Unbiased Ep. 2 | TXMC Trades: K-Shaped Macro, BTC Bottom Signals, Treasury Company Risks & The ETH Value Accrual Problem

Episode 2 of Unbiased brings on TXMC Trades — analyst, trader, and creator behind the Alpha Beta Soup YouTube channel — for a wide-ranging conversation on where macro and crypto markets actually stand.

TXMC has been in markets long enough to call his own recession prediction wrong and update his framework accordingly. That intellectual honesty runs through the whole conversation: he's buying Bitcoin at current levels not because he knows where the bottom is, but because the Mayer Multiple and realized price proximity put the risk/reward firmly in his favor. He's not calling a vertical recovery either — he expects a long base to form.

We push on the four-year cycle (he finds it amusing more than predictive), treasury companies (structurally skeptical — every one he's looked at has negative operating income), and Ethereum (the stablecoin market cap crossover is the chart he can't shake).

His final take for new investors: understand Bitcoin properly before touching anything else. Not because altcoins can't move — but because without understanding what makes Bitcoin distinct, everything else looks like a cheaper version of the same thing. It isn't.

Honest takes, no pumping, no agenda. That's the show.

Subscribe wherever you listen.

Links:
TXMC on X: https://x.com/txmctrades
Alpha Beta Soup (YouTube): https://www.youtube.com/@AlphaBetaSoup
Julio Moreno on X: https://x.com/jjcmoreno
Ben Sizelove on X: https://x.com/BenSizelove
CryptoQuant: https://cryptoquant.com
CryptoQuant Research: https://cryptoquant.com/insights/research

Transcript

SPEAKER_02 0:07

Welcome back everyone to our second episode of The Unbiased. Uh today we're joined by TMXE Trades, who runs a um Twitter account called TMXE Trades and also a YouTube account called Alpha Beta Soup. So thank you very much for being our second guest on Unbiased. How are we doing?

SPEAKER_00 0:27

Thanks for having me, guys. Looking forward to chatting.

SPEAKER_02 0:30

Yeah, um, today I think it would be super interesting to go over some macro, um, definitely Bitcoin, um, some of the altcoins, um, and then also some of the extra fun activity in the market, like treasury companies, and hopefully get into um learning your your take on some of these topics. Um so I guess first off, I think it'd be good to start with some macro. Um, I guess generally, how are you reading macro right now and the the current market?

SPEAKER_00 0:57

Yeah, you know, I uh it's been hard for me to get a clear read on macro, at least for the last maybe year, year and a half, um, because there's certain parts of the economy that like don't look so great. But because we're running such large deficits and there's so much money sloshing around, they're especially in the upper crust, like the top 20% of earners. Um, it's really just kind of keeping things moving along, you know. Um the labor market in the United States, yeah. I live in the US, so most of my view is US centric. Um, the labor market here is is pretty weak. It's like actually the lowest job demand we've ever seen in a period that wasn't a recession, uh, which kind of sends up red flags if you're someone who looks at business cycles or just like, you know, historical economic performance in general. Um, but at the same time, people keep spending money when personal consumption expenditures are still pretty high, even though we have rising delinquencies and things like that. And a lot of it is because the wealth effect and interest rates that are not zero are helping to provide um juice for people who still have assets and have money and are cash rich. Um, and those people are spending more. And now I think that last time I looked, the top 10%, or maybe it's 20%, the upper crust of earners uh spend more than 50% of consumption in the United States, which is the highest it's ever been, which kind of shows you that the rich are doing fine and people at the bottom half of the income spectrum are struggling, especially when you look at like credit markets where you see rising auto delinquencies, rising rising credit card delinquencies, rising student loan delinquencies. And so like there's pressure in the system, uh, but it hasn't really spilled over into what we'd be categorized as a recession. And I think that that is indicative of this period we're in now where the US is running, you know, six, seven percent deficits uh without a real crisis to justify those things. I mean, so that is a historically large deficit to GDP. So um right now, you know, the economy seems to be okay. I I don't think it's about to fall off a cliff tomorrow, uh, but it seems fragile, especially uh for anyone really looking for a job or hoping to grow their income. You know, wage growth has slowed down in tandem with the low, just general demand for jobs. And so I I as far as my read of the economy goes, I mean, it seems okay, um, but this is it's almost kind of a zombie in some ways. You people call it a K-shaped economy, meaning the upper crust is doing all right, the bottom half is doing pretty poorly. Um, and that can persist for a while, which I can I think makes it difficult for people who are trying to like call a top on the economy or the expansion or whatever. Um, and it's kind of been like this ever since we got away from the pandemic. You know, it's it's been a few years now. Um, and I thought we would have a recession three years ago, and I was wrong about that. I had to kind of readjust the way I was looking at the economy. Um, and we've just continued to go ever since then.

SPEAKER_01 4:10

Hey, TX, um do you think that the the weakness in the labor market is it's AI driven, is it, or not not yet?

SPEAKER_00 4:22

I think not yet, uh Julio. I think like it's it's in it is a possibility that we could see lower labor demand, human labor demand over time as AI becomes more capable. But right now, I think what we're going through is a combination of some other factors. So demographically, in the US, the labor force just hasn't been growing very strongly. I mean, uh, under the Biden admin, there was a big surge of immigration, but that has cooled off, and now the Trump admin has kind of been negative net migration. Um, but native, the native population just isn't reproducing at the rate that it was in the 60s and the 70s. And it takes a couple of generations for those things to really start rearing their heads. And I think now we're starting to see some of those effects of just really low labor force growth, which also kind of happens alongside low labor demand. And those things are reducing hiring, but also after the pandemic, there was like a hiring frenzy. Job growth was like the highest it had been uh in almost all of recorded history for the U.S. I mean, there's some other periods in the past where it was very strong, but in my lifetime at least, it was the strongest job growth we'd ever seen. People were switching jobs, all this kind of stuff. And then I think it started to settle in that companies were had overhired. There was like an abundance of staff in places that didn't need to be. Like I think I think a company like DocuSign at one point had like over 10,000 employees, uh, and they just don't, you know, they just don't need that. Um, so a lot of companies in those kinds of positions, and I think like over the last couple of years, they've started to let people go. And some of that is being the excuse being given is that it is AI when I think it's really just that they are overburdened and the the math is no longer mathing for them as margins get tighter, costs have been rising because of inflation, and so the biggest input to businesses is labor. So if you're overstaffed, you're gonna look for ways to cut. And like uh, I I had a full-time job up until 2023. Um, where I worked for a video game company and they started letting a lot of people go. And at the time, AI was still like in its nascent stages, uh, but that even the company then was still trying to kind of force it upon the workers, figure out ways for it to, you know, gain efficiency, and then they started letting people go. And some of those excuses were uh the word technology. And I think it that that's continued to grow in the last couple of years. But like if you look at productivity metrics, like if you look at real GDP over total employment, it it's kind of the same trend. It's been for a few years, it hasn't really exploded in the way that you would think it would be if all of a sudden technology was replacing humans in in like this big wave. So I think like it could happen in the future, but right now my assessment is that it's mostly the combination of demographics and like multiple multiple years of of companies being overstaffed.

SPEAKER_01 7:27

Yeah, is that what you see with this announcement of you know a few months ago, I think Coinbase and uh log, right? That they let go, like log almost half of the people, I think, uh like also a really big number. Uh and they say that they was because AI has changed things, right? Yeah, maybe yeah. What do you make of that?

SPEAKER_00 7:56

I I think I think it's kind of the same thing, you know. Um I I think they don't they don't need a lot of this staff, and uh yeah, like AI can write some code and it can probably replace like low-level support agents and maybe some people who do paperwork in like HR and things like that. It can replace paralegals at law offices and things like that, but it's really a long way from replacing more complex work, um, especially things that are more customer-facing. So, like, I I don't know the specific uh Coinbase, I don't know enough about the Coinbase situation to have a real deep insight there, but I I think it's kind of part and parcel of this whole um situation where they they overstaffed. There was so much money going around in 2021 and 2022, and companies just thought that they needed all this staff. Wage growth was like six, seven percent. Now it's been cut in half, and so the it's just indicative of of a significant cooling in the labor market, and I think um AI is kind of like a convenient excuse right now.

SPEAKER_01 9:01

Yeah, also for like crypto companies, it's a bear market, right? So, for example, like for Coinbase trading volume, it's uh you know, decline a lot because of the bear market. So uh that's I I mean I think that that's some some of the explanation.

SPEAKER_00 9:21

I think so too, and and also because of the crazy bull market in equities for anything related to AI, I think like it's kind of a really it's a it's a very contemporary way to spin it in like a positive way, to be like, oh, you know, we're just such a modern company and we're doing so many great things with AI. We just decided to let some staff go. Uh and you know, it's great for PR, but you know, my my wife worked for a Fortune 500 company until last year, and uh they started letting a lot of people go, and some of their public explanation has been AI. But I know from her firsthand experience that that's bullshit and that they are not really AI is not driving efficiency, they're actually wasting a lot of money trying to force different departments to use it, and they were overstaffed and they had their priorities going in all these different directions. They thought themselves a tech company when they weren't really, and uh I think Coinbase might have their own version of that going on, and the bear market, to your point, isn't really helping.

SPEAKER_01 10:26

Yeah, absolutely.

SPEAKER_02 10:28

So, in terms of I guess how you take macro and apply it to like crypto markets, do you view it in in isolation or like how do you factor in macro? Because I think you know a lot of retail investors see all these numbers like interest rates, jobs markets, um, like whatever trying to traditional companies and and equities, and they wonder how like where crypto fits in. So I'm curious how you um kind of view that.

SPEAKER_00 10:55

Yeah, it it's been uh tricky kind of trying to find a model, in my opinion, that works for the way that I look because you know, I my approach to trying to learn about the economy has been from the perspective of business cycles generally and how the Fed and interest rates kind of feed into those things, job growth, um, the cyclical parts of the economy, like goods production and manufacturing and everything. And it's hard sometimes to figure out how those things then directly link into a market like crypto, which kind of lives like out on the farthest ends of the risk spectrum, especially beyond Bitcoin, into the altcoins, they're even further out there, right? Um, and so that's been challenging for me. And I think before 2022, I think that because interest rates were so low for so long that it created an environment where pretty much any idea could be seen as a good idea because money was essentially free, capital was free, right? And as we've left the zero interest rate era, uh, Powell started hiking in 2022. And I think that period of time is gone now, barring like a depression event. I think the bond bull market is over for at least a decade or so, just based on history. Um, I think now we're in a period now where capital is no longer free. And so a lot of things that seemed like good ideas um are now kind of zombies and they don't really have a purpose. And I think the altcoin space is kind of fits into that a little bit because we have created an abundance of tokens, which led people to believe that there was an abundance of equities, most of these projects don't even make any money other than like moving PvP capital around in trivially different ways. And so it's it's a challenging environment, I think, uh, for altcoins, because as I said, most of these tokens don't really have a need to exist. And while some great ideas have been created in this space, you know, like distributed ledger technology and tokenized assets and things of that nature, um, there's not really a moat that crypto has been able to build that they can defend and say, no, these are our ideas, and if you want to use them, you need to buy our tokens. TradFi just said, oh, blockchain, that's cool. I'll just build my own. That's what JP Morgan did. They built Kinexis, and now they are creating their own blockchain, interbank, and they use some pieces, some ideas from crypto, but very little of that value seems to be accruing to the tokens behind them, like Chainlink, for example. JP Morgan's Connexus chain uses Chainlink to talk to other chains. But look at the link chart, it's in like the seventh level of hell. Uh, no one needs it for any of this stuff. So I think that there's kind of an uh, and and maybe this sounds too bearish, you know, we could certainly have a period where altcoins turn around and bounce higher, with along with maybe maybe a little bit of economic acceleration or something. But I think uh they kind of live way out on the risk spectrum. And we're not even like despite the strong bull market in in parts of the equity market because of AI and data centers, we're not really in like a full-blown risk-on environment with liquidity surging and all of these things. Uh, it's uh it's a little bit different, it's more of a capital goods boom and an investment boom. It's not really just throwing money at anything that seems like a good idea, which is the environment we were in in 2021 when everything went parabolic. So it's kind of a long way of saying that I don't really see a clear place right now in its current state that crypto like fits into you know how I would look at the economy. I think, you know, if we get to some period uh where something causes the Fed to need to stimulate dramatically, um, of course that would mean a crisis would need to occur. But the aftermath of that would be a lot of easing, a lot of stimulus, kind of like we had in 2020, but maybe not so extreme. Something like that could see alts perform well for a period of time. But I think and I think they're going through a bit of a house cleaning now. And maybe the industry needs to start thinking about what the next iteration of the token economy looks like, because it seems to me that maybe what worked from 2013, say, through like 2021, uh maybe doesn't work in an in a period of structurally rising interest rates versus falling interest rates.

SPEAKER_01 15:31

And you know, talking about you know how macro fits into crypto, how it fits crypto. Um there's some models that have been like the battle, right? Um people presented as as models. Uh can you uh give us your impression on the M2 model, which was very uh popular and in I think in the last year.

SPEAKER_00 15:57

Yeah, you you're talking about global M2.

SPEAKER_01 15:59

Yeah, exactly. Yeah, global M2.

SPEAKER_00 16:01

Yeah, so I that's something I have probably annoyed my audience with a little bit over the last year talking about it, because um there was a lot of a lot of pushing of this idea that uh global M2 is rising, so Bitcoin needs to rise, and the altcoins will need to rise. And uh a lot of the charts that you saw showed a very small window of time from 2023 through like early 2025, when it appeared that Bitcoin and so-called global M2 uh were moving in tandem with each other. Um, I always thought that was funny because if you looked before late 2023, the relationship is not nearly so clear. And I think part of the problem is when people create these models, they are introducing complexities that they don't fully understand. And unless they account for those things, they can be duped by what they perceive to be a relationship that isn't quite as tight. And when it comes to global M2, what that is is it's taking the local currency units in a bunch of different economies, you know, the US, Japan, the Eurozone, China, wherever, different people combine different ones, but they tend to be the G7 and maybe a couple of other economies. They're taking local currency units in all of these different places, and they're converting them all to USD and treating them as the same giant global pool of dollar capital available to buy assets denominated in dollars. And when you do that, you've now created, as I said, additional complexities. And when I when people present these global M2 models, I never see these things represented ever. Um, and one of those complexities is the conversion of everything to USD. So now what you've done is you have created basically an M2 weighted dollar index, like the DXY, uh, and it's just tethered to M2, which is always rising. And so what you're really looking at is a dollar exchange rate that's weighted by the money supply. And uh it's it's troublesome because a lot of these global M2 charts are shown on like a daily time frame or a weekly time frame, but M2 is a monthly figure, and many of these countries release it like one or two months behind present day. Like I don't know uh when the next release is, but I made a video about this a couple of weeks ago uh in late May, and the last M2 figures for most countries were for March. And so if you're converting everything to dollars and then showing it on like daily or weekly, uh, you're just looking at 30 out of 31 days that are just the inverse dollar exchange rate of that country times its money supply from like two months ago. And it's just kind of it's kind of irrelevant, um, especially because those M2 figures, like China's M2 or the UK's M2, that represents the deposits of regular people living in the UK and living in China, earning their incomes at their jobs, paying their mortgages, going to the grocery store, you know, going to the movies with their kids, paying their taxes. And it's not denominated in dollars for them, it's denominated in pounds or yuan or whatever. And so it it doesn't even reflect like an idle pile of cash waiting to buy dollar-denominated Bitcoin or whatever. So it's it's really just kind of a made-up metric. It's it's it's an abstraction of a bunch of different money supplies. So I I find that model to be kind of silly. I mean, you could look at it that if there is suddenly a dramatic rate of change increase in the M2 of multiple countries, then I think it's reasonable to assume that some of that will find its way into risk assets, right? Because that's what happened in 2021. We've seen that. But to try to paint it as some kind of a trading model or something that you can look at on smaller time frames, you're you're really not even looking at what you think you're looking at. You've kind of you've abstracted it to such a point that it no longer represents a truth. It's it's just kind of like a Frankenstein. And so I I I tend to avoid looking at it very much at all. And it's funny because ever since the the bear market began, uh Bitcoin and Global M2 have gone in literally opposite directions. Uh so hopefully that we hopefully we've just put that one to bed forever.

SPEAKER_01 20:43

Yeah. Yeah. Yeah, exactly. Um Ben, do you have a comment?

SPEAKER_02 20:48

Uh not on that. Um, but yeah, Julia, if you have another comment on the the macro.

SPEAKER_01 20:55

No, let's uh we can I think we can dive into you know more Bitcoin related stuff.

SPEAKER_02 21:01

Yeah, yeah. I think um, yeah, I mean macro is obviously super complex, and I think uh a lot of our audience is mainly interested in you know Bitcoin and crypto and how to how to navigate that. So yeah, I guess first question is sort of the the headline probably is is the is the bottom bottom in, or how do you um kind of navigate the bear market?

SPEAKER_00 21:25

Yeah, so it's it's very possible that the bottom is in. Um I think when you look at like fractals of bear markets, I think I posted one on Twitter yesterday. I posted uh all the bear market drawdowns from the peak. And so far, this one kind of looks like the last three, you know, it hasn't gone down quite as much at this point compared to the last three bear markets, but it looks similar fractally. But all those the past three bears all went you know 70 to 80 percent down, and I think uh it's reasonable to expect that maybe. Maybe this one doesn't go quite as far because volatility has been lower in the bull market this time, right? We didn't go up nearly as high. The there were long periods of kind of sideways consolidation, especially 2024, uh, where the market didn't really go anywhere, which is a bit atypical for a Bitcoin bull market. And so some of that I think represents its maturity, right? It's it the ETFs launched, it has been more integrated into the legacy financial system. Um, the derivatives market has grown a lot, which you know could suppress price at times. And so I think it's reasonable to think maybe the bottom is in here. Um, but bottoming is a process, right? I think a lot of people are looking for like that sexy V bottom big wick that they can bid and just go, that's the bottom, that's it, March 2020 style. Um but I I most of the time that isn't what it looks like. It's usually a multi-month process. If you look at this bull market, the top for Bitcoin really took like five or six months. It was like from July to October price just kind of going sideways. Then it took however long it's been in the bear market here, what's seven or eight months? And now we've been to the bottom. You know, the the low from February just got recently breached. So maybe we're in kind of a multi-month bottoming period now. Um, we don't know yet, right? Um, I think it's certainly possible. There are some uh on-chain metrics that still look a little bearish, you know, like uh net realized PL is still in the red. Um the SOPR, which is like the the profit ratio of spent UTXOs, that's still kind of in the red, which is similar to the PL. The realized cap is still repricing lower. So like there's still some changing of hands going on on-chain and and on the on the spot markets, uh, from weaker to stronger hands that that kind of needs to play out. Um but I I I also like for me as a long-term Bitcoin investor, like I do trade, but when I talk about Bitcoin, most of my perspectives are are longer. And for me, as a longer-term investor, it's it's down 50%. You know, so this seems like a great place for me. I've been buying at these levels because I am not trying to snipe the absolute low of the market. Uh, you know, I I would feel really stupid if I set a big limit by at like 53k or something, and it never went there, and I had to chase higher and buy at 70 or something. Uh I mean, 70 might end up being a good price five, eight, 10 years from now. But if I'm trying to make the best decisions for me now, it being down 50% seems pretty good. It touched the 200-week moving average, right? And so something I like to look at uh is the mayor multiple bands. You know, the mayor multiple is just uh how far price is away from the 200-day moving average. And relative to that, price is at a position where 80% of Bitcoin's lifetime price action has taken place above this level relative to the 200-day moving average. So you're kind of buying the bottom 20% of the distribution here. Could it go down to to where 90% has been above that level? Absolutely. It happened in 2022. We spent quite a bit of time below the 90% level on the mirror multiple bands. But 20% seems or 80% seems pretty good to me now to buy the bottom 20% of it. So I think from a value perspective, you kind of have to see this as like deep value for Bitcoin with the expectation that, yeah, you know, if something comes along, it dips, maybe it falls another 30, 40, maybe even 50% from here. I don't know that that's likely, but you have to be prepared for it just because it's happened before. Um, but I'm also sympathetic to the view that maybe this is the low, maybe right around this area is the low, in part because the run-up was much less volatile than pre prior markets.

SPEAKER_01 26:00

Yeah, actually, you know, this this week we published uh report. And actually the title was closer to the bottom, closer to the floor. Um, I do think that that um we're really close to that, you know, that uh real life price that um that it's uh uh uh has in the past uh in the the bottom, right? We're really close to that, like nine, just nine percent above that. Um what what I want all always to you know to say to people is that okay, maybe we are close to the bottom or or real report, but don't expect like uh right away, like are you saying, like a rally, you know, like uh oh, we are now switching to the bull market and and then everything is you know going up from here. Um because I think that a lot of people get that idea, and then they will get you know um they they they wouldn't get that. Um so uh because when I I see demand for for Bitcoin specifically, and it's still contracting, it's not like in uh in a full market mode, right? Uh is that how you how you see it also?

SPEAKER_00 27:15

Or yeah, I think so. And I think you're right, like um it's not whenever the bottom is in, it doesn't just turn around and go vertical and climb at a 45 degree angle for the next you know two years. It's something that you can see happening. And if it was something I've been kind of uh impos impressing upon my audience on my YouTube channel the last few weeks is to recognize when higher time frames are in play on a price chart. And so, like price has been, you know, it's broken through weekly and monthly lows. And so, you know, looking for the bottom on a four-hour chart or a daily chart might not be the way to go. It probably makes more sense to look at it at least on a weekly perspective. And that means you have time to allow it to play out. Um, the demand for BTC doesn't go from zero to 100, you know, as price price rises and that becomes the advertising mechanism to bring more people in. And that initial process is quite long. You know, in every bear market, it's been pretty long. So even if the low is here, or you know, as you say, the realized price, like nine or 10% below here, it's like mid-50s, right? 53, 54 or something. Uh, if if we go down and touch that as we always have, um, that's not very far from here. And and it would still probably take several more weeks or at least two to three, four months, uh, for the bottom to be developed there, wherever it is. And so I I think that's why I kind of look at this as a nibbling area. I have I have a DCA that I run on the place where I buy Bitcoin. I have some limit buys set in the 50s. One of them got hit um a few days ago when we swept the February low. Because I my goal is to average into the lows, wherever those are. I just want to kind of capture the average of the lows. And um that's so that's that's kind of been my approach because uh like I said, I don't know where exactly the bottom is, but I know it takes a while to form, especially after you know, eight months of down.

SPEAKER_02 29:17

So it seems, I guess, in terms of the the cycle, like your take on the cycle is um you do put some, I guess, um utility in the four-year cycle still. Because that last bull market, I mean, it was it was always a talking point if there's a super cycle, um, and then there was a camp, and then it turned out to essentially be the same as it was in the past. I'm curious your take on that.

SPEAKER_00 29:44

Yeah, you know, uh I I I said I said this um yesterday. I was in a a couple days ago, I was in a space with uh Benjamin Cowan, and I told him that I tend to root for the funniest outcomes in markets. And usually the funniest outcome is when everyone says a thing's not going to happen, and then it happens. And, you know, I as far as there being a specific like four-year cycle, I don't really like subscribe to that and lean on it. Um, I prefer to kind of just assess the chart, assess the indicators that I look at, and look for like a confluence of those things and figure out where I think the wind is headed. But a lot of people just kind of want to set it and forget it calendar that they can use to navigate the markets. And in a way, it becomes self-fulfilling, you know, like if everyone, if there's a bunch of people that believe in a four-year cycle, um, even if they don't want it to happen, it could have a way of kind of manifesting itself. And the funny thing is, like, if you're a if you're an explicit subscriber to the idea of a four-year cycle in October, it topped within like a week of what a normal four-year cycle would have looked like. So it is funny to me. Um, but I think like folks, I see a good deal of takes uh on Twitter where I spend a lot of time of people who are like, well, because the market topped in October, uh, that means that we could just come back next October, meaning this year, uh, and that will be near the bottom, and we can start buying again. And uh those people could get left behind. The bottom could be in July, you know, like there's really no way to know if that's going to be true or not. Um, so I don't I don't take it as a scripture. I don't think things are that neat and tidy in the markets. Um, and it it so to me, it was more amusing than anything that it actually did top in October. Um, and since since the the peak, if you just look kind of fractally uh from the peak in October now to the peak in November in 2022, it looks almost the same uh from that period until like May, June of 2022, and this bear market, they look very similar. It's just that back then, uh, you know, obviously in June, July, it dropped even more uh with the Celsius stuff. So uh right now I'm kind of seeing the four-year cycle thing as a funny thing, but I believe over time it will probably break down and no longer really be that useful.

SPEAKER_01 32:16

And also, I mean, I think you know, you can say, okay, uh you believe in the four-year cycle, but it's for different reasons that maybe that happens, you know. Initially, a lot of people um think thought that it was the like the halving, right? Like the supply shock, right?

SPEAKER_00 32:37

Right.

SPEAKER_01 32:38

Uh and that, you know, since probably two cycles ago, that that shock is really nothing uh compared to the overall supply of the Bitcoin that moves every day. Um but what I what I tend to see uh today is the cycles of demand. That's why that's what I I see more like every cycle, let's call it a cycle, there's just you know uh finite amount of new, you know, new capital entering, new users, uh buying Bitcoin or new institutions, like there's a finite amount of capital there. And eventually in that cycle it would be exhausted, right? And that's why we get you know the the bear market and additionally with the selling from you know long-term holders that are cashing out. So I I I tend to see it more like a demand cycle, not necessarily will would uh be four years, right? But it's like a it's it's that idea of a cycle, but more about the demand, I would say.

SPEAKER_00 33:53

I think you're right. And you know, you can observe these things in other metrics that don't have anything to do with the crypto markets. Um, you know, like there's kind of a multi-year up and down swing in long-term interest rates, you know, even if they don't go rip to whole new highs and whole new lows, they kind of oscillate. There's a period of time where they go up, then they go down, and it happens on a four to five year period. And then fractally, it also happens on like a 20 to 40 year period, you know, and inside those big swings are a bunch of little swings. Um, it happens in the PMIs, you know, the manufacturing PMIs. They've had kind of a rough go of it post-COVID. It's been a difficult uh journey for them as interest rates have risen. But uh before the last couple of years, there was like a four to five year swing up and down in the PMIs, the presidential cycle in the United States, which does have kind of a rhythm with the markets. Also, it's a four-year cycle. And so I I think the having, the fact that the had the having ends up being about every four years, I think it's kind of it allowed people for a while to believe that it was all just a having. Um, but it seemed to me that Bitcoin kind of was born into an existing rhythm. Like you said, a demand cycle, call it whatever you want, a liquidity cycle. You know, the the uh Michael Howell, who does cross-border capital, not to plug him or anything, but he's kind of the guy who talks about liquidity more than anyone. And his cycle is a 65-month liquidity cycle. That's just a little over five years. So we're calling all of these are kind of the same rhythm. And so I think Bitcoin was kind of born into those things. And because it has this halv event, which is really cool and unique, um, people people gave it a lot of credit that I think it wasn't fully deserved. Uh, maybe in the first couple of times that it happened, you know, when issuance got cut uh from 50 BTC per block to 25, uh, or and there was only 50% of the supply in circulation or whatever, like those those periods of time, maybe there was a bit of a shock to the market because it was so small. But now, I mean, especially the last couple of halvings, I mean, we've got 95% of terminal supply in circulation today. So, like, you know, if you cut the issuance, it's kind of irrelevant. You know, daily issuance is just such a thimble in the ocean of daily volume on-chain and traded volume in the markets, uh, that it just doesn't really matter anymore. I do think it's it's something external to Bitcoin that can be viewed in a lot of different ways. Yeah.

SPEAKER_01 36:29

Also, that's why when I I don't know what you think about this, but when I see some analysis of you know, treasury companies are buying you know ten times the issuance. And I say, well, issuance is is nothing, right? So it's uh you know the the the the trading volume that you say on exchanges is you know the normal uh or the even the on-chain uh the on-change movement is far greater than that, right?

SPEAKER_00 37:01

It is, it is. You know, if you look at a chart of annual issuance as a share of annual supply moved on-chain, it's like in structural terminal decline, it's just always getting lower, lower, lower. Um, and like what is what is the sum dollar value of daily issuance, like 30 million at these prices? Um, 30 million dollars. The Bitcoin trades 30 billion dollars a day, you know, like it's literally nothing. Uh, and so when I see um like people talk about my, like you said, MicroStrategy is buying uh X percent of annual issuance, I think it's funny, A, because of what we just said that issuance is very small, but also Bitcoin units are eternal, they can trade infinitely at every price over and over again, and 95% plus of them are currently circulating, you know, uh uh a little less than that because of lost coins, we know. But just for manner of speaking, most of the supply is already out there. And so, like uh, I posted a chart a couple days ago that showed daily issuance and next to it the daily movement from long-term holders to exchanges, right? Just coins that are six months or old or moving to known exchanges. And that activity, even in bear markets when long-term holders aren't really selling very much, there's never zero activity, there's always some, but even like the lowest ends of that activity dwarfs daily issuance by like orders of magnitude. So it just kind of shows that like this is a very large, deep market, and there is much more supply activity than a lot of people really give it credit for. Um, and I think they just it's very myopic and frankly just does a disservice to people learning about BTC to frame things uh in the context of daily issuance.

SPEAKER_02 38:56

Yeah, Julio, I'm bad. Um, I'm glad you brought up the treasury topic. Um because I think at least last last cycle, if we you know agree on that, um, it was all like the crypto lending companies were sort of the underlying contagion risk. Um, and now and like in the past um like year or two, all these treasury companies have you know started to form and go public. Um so TX, I'm curious if you think this is like a proper innovation or is this sort of a another bubble forming under under the surface?

SPEAKER_00 39:29

Uh I don't think it's much of an innovation. Um, you know, they're these are bit public companies, almost every one of them. I say almost just because I don't have the list in front of me to give 100% confidence, but every one of them that I have looked at has negative operating income. These are not profitable businesses. And I've long believed that the market, if it's going to have an appetite for a company to hoard Bitcoin instead of having productive cash flow generating business of its own, if there's going to be an appetite for it, it's probably just for one company. And that company is clearly strategy, right? Um, and I think whatever you think might happen with them, I don't think that they are a contagion risk the way that the lenders were, um, where they were offering, you know, 10% yield on a thing that doesn't have yield. Uh, that those those were a lot of issues with the lenders. But I do think that businesses um need to be productive, they need to produce goods and services that generate positive cash flows. And hoarding Bitcoin is not that. And if you look at MSCR, they don't have any meaningful income of their own from their own uh technical businesses that they run, um, their product, whatever their product is. Um, but they like to paint it as an innovation, but really they're just they're offering preferred stocks that pay a dividend, um, and they're having to dilute common shareholders uh to finance those things in lieu of enough people buying the yield instrument, right? The the STRC or whatever. And so, like you know, there's a lot of uh terminology that gets thrown around. Sailor is like the absolute king of coming up with new terms and ways to frame things. He's a brilliant man, and he's a great salesman, but uh I don't believe it's any kind of an innovation because at the end of the day, a company needs revenues. And if we had every company on earth just buying Bitcoin and not producing anything, the economy would not be in good shape at all. It would actually be terrible. Uh so I I am very just not interested in treasury companies, just as a concept. And it it's not it's not surprising to me at all that pretty much every one of their charts looks like complete ass, right? It's just an upside down V. Um, like Nakamoto, for example, like they've been doing uh reverse splits trying to keep themselves listed, and like the stock just keeps plummeting further and further down. Meanwhile, David Bailey makes you know eight, nine million dollars a year or whatever he pays himself. So, you know, I probably sound super bearish on this stuff compared to some other Bitcoin guys who might think, oh, you know, STRC's paying you 11% and M2 is growing at six percent. So just set it and forget it, and you're you know, beating the rate of debasement. Um, but I I think that really belies a lot of the inherent risks to an instrument that is not a fixed income instrument, right? It is a liability of a company that doesn't have any cash flows. Uh so I don't know. I I don't think MSTR is about to collapse or anything. I know some people have been kind of expressing the view that uh the bear market's not over until Sailor goes to zero. I don't think that's going to happen. He survived the last bear market, he has so far survived this one. I think he'll still be around. Uh, but I don't own any MSTR. I do think MSTR is the only thing that strategy offers that is worth owning if you're going to own any of their instruments. Uh, but I don't own any of it at all. And I don't plan to. I'm just a spot BTC and move it to cold storage guy. You know, call me simple, but I'd rather own the underlying.

SPEAKER_02 43:15

And Julio, do you I guess would you share the same sentiment? Because I guess before the launch of the ETFs, maybe these treasury companies served at least more of a value in terms of acquiring Bitcoin and offering ramps to it. Um now with ETFs, maybe the the landscape is different. I guess who do you think, Julio?

SPEAKER_01 43:35

Yeah, I mean I agree with the with uh TX here, but also I also don't think that it's uh you know like a net negative to have negative companies, right? Because uh you know I've seen the two extremes is that it's really good for Bitcoin, you know, it's it's uh not extreme will be it's better to Um the start right instead of Bitcoin because it will you know be accredited or something like that. And the other is that it's a net negative and it's uh it's uh like it's not good for uh an entity to want too much of it of Bitcoin, right? So I I think see that it's it's uh it's a net positive because it there is demand for bitcoin that otherwise wouldn't be there, especially from modern markets. How do you see it? Yeah, it's like you do you think that there's there's a pool of pool of capital. I think that's how they frame it. There's a pool of capital that will never buy Bitcoin, and we are you know uh getting some capital from that pool into Bitcoin.

SPEAKER_00 44:50

Yeah, that has been the talking point, you know, that they're servicing an area of the market that would not either legally be able to or ever be interested in owning spot BTC. Um, I do think the ETFs have undercut that a little bit because they're more of a direct ownership of Bitcoin. You know, every purchase of spot ETF shares means that they are then buying like an equal amount of Bitcoin because they are one-to-one and it's all on-chain and you can track it. Uh, and so like I think the ETFs have undercut that somewhat. Um, I I know there are still uh, like you said, pools of capital that can't even buy the ETFs, um, but they can buy some of these so-called digital credit instruments, which then also, if MSTR does what they're supposed to do, becomes demand for Bitcoin. And like like strategy is spot demand for BTC, right? And in the last few months, they've been doing more buying than the ETFs have, certainly, right? The ETF's been in net outflows. Um I think all of these things are, I guess, like a net positive in the sense of demand for BTC. Where I think it gets um a little wearisome is in the marketing tactics of like what strategy has been doing. They've really ramped up in the last year what what are to me, my personal opinion, are very sleazy tactics. You know, they've kind of sold some of their products as like, oh, just get your grandma to buy it, set it and forget it, kind of thing, and then it'll just become infinite bid for Bitcoin. You know, it's like a bank account, it's like a fixed income instrument, just completely ignoring the inherent risks, you know, sailor saying, uh, I take away all your risk and I pay you while you wait to get rich, like that famous clip that goes around of him. That stuff is really sleazy to me. And I think that those things can be a negative for interest in the asset generally, because of how much oxygen he sucks up in the room anytime we talk about Bitcoin. Like if you go on any Bitcoin space, you listen to most podcasts nowadays, anyone in the legacy markets that talks about Bitcoin, they have they bring up Michael Saylor and strategy. And like on some way, in some way, any any marketing is good marketing. Any buzz is good buzz, right? It's got people talking. Um, but I do think it becomes a bit off-putting depending on the ways that they're selling those things. I th I think it was better when they just had MSTR and the plan was, you know, you give us a premium to nav, we dilute the common shareholders and buy Bitcoin. You give us a premium, we dilute, we buy Bitcoin. If it's a negative, we don't do that. You know, maybe we buy some shares back. And like that seemed to be uh kind of a at least to me, seemed like a more stable equilibrium. And as their their offerings get more complex, uh, I think it becomes harder to justify them as like a uh a benevolent actor, you know. I think they they kind of become the sleazy salesman, like I said, that's the used car salesman kind of types. But generally, I don't really have a problem with companies buying Bitcoin, I just don't want to invest in them. I want to invest in something that has positive cash flows. Um, and you know, Lynn Alden said, I think I saw her say yesterday or the day before, if if somebody buying a lot of BTC is what kills BTC, well then let it die because they should it it's it's not anti-fragile, right? If that's if all it takes is someone being super bullish and buying three or four percent of the supply to kill it, well, maybe it doesn't deserve to be here at all. And I I agree with that, right? Like it if if if Sailor wanting to buy one in every 20 BTC Bitcoin that's ever going to exist is a problem for Bitcoin, uh, then maybe it's not what its billing is, right? Maybe it is fragile, maybe it isn't long for this world. Um, I don't believe that that's true, but I also don't worry about someone having a lot of corn. You know, it doesn't really bother me. I just kind of get annoyed with the sales tactics and the fact that their company, which on its best days only represents one to two percent of all volume that moves on chain, entity adjusted, uh, that they they suck up like 95% of the oxygen in the room about BTC. That that just gets old to me.

SPEAKER_02 49:03

Yeah, I think yeah, it is it is just has has grown so much, especially in the past like few years and the the development of it, even in other assets like altcoins, so Solana treasuries. I'm sure you're yeah, those would be even more uh uh critical.

SPEAKER_00 49:23

Yeah, I I don't see uh any purpose for those um at all. Just be I mean that the tokens themselves are completely worthless and don't even have like their own functional use case that they can promote. And then on top of it, some company is like, I'm gonna hoard this useless thing, buy my stock. Uh and and a lot, and what's funny is a lot of these treasury companies, uh, not all of them, some of them were started from scratch, but a lot of them were just repurposed other companies that like didn't do that well in their original industries, and that's why they have negative income to begin with. And they're hoping that by jumping on the coattails of Sailor and using his playbook, that they'll be able to make some money. And some of them have been great exit liquidity for the people who owned the stock before that they before they announced that they were treasury companies. Um, but uh yeah, I mean, like if if I can't even tell you what the point of the Solana token is, I certainly couldn't tell you what the point is of a company hoarding Solana.

SPEAKER_02 50:17

Yeah, I think I wanted to quickly touch on some altcoins because um obviously at some levels crypto Twitter, crypto you know investors are interested in that, the altcoin um industry. So how do you approach the altcoins? Is it purely like a levered bet like on Bitcoin when the time is right, or do you have some fundamental like convictions?

SPEAKER_00 50:41

For me, mostly it is a levered bet when Bitcoin is rising, I think is the best way that I would play them. You know, look, we talked earlier about how I think they're going through a bit of an existential crisis. Um, this bull market was very different for some of these coins, like Ethereum and Solana and XRP, like they just swept their prior bull market highs and then went right back down and retraced their entire moves. They didn't even print definitive new highs. And so to me, that's a bit of a red flag. You know, we there's been thousands of coins uh in the last four or five bull market cycles that have gone the way of the dodo. They had a big run-up and then they kind of disappeared. And but I think people were thinking, oh, well, Ethereum, everyone's building all these stable coins on it. It's got a place in this world. There's gonna be all this demand. Well, it just swept the 2021 high and then retraced. Solana, you know, the people are gonna be trading on it. It's the home for the, it's the you know, the fuel behind the meme coin mania, all this stuff swept the high and retraced. XRP, it's gonna be for institutional settlement and interbank settlement and all this kind of stuff, swept the previous all-time high and retraced. And so I I think that those are things I'm not super interested in outside of just trading them for a technical bounce, right? And if I think if I saw the monetary regime changing, like if we had something that required the Fed to lower rates back close to zero and start running QE again and start and the and the Congress was going to start raining STIMI checks down again, well, then I think altcoins would probably do pretty well because that is literally their environment to to succeed in. But outside of something like that, just a general bull market in Bitcoin, uh, I don't see a lot of reason for a lot of these coins. I think going forward, it makes more sense for me, from my perspective, um, to look for tokens that maybe actually accrue some value from the service they provide back to the holders of the token, like kind of the way the hype token is doing for hyperliquid. You know, I don't use hyperliquid, the service, but I've seen it. It's a great website and it's very popular. And um the token is doing there, they're doing buybacks of the token with revenue from the exchange. And that's it's an arbitrar, it's an artificial mechanism, but it's putting value back into the hype token. And so I think something like that is pretty interesting. It's an actual business that is profitable, and they are putting some of it back into it's just like doing share buybacks. I think that's an interesting way to approach it. 99% of alts don't even make money, let alone have a mechanism to do that. No one's even using anything. I mean, like, look at look at algo, look at Cardano, like look at Matic, look at all these things, look at the look at Dot. You know, they these these charts are are completely dead. Uh so to me, I'm not really interested in putting in making a shopping list for a bunch of different altcoins, uh, the way that I think it worked in cycles past, because I think this is a different monetary regime and cash flow is king. And so if we get some projects that actually seem to be providing value and growing profitable business, and they have a token that isn't just uh an exit mechanism for the people who built the company, but actually serves some kind of a role beyond being gas fees, uh, then I I would maybe be interested in that. I don't know what that would be though.

SPEAKER_01 54:18

Yeah. Um yeah, actually, you know, a few months ago we published some to your point, it's some analysis on Ethereum. And if you look at Ethereum, like the the data from the network, like activity. Right, but if you see the price, you know it's it's uh it's uh down you know more than fifty percent, even after activities like in all time five. The activity or in on the network it doesn't accrue to the token, right? There's no like a the red mechanism that that takes takes that value back to the to the token. Uh and you know you you also posted a chart that I saw um I think uh last week about it the market cap of Ethereum compared to the market cap of I think it was stable coins, old stable coins or USB T. Yeah. Old stable coins. And now it's you know it's basically lower than that, right? Uh can you uh just uh maybe explain a little bit of that, Charla. I really like it. Sure.

SPEAKER_00 55:34

Sure. Uh I it surprised me when I looked at it and I thought it was interesting, so I posted it. Um, it was USDT, USDC, and die combined, the three biggest ones that I had long charts for. And uh the Ethereum market cap is, like you said, now below the market cap of the three biggest stable coins. And in 2022, the Ethereum market cap bounced off of that level, you know, for whatever you could think of it as a technical level or not. It it reversed when it was at parity with the stablecoin market cap. In 2025, last year, when everything pulled back in the first part of the year and we had the tariff tantrum, uh, it pulled back and kind of turned when it had parity with stable coins. But uh in the last year, the stablecoin market cap has continued to grow. And in the last four or five months, Ethereum has now gone below it, gone up and tried to bounce, bounce back above it from below, and has now turned lower again. And I I think, you know, from the way I've looked at it, uh I that was interesting, but I didn't know that about the Ethereum, the activity on the actual network. I I I'll be interested to read the report you guys put out. Um, I I I did not know that, but uh it just seems to me that there is no mechanism to accrue value back to the mother ETH token. It's its purpose, as with most altcoin tokens nowadays, its purpose is gas fees and governance, I guess, you know, like in proof of stake. Uh and it it doesn't really serve any other purpose beyond that, right? And and the way that my framing of that has been well, gas fees is not a bullish narrative, right? You don't need to hoard gas for the future. You just buy it when you need it. You pay the transaction fee at the time of the transaction. Maybe you keep a little bit in reserve, but it's not something that justifies hoarding ETH in massive amounts. I mean, we have all these different stable coins launching on Ethereum Rails, but they don't, they're not requiring ETH to continue rising in value. Now, I'm not saying Ethereum could never make another all-time high. I'm not making any proclamation, uh, but it just seems to me that there is not a direct relationship anymore, and that maybe that's going to start breaking down as stable coins get more integrated into the actual economy and the legacy financial system and are used around the world. Uh, I just don't really see any reason why that's a bull case for Ethereum. Um, and I don't know, we're seeing that kind of play out with the relationship with the market caps.

SPEAKER_01 58:07

And also when you say that you know they're um only used for gas to pay fees, and on top of that, uh fees are lower and lower and lower because they need to be low, right, to support a lot of these.

SPEAKER_00 58:23

These are a race to the bottom, like it like it. It happened in TradFi, all the different brokerages in TradFi, like Charles Schwab's and Fidelities and TD Ameritrade, which doesn't exist anymore, and e-Trade and all these different places. Uh, they used to all charge five, ten dollars a trade. And then Robinhood came along and was like, Yeah, we're not gonna do that. And then Charles Schwab said, Oh, okay, well, we're gonna cut fees. And then TD Ameritrade, they got bought up. But before that, they were cutting fees, and fees just become a race to the bottom, the same way that management fees of ETFs become a race to the bottom. You know, Grayscale had massive outflows because their fee was significantly higher than the iBits and the FPTCs and whatnot, or at least that was a big part of it. And so fees are not, and and Ethereum, right? They've they've done upgrades to the chain over the last few years to reduce the fees. And then base launched on Ethereum, and their fees are basically zero, right? So, like it's no matter what, fees are gonna go down, and so there's not really a structural bull case for being gas.

SPEAKER_02 59:26

Yeah, I just had um, I guess one final question before we uh close out. Um, it's only our second episode, but I my goal is to you know ask all of our guests, um, I guess what it what advice would they give to the average crypto investor? Because we've spoke a lot about um complex topics, macro indicators. Um, and I'm curious if you were to give advice to um like a new crypto investor, what what would it be?

SPEAKER_00 59:51

Well, I am uh I don't like to use this term, but I'm pretty much just a BTC maxi. Like, you know, I don't really hold anything else. I don't I own zero other tokens. Uh there have been times where I've owned some Ethereum, owned some XRP, I traded Cardano in 2023. I I trade things and I've hold held them at times, uh, but I'm pretty much just a Bitcoin guy. And um, I think uh when people come into the space, you know, at least this was true in the past where they'd see, well, Bitcoin's up a lot, uh, I'm gonna buy some really small altcoin because it hasn't caught up yet, and uh that's where I'll make all my money. Um, but every altcoin eventually just bleeds out to BTC. I mean, find me one that hasn't, other than hyperliquid, which is brand new, right? It only has like a year and change of history. So if I was coming into the space today and I didn't really know anything about anything, I would focus on trying to learn the most about Bitcoin before I tried to branch out. Because I think unless you really understand what that is and what's unique about it, it's easy to think that other tokens are just other versions of Bitcoin, right? With like small characteristic differences. Oh, this one supplies a little different. This one has a trading platform built on it, or whatever. Um, when those things are not those things are not true at all, they're distinctly different. Uh so I I would just try to avoid getting super deep and super ideologically attached to various projects that like promise me riches from some centrally operated group of people uh that have massive insider allocations, and I would focus on learning about Bitcoin itself and uh how it came to be and what makes it unique, because without BTC, none of these other tokens would have existed in the first place. Um, so that that's that might not be a sexy answer for someone who's mostly an altcoin person or someone who's still into NFTs, rest in peace. Um, but uh I'm mostly a BTC guy, so I come at everything from that perspective.

SPEAKER_02 1:01:55

Cool. Yeah, I think um in that case, I will wrap it up there. Um thanks so much for being uh being on the unbiased. Um I think we covered a lot of important topics. Um and yeah, all the links to uh TXMC will be in our our descriptions and and YouTube. Um so please go check them out and yeah, hopefully we can have them on again one day.

SPEAKER_00 1:02:17

Yeah, I really appreciate you guys having me on. Um I didn't know I was just the second guest in history. That's pretty cool. Yeah. Julio and I have been mutuals now for a few years, and this is the first time we've ever spoken. So it was really good to meet you and get and chat with you a little bit, and I'd be happy to talk again sometime.

SPEAKER_01 1:02:32

Yeah, you too, Dek. Thank you. Yes, thanks again. Thank you guys.