um, and and so, you know, we had this really large distribution zone between fifty, sixty K. And we trapped around for whatever two, three months before we moved, started moving down. Um, and. What you don't want to see is that overhead supply to come onto the market and add in additional sell pressure.

• 13:42Speaker 03

  So I'm watching realized losses to see if those coins from above are starting to to move down here. Um, which doesn't seem to be the case. It seems to be mostly just realized profits, which is a good sign. Um, also, the percentage of addresses in profit is is kind of important because. You know, the longer that, the longer that the market stays below people's cost basis, the more likely they are to to capitulate. Um, in theory, so the fact that we've gone up from sixty-nine percent at the lows to eighty-six percent of addresses now in profit is is a really good sign. Um, yeah, I'd like to see continuation of that. And then like kind of on on a similar note, looking at Soper. This is once again looking at the profit taking of coins. Um, we're back above the one threshold, which means the market's trading in a state of profit, which is once again a really good thing.

• 14:27Speaker 03

  Um, and and so this is the weekly version that I threw in the newsletter, but also if you look at the daily version. Um, we got a bounce off of one, uh, whatever, two days ago, when we we had this little mini correction. Uh, which is a good sign because it's showing that, uh, investors aren't willing to sell at a loss. So kind of using those things in tandem, but Soper is a good gauge to say, okay, like, are are investors? Um, you know, are are market participants willing to start selling at a loss? Do they want to get out of the market that bad? It doesn't seem like that so far because of the, we've gotten a bounce off of one twice over the last two weeks.

• 14:58Anthony Pompliano?

  Got it. And then when you start to look at the transaction, uh, volumes, I know that at one point you were a little worried because it seems like the number of transactions was, uh, trending downward. It seems like those are recovering.

• 15:08Speaker 03

  Um, like slightly, but I'm still a little concerned about it because it's it's pretty much just ghost town. And we've gotten off the lows that we were at like, you know, last month. But when you look at like the transaction fees, which is a good uh kind of proxy for like uh you know, block space demand. That that continues to move down. But the number of transactions and and also the active addresses that this kind of moved up a little bit, but still nothing that that you know. The way I worded in the newsletter was we've had a big swing in price, but no gain yet in transaction activity. So I I want to see some follow through on that. And some people have been saying that it's because of all the, you know, all small uh transactions are moving to Lightning Network, which is possible.

• 15:51Speaker 03

  But um, you know, I think there there's no real way to to exactly quantify that. So it's hard to say. And then also uh we are seeing really strong hodling behavior. So, you know, it could partially have something to do with that. People just don't want to transact their BTC and we're just seeing people, you know, buying and holding their coins. Like, when you think about the network, do you think of, you know, this this is just a rhetorical question for listeners. Do you think of usage of the network as transactional activity or do you think of it as hodling? Right? Um, I guess some people have different answers. Some people say it's a combination of both. Um, I personally think the Bitcoin networks, you know, considering usage of it would would be hodling. And and if you think of it that way, you're seeing usage of the network at all time highs.

• 16:32Speaker 03

  But if if you are considering it uh using using transactional information, then we are kind of in this uh kind of stalemate ghost town. Where, you know, it is it is a bit concerning to see and and something you definitely kind of want to see pick up over the next couple of weeks. If we get more price continuation.

• 16:48Anthony Pompliano?

  Makes sense. Exchange net position change, basically how much Bitcoin's on the exchanges versus not? What are you seeing?

• 16:55Speaker 03

  Yeah, so we got another little dashboard for chart thing here. Uh, top left, like you said, is is the net position change. So looking at the 30 day change between a month ago today and now, uh, top right is just a raw balance on exchanges. Bottom left is the balance on Coinbase, bottom right is balance on finance. And so what you see is that um exchange flows have gone kind of flat uh when the and then the newsletter last week. Um, and the one I set out Tuesday was suggesting caution was when we had started to see net inflows to exchanges. Um, which once again suggested that people had started to take profits on the rally. Um, and and then about. Two days ago, we saw this downdraw in balance exchanges again and looking at the individual different exchanges, it looks like that that's coming from Coinbase. So you'll see in bottom

• 17:39Speaker 03

  left that that drawdown in Coinbase's balance. I think it's roughly 30,000 coins, but don't quote me on the exact number. Bottom right is Binance and what you see is that Binance continues to increase in terms of how many coins are on the exchange. So you know, you're seeing it what looks like selling from from the east and then buying in the west, or also some people could could consider this kind of a way to gauge like, you know, people are moving coins on to Binance for speculative purposes because Binance has leverage and all kinds of, you know, products that you can get, you know, speculative leverage on anything. So that you could see it that way as well. But generally, like when you you see a lot of selling in in Asian hours and then buying

• 18:21Speaker 03

  in the in like the early morning eastern hour. So I I think that's probably more of more the explanation, but that's just kind of a theory.

• 18:29Anthony Pompliano?

  Got it. And then when you look at miner profitability as the last thing here, what are you seeing on that?

• 18:35Speaker 03

  Yeah, so, you know, we we just had this difficulty adjustment. And so when you have more hash coming on the network, which by the way is slowly recovering, nowhere near where it was a few months ago, but you know, it's it's been recovering, you know, slowly grinding up. When you have a when you have a difficulty adjustment, the miners that are still, you know, that are on the network, they become less profitable. So so what you see is in in this green line, that that's the revenue in Bitcoin terms per hash. And so after the difficulty adjustment, whatever two days ago, you saw a drop down in that. But yeah, hash is coming back up, which is a good sign as well.

• 19:12Anthony Pompliano?

  Got it.

• 19:12Speaker 03

  And so like this, you know, it makes sense why miners have been holding their coins because they've been more profitable lately, right? And so I I'm curious if maybe we start to see a little bit of miners trimming their holdings because they'll be less profitable over the coming weeks, but they still are way more profitable than they were even two months ago. But, you know, as as that hash starts to come back on, you know, the miners are competing more so for for the same amount of block reward, then you're going to see that the revenue per hash go down.

• 19:40Anthony Pompliano?

  If you had to kind of summarize how you're feeling right now, bearish, neutral, bullish, how do you think of yourself right now?

• 19:48Speaker 03

  Well, yeah, I'm leaning kind of neutral to bullish because we had an uptick in the liquid supply shock ratio and then also, like I mentioned, some of those coins moving back off of Coinbase, which sometimes it could take a few days for the heuristics to update. So wouldn't be like 100% solidified on that, but over the next couple of days, we'll get confirmation to see if it sticks or if, you know, that trend continues. But as of right now, I'm leaning at least short-term bullish for sure. The only thing that's really concerning me is the transactional activity. You know, it is really low relative to what you usually see in a bull market, but some people say perhaps, you know, that's just like a, you

• 20:29Speaker 03

  know, a following factor. You know, you see the price increase and then the transactional activity follows. But we did just have a big move over the last couple of weeks. So I would be expecting, you know, more follow-through in that. So something definitely to keep an eye on over the next couple of weeks.

• 20:45Anthony Pompliano?

  Got it. Joe, John, you guys got any questions?

• 20:47Speaker 04

  Yeah, I guess, Will, my question would be around just some of the metrics that you look at, right? And I think most people expect, kind of based off of your evidence that you've presented on chain and some of the other stuff going around, that the price is going to appreciate here over the next few months. Some people think more rapidly than others, but I think everyone kind of generally understands it's invested, it's going to appreciate. Do the metrics change? And like, what metrics do you look at as we start accelerating and as we start getting, the price starts accelerating towards 100 and all these other numbers? Do those change or do you look at the same metrics?

• 21:18Speaker 03

  No, yeah, it's a great question. Like, the way I think about it is, you know, on-chain is just a toolbox. And so, you know, for different circumstances, you use different metrics. You know, for example, like, you know, two months ago, I was looking really heavily at what miners were doing because of the Chinese miner migration and we had really low volume. So, you know, it didn't take as much sell pressure to move the market at the time. So seeing some of that sell pressure for miners, in my opinion, contributed to some of the downward price pressure that we had. So like, you know, when we get back into a raging bull market, I'm not going to be looking at what miners are doing as much because that sell pressure pretty much just becomes insignificant compared to even like

• 21:58Speaker 03

  The exchange fees that are being sold onto the market, although Brian Armstrong did say they're going to put 10% of their their profits into into buying crypto. So that's a good thing. Uh, but anyway, yeah, I I would be looking for, um, you know, what what's going on in the futures market. I think like for short term price movements, that that'll become uh, more prevalent as we probably move up. For now, I think like the futures market is probably just just remaining cautious until we get that, you know, uh, a solidified move perhaps over 50K or over like the one trillion dollar threshold or whatever these traders are looking at.

• 22:33Speaker 03

  Uh, but for now, it looks like the market's mostly spot driven, uh, as as we kind of looked at like the O I dominance. So that would be one of the things I'd be looking at as leverage starts to come back in if if we get a price move up. Uh, because that'll that'll play a bigger role in in kind of the the market structure.

• 22:49Anthony Pompliano?

  John? Will, did you say 85% of the coins are held by whales or bigger entities?

• 22:56Speaker 03

  Uh, yeah, so eighty it's eighty four and a half. Uh, I just have to be a smart ass, uh, because of, uh, when you're looking at the adjusted supply, but when you're just looking at circulating supply, it's 67.7. Um, but either way you want to cut it. I mean, they they the long term holders own a very large portion of supply. Uh, when you're talking about whales, it that's another interesting conversation. Like when you plot this out over time, what you see is that whales distribute their coins throughout the coins history while retail as a percentage of overall supply increase their holdings. Um, and so, you know, if you had some theoretical Gini coefficient for Bitcoin, it'd be moving in a positive direction because you're having that help the supply distribution over time.

• 23:34Anthony Pompliano?

  Will, where are we going, man? What do you think happens to the rest of the year? Are you still, uh, pretty bullish on a much, much higher price?

• 23:42Speaker 03

  Yeah, I'm I'm still, uh, after this, after the data updated last night, um, I'm no longer, you know, short term bearish. I'm leaning more neutral to bullish over the next week or two. Um, you know, technicals, it looks like we're perhaps setting up for volatility squeeze here in in that kind of same timeframe as well. So, um, you know, looking for that in the short term, in the midterm, you know, I still think we need to get over, uh, whatever 50K or The trillion dollar threshold that that gives the capital on the sidelines kind of that confirmation. And then for like from a non-chain perspective, I talked about like some of my my top and bottom price models. The the kind of bull market threshold that I'm looking at is right around sixty K.

• 24:23Speaker 03

  So if we did get up there, probably line up right around when we theoretically break all time highs because it's slowly trending up. But if we were to get over that, then I would I would be targeting, you know, whatever the the next part of the models, I think it's like ninety five ninety five K. So, yeah, in in the short term, though, like watching some of those things we touched on earlier. You know, it is with with this data, you kind of just have to take it day to day and watch how it's coming in. It's, you know, once again, kind of hard to to predict several months out. But I think just anecdotally, hearing some of these things from from people that I know who have some, you know, connections in the space and and the capital that's supposedly coming in towards towards the latter half of the year and just kind of the seasonality of Bitcoin.

• 25:08Speaker 03

  I think I think we're still kind of set up for for more upside here. You know, something we touched on many times with broader metrics, just really never really reached any kind of overheated euphoric zone, kind of resembles a lot of stuff in twenty thirteen where you kind of ran up about halfway and then came back down and and then went up and reached those kind of euphoric, you know, but off top levels in some of these macro metrics. So watching some of those things. Also, one other thing we didn't touch on, which is just kind of a side note. The the percentage of of futures that are margined by by stable coins versus Bitcoin. So like, this has been an interesting trend that you've seen since May nineteenth,

• 25:51Speaker 03

  where now you're seeing a lot of traders preferring to use stable coins as as margin instead of Bitcoin, which kind of makes sense because a lot of traders got wrecked on May nineteenth and it seems like now they're they're being a bit more cautious. You know, if you just think about it, right, like i- i- if you're margin with Bitcoin and the price starts going up, well, not only is is the price of the asset that you're that you're betting on going up, but also the margin, right? So like if if you're betting that Bitcoin's going to go up. Long Bitcoin and your margin with Bitcoin. Well, Bitcoin's price is going up, so your P and L is going up. But also the margin of that position is going up. So it creates kind of this reflexivity up. Uh, but then also on the way back down, um, you know, it, it can be bad because

• 26:32Speaker 03

  your, your collateral is going down in value. I mean, in tandem with your, with your P and L. So it can kind of create this convexity on the way down. It kind of accelerate, uh, moves down and, and that's kind of, I suspect played a role in, in that drawdown that we had in, in, uh, early May. So the, the good part of seeing, uh, you know, these stablecoin margin futures is, is in theory, um, they're more susceptible to getting squeezed. Shorts are more susceptible to getting squeezed. Cause right, like i- i- if you're short and your margin with Bitcoin and the price starts to go up, yeah, like the trade is going against you, but also your collateral is increasing. Right. Because you're, because you're margin with Bitcoin and the price of Bitcoins is going up. So

• 27:11Speaker 03

  the fact that they're, that their margin with, with stablecoins, uh, takes away that kind of like double dipping you get where if you're short, uh, you know, and the trade starts to go against you, you're still, uh, you know, you, you're still benefiting partially because your collateral is going up. So you, you're not as, as, uh, suspected to getting squeezed. Um, so yeah, like I think, I think, I think seeing like an increase in stablecoin margin futures, um, is, is somewhat bullish in, in theory, because you have people that are, are more susceptible to getting squeezed than normal, if that makes sense.

• 27:43Anthony Pompliano?

  It makes a ton of sense. And I, I think this all goes back to like the on-chain metrics don't lie. And also what's really fascinating is you saw some metrics change, but you actually waited a couple of days to, um, understand how they were going to play out. And so it's not something that you can necessarily trade on immediately because you could get faked out by, um, kind of the real time nature of it. But if you understand the right cadence of how to internalize this stuff, synthesize it, uh, allow for enough time to really have confirmation in a trend change or not, then you're able to apply this stuff and understand where we are in cycles, both in the short and, uh, long term.

• 28:15Speaker 03

  Yeah, a hundred percent. Like if, if you're using like exchange flows and you're tracking that intraday, like you're going to drive yourself crazy. Well, you know, the heuristics, they're not perfect, right? So sometimes it takes a few days for, for them to update and. Um, you know, I think if you're using this stuff on like some kind of like you're day trading off of it. I mean, you're just kind of setting yourself up to get wrecked. Uh, like you just said, it's, it's best used, you know, over a, you know, week to two week kind of timeframe. Um, and, and, you know, especially with the exchange balance stuff and some of the, some of the entity labeling, um, you need to wait at least a few days to, to kind of wait for that stuff to update and also see if it's a trend. Um, cause you can drive yourself crazy. One day, you know, the exchange balances go down, the next day it updates and it's up. So it's like,

• 28:57Speaker 03

  you need to wait at least towards the end of the week, you know, see is there a trend like, you know, when, when I send, when I sent out the letter Tuesday, the exchange flows were in, were increasing. That was like a week long trend that they had been moving up. So I felt confident in, in putting that out, but you know, like this, this uptick, I mean, this downtick in exchange balances, uh, from Coinbase yesterday. Uh, I'm still not fully confident in that. And that's why I'm like a little bit hesitant to be bullish. All the like the data in itself, like the downtick in exchange flows and the uptick in liquid supply ratio. That is bullish, but I'm waiting a day or two, like, you know, to kind of see if those heuristics kind of filter some of that out, but, uh, but yeah, like definitely needs to be used in cadence. Like you said.

• 29:38Anthony Pompliano?

  Got it. Uh, when you start to think about, uh, this weekend, forget Bitcoin for a second. We, are we, are we partying this weekend? What, what's going on with, uh, school?

• 29:48Speaker 03

  Yeah, bro. It's, it's syllabus week. So no, no one's been doing any school stuff this week. I'm sure everybody's, uh, ready to have some fun, but, uh, stay safe out there. Hopefully nobody, uh, gets COVID, but, uh, you know, aside from that, um, I'm ready to have some fun this weekend.

• 30:03Anthony Pompliano?

  Let's go. Will, Will back in college. I love it. I love it, man. All right. Listen. Thank you so much for doing this. Uh, what is Twitter? Where do we want to send people? And then they can find the newsletter, uh, in your Twitter bio.

• 30:16Speaker 03

  Yeah, sure. Thanks for plugging me in as always, man. Uh, I'm on Twitter at W Clement T I I I. I'm at a hundred ninety nine point one. So if you guys could pump me over two hundred.

• 30:26Anthony Pompliano?

  Ooh, wait, wait, wait, wait. You're, you're right now at a hundred and ninety nine?

• 30:31Speaker 03

  Yeah.

• 30:32Anthony Pompliano?

  Oh, hold on a second. Hold on, hold on, hold on.

• 30:35Speaker 03

  You gotta get me right, uh.

• 30:36Anthony Pompliano?

  This is what we're gonna do right now. Ready? So I just put in the chat, everyone, his Twitter account. Go follow him. And then let's do this. Ready? I'm going to, man, I can't believe I just got tricked into doing this, but are you ready? The young on-chain wizard Will Clemente is at 199,000 followers. Bet you all can't push him over 200K before the end of the day. Let's see, is this gonna work? Go follow at Will Clemente.

• 31:21Anthony Pompliano?

  Alright, let's see. I just tweeted it. I didn't even spell check or anything, so if I spelled anything wrong, whatever.

• 31:28Speaker 03

  Appreciate you, man.

• 31:29Anthony Pompliano?

  Let's see what happens. Well, if you get to 200K, then the next stop is a million, so perfect. You'll be ready to rock and roll.

• 31:35Speaker 03

  There's one thing you taught me, Pop, that's to think big.

• 31:40Anthony Pompliano?

  Keep going, man. You're doing a great job. Alright, we will, we'll see if we can get you over 200K before the end of the day. And I appreciate you coming on. We will, we'll see you on next Friday. Don't have too much fun this weekend.

• 31:52Speaker 03

  Yes, sir. I'll do my best, and you guys take it easy. Thanks for having me.

• 31:55Anthony Pompliano?

  Thanks, Will. Alright, see you, buddy.

• 31:57Speaker 03

  See you, guys. Cheers.