Macro View of the Crypto Market | Unbiased Ep. 1 ft. Jamie Coutts

In the debut episode of the CryptoQuant Unbiased podcast, host Ben Sizelove brings together Julio Moreno (Head of Research, CryptoQuant) and Jamie Coutts (Chief Crypto Analyst, Real Vision) for a wide-ranging macro and on-chain breakdown of where Bitcoin and the broader crypto market stand today.

Topics include why global liquidity is expanding but Bitcoin has still underperformed, how the transmission mechanism has shifted from central banks to the Treasury, and what drove the depth and speed of the Q4 2024 drawdown. Jamie and Julio break down why the M2/Bitcoin correlation broke down, whether the February 2025 low was a genuine capitulation, and what on-chain metrics like MVRV Z-score and SOPR say about current positioning. They also get into ETF and MicroStrategy demand as structural market changes, the four-year cycle, weekly RSI divergences, the altcoin landscape, and practical advice for sizing a crypto portfolio.

Follow the guests: 

Jamie Coutts — x.com/Jamie1Coutts | realvision.com 

Julio Moreno — x.com/jjcmoreno 

Ben Sizelove — x.com/BenSizelove

CryptoQuant: cryptoquant.com 

Research & Reports: cryptoquant.com/research 

CryptoQuant MCP: mcp.cryptoquant.com

Transcript

Intro & Welcome

SPEAKER_02 0:00

All right, well, thanks everyone for joining. Julio and Jamie both here. But super quickly, this is our first ever episode of the Unbiased Podcast. A little background on CryptoCon is we're a function data provider for crypto assets, so Bitcoin and basically any other crypto or token you've heard of. So today we're having Jamie on and also our head of research, uh Julio, uh, to hopefully go over some macro, um, dive down into some indicators for Bitcoin, um, and really just generally um get a false on what the what the market's like. Um so Julio, Jamie, thank you so much for coming.

SPEAKER_00 0:39

Hey, thanks for having me, Ben. It's a privilege to be on the show for the first one.

SPEAKER_02 0:43

Yes, exactly.

SPEAKER_01 0:46

Hello, hello Jamie. Thanks, thank you for for being here.

SPEAKER_02 0:51

Yeah, it's good to see you again. Yeah, I I had met Jamie, I think it's been maybe almost two years. Um, and when you were working at Bloomberg, and then since then you've also um I think founded your own analytics company and also heading out the analytics side of realvision. Um, but yeah, maybe give a quick intro in case I I missed anything. You're involved in a lot, it seems.

SPEAKER_00 1:14

Yeah, time flies. It's actually been, I think, three years. So um three years since we've been working with you guys as my as my primary Bitcoin data provider. But yeah, so background is in traditional finance. So I worked in equities and macro, worked on the sell side and the buy side in Australia, Singapore, London. Um, spent a bit of time at Bloomberg, really 10 years on the technology side and working as a sort of equity specialist in Asia, headed up a crypto team there back in sort of 2020 when the the company was still trying to work out what it wanted to do in the space. Um, probably still hasn't worked out what it wants to do in the space. But uh in that time, I transitioned from leading the sales and product um initiatives in Asia to uh Bloomberg Intelligence. Um, hadn't been a research analyst before, but I thought the area or the new asset class of crypto was fascinating and it needed to get, it needed proper institutional coverage at the time. So that was when I sort of took my previous experience trading in equities and on the and on the sales side and really plied it into crypto developed models, on-chain models, and macro and technical models, so really sort of a multidisciplinary approach to to looking at the space to try and bridge that gap for institutions to start investing and allocating into uh crypto. And I stayed there for a couple of years, and then I joined Raoul at RealVision in 2023, um, chief crypto analyst there. Um, I've also spun up my own um analytics platform. Um, and yeah, I'm just uh basically serving the community at Realvision, um which has grown in leaps and bounds and now has a essentially a social media type platform where content is being published in a sort of uh Twitter style um fashion and with Rao and a couple of other you know really really amazing analysts.

SPEAKER_02 3:11

Awesome, thank you. Um yeah, I guess quickly, Julio, too, if you could uh quick intro and uh give us an idea of some of the things you're working on.

SPEAKER_01 3:22

Oh yeah, I'm I'm the head of research here at CryptoQuant. Uh basically uh the guy that makes the analysis for CryptoQuant and you know what we publish on our weekly reports or uh research reports, um also working with clients to make uh you know analysis for them, uh content for them. Um so yeah, uh happy to to dive in into the today's topic.

SPEAKER_02 3:51

Yeah, the Jamie, the first thing I wanted to ask you um was really about the the macro side of things currently. Um I remember you before when you were a client um at Bloomberg, you were working on these kind of quantifying metrics for the macro macro state and liquidity. Uh and I'm curious right now what your kind of update is on that or general take and where are we at basically?

SPEAKER_00 4:17

Yeah, well, I mean, liquidity is like this massive driver of all asset prices and the the correlations and if you run these regressions on liquidity, they're pretty tight. Um, the thing that you've got to remember though that is nothing is stationary in markets. So the relationship that asset classes have with factors, whether it's liquidity or other factors, changes over time. But the relationship itself is still uh liquidity, the liquidity relationship that is, is still one of the strongest. In fact, it's the strongest driver of asset prices. And Bitcoin in particular, because it is a it is an asset that was designed as really the antidote to the current system and the sort of monetary inflation uh that we are now experiencing. So it is hypersensitive to that. And the thing that um I think has been interesting in the last cycle is that the transmission mechanism has also changed, so it's non-stationary, meaning that we lived in an era from 2008 really to 2022, which was the QE era. And quantitative easing had a very direct impact on asset prices and it really amplified sort of asset returns. Now, liquidity is still expanding, and we've had four years of uh expansionary global liquidity measured through global end two central bank balance sheets, um, although they've played a much smaller role because of this sort of transmission mechanism that's changing, where liquidity is no longer being driven as much by the central banks through asset purchases, but it's really coming through the treasury. Um, some people call it like Treasury QE, where the Treasury is issuing a lot of short-dated debt, and that can be consumed by the banks, and now they're even um changing sort of the capital requirement rules to allow banks to consume or to um buy more of this um treasury debt, and that just is essentially monetization of the debt because that allows them to expand credit into the into the economy. So we have really seen a new sort of a new era in liquidity, and now the new era of the liquidity that we're currently in is bullish for asset prices still. Um but I think the transmission mechanism, at least from my perspective, is a little bit different. And that's been playing, I think that's been playing out in the Bitcoin price, but you've also had other factors, just like the maturation of the asset class from you know the early adopters to ETF holders now to institutions, and they have different time frames, different risk parameters, and different ways of investing in the space. So, you know, I think we're I think we're coming up to um the very pointy end or the the last phases of the liquidity cycle. Some have argued that we're actually on the downslope in the liquidity cycle. Um, I think that actually, given that um the debt is rising as much as it is, this year is going to be a tricky year for asset prices. Um we can get into whether Bitcoin has sort of bottomed and all that and all that stuff, which is super interesting, obviously. It's the core of what I sort of look at. But I think asset prices themselves, uh, it's not necessarily going to be like a bear market year. It's just that the US debt is growing so much faster than the liquidity is growing. And that will eventually cause fractures and stresses in the system. So, you know, you get a war on top of tight liquidity, liquidity stress indicators spike, market goes down, um, those liquidity stress indicators start to back off, things like the dollar, the move index, bid R spreads on treasuries, and then the market rallies again. But when you have debt growing so fast and liquidity not matching it, you get the setup for a lot more volatility, and that's what I'm looking at this year.

SPEAKER_01 8:21

So, uh Jamie, uh if I understand correctly, so you say liquidity is growing, still growing. That's right. Okay, and so I guess the question that uh uh a lot of people have is when they when they they see that, right? Like the liquidity growing. But we we have seen this year like a bitcoin um decreasing in price and also icons that performing every basically every major asset. What what would you say is the like the explanation there?

SPEAKER_00 8:56

If you look at Q4, the contraction in liquidity was was pretty severe. So I'm you measure total global liquidity by looking at all the money supplies of different countries, the central bank balance balance sheets of other countries, um, you look at specifically what the US government treasury, because it is a central part of the liquidity um sort of uh patchwork. And in Q4, you had a government shutdown, so the TGA was drawn down. You also still had QT. So despite the total global liquidity growing, so base money growing through credit, through the banking system, the central banks were basically a big drag on this and on this cycle. And that was never the case before. Like central banks were doing QT, right? So we had four years where Bitcoin went up and the Federal Reserve was tightening its balance sheet, right? The total global liquidity, all the other factors overlaid, was still expanding. So you had a a you you know compared to previous cycles, there was a drag on this one because of what the Fed was doing. We get to Q4, and what happens when liquidity is excessively tight from central banks? We started to see issues in the um in the interbank market in the US, like sofa rates basically exploding. And that was essentially a sign that there wasn't enough bank reserves because the bank reserves were being sucked out of the system by QT, essentially. So what happened? The market collapse we had also had the um the Binance deleveraging event, whatever you want to call it, um, rug pull, where basically you know the market makers um weren't able to perform their duties, and we had a massive crash in the in the ecosystem. That was a function of sort of the market structure and the lack of regulations, which we desperately need, and better systems and technology, compounded by also the tightening liquidity situation in the US shutdown, and then the the banking and the banking sector having issues with reserves. So that all contributed to a massive underperformance. Leading up to October, gold was outperforming Bitcoin, but Bitcoin was outperforming everything else. So we've forgotten that 2025 was a great year, except for Q4. Then obviously, the unwinding that we had with all the derivatives, you know, Bitcoin now is a derivative asset. You could argue that really it's been a derivatives asset five years. Perhaps trade four to five times volume than spot. Um, but it's the I it's the ETF um derivatives that are now really driving things, and the institutions and the amount of I think um you know convexity and the all their structures that have been laid onto Bitcoin. Some people call it a paper Bitcoin, but the amount of derivatives overlay caused an accentuated, I think, decline into Q1 of this into Q1 of this year. Now, QT was reversed, uh, and you know, global liquidity is expanding again. Um, but that is essentially why I think we saw such a massive, uh, massive pullback and underperformance from Bitcoin. But there is this undercurrent that I mentioned as well. Debt is expanding faster than liquidity, and that is generally not good for, I would argue, for Bitcoin, because you know, when there is when there is excess liquidity, it flows into assets like Bitcoin and gold. Um, when there's not, it doesn't as much. And the reason why gold is, I think, outperforming is because really the only central bank that has been adding liquidity, like it's expanding its balance sheet, has been the Chinese central bank. The Chinese buy gold, they can't buy Bitcoin.

SPEAKER_01 12:52

Okay, okay, got it. Any any other macro factors that you think that has influenced this year's performance? Maybe, I don't know, the conflict in Iran, or or maybe the the the Fed also uh their their stance on on interest rates. What what do you think?

SPEAKER_00 13:11

Yeah, I mean, I think interest rates are um not as big a part of the of the picture for Bitcoin, as far as I as far as I can tell. Um really it's it's how well the system is behaving uh in terms of like the the volatility in the US Treasury market. When you see the move index moving higher, that's generally a that's a that's an immediate um pullback in asset prices, especially Bitcoin. Um so the interest rate cuts, and I don't think we're gonna get interest rate cuts now because of the war. So generally that's um you know that's a negative for the economy, negative for markets. But if you look at the um if you look at the sort of business cycle indicators like the PMI's new orders, actually we're in expansion and still expanding. So the economy's done you know quite well. And it's really just due to the AI build-out and the and the capital demands that that is having on the on the economy. Credit is still flowing in the US economy, the US banking system is expanding, M2 is expanding. That's flowing into productive assets. The US administration has been very determined to try and get the banks to start lending again, and that was the one of the main drivers behind changing the supplemental, supplemental liquidity ratio, the SLR, for the banks that free up their free up their capital so that they can actually lend more. So the US economy is going, it is actually performing really well, but you've got this inflation drag as well at the same time. And high inflation uh regimes are generally not good for um equity prices, but at the same time, there is this insatiable you know uh demand for capex that is still driving the economy, you know, pretty strong. So my sort of view on how this impacts like Bitcoin is that um it's generally good for Bitcoin that ISM is expanding. We've seen in previous um business cycle expansion periods Bitcoin does well, especially altcoins actually. Now, whether that's just coincidence, you know, we've only got like three business cycles to work with because of the the short-dated nature of the asset class. But typically we've seen like the altcoins start to outperform and business cycles in expansion. We've moved into expansion just in the last couple of months, but we've got a war that's um now pushing up input prices. So it's a very that's why I'm a little just I think it's gonna be a stock pickers year um rather than just a broad-based market rally. There's gonna be sectors that do very well, there's gonna be sectors that really underperform. Uh, and I think, you know, specifically in relation to Bitcoin and crypto, I think that you know, most of the bad news was priced into that February 6th wick low. And I use your data to, as part of my toolkit, to look for what I think are capitulation lows. It had all the hallmarks of a capitulation low, except that liquidity isn't it's still in a like if we look at the cycles for liquidity at the end of this year, it sort of gets um towards the very, very end of the liquidity cycle. So typically Bitcoin does poorly in those periods, but if you look at just the way it overreacted in Q4, Q and early Q1, it had the markers of uh capitulation. So we're close to the bottom. Like what I've been saying to in Real Vision is that you know we are very, very close to the bottom. If we look at previous cycles, there's typically a leg lower if we are aligning up with the liquidity cycle, but everything's out of sync, right? The liquidity cycle is out of sync with the business cycle, and Bitcoin's out of sync with both. So it's it's a bit tricky, but like I think you know, in the 60,000 price zone, two, three years out, you know, you're looking at you know the best performing, probably the best performing asset over that period.

SPEAKER_02 17:18

I had uh one thing I wanted to get your take on. Um it was super popular on Twitter uh to try to map out a correlation between M2 and Bitcoin price, and we saw like I think a fairly large portion of crypto Twitter trying to follow that to play the site. Was that sort of the right intentions and wrong execution, or was it just too little of a huge factor?

SPEAKER_00 17:45

Yeah, it really helps like you know Raoul put out the um M2 chart, right? And everyone sort of followed it. And the issue is that you know on Real Vision we talk about total global liquidity, that M2 is just one part of it. M2 is available basically on every trading platform. You can go to TradingView, you can map it out. But M2 is such a well, it's not a small part of the total picture, it is a part, but it is not the total picture. The other thing is that um, you know, the relationships between prices and these indicators are non-stationary. So, you know, the lags that people use, and I've always said this, is like you can't be tied to that uh uh lag relationship because it's going to change every time. Market, as soon as, as soon as the market picks up on a relationship, by just identifying that relationship, you change the outcomes of that relationship.

unknown 18:44

Right?

SPEAKER_00 18:45

You front run it, it's arbitrage. So if something has stuck for a period of time, it will change as soon as it becomes into the into the um, you know, it rises up into the into the uh consciousness of the market. But you know, what we've always said is that it's total global liquidity. Now the other thing that you know I am different to Raoul on is that um I think the transmission mechanism or the type of liquidity matters. It's not just expansion of um M2, it's it's the re it's the interplay between the debt and the liquidity, which one's growing faster, which ones um you know, which one's lagging, and also the type of uh liquidity, meaning is it coming from the treasury or is it coming from the central bank? The central bank is very, very blunt. When they buy assets, they're not giving the banks leeway to go out and and and and fund productive uses in the economy through um issuing of loans and credit to you know manufacturers and whatnot, typically banks, because after 2008 were constrained in their lending practices and outsourced it to private entities, which has caused another big problem in the market that I haven't mentioned, private credit and private equity, which is definitely in trouble. And a result of the reaction from the 2008 crisis, where after it they basically, you know, slapped the banks uh um on the wrists. Not really, all the executives got their bonuses, like nothing really changed on that front. It was all good. They just couldn't lend as much, they stopped performing their their primary function in the market. And so, what did they do when QE happened, right? When when the central bank was buying um buying reserves or buying assets and putting reserves into the system, the banks would go and basically give it to their hedge fund clients to their private banking, uh, sorry, their their prime brokerage um arms, and just allow hedge funds to access more leverage, right? And that would basically go straight into what do hedge funds do? They don't build anything, they invest. So that money flowed into asset markets, right? Through that transmission mechanism. Now, Trump administration is saying, hey, that's you know, Wall Street, you've had your time, now it's Main Street's turn. We're gonna get the banks back into the uh the business of actually lending. And when they create credit, yes, it can go to speculative uses, but primarily it's going into you know that AI data centers, um, you know, imports uh you know from uh manufacturers, but it's basically capital expenditure to drive economic growth, which was pretty non-existent during the QE era. I would I've never argued that you take one chart and use that as gospel, especially when it's a macro to asset pri asset price chart, because markets are non-stationary and M2 is only a fraction of the total global liquidity picture.

SPEAKER_01 21:44

And is it also because the growth in M two was mostly China? Right? You also mentioned that, right? Um and China bought uh or is it

SPEAKER_00 22:00

It wasn't um M2 that was growing in China, um, although it is growing, it's growing in most countries, um, right, because the economy is growing and so bank lending is increasing. When whenever there's a a loan created, the base money grows, right? So a new loan is new currency, obviously. And and provided the US dollar doesn't um because it's all when you measure total global liquidity, you measure US dollar. So a big factor is the dollar, the DXY, right? So if that is not uh appreciating greatly, then global M2 is essentially expanding, right? In dollar terms. Um that's one component. The other component is the central banks. The Chinese central bank was really the only major central bank that was growing its balance sheet, it was adding reserves into the system, and that was a that was a huge, I think, driver of the gold price. So Global End 2 is expanding, no issues there, some faster than others. We've seen some pretty rapid uh growth in some of the emerging markets, which in the UK basically flat or down, I think, last year. Um, but it's essentially growing. But really, it's the central bank layer which has been the biggest driver of Bitcoin, and only the Chinese have really been adding until Q4, December 5th or 6th, when the Fed did the pivot, said, hey, we're not doing any tightening anymore, we're doing RMP, don't call it QE, it's essentially QE, reserve purchases, right? And uh they're just basically trying to add reserves into the system to prevent the same sort of um uh in the the plumbing issues that we saw in Q4 when the banks, when the sofa rate started to explode. And that tells you that there's not enough reserves in the system. So they're trying to address that, but they're not going at it in the same with the same um vigor that they have in previous regimes. They're just trickling reserves in to keep the system running, but they're not really expanding their balance sheet at a great rate. Not enough to offset the amount of debt that's being issued from the US government.

SPEAKER_02 24:17

I guess, yeah, maybe now to get into specifically for crypto. I think there last year there was maybe two camps. One of like this time is different, um, maybe a Q4 top, and something will change, right? So and now looking back, obviously we have some hindsight that it did sort of play out similar to previous cycles, you know, peaking out in the Q4 post-haven year. Um, but I'm curious your take generally on that that timing and maybe even where we are now.

SPEAKER_00 24:45

Yeah, look, I mean, in the I guess the four-year cyclists were were correct, right? And it doesn't matter, I don't think it matters why. It it just it just played out that way. Um so in September I wrote a research report at Real Vision, which said we were in in line for a 30% pullback. And I was just using at that time the tightening uh liquidity conditions that I could see um happening in the interbank market, and also the fact that if you just look at technical indicators, uh Bitcoin, I used I think one of the most um powerful um tools you can use from a technical standpoint is just zoom out onto the weekly chart and use a weekly RSI. And weekly RSI divergences have been this thing that I've used throughout my entire career. Um, in hindsight the first time, because I wasn't using technicals when I first started in the market, but there was a massive RSI divergence in the SP in 1998. It started in '97, and then there was a series of higher highs in the SP and in the NASDAQ, but lower highs on the RSI and a weekly. Um, if you look at a daily chart, it's just too much noise. You look at a weekly. Now, what it tells you is that moment there is momentum degradation in the market, and then you can use other tools like breadth indicators and whatnot to see if the underlying structure of the market is on a really weak, weak footing. You don't know what's going to kick it off, but you know something could kick it off because the market is structurally weak. 1998 it was LTCM, the market fell 25%, the Fed came in, cut rates massively. We had the biggest bull market in Nasdaq insuring over the next two years, and then we topped in 2000. The same pattern played out in 2007 across most equity markets. SP, I was in um I was trading uh Japan at the time, we had it on the Nikkei, and I knew that basically that there was structural weakness, and of course the GFC happened and um subprime and everything kicked off the GFC. Uh in Bitcoin, it was the first ever weekly divergence um that I saw leading into September, October. So I was right in calling a pullback, I was wrong in thinking that it was the end of the cycle. Because my view was 30% pullback and then off to the races, and then you know it will peak sometime in sort of the middle of the year. So that was my thesis. I got the part I got right, the part I got wrong. Um now I think uh it's interesting because typically a bear market takes 12 months in Bitcoin, right? If you look at the previous one, so October was the high, and we are on a normal cadence, then 12 months from now we should sort of bottom out, give or take. Um, but we also had a couple of you know, there's a couple of other uh things that happened that sort of give me a little bit of pause. Number one, the speed of the decline was as great as previous um uh uh bear markets, right? Um it's basically a 50% pullback. The velocity of the move, Julio, would you agree, was almost it was stronger than it was in 2022, right? It happens much much more far, much more faster than it did in 2022. Um and then you look at like the volatility of the asset, the volatility of the asset is maybe half of what it was in 2021. So is a 50% pullback the same as a 70% pullback in previous cycles? Quite possibly. And what's to say that it didn't price in everything in six months, and the next sort of you know, six months is chopping it up. I mean, I you know, that's kind of my view. I have technical indicators uh that I use for saying, hey, it has now broken the downtrend, it is now based on all previous cycles, most likely in a new cycle move. We're not there yet on the on the weekly charts that I'm looking at. On the daily charts, it started to turn up, um, but we're not there on the weekly. So that's kind of like I'm I'm in the camp that we probably, you know, that I will count the October high as the cycle high.

SPEAKER_01 29:01

Do you think that uh we already saw like the the bottom 60k was the bottom? Even if we don't start like a bull market, the 60k was you know the bottom for the cycle.

SPEAKER_00 29:15

I think it's a very good chance in that, and like I've I've I get asked this question all the time, Julio, and my answer is like everyone gives me shit for it. But it's like you know the bottom several months after the bottom. Everyone wants to be a hero and say, you know, on February 6th that this is the low, and it had all the markers of the low for sure, but like you only really know after the fact, and that's why I use technical indicators to overlay, just to say, okay, there's a capitulation low back in February. Let's just see it start to break meaningful resistance levels on technicals over meaningful timeframes. So weeklies are generally good for that to confirm it, and that's what I'm sort of looking for. But yeah, I think um it there's a better than 50% chance that it is the low. But if we if we pull off from here, it might test that low. But you know, there's a there's still a decent chance that we get one more week down, but like for people who's listening to this and thinking about um investing, and it's really a question of time frame. You know, if if 60,000 is the low, these are really good levels to buy at. If it's not, it's still in the what I would call the value zone, right? Julio, I use you know your data, the MVRV, Z-scores, SOPRA um Z-scores, various other things on the unchained side of it, puts it in my reckoning, in the value zone right now. That doesn't mean it's bottled, but it's in the zone where you get the best returns over a four-year period. So it's kind of like, you know, if you're trading it, okay, maybe now's not the right time, right? But if you're a cycle investor, if you've got a long-term perspective, you're in the value zone right now. Whether we get this week lower that we're all talking about, or whether the February low was the lower and we break out to the other side in a couple of weeks.

SPEAKER_01 31:07

Yeah, yeah, yeah, I agree. We agree with that.

SPEAKER_02 31:09

Yeah, I think now might be a good time to pull up the charts that you had.

SPEAKER_01 31:13

Um, yeah, Jamie, we we put just some uh few slides here. It's it's it's charts about um our metrics. So I'll I'll explain a little bit and you can of course comment or you know, if you have another view, another uh idea. One one of the first charts that I I'm showing is the um this is the uh the on-chain trader realized profit and loss, unrealized profit and loss margin. It's something that I follow a lot to see if Bitcoin is you know over value or undervalue on a more like a shorter term. Um and and actually here, you see here like uh you you talk about the February 6th being you know like the capitulation, right? That you saw a lot of those metrics. Uh you know, uh funny that this this metric around that you know, February or early March, it was showing that uh you know the the traders um experiencing some uh large large uh losses, unrealized losses there. That's typically when when I see when I say okay, maybe the prices have gone, you know, has decreased too fast, right? Um so that's that's basically the idea on this chart. And since then, what we have seen is that the price has recovered, right? Because there's too much uh unrealized losses, and then so there's no more, you know, room, maybe there's a little you have no more room to to sell for from the trading side. And so after that, we have seen that the recovery of Bitcoin price towards towards the trader realized price, which is right now at 76k, actually. Uh so the price is right there. This is this is what I would say is um a really uh tough um resistance. Uh and so so that's that's one of the things that you are also saying that you know we need to to go above some uh important price uh resistance and thresholds. That for me will be one of those, like 76, right? Uh because at that point we are the trades are break-even now. Uh and so we if we are in a bear market, that will say this is a resistance. If not, then we can go higher, right? So that's uh you know uh a really important thing.

SPEAKER_00 33:47

Yeah, can I just ask uh I mean, do you have a do you have a chart of this capitulation low relative to the like say 2022 in terms of how extreme it was?

SPEAKER_01 34:01

Uh yeah, I mean I don't have it right here. I do have like the entire history. What I can tell you is that it was um I think 2022 was uh you know a bigger um you know more negative uh unrealized loss. Yeah.

SPEAKER_00 34:21

Um one of the things that I'm just remembering from my my dashboard in 2022 I had things that I was looking for that mapped well to the 2018 low. One of them was realized losses, just realized losses, but not in nominal terms, in percentage market cap or market cap adjusted. And that level, um, that indicator spike to I'm trying to recall, it was as big or bigger than the June 2022 low, which was the big week down, then we had a bit of a recovery, then FTX took us to a new low. And then so there were two massive realized loss spikes in 2022, and the February 6th low mapped very, very closely to those two big spikes in terms of the magnitude when you adjust them for market cap.

SPEAKER_01 35:21

Okay, yeah, interesting. Yeah, that's really interesting. So, yeah, and so yeah, that the idea is that you know, to here show that capitulation, right? And then that we are in a really key resistance level there uh for Bitcoin. Um yeah, it could be like uh this is you know as as as slow as as we may see this this type of of metric. Oh the next one, the next one is to talk about a little bit of the the demand for Bitcoin. Like uh you know, a lot of talk is uh that you know this cycle is different in terms of there are other players, right? There are ETFs that we didn't have. Um there is also micro strategy, which is buying a lot. Um, and so yeah, that that I I'm curious to get your your thoughts on that because what we show here is that you know, between ETFs and micro strategy, they are you know buying uh more than basically this other other metric that we uh call the apparent demand growth. So they're growing a lot, uh, and that's something that we didn't have in the previous cycle. And so the idea that would be that maybe this bear market is you know, let's say um smaller because we have a source of demand that we didn't have in the previous one. What what do you think there, Jimmy?

SPEAKER_00 36:46

Yeah, I'm I'm I'm sympathetic to that um to that theory as well. Uh it's because like the ETF buyers uh are being driven primarily through private wealth channels, and private wealth channels invest differently to you know Bitcoin plebs and the D-Gens that have dominated like the asset class for the first decade, they tend to buy dips, right? And they also rebalance more often. So they may have a structured portfolio or a portfolio allocation uh framework, which has Bitcoin sitting at sort of 2%, 3%, whatever the case may be. Um, and when that underweights or when that uh drops below the benchmark weighting, then they'll add, and when it um, you know, when it outperforms, they'll trip. And that could uh you know, that could be a big, big change in the market structure going forward for Bitcoin in terms of potential returns, uh, but also in terms of the volatility. So yeah, yeah, I'm sympathetic to that. Like it's all like theorizing at this point, but um it looks it certainly looks that way.

SPEAKER_01 37:55

And the other one that I'm I'm looking at in terms of like liquidity, I mean, I know that you make a lot of uh measurements of liquidity on the macro side. In terms of the crypto side, I just uh tend to focus on how how the USDT market cap is changing, specifically like the growth. Um, and you see that um when we enter this like this bear market, it coincides with you know the liquidity of USDT, the growth in the market cap this as um decelerated. Um and then we even showed um um um a decrease in the market cap uh on March was it it went to a low of um 3.5 billion, so a decline. Um and now it's growing again. Uh uh in the last few days has been growing and it's growing by now 3.5 billion. So that's another sign that I look at in terms of liquidity, but more specifically for for the crypto crypto market. I'm curious just to know, you know, how how how do you see or or look for liquidity but specifically for for the crypto market?

SPEAKER_00 39:11

Yeah, so I would love to see this as a z-score. Right? Because I what is 3.5? I think this is excellent. Like, I mean, I don't have this in my in my dashboard, um, and I have the data, so I'm gonna I'm gonna definitely look at it. But what I would do is um just look at the magnitude of that decline also and the rate of change increase that we're seeing at the moment, and then look at historically how much was that 3.5 billion decline in um stable because it's like structurally, or should I say, yeah, you can call it a structural shift or a secular shift, stablecoin um supply is expanding. It's in a mega trend up until the right. Um, so you know, it's the oscillations in that overall secular trend that's interesting. I think it'd be interesting to measure it um sort of like as a z-score, like just to get it normalized. But like how was it? Um, you know, and if it ever was that deep, have we come out of it as fast as as we have here? Because that looks like a that looks like a very big turnaround, and I wasn't aware of that.

SPEAKER_01 40:26

Yeah, yeah, that's uh interesting to see it as um yeah, normalized actually. Yeah, it could give you like a more um accurate um metric, but yeah, that's one of the things that I always follow in terms of liquidity for crypto is uh you know USDT market cap, but the growth actually, you know, like you say, not the overall um yeah balance, but the growth in that, right?

SPEAKER_00 40:53

Yeah, uh well and is there a reason why you haven't added USDC there as well because of the like USDC's uh you know popularity within DeFi. Um it wants to be a good kind of yeah.

SPEAKER_01 41:09

I focus a lot on USDT for this, uh just because it's it's used more like for the trading purposes. Um there's uh you know in terms of like reserves on exchanges, USDT is much like like bigger um for for trading purposes uh than USDC. So that I think that it follows more that those market cycles uh that than USDC. Um yeah, and well finally just uh you know by looking at it into inflows into exchanges after this rally, you know, from the 60 that we saw here in uh sorry, this is now this is uh this week. Um we had this rally at 76, and now we see a spike on on inflows to exchanges, so just that to to give a little bit of uh you know, let's say uh an alert or warning that typically that happens, you know, when we had some rally and we can see the inflows to exchanges or to expect you know a little bit of a pullback, or it's it's always that that uh important to to keep an eye on on this uh on this type of metric.

SPEAKER_00 42:29

Yeah, yeah, I I mean this is actually uh something else that I've neglected to use, but I'm not sort of trading on the uh on the short term uh anymore. But I would be really interested to see this on a longer time frame and a more smooth metric, and also like normalized to um normalizes the market cap as well.

SPEAKER_02 42:50

Well, Jamie, one thing I wanted to ask, because we we've touched upon I mean macro, now some technicals, but you approach, I guess, investing in in Bitcoin. It seems like that maybe there's a macro like bias helps you establish, and then you have a set of technicals to kind of dive in for timing. I guess what kind of what's your process in general?

SPEAKER_00 43:14

So the the thing there is also on-chain, like all the Julio stuff is critically important. Um the I tend to use the on-chain for Bitcoin more for understanding the major turning points. So, you know, back in the day before ETFs, general activity on the chain was indicative of of price moves. So, you know, how much how much money was flowing across the chain. And the I don't know if you want to like for me, I think it's a sad reality that the chain is not being used for its really original purpose. It's just basically becoming a hodler asset. Um, but those metrics, those network activity metrics, Julio, please weigh in here. Like if you found anything that you would disagree with here, because I'd be fascinated to know. But like the network activity metrics don't really have a great correlation with tracking the performance of the asset anymore. And most of the activity now is happening off-chain, right? Through the ETFs. And they don't leave a they don't leave the same sort of activity for prints as before the ETFs were launched. But they certainly, like on-chain metrics, are critical for understanding cycle turning points or major low, major tops. I use that either toolkit, I've talked about it here, like the realized losses. I mean, for capitulation lows, realized losses, the funding rates, futures, futures, positions, losses, they're all like when you start to look at them, normalize for market cap, because that's the that's the uh I guess the the thing that I see people on Twitter mistakenly do. They go, well, look, you know, it's the biggest liquidation day. Sorry, liquidations is what I meant in uh derivatives, right? So liquidations and derivatives positions, realized losses on the spot, funding rates. Um, but when you see liquidations not normalized for market cap, it's like, I mean, like, what the hell does that mean? Like Bitcoin's five times the value of it was in 2021, right? Or 2020, I should say. Um, of course it's going to be a higher liquidation day when it has a big data. What is it normalized for market cap? So I use those and they are very good bottom indicators. Uh, but you only you only need them a couple of times a you know, arguably a year or over a cycle to understand things. But um, they are it's on-chain data for um understanding those um highs and lows because I use um I have my own Bitcoin cycle risk score, and I use crypto quads data for understanding like long-term holder selling as a major turning point for uh cycle tops and a couple of other metrics, MBRV, net unrealized profit loss, uh all these things combined into my own custom metric that I use for realvision. Um, but then it's also like the secular macro stuff as well, Ben. Like, you know, the reason why are we here in Bitcoin for the first place is because it's an asset that has an answer to the problems of the current financial system. So understanding how that financial system is operating, what levers the central planners are pulling certainly has an impact on the asset. And then, you know, I'm I'm a technical analyst actually, really to my heart. So I have to overlay technicals on top to understand, you know, entries and exits, uh, and the health of a trend as well. So it's I call it multidisciplinary, but it's like you know, it's macro, it's on-chain, and it's technicals.

SPEAKER_02 47:02

Probably I bet you would uh agree with that.

SPEAKER_01 47:05

Yeah, yeah, of course. I mean, I I'm not um much of a micro uh analyst, but it's just uh because I I never uh done that. But yeah, I mean on-chain, uh also on-chain I also you know a lot of what I follow is flows, uh like uh like exchange flows. Um specifically for for tops, it gives you they spike actually, and you know, on on a if you see it on a longer term, uh longer time span, uh it also like spikes when there's like tops and that. So it's uh really really uh helpful to look at flows into exchanges. I will uh add that. But yeah. Um yeah.

SPEAKER_00 47:48

You've gotta you've gotta get your your CNT designation, the charming market technicians using we need we need more, we need more crypto on-chain analysts. It's something that I've been trying to drive with the designation now. We're actually in a I wrote a syllabus for the CNT on crypto using a lot of the on-chain data from Crypto Quant. Um, but yeah, I think it's the crossover between technicals and on-chain is just a perfect symbolis. It's all data, um, you know, and it's all visualized in a chart. So the the crossover from understanding the technical indicators onto on-chain metrics melds really well. So that's my pitch for you to get your CNT.

SPEAKER_02 48:32

Sure. And and on the indicator side, it seems both of you are very aware that it's it's a little too easy to just pick a value of historical metric and try to place it on today's. Like Jamie, you've mentioned many times, normalizing data for the current market in Julio. Like you don't just take the MVRV from you know 10 years ago and try to apply it to the price today, um, trying to find exact top. So yeah, it seems like that's a pretty good theme. Yeah, you're not taking data at the face value, you're really trying to understand it today.

SPEAKER_00 49:09

Yeah, normalizing data is is absolutely critical, which is a bit of an art more than a science, isn't it, Julio? Like you then you get into the the trap of trying to you know overfit, yeah, it to match. But the exercise of doing that eliminates some of the bias or the um, you know, the sort of too easy to really uh you're not activating much of your uh your gray matter when you just see a chart that looks, you know, looks wonderful in one instance and not actually understanding the full picture. So um some sort of normalization is just really healthy.

SPEAKER_02 49:46

And moving into the I guess broader crypto market, um, now that we've you know scratched the edge. Um yeah, like on the altcoin side of things, um it seems like the the fundamental Bitcoin crowd, like a lot of indicators are built out. Maybe for altcoins it's a little more challenging to find like a good set of on-chain data for actually like pricing out like valuations. So I'm curious your process for the altcoin in the broader crypto space.

SPEAKER_00 50:20

Um, yeah, I'd actually push back on that. I think um there is definitely good data to understand the health of a like an layer one and also a a DeFi um protocol, which is essentially the two main sort of use cases these days. Um the again relationships change, but the there is a lot more, uh, I think there's a lot more people looking at the data um with a better framing than there was maybe three or four years ago. And what I mean by that is you know, if you look at sort of fees, right? The fees that an L1 generates, like settlement fees, um, you know, the common trap is that you look at fees and you see them going up, but people don't distinguish or delineate that fees are priced in the currency of the L1 token. So fee activity may not be increasing, but the token may be going up because there's more demand, more speculation for the token, and fees are actually rising, right? And so that's a that's a sort of a false signal. Uh, also you look at fees and you see big spikes, typically that's really horrible for forward returns. So, one of the one of the stuff that I do is really statistically breaking down what drives the value of an LOD token primarily, um, and thinking about it not from like a short-term trading perspective, but from a structural secular trend. Over time is consistently a broad range of different measures increasing for this asset, right? So fees, stable coin supply, um, the number of applications being built on the on the token on the L1, how many of those applications are profitable or generating fees above how much supply is being generated, and then looking at the L1 token supply schedule and understanding, you know, what is the you know, what is the inflationary nature of that of that L1 token, how much vesting is going to take place, um, and then trying to sort of distill it down to these networks are structurally strong and growing, and these are essentially networks, and they have they follow Metcalf's law or Reed's law, where you know just more activity on the chain and more interactions between all the different nodes on the chain, call it applications, call it users, is going to actually increase the value of the underlying infrastructure. So there's you know, there's a lot that can be gleaned from on-chain data for L1 tokens. DeFi tokens, they're kind of like businesses, they're kind of like stocks, um, where there's really just you know they're they're businesses on-chain, and you can measure them in terms of cash flows, like discounted cash flow models, uh, but you also need to take into effect the supply as well. So, yeah, I mean it's uh it's a really interesting, it's it's intellectually fascinating because it's a lot more complexity than to Bitcoin itself, but it's a harder place to invest because it's a VC, uh it's a VC asset class traditionally. Most of the VC funding, though, in the well-established networks is gone. Right? Solana's 93, 90% through its um uh inflation um uh supply schedule. The BCs are kind of out of it now. They're buying it, but they're not the initial investors besting are kind of out of it. And so you don't have the overhang that you did for the first four years of that token. So now it's basically price discovery, where increasing demand is not being offset massively by supply. And so the demand factors will actually really start to signal uh price performance.

SPEAKER_02 54:17

I think one one thing interesting last I guess cycle, if we're calling it over, um, was that many of the I guess blue chip L1s they didn't even reach an all-time high, as many would expect in previous cycles where you know every coin is is just pumping into new off tops. But it seemed like there was only a select few, like hyperliquid, um and some other ones were formed. So do you see uh solidation happening in some of the fundamentals of these real real projects, I guess?

SPEAKER_00 54:48

So B, Tron, Solana, they're the they're the top three in well, they're three of the top four, Ethereum didn't, Ethereum came close. So three of the top four hit all-time highs and actually outperformed Bitcoin. I'm just trying to remember. I did the rankings at the end of the year. I'm sorry, at the start, yeah, starting for this year, and so because I was talking about like October being the end of the cycle, so I wanted to go back and like measure what happened in that cycle. You know, we're surprised that it ended. Now let's do the post-mortem. And so BNB Tron, yeah, no one talks about Tron, and like let's face it, but it has crushed it. B all-time high, Solana all-time high back in December of last year or January of 2025, um, traded down for most of the year. But the point being is that the assets where there's activity grew faster than Bitcoin, and so the issue is not you know the whole altcoin space under the fog, yeah, but like there's too much supply, and no one's adopting it. No one's no one's using like the fifth L2 on Ethereum, right? No one's using the sixth L1 in market gap rankings, but the growth numbers, the active users, the stable coin growth, the transactions, the settlement volumes, the DEX volumes on some of these are exploding and have consistently grown. And that took them to all-time highs. So the you know, the old season thing is definitely dead for everything other than the stuff that matters. And the stuff that matters is a fairly small slither. Like I've created crypto indices, crypto sector benchmarks. So I've got you know seven sectors, I've got the top 200 index, the top 100, top 50. I track all this, I do breadth measures and all this. So I dissect it in great, great detail. And it's just obvious, like you do, you know, the the the the networks that matter that are being used will go up in price. And provided those metrics are increasing over time with a lot of oscillations, obviously, the liquidity cycle played a part, these things will be higher in in years to come. It could even outperform Bitcoin.

SPEAKER_02 57:13

And I guess the types of activities that you're focused on as well on these networks, like the big three that you listed off. I mean, primarily trading and stable coins are the utilities, not necessarily. I mean, marketplaces and NFTs obviously exist there, but the what's excelling those networks is stable coins and trading, essentially.

SPEAKER_00 57:32

Yeah, yeah. So the way I'm defined in my research is you've got the spec a little bit because L1s are the digital economy or the L1s are countries within the global digital economy, right? So Ethereum's a country, Solana's a country, and they all have different taxation, um, you know, taxation and immigration and other policies that govern their economy. They've all got their own individual jurisdictional sort of policies, but there are two structural uh sort of drivers of the price performance of the assets of the L1 tokens. It is the speculative economy, which is DeFi. Um, and when there is when there is increased intensity of usage, it is very closely related to L1 token price. Then you've got this flower burn structural driver on the prices, which is essentially the settlement of stable coins and transactions and payments. That has less of an impact on the day-to-day price, but over the long term will determine the performance of the assets because that is less cyclical than the speculative economy, right? You can see an a meme a meme coin explosion happen in one ecosystem in the last six months, and it'll drive the price. And because it's speculative and it has a finite um you know time period of basically um destroying everyone's money because that's what they do. 99% of the meme coins, uh traders lose money, so it'll suck money in, everyone will lose money, it'll die, and it'll be reborn in a couple of months because we're humans and we can't help ourselves. But underneath that is you've got to ask yourself, is that L1 building the stablecoin economy of the future? If those metrics are driving, then that is really the long-term determinant of success for an L1 token.

SPEAKER_02 59:41

Julia, do you have any any takes on the the altcoin side of things?

SPEAKER_01 59:46

Yeah, no, I I agree with you know that um especially the stablecoin use case, right? Uh it's it's like the I would say like the more boring side, but it's the one that is really you know uh driving adoption. And you can see that on Tron. Uh we we we have made uh research on Tron over the years. It's what they you know, they really find the use case right there in the stable coins. And as you say, Jamie, you know, TRX and Tron are the ones that you know one of the coins that really got through the new outline highs this cycle, right? Because they over the years they continue to to add more and more and more stable coin liquidity and and of course more more transfers, more activity, and and just basically what happens in that network is stable coin.

SPEAKER_00 1:00:42

Uh yeah, that's that's the activity there. But as a transfer mechanism, it is it's got product market, it's found product market fit. The other thing too, Julio, is like it's it's got a very effective um tokenomics policy. Is it burning 100%?

SPEAKER_01 1:01:00

Yeah, it's it's burning, yeah, exactly.

SPEAKER_00 1:01:02

So of course it's gonna go up. Like people are using it only for one thing. So like I would argue that is why Tron trades at a significant discount to Ethereum, even though it has four to five times the daily fee revenue, and all those fees, I think I could be wrong, but 100% of those fees I think are burnt. So you just have this continual price, you know, it's like a massive buyback. But the market discounts it because it doesn't have diversity, its economy does one P. So if something comes along, like maybe you know, Stripe and uh Circle with their own corporate chains, start to really take over stablecoin flows, like that's the big risk for Tron. There's no evidence as of yet that they can displace the network effects that Tron has built up over six years, especially in emerging markets, but it does trade on a discount because it doesn't have diversity in its ecosystem. It's just just one thing. But that one thing is actually the most valuable thing in crypto.

SPEAKER_02 1:02:12

Awesome. And the fun thing is we can track it all using crypto coin, actually. Um I guess one final question for you is um I think with this podcast, one of our goals is to give the average crypto investor some insights or or or tools to kind of navigate the market. So I'm curious if you had maybe one final advice for the average crypto investor. Because we've talked about you know general macro geopolitics, how that affects price, all these different tokens and indicators. Um, but do you have like a general framework you could share or any simple advice?

SPEAKER_00 1:02:49

Maybe I'll just share, I'll share a couple that come to mind. Number one is um, I think unless you have you know uh a remarkable skill for picking tokens, the best thing you can do is invest where there is usage. And the second thing I would say, I'll come back to that first point. The second thing I would say, if you're investing in token and you follow that principle, like where are the users, where is the liquidity as your sort of guiding investment framework for picking the tokens? The next question is how do you size the crypto allocation in your total investment portfolio? And that's where I think a lot of people get it wrong. Like, even if you're 100% bullish on Bitcoin and crypto and its future, unless you're willing to accept the 80% drawdowns that happen all the time, then you shouldn't have 100% of your investment in crypto, even if you're following the right methodology of buying the assets that are that have the usage, that have the liquidity, that have the network effects. So that would be that would be my um my my guidance.

SPEAKER_02 1:04:11

Awesome. Well, thank you. I think uh I think that's great advice. Um well and yeah, thank you very much for being our our first ever guest on Unbiased. Um and I'm sure we'll we're gonna link all of your um projects and socials uh when this is released. Um yeah, really thank you.

SPEAKER_00 1:04:28

It was a pleasure. Thanks for having me on, Ben. It's a privilege to be on the first the first of the series. Yes, thanks for the work that you're doing on your side as well. I love the I love the content that you're putting out.

SPEAKER_01 1:04:39

Thank you. Thank you, Jamie.