Checkonchain Q&A - May 2025

[Music] Good day folks, and welcome to the May edition of our question and answer. Thanks for getting all of your questions in. I'm joined with Alec. Mate, how you doing, man?

Going really well. Um, just moved into a lovely apartment here in Sydney. Um, and the sun's coming through the window. Feeling great today. And we're a stone's throw away from 100K.

Yes. Also feeling really good looking at that price chart today.

Feeling really… Yeah. It's good, isn't it? Look, it's one of those things where, you know, we were at a decision point. It seems to be that the market wants to go higher, which is great to see. Um, you know, we still got to be careful. We have to get past all-time highs first. Like, you can still establish a lower high, but, you know, my core, if I really want to simplify everything, gold is telling you a signal. Bitcoin seems to be following that signal and saying, "Hey, look, you know, the market wants scarce, sound money, neutral reserve asset. It's just in a really, really good position." So, uh, yeah, fascinating stuff for sure. And I was really concerned we're going to go through a real long chop here. I think I was telling you this yesterday when we were having coffee, and yeah, lovely to see it break out here and keen to see what it can do.

Yeah. And and something I was just playing around with before is if you look at BTC, in fact, maybe I can pull it up here just to uh quickly. It's not going to be a perfect view, but I've just overlaid, you know, people like to talk about Bitcoin and the S&P 500 being correlated. You can see Bitcoin's price. We're coming up and we're getting into the top range, right? There's not that many trading days where it's been unprofitable. The S&P, yes, it's recovered a lot from liberation day, but it hasn't recovered anywhere near its peak. You can see like this to me looks like we have a bit of a divergence. Bitcoin is just doing notably better. Gold is doing even better than that. But then again, you put gold into the into BTC denomination and, you know, it still looks like uh it still looks like Bitcoin's about to rip its face off. So, it's part of the fun.

Yeah. I was chatting to my old man yesterday, and he's very sad at his super account, superannuation or 401k account. It's pretty down, and I'm like, you know what, all of mine's in Bitcoin, and the numbers pretty green. Um, and I also thought I bought in really high. So, yeah, Bitcoin's just performing amazing. Um, I'm constantly amazed to look at how it's going. So, I I think about this all the time cuz like you're in this Bitcoin is one of these weird things where you always feel late. Like even now when I'm buying cuz you know for you Americans you're looking at a number that's 99,000; for us Australians it's 151,000; it's just a much bigger number. 1,000 bucks doesn't even get you a million sats, and it hasn't been that way for some time. So, you know, you just get… and I get it, 1,000 bucks is different everywhere, but the number gets bigger and bigger, and it always feels late. And then there's sometimes I'll just go for a walk and I'll be listening to a podcast, and there just be this point where you're like, I know exactly why I own this thing. Right? It could be a macro podcast. It could be a Bitcoin podcast. There's a lot of the time where you're just like, ah, it's just part of my day-to-day, but sometimes you just hear something like, I know exactly why I own Bitcoin now. And I've I've had a few of those moments recently.

Yeah. Yeah, definitely. Well, let's move forward with the Q&A. Thank you so much to everyone who asked a question and upvoted a question. We're trying something new this month. We're using this tool called Slido. Um, we actually used that in our last live Q&A. It's a very good tool to manage all of your questions while we're doing a live stream, but we thought why not use it for this where we James and I can just record, go through as many questions as we can in an hour, and yeah, we hope we can tackle all the questions. So, how it's going to work is we're just going to literally rapid-fire through the questions top to bottom based on the popular questions, and we're going to group together some of the questions that have very similar themes. So, not everyone's questions going to get answered, but be sure that any questions that are related, you're going to kind of get enough of an answer on those. So, yeah, let's kick off. James, question number one from anonymous is, "What's your best guess as to when the Bitcoin price will peak this cycle?"

It's a good one because it certainly falls. Here's where you get check the analyst and check the hodler. You get the division. Check the analyst says, "I have no idea. How could you possibly know? How could any of us possibly know?" And then check the hodler is like, "Okay, I'm going to simplify all that information. Just try and think about like where could we go?" So, um, you'll often hear in markets that you should… most analysts will never give a time and a price. They'll give a price and no time or they'll give a time and no price. And the reason for that, it's kind of like physics. If you're trying to spot a particle, you can't tell how fast it's going. And you know, if you're trying to observe these things, you'll you'll never get both right. It's impossible to know when something happens and what price we'll get to. Um, there's a couple of questions coming up that I know talk about cycle tops, but at the end of the day, in terms of when we hit it, that's much harder to read because we're in a very headline-driven world and it's changing very quickly. As you've probably noticed, we're one headline away from something very significant happening, from something not happening. But at the same time, the macro backdrop, like if I take all of the, you know, all of the tariffs, all of the news, all of the headlines, if you strip all that away, what are you left with? You're left with governments around the world that are broke. And as a result, they're going to have to debase the currency. So, it doesn't matter who the president is. It doesn't matter who the prime minister is. It doesn't matter who's in charge of anything. The debt dominates all of it because there no… no one is above the bond market. So the bond market is going to force the hand of central banks. It's going to force the hand of governments. No central bank is going to allow their government to go bankrupt in their own currency. You know the reasons why I started buying Bitcoin back in 2019. It's just happening around us. Um, what I think is quite interesting is that we are clearly living through history. Gold is telling you that we're living through history. This is a changing of the regime: global trade, um, uh, geopolitical relationships, monetary system. We are watching something that hasn't happened since 2000, uh, sorry, since World War II, really, maybe since the Breton Woods, um, broke in in 1971. There's a whole lot of ways we can think about that, but Bitcoin hasn't, you know, it's 16 years old. It hasn't lived through any of this stuff, but at the same time, it's what it was designed for. So, um, to to try and get back to the question of when, um, let's do a price. Let's do a price, and then we'll do a um uh a when topic. So for the when, let's actually just simplify things because you know without any other guide, what else do you go to? Prior performance. I know everyone says past performance and prior cycles. I like to use the cycle low version of this chart. I think it's the best one just because it captures the duration of things. Now, if we look at where Bitcoin is currently trading, right, we're about 900 days into this cycle, measuring from the cycle low back in 2022. And really, we get to about 1,500 days thereabouts where we've peaked in previous cycles. No idea if this is what's going to play out, but that would tell you that this thing could probably have 200 days left before the bulls start to get a bit tired. So I think that we're probably in that later stage, but at the same time, if we're in a generational shift, this thing will go on, and this will take decades, right? This whole thing is going to take a long time to play out. Um, so how Bitcoin performs in that, but for the foreseeable future, um, I would say that if we are going to break above all-time highs, we're probably going to move into some exciting times for a couple of months. But keep that idea, 200 days, what's that put us in the back half of of of this year. Um, that's probably about right and would be very strange. And on the price level, I think we're going to talk about this later on. I think there's a question, but I just continue to come back to the topping cloud. Um, this is check the analyst way of just saying I want to look for when all of my models are just way too overheated. So, um, where we are at the moment, notice that these… this is the top bound we've got on based on MVRV. The reason that we use these topping clouds, it's not because we know that the price is going to go there. It's also not a prediction that we have to go there. What this is showing is that if we get to 166,000, MVRV will be two standard deviations above its mean. And historically speaking, that will mean that the average guy is going to be in so much profit, they're probably going to sell at the top, create that sell-side pressure. Now, the more of these levels that we break above, the more profit people are in, the more likely that profit's going to be to be taken. And then you just need more and more and more demand to come in. But notice that they're starting to climb. I did a piece probably about six months ago, I would think, called moving target. Um, that's a really good one to go back and review because moving target explains why these climb. It's because demand comes in. As the realized cap is climbing, it's telling us people are coming in and stacking sats. Um, and this can be at all sizes. I mean, we're more in an institutional real um world now. So the more people are stacking sats and the more demand is coming in, the more we can say, well, if you've got demand here then we can raise that ceiling, right? Because people's cost basis comes up, uh, and it just makes it more… it's more normal. I think all of us are now used to Bitcoin being an $85,000 asset. Uh, this is not abnormal; we've become accustomed to it. Once we get to 160, it's probably going to take 6 months, 12 months, maybe 18 months for us to reacclimatize that new price range, so uh yeah, hopefully kind of, you know, we can never know, but you know, at the end of the day we need to have some kind of a framework, and for the foreseeable future, you know, I'm just looking at something on the order of about 200 days, and somewhere up in this topping cloud is is where I'm… you know, things will start to shift and change. Awesome. It would be wild to see us enter that purple zone for sure at exactly 200 days. Cycle peaks, cycle returns, four-year cycles… the one… once again, the one thing that returns and doesn't die every cycle. Why does it feel like that's probably the likely outcome? Because everyone's written it off.

Yeah, exactly. Okay, question two. So, this is one of those grouped questions. One person asks, "Since I have a significant percentage of my wealth in BTC or BTC proxies, I'm constantly trying to find reasons it won't work. What worries you the most about Bitcoin?" That's part one. And part two, "Are you worried that too many coins are concentrated in strategy, formerly Micro Strategy? What do you think of STRK, STRF, and IM is ST ETFs?"

Yes. Um, so there was a couple of other questions as well, but basically I think a lot of this is going to be centered on strategy. Um, there's obviously strategy, there's the MetaPlanets, there's, you know, maybe GameStop, TBC. So, there's all of these different entities who are Bitcoin treasury companies. What's the new one? 21. All right. There's all these new treasury companies. Now, uh, there's a couple of angles to this, right? Um, actually when I was in Bedford, I know a lot of people, if you're from the UK, I know a lot of people actually can't get access to the ETFs in their retirement accounts. So, they've been using MSTR as that proxy. Um, and you know, in many ways, the the way that I view Micro Strategy, it it is just 2x levered Bitcoin. Sometimes you're going to get outperformance, sometimes you're going to get underperformance. Uh, it's generally… and and I still need to do some studies on it. I think it's going to move faster and harder in both directions. So, in many ways, I think MSTR will run… I I think it can run quite hard. I don't know where the premium can get to historically speaking. And in fact, I should have a chart for this. Uh, might be this one. I think it is. Um, the premium, so this blue line that we've got here is basically showing how much of Bitcoin of sorry, strategies market cap is Bitcoin treasury value. Let's think about that as equity. And then the sale of premium is everything that sits on top of that. So you can see the market cap is mooning right up here at 100 billion. Um, pretty pretty remarkable. I mean, look at this rip. So the market cap is yeah pretty much doubled in the last month or two. Uh, but the sailor premium, right, it's trading at 1.8. So you could argue that we're not… by this metric we're not actually overheated at this point in time. Now at the peak here we got to three. And as you can see, I would largely ignore previous history. Getting up to a premium of three is where… think about this from an MVRV perspective, people will like… it's a bit overheated. It is also the point in time when strategy is going to have the most ability to sell more equity because they've got the highest premium. They're going to try and capitalize and arbitrage that down. So, this is why you'll often see me talking about gravity is towards one. That doesn't mean that the sailor premium has to go to one. It means that if it gets too high, Sailor is incentivized to sell more stock to buy more Bitcoin. Buying the Bitcoin brings the equity value up, and selling the stock brings the price down in theory. So, he's trying to compress that as well. Uh, so generally speaking to date, the way that strategies performed, whenever the premium gets above, you know, we're starting to get these kind of oscillation periods. Whenever it gets above… I don't know, was this two and then up into three… that two to three zone is when we're overheated just based on on how this metric trades. Uh, you could probably bolster that… I actually quite like this thing; it's almost like the short-term holder cost basis for Micro Strategy. Same story: when you get a really high… this is just how it deviates from its 155-day price average, volume-weighted price average. You know, we can start looking at these peaks and say, all right, the premium is really high, um, the short-term cost basis for strategy is high, um, maybe we can then use some onchain data and say SOAP is high, funding rates high. Now it's a bit hairy right now. The second part of this question… sorry, there there's a part here about what worries me the most and also do they have too many coins. I've had some concern that if they get too many coins it can be a bit of a concentration risk. Uh, I think there's a little… again, this is a bit of a soft signal; there's hard. This is kind of my speculation. If I'm a trad guy and I'm trying to say, do I want to own Bitcoin? And I see, you know, I think we can all say that Sailor is… he's certainly a fascinating dude. He's not everybody's flavor. So, if you've got… if you're a conservative pension manager and someone says, "Hey, I want to add Bitcoin," you know, your junior comes up and says, "Hey, we should add Bitcoin to our portfolio," and he goes, "You want me to get in the same room as Michael Sailor and the GameStop guys?" Like, I I have a concern that that can just be a bit of a reputational risk, but at the same time, the idea of being fast and early to these things is to look through that kind of noise. So, look, I don't think that there's too much about Sailor having too many coins that concerns me. Uh, there was a question that I think comes up later on saying uh it was about Coinbase. Do I believe any of the claims that Coinbase doesn't have the coins or they're trading paper Bitcoin? No, I don't. Not at all. I think the problem with… if you want to actually have… what is the biggest risk in my view? It's not that Coinbase doesn't have the coins, it's that they have all of them. They've got Micro Strategy's coins, they've got the ETFs' coins, they've got their exchange coins, they've got institutional custody coins. They have so many coins, 3 million or so. My concern is that the risk isn't actually that they don't have them, it's that they have way too many. Um, now kind of building on this, there's been more and more of these levered products coming out. So, for example, um, one thing I'll say quite confidently, there's the 2x levered MSTR ETFs. I think it's MSTX and MSTU. I would not recommend people touch those personally. And the reason for those is they rebalance every single day. So there's this thing where when they rebalance those assets, there's a drag. There's like a a carry cost that slowly but surely erodes the value of those ETFs. You can look at the charts. This… and then they're 2x levered in both directions. They are very much… they're designed to be an intraday trading instrument. I think a lot of people get confused and think that I'm bullish Bitcoin, which means I'm bullish MSTR, which means I should go 2x long MSTR. Those things will go to zero so fast. And they also… if they… they are great when the market's going up; the moment you get a red candle it is going to hurt. So I think keeping that in mind is important. Um, MSTY is very interesting because it's basically a synthetic covered call option. They're long a call option, and then they sell covered calls as well, and they're generating quite a remarkable amount of revenue right in terms of dividend yields. Um, the the the distribution that just came out, it's like 125% annualized. Now, that sounds very exciting. I think just be careful with it. Uh, I think it's one of those things. I mean, I've been contemplating just putting a bit of money to work and just seeing how it operates. And I understand a covered call strategy, and it makes sense. So, it's this is actually something that I'm contemplating just putting some money in. I would not put my life savings into these things. The main challenge with these kind of levered structured products is that there's there's all sorts of ways that they decay in AUM. There's all these like nuance intricacies. Um, at the core level, if someone says you can get 125% APY, as all bitcoiners we should say, where does the yield come from? Right now, in this case, it's coming from volatility premium, which I generally like. I think you can understand, and I understand… I can wrap my head around it, but at the same time, uh, it's fully exposed to MSTR's downside. Uh, it doesn't have the c… the the upside. So you're essentially trading MSTR's upside for a yield. Generally speaking, something like that's going to do way better, way better in a choppy… in chop consolidation. So MSTY is a chop consolidation type asset because the idea is you get paid the dividend as MSTR chops around and generates V uh but really doesn't go anywhere. But if it starts trending down in a bear market, and I think that whenever this cyclical top gets put in at some point, we all know it's going to happen, I think MSTR gets slapped on the other side of it. So that's my core view. I think in terms of uh key risks, just… I would avoid those levered 2x levered ETFs. I don't think… I think they're actually quite dangerous. Uh, I worry a little bit that too many people are going to pile into this stuff expecting free and easy yield. These things are nuanced, complicated, quite advanced instruments. Um, generally speaking, these are the kind of things… like for me personally, I do it with money that I'm willing to just put a bit of a bet on, right? And just like test the waters. I'm…

Never going to allocate these things as a I'm going to retire on this money. And I would never hold the view that I'm going to retire on the money I get out of these levered plays. It's very much a I'm here for 6 months, 12 months. Let's play in the ring, see what we can generate, and then pull out. So, that's how I'd think about it.

Okay, great. And we mentioned that Coinbase question just before. I think maybe we can just tackle that now, seeing as we're talking about it. Simon asks, "Do you believe there is any truth to the rumors that Coinbase issues paper certificates for BTC purchases without buying BTC, potentially suppressing its value? What are your thoughts?"

No, I don't think so. I think what you'd be looking at there is uh outright fraud, and I'd be very surprised, shocked, and amazed if that turned out to be the case. Um, Sony X, who's done a TR, he spend, he's got his own labels and he tracks entities on-chain. Um, he's a professional whale watcher and good at it. Uh, he believes that em that Coinbase has over three million Bitcoin. He's got more wallets labeled than just about every data provider in the industry. So uh he's been tracking all this stuff. Uh, I generally have to, you know, he's an expert to me. Um, I rely on him to kind of have a bit of a sense check to these things. I think a lot of people who say that Coinbase doesn't have the coins are just bored Bitcoiners who are tired of the market going sideways.

So, no, I do not believe there's any credibility to it. Um, I think every single time I hear this topic come up uh on Twitter, I often say, "Based on what evidence?" I've got a set of evidence, which granted could be flawed, could have errors in it, but in my experience in this industry, I've seen enough data and enough evidence points to say that Coinbase has more than enough coins. I've never seen anybody come up with evidence whatsoever aside from, "but the price didn't go up as much as I thought it should." That's the primary reason. That's like the case that people generally make. They actually don't have any evidence for it. If there is evidence for it, I'd love to see it. I've never seen it. It seems to be primarily an emotional reaction.

Yeah. It's it's a chop consolidation phenomena. When we go sideways, this never happens. You'll never hear about Coinbase not having coins when we're going up, when we're going down. Only when we're going sideways for too long. People just get bored.

Oh, yeah. Now that the price is green, you won't see any of those trending tags anymore.

Yeah. Okay, moving on. Question from Anthony. What are your thoughts about an elongated cycle into Q1 of 2026? What indicators are you watching to measure this path? What indicators would negate this path?

Yeah, that's a good question. I put it in a similar bucket to what we talked about at the start in terms of it's just very hard to project out that far. Um, I think there is a case to be made like, you know, when we look at the ETF flows, they're absolutely phenomenal, you know. Um, let me just pull up the uh the weekly in USD. I've been talking and alluding to this in a couple of posts recently. In the outflow days, right, we're getting 300 million, 250 million on a week, and then it's just covered by 2 billion, 3 billion, like just crazy numbers on the inflow. And when you look at this from the perspective of like the gold ETFs when they went live in 2004, um, you know, that's a case to be made that the market could just keep running on momentum; it really could just have enough juice uh to just keep moving. So, um, I've been shocked, amazed, and very, very impressed with the amount of money that's come into these ETFs. They're very serious products. They're already some of the biggest ETFs in the world. They're just they're winning in terms of flows. Anyway you want to measure these things, remember the ETFs are a subset of the market. This is a real structural tailwind for Bitcoin.

Uh, when we look at the world around us, right? As as I mentioned before, this is why I started buying Bitcoin. I didn't know it was going to be tariffs. I didn't know it was going to be Donald Trump. I didn't know it was going to be um, you know, geopolitical tensions. I didn't know it would be conflict over here. All I knew is that there's too much debt and they can't service it. And as a result, you know, for me, I want to be long something that's scarce, hard, digital, and just makes a hell of a lot of sense.

Um, right. So, uh, I think in this case, we could have an elongated cycle. Uh, I think if there is a time for Bitcoin to behave more like the rest of the world, this is when that happens. I think we've left the phase where Bitcoin is doing its own um, it its own internal stuff. It's kind of matured. It's reached escape velocity. I rather than people reacting and responding to Bitcoin as a new thing, Bitcoin is now responding to the world. People used it to respond to the world. So therefore, what would be an elongation of this cycle that the world just goes in this direction where, you know, QE returns or whatever else it is. Um, but remember these things are going to come hard and fast. We might get a bout of QE because they got to arrest the bond market having a spasm, but that's not going to last forever. At some point, they're going to want to stop that. Is the the um, I think the right chart you've probably seen it, there's a chart of the gold price in German marks during the hyperinflation. Now, I'm not saying we're going to hyperinflation, but the price is just up and to the right exponentially, but on a monthly basis, it's up and down. It's chopping left and right. It's all over the shop. So, I think that's more like the the type of environment we're in for the next decade, I would say.

Yeah. And I think the recent divergence from the S&P just going up forever. Um, and Bitcoin looking really strong right here is just another indication that this time's kind of different. And when I talk to my dad, when I talk about Bitcoin to my dad now, he's kind of like, "Okay, I regret not buying when you told me a year and a half ago." He's finally saying that. So I think the legitimacy of the asset is just strengthening every day, especially right now. So and the outflows in the ETFs were honestly not even that crazy over the past couple of months. Like that the chart you were showing, it looks like the ETF holders are almost diamond hands. There's a bit of puking, there's a bit of outflow, but it really isn't that crazy.

Well, this is one of my favorite charts. When you look at it, this is on the cumulative inflow. So we're basically looking at dollar value every time it comes in. New all-time high, right? So, I mean, this thing just it's just blasting to new all-time highs. So, you know, this was the first significant period of outflows. And by the way, this was about 4 billion or thereabouts in net outflows. When you overlay uh that with CME, let me get rid of realized cap and long-term holders. Uh, I'll get rid of GBTC2. We had this is the cash and carry trade. So, these are people buying the ETF and putting on a short future in the yellow. And then this is them unwinding. It notice how they're very much the same size. So in a way we basic it's a mechanical it's a structural thing. What we're seeing here this is not people going, "quick, I'm out of Bitcoin, I hate it, I can't hold it anymore," like I don't believe it. Most people are like, "keep chilling and stacking and you know accumulating and oh away we go again." Suddenly people are excited. People start buying. You know, in many ways there's a lot of TradFi guys who thought the ETF buyers were just orange poker chip holders. The data is just proving that that's just that thesis is just wrong.

Okay, moving on. We've got another double whammy. So, I'll just read about both questions. So, this is from Nick. For your personal bag, is there a minimum percent you DCA consistently and how often? Um, regardless of the price, do you take a more dynamic approach and wait for dips? Um, and another question from Sugam. Hey James, for someone new apart from DCAing, are there any other strategies you recommend? And how to fight the feeling that I'm too late to BTC?

Sugam, I know that feeling. Oh yes. No, it's a real thing. So I I think the best way to tackle this is to explain my Bitcoin journey. So I bought the absolute P, I'm actually just turn off these bubbles here. Um, I bought the absolute pico top. Where's my price chart gone? And this one. And this one. Bought the pico top in 2017. Uh, traded so watched the market sell off. Sold all my Bitcoin for Ethereum here. Sold all my Ethereum for Shipcoin 25 here. And just built this massive portfolio of a spreadsheet of things that just ultimately went to absolute zero. Down here, I finally clicked and go, okay, I'm going to read the white paper for the first time. And then it's just dawned on. I was like, okay, I'm an idiot. Time to change course and get my uh get myself back in order. Now, at the time, I was working on a very measly crappy engineering salary uh over there in London. And I was looking back here where the realized price, we were trading below the realized price in 2015. I'd only just worked out what the realized price was. I was like, "Wow, this is amazing." So, that means I've got a year, right? I'm looking at this past performance and saying, "We're going to trade down here for a year at $4,000, $3,000 as an engineer. I've got my spreadsheet working out my disposable income. If I buy this much, oh wow, look how much Bitcoin I'm going to have. And then of course pop and then away it goes to 14K. And this rally is the first time where I felt that it is a very real feeling. And it is measurably harder to deal with FOMO. I missed the train. It is harder to deal with that than it is to take a loss. It's actually people have done psychological studies. It is so much harder watching a thing that you wish you owned more of run than and so that was my lesson. It can be very painful to the upside. So I bought like a madman which by the way now that we're trading at 100K buying down here at 6K and 8K. This felt like I was chasing a train that was leaving without me. We then had a bare market that went for another year. Now, I made a decision in that period that I don't know what this thing's worth because all I've ever known is red, massive red, 3 months of green, and then more red. I had only ever lived through red. And every green candle was a joy. I I was actually, strangely enough, I was actually thinking about this candle specifically um last week cuz I was like, this this rally could be one of these things where we actually were calling this a god candle back then. This was a god candle was like one daily green and then we just got absolutely slaughtered following that. So you always feel like you're late to Bitcoin.

Now from 2019 I would say probably through to in fact um from 2019 all the way through to 2023. So this entire process up down tops bottoms the whole lot. Um, in that period of time, I was get paid, pay all of my bills, empty my bank account, get paid, pay all my bills, empty my bank account. That was that was my status mo. Um, I was very, very fiscally responsible. I wouldn't spend money on, you know, I'm selling chairs and I'm living on the most frugal stuff that I can. I'll walk to work rather than get the bus. That's the level of Bitcoin that I was through that period. And I actually stopped when we broke above back here in October 2023. This is actually when I stopped that behavior. And it's not because of any other reason than I made the decision that Alec and I made the decision to start this business. So we actually had to save some money to start Check on Chain. That was the only reason that I actually stopped doing that. Now my trigger point was the true market mean, which at the time was trading here at about 30K. And I made a rule for myself. And to answer some of these questions, the most important thing is like having your own set of rules. So, uh, my rules in this process is first of all, I'm just going to buy as much Bitcoin as I possibly can. And I made a promise to myself back here in 2019 that at some point, I don't know what it's going to be. I don't know what the what it feels like. When I have enough Bitcoin, not that that ever makes sense, but when I felt like I'd had enough Bitcoin, I would build my gold position as a as a hedge. Same trade but as a hedge against just in case something happens with Bitcoin, right? I don't want to end the day with zero if it really did just implode. Um, now again, this is 2019 where implosion was a real thing. So, um, through that whole process, it was it was just straight DCA. I didn't think too much about it. I just bought as much Bitcoin as I possibly can. Um, every dip felt like the dip and you know, I ended up buying not when we got above 50K, I probably I didn't buy as much. Um, certainly when we sold off down to 29, I was buying a lot. And when FTX blew up, I was I was I was starting new jobs. I was doing I was mowing more lawns. I was doing whatever I could to buy as much as I possibly could. So there is a question later on that asked like when do you know to go harder or faster or all this stuff. So in this period right we're now trading at as I said before Bitcoin's 150,000 Australian dollars. It's just a very big number these days. Now, um, having been in the market through this whole period and doing what I did and just kind of stacking away, um, there's a point where you just like you don't you you feel like you've got enough Bitcoin that you don't have to just all in every paycheck. You can be a bit more discreet. So, now that we're trading in this environment where Bitcoin is trading in a more structured format, um, we've had more of these chop solidation periods. Um, obviously I write the newsletter, so I'm studying this thing all the time. In my new, you know, I I've emerged from my cocoon of just like buying Bitcoin no matter what I can do. And now I'm in my moth stage where I'm a bit more um experienced. I understand how markets work. I will buy when this thing when short-term MVRV is below one. Um, and it's crazy because like when you're down here, when we're trading down here at 74K, Alec, you saw me, that was that one day we sold off to 74 and we were talking about, oh, should we buy? Should we buy? And then it sold to 74. And what what was the thing I said? I just bought way more than I should have, right? Emptied my bank account because something about that particular selloff having been in the space long enough short-term MVRV was super low and short-term soaper was puking. So I had both of my two conditions where I want to see short-term soaper be red. Let's go recent history. Short-term soaper was red and we've got short-term MVRV below one. Both of those are the kind of conditions where um I have the luxury now of being experienced enough that I don't like to buy when we're up here. It feels awesome. But I almost taught myself back here in October 2023 when I said I need to stop buying Bitcoin to save money for this business. And I watched this whole thing, right? I I was scared back in 2019. We went from 4K to 14K. Here we went from 40k to 73K. So the numbers are just getting bigger and bigger. I'm like, "Oh man, I wish I could buy into this rally, but I had a different priority, which is starting a business." And that's another thing that I think you should always balance. Bitcoin isn't everything, right? You should also make sure that you look after yourself, your family, give yourself like there there's a period in time and depends what age you are. And I know there's a lot of check on chain subscribers. Some people are in there close to retirement. Some people are still in accumulation mode. Some people this might be your first cycle. So there's people across the entire spectrum. In your first cycle, right, that's what I I just went ham. I just went as hard as I could. And if I was young, I knew that if something blew up, I'd be fine.

Um, there was a line that Peter Dunworth said at the Bitcoin Alive conference. Alec, you you actually that was one of your big takeaways. Why don't you give that because I think that was such a a good way to think about am I late to Bitcoin?

Yes. So essentially the idea was the reason the price is higher is because the risk of owning Bitcoin is lower, and this is due to many factors like all the different fear, uncertainty and doubt media campaigns, news campaigns back in 2020. There was a massive chance that Bitcoin was going to die. That it was a massive risk to buy and hold Bitcoin because there were so many things that could have killed it back then. So, it was here. This was the most horrifying thing I've ever seen. Second most horrifying thing. This is the most horrifying thing I've ever seen. But either way, there's these gut checks where you're like, "Oh my god, I think I think I think I'm wrong."

Exactly. There's gut checks. I think I'm wrong. Back then when that happened, you go, "Oh my god, all the miners are going to blow up. It's going to get censored. They're gonna can't they'll not an ETF. I mean, Larry Frink hates us. There'll never be any financial institutions that adopt Bitcoin. There's so many potential risks to owning Bitcoin that it makes sense that you didn't buy Bitcoin back then. And it's not your fault. It's not my fault. I mean, fun fact, that first time Czech bought Bitcoin, I was actually over at his house showing him crypto and we were just spending all night just freaking out about it. We bought some coins, we bought Bitcoin. Um, I got absolutely smoked during this and I left the market until 2021 where when I came back in when James finally um orange pill me. But yeah, right now the risk to own Bitcoin is just far less than it ever has been. So that's why the price is high. That's why it costs more now. But still relatively, if you ask anyone on the street, do they own Bitcoin? It's like, no, but I've I own Dogecoin or ShibaInu. That's the other one that I owned. That that's literally what most people still think about this industry. So we're still very, very early. We're just not as early as those OGs who took insane risks. So TLDDR, it's fine to not have owned Bitcoin back then. It's okay that you missed out because most sane people probably wouldn't have bought it. So totally that's how that's how I sleep at night because I know James and I got in late and I think it's a completely fair assessment. So and if we also just think about it right that sometimes it's good to just do this exercise. So this is this is what I grew up seeing. I grew up seeing this parabola and being like, man, I missed it. So this is why I got smoked in this process. Right? This was how I got into Bitcoin. This thing, this awful. I mean, imagine if the price chart did this today. It would feel absolutely horrific. And then sometimes just go through the experience of what it's like to be a Bitcoiner at different times and then suddenly you're like, "Oh, it actually didn't matter at any point in time that I bought because the price is here." And then oh my, this is the thing that I thought Bitcoin was over as over at this point in time, right? I I granted I woke up I actually I don't know why it was like 1:30 and I woke up and I was in this phase where Bitcoin's my whole life and I didn't expect this. I was writing for Glass Note at the time. Nobody saw this coming. Um, I can now see it in the data. It's clear as day what I missed. But I woke up at like 1:30 and I saw the price at like 29K and I went to bed and it was like 45 or 50.

or something. I just emptied my bank account because I'm like, it feels absolutely awful, but I have to buy a 29. So, you know, um, when you actually zoom out, we're now going through another parabolic run. And let's look at this thing on the full history. You can't see 2017 at all. You definitely can't see 2013, but this looks like a massive growing exponential parabola. This thing is just ripping over the long term. So, you know, there was a question before about the elongated cycle. The cycle just keeps going. There is no top for Bitcoin. This thing just wants to keep going. So, I think that's it's really important to keep in mind. Um, and for those folks who are looking for a more strategic way to do things, there's two things you want to do. You do not want to buy when it's high, because every single time I've done that, it's sucked. Always whenever you buy high, and usually you buy too much at the high, and you mean, sorry James, you mean when short-term holder MVRV is too high, MVRV, but also price right, because it feels amazing when the price is going up, and that is when you you've been you've been concerned and you've backed away your DCAs cuz like, oh, but what if it goes lower, and then you feel like you missed out. It's uh what I find onchain data is really useful for is just flip everything around. And this is true in all senses of markets. If you flip it around where it feels amazing here at 41K, but um short-term MVRV is high and uh short-term soap was ripping through the roof, almost all-time high. Profits are getting taken. Too many people are in profit. Take a step back, walk away, go for a walk. Know that the market will come back. It always comes back down. A lot of people get caught up in the omega candle. It's going to go to the moon. It's never going to go to the moon. It's it's it will, but it's never going to happen between when you make a decision that I want to buy Bitcoin and the next 6 months. It's, you know, these things take so long. Most of the time, Bitcoin goes nowhere. So, avoiding buying high, step one, and being bold and brave when things are low, when the market sells off and everyone else is panicking. Yes, we always have to be conscious that we might go into a bare market, but this was a great bare market because it was at 10K and 6K and here we are at 100. So, I don't really think about those UTXOs. I remember the lessons I learned. I don't think about the pain that it went from 6K to 3K cuz we're at 100 now. Okay, let's move on.

So, another question from anonymous. What do you think of all the M2 correlation to Bitcoin price charts? I know you love these, Chad. That's a good one. Um, are there any M2 indicators that are actually useful? Yeah. So, I would put the M2 charts. The problem, let me let me talk through the problem with the M2 charts. Firstly, can you break down what is M2? Good question. TLDDR. So, M2 is a very imprecise government measured tool that tries to look at broad money supply. Now, there's different ways you can measure how much money is in the system. M2 is trying to I don't actually know the it's so unimportant in my framework I actually am going to get the definition wrong, but there's like base money which is M1 um uh which is trying to look at like cash and there's there's two components of it; there's like cash and bank reserves or something like that, and then there's M2, which is then your deposit accounts and demand deposits, and it's like an expanded view of how much dollars are in the system, or yen, or whatever it is; every government has their own way of measuring M2. They phase in and out definitions of M1 and M2 all the time. They supersede it and say M3 doesn't work. And so you're using government statistics. And the problem with uh the reference point here, there's been a bunch of charts circulating recently where people go, look, M2 is exploding higher. Therefore, Bitcoin must go up. There's a few problems with this. M2 data is usually monthly or quarterly at best. So, you're looking at quarterly data and monthly data. How on earth do people have daily charts showing M2 versus Bitcoin price? How are they doing this? It's because what they're doing is they're taking Chinese M2 in yuan, converting it to dollars. Japanese yen, convert it to dollars. US dollars, leave it in dollars. Pounds, convert it to dollars. So suddenly you've got these monthly to quarterly traces where the data doesn't change, the underlying doesn't change. What's changing? The value of the dollar. What people are actually measuring is the DXY. They're actually measuring the US dollar exchange rate versus all those currencies multiplied by a monthly to quarterly data series. So the problem with this argument in my view, and no, I don't use any of it. I actually don't recommend people do it. It's like a it's a fun curiosity, but it's it's firmly in the bucket of engagement farming tools. I don't think there's any signal in it. Directionally, yes. If they print more money and if M2 expands, yes, Bitcoin will probably receive that. But there is no pipeline from the Fed into Binance. There is no direct pipeline. You know, if the dollar gets um cheaper, yes, countries and nations and companies, they can service their debts more, but they don't watch the US dollar exchange rate and go, "Ooh, dollar's cheaper. I should go and buy some Bitcoin." Like that's just not that's there's a whole series of things they do and think before that happens. So directionally over quarters. Yes. Daily price charts: pure engagement farming. So you know, just if M2 goes up over 3 months, 6 months, Bitcoin will probably have a tailwind. It doesn't mean Bitcoin's going to follow that price chart like a daily trace. It's just not how it works. The charts sure do look bullish on Twitter, though. Of course they do, which is why people like to share them. And it's why everyone knows what M2 is. Where does the yield come from is you should always ask the question. Big line going up behind Bitcoin in a couple of months from now. Oh my god, Bitcoin's guaranteed to go up. That's likes equally yield. 5,000 likes immediately on Twitter. Cool.

Okay, so we've got a couple of questions here that are linked. Um, and it's about Warren Buffett's strong skepticism towards Bitcoin. Um, A, what are your thoughts on this? And B, why do you think Bitcoin isn't widely recognized by other investors in this way? Like what gives currency or commodities value to these? It's a great question. So, I think the first reason, and you've got to give all the credit in the world to Warren Buffett. I think I saw his performance. It's like, you know, 15 million percent. An incredible an incredible performance. I don't know about you, but I don't go to my what is he, 96, 98? I don't go to my 98-year-old grandfather to ask about how technology works. He's just just not his thing. You know, he was late to Apple, on the internet as well. That's and that's okay. He's he's an investor who has a very particular style which was perfectly designed and suited for that 1950s 60s 7s era where like it's it's just hard yaker companies, right? Companies with factories and you know they're kind of going through the industrialization post World War II. That's really the world that he grew up in investing. He was late to the internet. He was late to Apple. But eventually he realized that there's a network effect there and obviously they're going to pay nice dividends and blah blah blah. Warren Buffett, I don't expect to understand Bitcoin. Um, you've probably had I'm sure everyone watching this has had a conversation with someone in your family or your friend group where they're like, "But I can't hold it." It's like you can't really hold the money in your bank account either, because if you even if you go and try and take it out, they're going to say no. So there's just a whole lot of things where Bitcoin is just it's so different and it it forces people to completely break so many assumptions. It's a very large hurdle rate for people to get there. So I think that's the first one. Uh, in terms of what gives commodities and currencies their value uh there are two important distinctions. Commodities generally speaking are in two buckets. There is monetary commodities which I would put gold, silver and bitcoin in, maybe platinum. Um, and then there's industrial commodities which I would also put silver and platinum in very much so less so gold. Um, copper, iron ore, oil, that and those that bucket of commodity commodities straight up supply and demand; that is all that is all it is. it. I mean, everything is supply and demand, but it is how much is is the world demanding. If we're going into an inflationary world where people are going to be building new factories and building new power plants, you know, that requires steel, that requires um coking coal, that requires oil to move it, it requires diesel to mine the materials, it requires copper to run the wires. It's pretty obvious where that, you know, inflationary regimes generally benefits those types of commodities. Monetary premiums, that is I mean you know you can argue this with Peter Schiff to to your blue in the face; if gold went to its intrinsic value, intrinsic value of dental fillings, no one wants to no one wants to see that in the long future; in the event where we mine an asteroid and suddenly everyone's got a trillion ounces in their backyard, the moment that we get to that point gold will trade just the same way as copper, which: How good is it as an electrical conductor and how many iPhones do I need to produce? That is how gold will trade in that environment. So commodities very much trade on that that supply and demand balance from the economy. Bitcoin and gold are different. And I think silver, I mean if you look at the gold silver ratio, in fact I can probably uh pull that up. This is actually a really interesting chart. I think paints a very important picture. So the gold silver ratio um the higher it goes the more silver is being demonetized. There's a lot of gold bugs who are looking at this and saying, oh, we're 102, that means gold super uh sorry silver is super undervalued. And I just look at this and go, kind of looks like the Bitcoin dominance chart to me, just over decades rather than years. And uh at this point in time it kind of looks like silver's just getting wrecked. Like it actually looks like silver's just not coming back. It's almost like silver has lost its monetary premium. It's lost its sheen. Maybe Bitcoin took it. Probably did considering we flipped it. So, it may just be that why would you actually buy poor man's gold, which silver is often referred to as, when I could just buy Bitcoin that's better anyway. So, I would actually argue that we're in this world where more and more people are working out that silver is actually a commodity. It's moving from the monetary side over into the dental filling side. We are now going to use silver a lot more as a conductor, as a metal rather than a monetary asset. So, I would love for silver to go up because I've got a couple of silver coins I would love to sell. I don't expect to ever sell them. I kind of bought them because I just kind of like them. That's I don't Yeah, they're pretty. I get it. I'm a bit of a pirate, but at the same time, I'm just not expecting these things to moon. I bought them more of a sentimental thing than anything else. Um, I think silver's being demonetized, and I think we're actually going to start seeing this a lot more. I think it's a really interesting dynamic, and worth just keeping an eye on as a, you know, as a frame of reference.

Okay, awesome. So, it's about it's been about 50 minutes, so how about we do a bit more rapid fire cuz there's so many questions. Again, thank you everyone for asking all of your questions. We obviously can't cover every single one of them. Um, but we hope what James is going over at least kind of blankets most of them. So, we'll we'll go a bit faster now. So, I'm just going to pick ones at random and and let's go from anonymous. Do you believe Bitcoin can hold up well even should the US go into a recession later this year or next? Great question. Uh, I often look at what is the initial impact and then what is the response? So, you've got to think one, two, sometimes three steps ahead. I think like all assets, if the US goes into a recession, it's really been the primary engine. If the primary engine starts to stall out, everything's going to sell off, I would think, and at some point in time, the pain will get so great that everyone's going to have to stimulate. So, the trade after the trade is that Bitcoin is going to absolutely rip. It's probably going to go down before it rips. So that that event um it's one of those things where you've got to be really careful because it can keep dipping, but I do believe it would be a bit of a slingshot maneuver once that money printer fires up and it has to. It has to. Um, just mathematically um it's it's off to the races. I would say most people playing with leverage might get a bit of a scare. The MS the MSTR levered products will go up a lot afterwards, but they probably won't recover what they lost on the move down. That's the way to think about it. Yeah. Okay. All right. Next from anonymous. Have you ever met any professional successfully outperforming BTC by trading using onchain data? There is so much signal in it, but people always say just huddle. Yes. Um, yeah, uh for sure. Um, lots of folks at Glassnode, of course, and indeed some of our certainly some of our orange subscribers um are doing you know all sorts of algorithmic strategies and using onchain data whether on a discretionary level or in an automated sense. Um, absolutely. There are definitely people out there who are who are using it and uh it's amazing how unexplored it is. Awesome. So, here's an interesting one we were chatting about yesterday, James. So, his question is about the latest debate in the Bitcoin core versus Bitcoin other space these days. So, I think it's about the filtering. Oh, yes. And the spam and Yeah. Honestly, it's a bit over my head, but jump straight in and maybe give the audience a bit of a TLDDR just before we jump into it because Um, knowing this knowing this this question was coming up, I actually this was one of the reasons that inspired me to do this tweet. Um, I tried to filter a lot of my thoughts. I've been somewhat provocative on Twitter, but also I I use Twitter to test where people are at. And for this particular debate, I think you'll be amazed how close everybody actually is in their overall views. Um, so we'll actually I'll leave a link to this tweet in my in the um uh in the Q&A, so you'll find it in the in the written section. But at the end of the day, I think a lot of people are just talking past each other. Uh, it's very much an ideological versus a technical debate. I think a lot of people actually aren't understanding the mechanics of this thing that a lot of people and what's the debate just in a do a couple of dot points. What is actually going on right here for people who don't understand? So in fact, maybe I can do this. Let's go mempool.space. So, uh I believe if we look at this, so this is mempool.space. These are the confirmed blocks. These are the blocks waiting to get mined. Um we are looking at what is inside this block that is looking waiting to get mined. And what I've done is turned on this data. So all of these on see how this says inscription. Basically there's there's a few number of ways you can use Bitcoin. You can send a monetary transaction which I'm sure most people will have done, and there's other people who are using this to encode data into the blockchain. Now um some people really really hate this. They hate the fact that their mempool is which is your nodes kind of pending transaction pool. They don't want to be relaying people's pictures of JPEGs and you know and by the way the number of JPEGs on the chain is actually not like this isn't the majority usage of the chain. The V see on most of them are actually monetary transactions. They're not data, but people don't want it to happen either. Right? So there's another they just they just they just don't want to see that on their specific node. Yes. So there's there's two layers here and actually I'm going to use the left hand side and the right hand side to illustrate this. The right hand side is the stuff that the miners put into blocks and they make permanent. The left hand side is the stuff that hasn't been confirmed yet. Imagine it's a big cloud of transactions. If you have your node and you just download the Bitcoin core standard software, you will look at all transactions. You're not going to filter and say that's a JPEG. I don't want to see that. Um, there are some people out there who do not want to see it. They want to limit their nodes so that they don't see it because they don't want to propagate it, which I understand. They they they don't want Bitcoin to be a data warehouse. I get it. It's a valid point. It's a principal position. The problem is those inscriptions pay a fee and the miners are more than happy to include it. So what actually ends up happening is by them filtering the network at the mempool level before they're confirmed, it is strictly speaking, it is a head in the sand moment. I'm going to close my eyes and pretend that these don't exist, but I'm also not going to tell my my other node, my my friend about it, which is fine. But once they get mined, they still have to download them. So what happens is the whole network actually has to work harder because it's downloading blocks twice. You've got to download it from the it's technical doesn't matter. I won't go into that. The point is there's a whole lot of rhetoric and debate. Bitcoin core is making some changes and some people don't like it. They don't like how they handled it. I tried to summarize all of the points here. Basically, it's a technical problem that as with everything in Bitcoin, it gets a little bit moral. It gets a little bit religious. It gets a little bit technical. It's nuanced. There's a lot of, but at the end of the day, I think most people actually agree on most stuff. And from my a question from me, from a noob hodler perspective, is this going to change anything with mining? Is this a security risk? Is there any sort of problems that might come out of here? Or is it more just a big red verse blue debate? There is almost nothing whatsoever that's going to change anything ever in any way, shape, or form. In my view, this is a bunch of nerds arguing on the internet because chopsolidation has got them absolutely stir crazy. Yes, you can argue there's some elements of like node decentralization and this that and the other. If you truly look at this from an engineering perspective, in my opinion, this is the most nothing burger thing ever. It is purely a principled versus I don't think you're principled perspective. Um I know as many hardcore Bitcoiners who are like it's a bit communist that people are telling people not like what they can and can't put into their node. And there's other people who are saying I can't believe people want to oppress me and put into my node and it's like guys it's it's a mempool. Like chill out. So in many ways it's a it's a bunch of nerds arguing over technical It's it's not going to impact markets whatsoever. Um it's it's interesting. I find this stuff intellectually interesting, but uh I if you do not find this interesting, I do not recommend that you need you do not need to go down this rabbit hole. It's not going to change your life in any way. Okay, three more questions left. So, please explain the technicality behind the network to differentiate between a realized profit and loss UTXO or a UTXO just moving around like when it gets rebalanced between exchanges. That's a great question and this is something that I tried to tackle in uh let me just pull it up in uh this piece. Uh the exchanges are running out of coins. Um I went into this trying to solve a problem of you know addressing this exchange balance problem. And as I was doing my studies I realized hang on a second there's actually an opportunity here to explain why onchain data works in the first place. And it actually answers exactly this question. Um it it is a nuanced piece and there's a whole lot of

Levels to it. Uh, I think, let me just find there's a key chart here that I want to highlight. Uh, where are we? Hang on. This one here. So, basically, the the question came up; there's there's a question I get all the time, which is: doesn't on-chain data break because of the ETFs?

As I went through this thought process and I was going through data and trying to get my own head around this, and I've done this for a long time now, my conclusion was: why are people worried about the ETFs when the exchanges are so much bigger than the ETFs? So, think about the ETFs. They are a place where people send their coins into custody, and then once they're in custody, they trade around on the inside. That's mechanically what a ETF is. Exchanges are just that—bigger, much, much bigger. So, put ETFs and exchanges into one thing: if you're worried about the ETFs, you should be actually way more worried about the exchanges.

So, as I was studying and looking at, you know, there's various ways we can filter data, and Glassnode's got entity adjustment, which, you know, uses all sorts of very smart heuristics and labels and says: get rid of all Binance's internals and get rid of all Coinbase's internals, blah, blah, blah. What I found by running this study is most—like 95%, 90%—of all exchange activity that we don't want to see. That's not really realized profit and realized loss. It's intraday. It's a coin that gets deposited by a customer. They lock in a profit, and then Binance moves it to their hot wallet, moves it to another hot wallet, moves it again, moves it again, moves it again, and then withdraws to some other customer.

So, if you only looked at the deposit on Monday, ignored everything else that happened on Monday, and then saw a withdrawal on Thursday, that's the signal. That's the signal. And in any of these filtering techniques, we by, you know, the data that I use just looks at what changed over a 24-hour period. We don't care about all the stuff that happened internally. Simply by getting rid of internal, hour-long, intraday spends. By getting rid of that information, you actually achieve exactly the same—almost exactly the same—result as labeling every entity and labeling every exchange and then filtering it with a complex algorithm.

So, in a way, we actually don't even need to recognize which one was an internal spend because when you send a coin you've held for a long time into an exchange, you're going to realize a very large profit and a large amount of coin days. Once it's there, it's getting revalued at a very similar price. So, there's very little profit or loss. There's very little CoinDay destruction. So, you you're capturing the 99%, which is the information, and then ignoring all the little spends which have no real impact. Anyway, so in a very strange and elegant way, this data kind of self-corrects, which I think is very, very cool. I didn't actually expect to come up with that conclusion, but that's—as the more time I've spent with it, um, that's more or less where I sit at the moment. Cool. Next one.

Knowing what you know about Bitcoin, do you short-term trade it? Why or why not? Good question. Um, I could probably have covered this when we were talking about my Bitcoin experience. I can trade. I hate it. I absolutely hate it. And I think this is a really important uh journey that I went on. I have traded pers. I've traded options. When I do trade, I like to trade options. That's my preferred instrument. Um, because I can usually—I'm trying to capture—I don't know which way the price is going to go, but I know it's going to move. Uh, and they're the kind of trades where I like to put on. The reason that I do not short-term trade is because I learned it consumes way too much of my brain power, and I do not enjoy it. What I do enjoy is solving the puzzle of what I think's going on.

So, basically, the um, at a very similar time back here in 2019, at a similar time when I made the decision—I consciously remember this—when I made the decision to stack as much Bitcoin as I can and then stack the gold later on, around that time I also made the decision: I'm just—rather than bothering about trying to trade and, you know, spend all my time in per dexes and trying to like make money that way—I'm just going to generate more income so I can buy more Bitcoin. That's how—that's—that's the option that I went for. So, I started a side gig writing a newsletter. That side gig turned into a role at Glassnode. That role at Glassnode turned into starting my own business at Check on Chain. So, there was one of those things where my—my basic—my pathway was: I'm not going to worry about short-term trading because I don't enjoy it. It takes a whole lot of stress. Um, my whole net worth is in Bitcoin, and I don't think about it at all. I don't think about it ever. I think about my latest buy and when I want to buy. I'm concerned about that. Once I've bought, I don't care. Once it goes on the cold card, I stop thinking about it. If I've got a $100 per on and I'm down 30 bucks, you better believe my brain is like 45 or 50% occupied on that $35 loss. That's what I worry about. And it's like, is this productive? So, I actually don't short-term trade, not because I can't, but because I just hate it. And I don't think you have to trade. I actually think that just by being smarter with your DCAs, understanding why the market moves the way it does, you actually don't need to trade to be very successful. Um, just not buying the top and buying at the lows confidently. Those two alone, you know, they will compound 15, 20% on top of every DCA on average. Um, that's fantastic, especially when you think about Bitcoin's return profile. Yeah. Cool. And we do have this tool on the charting website called Hodler's Dashboard, which I love and I look at. Um, again, I'm not a super sophisticated on-chain analysis analyst, but I've been around here long enough to know that these four metrics are everything I kind of need to get a sense check usually of one not to buy. Um, usually to see when things are overheated. Um, but yeah, maybe James, can you run through? Yeah. And a very quick snapshot. Um, you know, MVRV is a macro scale. Show us the cycle as it moves around. Um, you know, high values means we're usually getting some into some kind of steamy territory. Low values is the opposite. Short-term MV much the same. The unrealized profit or loss by short-term holders. Whenever it's high up above 1.4, 1.3, it's usually getting a bit long in the tooth. It's usually going to pull back. Once it starts getting down to like 0.98, 0.85, historically speaking, especially this cycle, it's a great time um to for for DCA short-term soaper. So, where this says that they're in profit, right? Incentive, um, unrealized profit, paper gains, this shows locked in gains. So, you can say, okay, they're in a lot of profit, and they're taking it. Probably not a good time to be lump summing my net worth. Probably a good time to just sit back and wait. And then you can look at funding rate as well. Funding rate looks very, very similar to SOA. Um, when funding rates high, you've got people taking profit, you've got people in a lot of profit, and you've got people going levered long at the top. All of those are a recipe for probably not going up much higher. Take a break, go for a walk, come back later. You'll probably find the market will have pulled back. Great. Thanks for that. We're on to our last question. Uh, it's a pretty fun one.

How do you think about the chance of Satoshi suddenly coming back out into existence? What will be the impact, and are you prepared for it? Good question. Um, I don't think Satoshi comes back. I—I whilst I have no idea, I think there's really two—two dominant thesis that I would assign meaningful weight to. One: that whoever it was is is dead. Um, I think that's certainly a meaningful—a meaningful probability. I think it'd be very, very hard for somebody to have that kind of wealth and to not spend any of it. I think that's—that's tough for anybody. Um, so I would say that they're either dead, or I would also say I do not discount the idea that Bitcoin is a a project, let's call it. Um, maybe doesn't have an individual, maybe was a was a a lab leak, let's call it, something to that nature. Um, I have no idea which one I'm going to weigh higher. Um, but there's a possibility that this is something that's grown in the lab in the CIA or the NSA or one of those entities. It's very, very possible. Um, I don't discount it. So, um, in that case, I think it's actually more interesting, and strangely enough, in my draft folder, I have a report which I haven't yet got my full scope on yet, called—at some point Satoshi's coins will move. So, I have a draft that I'm in the process of thinking through because at some point it doesn't actually matter if it's Satoshi; at some point Satoshi's coins will move, and the reason is most likely going to be quantum computing. Now, I'm not going to say that quantum computing—I have no idea what—what I do know about quantum computing is that no one knows anything about quantum computing. It's one of these like strange industries where there's more marketing bollocks than there is actual physics. Um, and it just seems to be that there's no consensus. Everyone seems to be a liar. Everyone seems to be a crook. There doesn't seem to be any real indication that we are closer or further away. Now, that doesn't mean that that's not going to change. If you run the human experiment long enough, we will eventually construct a machine that helps us break cryptography. That is going to happen. So, at some point in time, Satoshi's coins are going to move. And there's a few ways this happens: Either he does come back and move them, we move them for him and burn them or take them or whatever it is, or um, quantum or some system is going to come and eventually crack them because they're the oldest coins, and we can't backdate cryptography in Bitcoin. So, at some point those coins are going to move. I had this debate with a bunch of guys in uh in Bedford, and that's—that was really the impetus for this piece I'm going to write about what—what my view is. Generally speaking, I am already at peace with the fact that those coins are going to move, and I am certainly not interested in freezing—freezing the coins. I think people who think they're going to freeze the coins are kidding themselves. I think from a practical standpoint, it's not going to happen. From a consensus standpoint, it's not going to happen. Um, but then we're going to have to reconcile a whole bunch of other things. Does that negate Bitcoin's security profile? If people can steal coins with quantum computers, um, was it quantum or was it Satoshi? The fact that you can't answer that question—we'll never be able to answer that question—means we just don't know, right? So, I'm for one at peace with the fact that the coins will eventually come back. There's no question the market won't like it. It'll be a rocky ride. However, will Bitcoin be affected in the short term, but at a system level? Absolutely not. Bitcoin is going to keep chugging along, and there will come a time where those coins get soaked up and the market just moves again. The ETFs have taken in a million coins, which is Satoshi's stack, in one year. In one year. Bare markets go for longer than that. I'm not—I'm not that fussed. Honestly, at the end of the day, I'm just not that fussed. And here's another crazy idea. What if the quantum computer—I mean, who's—who's going to have the resources to do this? It's going to be one of the big tech companies in the world. It's going to be the US government. It's going to be the Chinese government. I can't really think of too many other entities that are going to be at the cutting edge of quantum computing. If the US government is involved, stick them in the Strategic Reserve. Maybe that's how this ends up. If Google does it, what are they going to do? Steal Satoshi's coins and suddenly have to deal with public back? Like, I—I—I don't think that they could steal them and get away with it. So, I—I think we're in this strange situation where as long as like the North Korean hackers don't get it, what do you do? You want to launder them through Coinbase or Binance. Like, it's too big. It's just too big. So, I'm actually not that phased about it. I think a lot of people are going to be upset and concerned, but I'm—yeah, I'm a bit more sanguine and measured about it. It's going to be fascinating. That's for sure. I, for one, am keen to buy the Satoshi dip. I would love to have a Satoshi coin. Like, I would actually go in there, and I would try and buy a Satoshi coin. They could auction those off. There's a million of them, right? 1.1 million. They could get a premium. They could actually trade higher than the market just because people want to have one. That's it. I reckon—I like—go nuts. I don't think you could find a Bitcoiner that wouldn't want a Satoshi coin, bro. It would go gangbusters. It might actually have another god candle, as you like said before. Could you imagine? Yeah, exactly. Oh, awesome. Awesome. Awesome.

Well, thanks everyone, if you made it to the end here. Um, your questions are amazing. I think this is a very good thing to keep going for next month. I like this kind of format. What do you reckon, Chad? No, I—I enjoyed it. So—so let us know your comments. As always, look, we'll never get through all the comments because I like to ramble and just mumble along. But um, you know, let us know in the comments of this post uh whether you enjoyed this format. Um, I think it's good. We can just kind of riff ideas. I love Q&As because like you never really know where the story is going to go, right? Even I don't. That's—that's how I analyze stuff. I just think about stuff on the fly and try to piece together all these bits of the puzzle, and um, I do a lot of thinking kind of outside the office. Um, and then these kind of sessions are good because it consolidates ideas, and you're like, "Oh, hang on. Let me draw on that chart, or maybe this will be useful." So, I think it's a really useful structure. Yeah, me too. Well, have a good afternoon, mate. We're going to stop here. Happy days. Good on you, folks. Cheers. All right, see you everybody. [Music]