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Our weekly show is hosted by Michael Nadeau (The DeFi Report) and Ryan Sean Adams (Bankless). Each week, we discuss how we approach managing our own portfolio and the data, research, and analytical frameworks that inform those decisions — for educational and informational purposes.
Ryan Sean Adams:
[0:09] Is the next stop $100K Bitcoin? That's what we're talking about on the week. Got a few things for you on the DeFi report. This is our weekly report on everything that's happening in crypto, at least price-wise. Three things, Mike, that happened since last week we got to discuss. First is price action. We're seeing some positive price action on the week. Bitcoin, it's time of recording. I think we're above the $96K level now and also rebounding a little bit. the question I've got for you today is, is all of this durable enough to reclaim our support price levels? Like, are we hitting that? Also, we've got some CPI numbers in. They're better than the market anticipated. Does this change your case? And the Trump prosecution of Jerome Powell, this was like an unprecedented attack. This has got to change something in your mind. So we'll have to discuss all of that today. And of course, guys, stick around until the end, because we will dive into Mike's portfolio, how he's positioning things.
Ryan Sean Adams:
[1:06] And then I got a question for him of what assets are on his watch list as well. Mike, you ready to dive in?
Michael Nadeau:
[1:12] Let's do it. All right.
Ryan Sean Adams:
[1:14] So you entitled this post, the next stop, 100K. You meant 100K Bitcoin, of course. Let's start with the CPI numbers because that was better than expected, as I understand it. What were the numbers?
Michael Nadeau:
[1:25] Yeah, it came in slightly better than expected. So 2.7%, sort of top line CPI, which was down from expected at 2.8%. This is something, we mentioned this a little bit and how it's kind of feeding through to real rates, which is really kind of what I'm paying attention to. We talked about this in our 2026 outlook. And what we're highlighting is that Bitcoin has shown some extreme sensitivity to rising real rates. And this chart that we're looking at here, the 10-year real rate is that bottom greenish line there. And that has been rising since mid-October or so. And that's really where Bitcoin saw most of its weakness up until really year end. And at the same time, the breakeven inflation was dropping. So basically nominal rates are staying where their inflation expectations are dropping. So real rates are rising. And, you know, Bitcoin has shown a negative correlation to this, right? So rising real rates, bad for Bitcoin, dropping real rates tend to be good for Bitcoin.
Michael Nadeau:
[2:34] But what I'm sort of highlighting here is it's not always like a perfect negative correlation. So actually in 2023 and 2024, Bitcoin actually had a positive correlation to real rates, but it had like an almost perfectly negative correlation to real rates in 2022. And I just think this is sort of signaling that it's kind of like regime specific as to how Bitcoin performs during these environments. And so I'm paying close attention to it because it's sort of a proxy for liquidity out there as well. We've seen like since year end, Bitcoin is now showing some strength. And that is happening as sort of breakeven inflation is coming up. That has caused real rates to sort of level off. And I think this is playing into some of the strength that we've seen with Bitcoin. I think we've been trading in a range of 86, you know, 94K or so. And there seems to be a bit of a wall at that 94K level. And we're recording this, you know, morning of, you know, Wednesday, the 14th. And Bitcoin is showing a lot of strength right now. I was actually just looking at some charts before we jumped on.
Michael Nadeau:
[3:46] Because it's an interesting setup where you have NASDAQ is actually down, you know, about 1.5%, fairly significant move from NASDAQ to be down. Bitcoin is up, I think, close to 5% or so over the last 24 hours. That's a pretty like kind of idiosyncratic, you know, move. And what I was just looking at with some Glassnode data was there's a lot of short liquidations that have been playing out, like pretty significant short liquidations. So in the near term, kind of like just monitoring this to see if there's going to be carry through. Is this just sort of a weird idiosyncratic move because of, you know, positioning around that sort of 94, 95k level? And we're going to, you know, sort of push up. We'll see if there's like real kind of durability behind this move. But just keeping an eye on these real rates and how that's kind of transmitting itself, you know, into Bitcoin here.
Ryan Sean Adams:
[4:36] It's really interesting. So I guess you'd be looking for more of that idiosyncratic move for that to strengthen, for that to continue to sort of reverse your previous bearish take going into the year. It does seem like there is some
Ryan Sean Adams:
[4:50] narrative favorability for Bitcoin as an asset, given some of the news. Maybe this is where we bring in kind of Powell. So it seems like the executive branch is attacking the so-called independent Fed. And Powell has said as much as a prosecution going on. Powell came out with a video message on Sunday. I believe this is pretty unprecedented saying, hey, they're prosecuting us, the Trump administration prosecuting us because they want us to...
Ryan Sean Adams:
[5:19] Implement an easy money policy. They want us to reduce interest rates. And we're not willing to do that unless the economic data supports the case for that. Basically, he's saying we're under attack from the executive branch. And of course, we've seen gold rally on that. That seemed to be a price move based on what is actually happening. Silver is going crazy, all-time highs. And one would think that the digital gold narrative for Bitcoin, wouldn't it be Bitcoin's chance to shine? And maybe that's what investors are positioning where we've seen some of the strength on Bitcoin. So from a narrative perspective, like, isn't this Bitcoin's moment? Isn't this crypto's moment? If you've got, if you're losing the independence of your central bank,
Ryan Sean Adams:
[6:04] seems like digital assets are poised to really succeed here.
Michael Nadeau:
[6:08] It should be. It should be, right? This is like the Super Bowl of what we've been waiting for. I think there's a lot of drama here and what does it actually mean? And should we take this sort of what's happening between Powell and the executive branch? Should we read into this as they're essentially trying to get him to resign right now because the market is not pricing in any more cuts currently during his term, the chances of a January cut are down to like 3% or so when I checked yesterday.
Ryan Sean Adams:
[6:45] Even still, even post this prosecution move?
Michael Nadeau:
[6:48] Yes, it actually dropped further after that news came out. And so the market's sort of thinking, okay, Powell's really sort of digging in his feet here. And in some ways, you know, it almost makes him look like he's becoming quite biased. You know, we learned that apparently the Trump administrator, Janine Pirro, I believe she's in the DOJ, but they had reached out to the Federal Reserve offices, I think sometime in November or December, to inquire about the cost overruns, I guess, of this new Federal Reserve project. And that was not responded to. I think they followed up again and it was not responded to. And then that's what sort of got them to send, I think, to go the sort of the legal route.
Ryan Sean Adams:
[7:36] And it seems like Powell- That's what they're claiming, but isn't the actual reason why that Trump just doesn't like Powell's, like how he's running interest rates?
Michael Nadeau:
[7:46] It seems, yes, yes. I mean, that's like pretty clearly like, you know, what's going on here. And then, you know, Powell comes out and just, you know, does a public address. I don't know if he responded to them, but he comes out to the public. So it's becoming like a very like sort of public drama at this point. This is obviously, you know, the markets have to find a way to process this information. And yeah, gold and silver have done well since this has started. Bitcoin, we're starting to see a move here. The question is, like, is this... Is this like a true catalyst for like this, a more durable move for Bitcoin? And I think that still remains, you know, to be seen. Like right now, like I said, I'm seeing some more idiosyncratic stuff with sort of a short positioning unwind right now. But as we know, like price action, narratives follow price action. And so, you know, price action can do something. The narrative can turn into, oh, this is Bitcoin's moment. This is why price is going up. And then that has a reflexive, you know, sort of feeds on itself. So we'll see. We'll see. I think it's a very interesting, you know, setup right now.
Ryan Sean Adams:
[8:54] My read of your report today is you don't think this is enough. At least you're not seeing that in the data that this would be enough to turn the tides on Bitcoin for the year. However, you did say, and we've talked about this several times on the DeFi report, that Trump is really the wild card here.
Ryan Sean Adams:
[9:10] And he could do something that could completely change your calculus. So maybe we'll check back in at the end of this episode and talk more about that. But can we get into the rates here? So sometimes, honestly, I get lost when it comes to CPI versus real rates versus the break-even inflation. Can we define some of this a little bit? So you said that the real yield is actually up. And can you just define what is real yield, when you measure that and you calculate that, what are we talking about exactly?
Michael Nadeau:
[9:44] Yeah. So the green line there, that's the 10-year real interest rate. And what that is, is it's just the nominal interest rate. So the actual rate that's being paid on the 10-year, less the breakeven inflation rate. And so- And that's the dotted yellow line above there. And so if nominal yields are flat, which they have been, even though the Fed has been cutting the short end of the curve, the 10-year and the longer end has been staying flat, right? So they're cutting, the 10-year is kind of staying flat. And what had been happening since like mid-October, so is that breakeven inflation as the market is sort of like looking out and saying, okay, growth might be slowing. it looks like inflation's potentially slowing, that breakeven rate drops. That means the real rate, the difference between the nominal rate and inflation is rising. And that tends to be negative for liquidity because if that rate is rising, then investors can get a decent return with their cash and they're not going to be forced to go into more longer duration risk asset. So that's kind of how it feeds through to like a risk asset, like Bitcoin.
Michael Nadeau:
[10:57] And what's interesting is like it was cut, the breakeven inflation is kind of like the market's expectation of future inflation. That was dropping. It started to pick up like around the end of the year. You know, this is happening as we're seeing, you know, Trump talk about adding, you know, $500 billion to the military spending, you know, budget, you know, 200, a couple hundred billion for mortgage-backed securities.
Michael Nadeau:
[11:24] So there's a lot of sort of stuff that's being tossed out there. I wonder if the market's starting to price some of that and saying, okay, well, wait a minute. Inflation was coming down, but maybe we're changing our mind. We think it's going back up. That is reducing, or it's not reducing the real yield just yet, but it leveled it off. And at the same time that that happened, that's when we started to see more strength from Bitcoin. And so we'll see. It's possible this is a spurious thing. Right now, it's something I've been paying attention to just because of how sensitive Bitcoin has been to this more recently. And like my view on it is like Bitcoin, even in like, you know, a rising yield, real yield environment, Bitcoin has, you know, had periods where it's performed well in that. But it's typically during like the meat of a bull market when there's just like lots of demand behind Bitcoin.
Michael Nadeau:
[12:15] It had a very strong negative correlation in 2022, which we know was a risk off year. And so I think a lot of this just comes down to is like, is there real demand in the market for Bitcoin right now for crypto broadly that's going to allow this to be a more of a durable move? I think that's the big question. We can get into more on that as we go here.
Ryan Sean Adams:
[12:35] It's interesting, Mike, that the 10-year rates would continue to rise even as kind of the short-term rates have dropped. And if we do expect short-term rates to continue to drop into 2026, as investors are expecting and whoever Powell's successor is will likely try to do, what does that mean for the 10-year? Does that mean it continues to rise or should it also drop?
Michael Nadeau:
[12:59] Well, that's the big question because the Fed controls the short end. They don't have control over the longer end of the curve. So the 10-year all the way out. So they cannot influence it. The only way they can influence is through QE, which would be them stepping into the market and actually buying those longer-duration assets. Right now, they're buying short-duration assets. They're buying treasury bills. And so that has no impact on the supply and the demand of longer-duration bonds. Therefore, they're unaffected. And what's interesting is the Fed has cut we started this cutting cycle in September of 2024. We've had six rate cuts since that time. And the 10-year is up 44 basis points over that period. So the 10-year has not come down at all while the Fed's been cutting. And the 30-year is up 75 basis points. And so it's kind of like the bond market's looking at it and saying, well, inflation is still kind of high.
Ryan Sean Adams:
[13:55] Growth is still decent.
Michael Nadeau:
[13:58] We don't see any reason why the long end of the curve should be coming down. And if you're going to run it hot with all of this, you know, spending, you know, military spending, all these other populist programs that Trump is talking about, the market could start to say, okay, well, that's going to cause inflation. And therefore real rates could start to collapse unless the long end actually just starts to go. And like, that's what I would start, you know, that would be what I would be worried about is like if the market starts to just look at all this and say, okay, he's taking over the Fed, he's going to run all these populist spending programs, inflation is going to run hot, So I would expect the long end of the yield curve just to rise in that environment. And then that can also be a problem for risk assets if they don't start doing QE and other programs to try to suppress it.
Ryan Sean Adams:
[14:48] I mean, I would expect that too. In fact, it's surprising to me. I don't often look at this number, but it's surprising to me that the real yield is so high at this point, like 1.9%. It's not so bad. And so when you're saying the correlation between real rates and Bitcoin, you think that this year is maybe more like a 2022 type of correlation rather than bull market type correlation of 2023 and 2024. And so what happened in 2022? Real rates rose and Bitcoin fell. Is that the case?
Michael Nadeau:
[15:21] That's it yeah like like real rates rose rapidly fed was hiking rates and real rates rose rapidly bitcoin obviously had a very down year in 2022 and you know like i was saying before it's possible for bitcoin to do okay when you know it did fine during 2023 and 2024 during similar periods not as aggressive you know moves from you know upward moves in real rates but it did okay and i think the reason for that is just you're in a bull market, there's tons of demand for Bitcoin. And that's the big question. Is 2025 or 2026 going to have enough demand, even if we sort of are in this sort of like, maybe not as positive of a sort of risk environment, risk asset, real interest rate environment?
Ryan Sean Adams:
[16:08] And then and then is your base case that real interest rates will rise this year? Because that also seems counterintuitive, again, with Trump doing everything that he's doing and easy money likely coming to the picture. But it has risen lately.
Michael Nadeau:
[16:21] It has. And now it's sort of leveling off. And I think the key thing to pay attention to is what are those break even inflations going to do? If those keep rising, then real rates could start to fall. And that would be that's what you would be looking for, for like, you know, debasement trade. That's the environment that Bitcoin typically does better in.
Ryan Sean Adams:
[16:40] And the driver of breakeven, of course, is CPI.
Michael Nadeau:
[16:42] It's, yeah, the market's expectations of sort of where inflation is going to be. Exactly.
Ryan Sean Adams:
[16:47] Okay. All right. So that's the yield picture. Where does that bring us with global liquidity? We talked about that a little bit on the last report. What's your position now?
Michael Nadeau:
[16:57] Yeah. I mean, it just kind of like, you know, 2022 was a year where liquidity, you know, rolled over. And we're seeing just the early signs. And, you know, if you look at the upper right-hand corner there, it looks like it's rolling over. We're sort of like following this work from Michael Howell and assuming that the base case is like, yes, his data is good. And this is sort of what's playing out. And if that's the case, you know, is this the environment that Bitcoin is still going to, you know, be able to perform well? And are we going to be able to just, like I said, have that durable move that can sort of get us back to some of these key levels that Bitcoin really needs to turn into support to kind of really kind of, you know, keep this momentum moving.
Ryan Sean Adams:
[17:42] It is interesting because global liquidity did rise last week a little bit, but this is still consistent with the story that it's kind of, it's rising more slowly, it's kind of tapering off and it's getting ready to roll over into a downward liquidity cycle.
Ryan Sean Adams:
[17:57] That brings us maybe to the on-chain data that we're seeing and how this relates to the picture of where in the cycle we are. So Bitcoin ETF net flows, what are those numbers and what does that represent to you?
Michael Nadeau:
[18:11] This, you know, this is the key thing on the demand side. Like we've seen, you know.
Ryan Sean Adams:
[18:16] Really since, you know,
Michael Nadeau:
[18:17] Mid-October, it's been the longest period where there's just been very, very muted demand for these ETFs. We had a similar period, like sort of starting the year last year between like mid-February and mid-April or so, where there was very muted demand. But we saw like, you know, after about, you know, eight weeks of that, like really strong demand come back. And that had flows behind it, and it was durable. This time, we haven't seen that just yet. We did see, you know, some decent inflows to start the year, that was, you know, followed up with like four straight outflow days. I haven't looked at the data. We, you know, Bitcoin made a pretty good move yesterday. So I want to look at the data on once that's available to see if the ETFs picked up a bunch of inflows yesterday. But to me, again, this comes back to like the setup can look good in terms of narratives and potential liquidity conditions, whatever the Trump administration is doing, but you still need demand. And we were just not seeing a durable move there just yet.
Ryan Sean Adams:
[19:22] And ETFs to you represent really institutional demand, don't they? I guess for those numbers, the comparable time period last year that you were talking about, you said between February 10th and April 17th of last year, ETFs saw 5.25 billion of outflows. Of course, that was followed by some pretty heavy inflows after that. Right now, since 1010, October 10th of last year, we have 6.48 billion in outflows on the ETFs. So the outflows are still vastly outweighing any inflows, even the more recent inflows. How about long-term holders? What are you seeing on the amount that is being transferred by Bitcoin holders to exchanges?
Michael Nadeau:
[20:05] So, yeah, I'm looking for signs of seller exhaustion here. And, you know, we've had, you know, roughly three months or so of like kind of downward choppy price action. And we've seen, you know, long-term holders sending a lot of their coins to exchanges. This is something where we're looking at, we're looking at a 30-day moving average here with this data. The reason I do that is just so that I can kind of smooth that line and get a little more signal. So it's not just kind of a very bouncy, hard to read chart. And the other reason is typically the sort of 30-day moving average of coins held by long-term holders being sent to exchanges, that when we're in like a real risk-off, like kind of like macro low type of environment, it typically drops below a thousand coins or so. Right now we're at about- Per day. you know, roughly 20 per day. Yeah, per day. Right now we're at about, you know, 2,500 or so. So it's down significantly from where it was peaking, late November, but, but still, like, I would say historically elevated levels, if you were looking for, you know, a lot of, a lot of my work is like trying to figure out, like, are we potentially just going to consolidate in the, in the eighties or so as like a potential bottom? And, you know, I, I still think, you know, we still have a little ways to go here in terms of like exhausting some of these, these sellers, if, if that's in fact, like what we're going to do here.
Ryan Sean Adams:
[21:33] Yeah. Okay. So this would be a good signal if you saw the figure collapse under 1K and it hasn't yet. So this indicates that we're not quite where we expect to be during a risk off
Ryan Sean Adams:
[21:44] macro low, which is what you're anticipating at some point in this year. How about open interest? Does that confirm the story? Yeah.
Michael Nadeau:
[21:51] Again, this move from Bitcoin is somewhat predictable and we've been expecting a move back to 100K or so. And part of the reason I think it's playing out is you did have a reset of a lot of the sort of like leverage ratios out there. So I'm monitoring this again, you know, looking for, you know, has enough of this, has it come down to a point where I think it's like we're getting closer to a macro low for a cycle? Obviously, conditions are starting to turn in the other direction right now. But just gives you an idea, you know, last cycle, we dropped in open interest, you know, 70%. We're at like 42% or so right now, just as a reference point.
Ryan Sean Adams:
[22:34] Okay. And the funding rates is saying a similar story on perps features?
Michael Nadeau:
[22:39] Yeah. So this is just showing, like, again, I'm trying to focus on the demand side here and the sort of, you know, appetite for people to be going long, putting on leverage, these types of things. And we've been in a steady decline, you know, from like a trader sentiment perspective ever since actually early, you know, 24 is really where that peaked. What I would look for here, like if you're trying to spot a bottom, is typically that you're going to see some big red bars because traders are going short, right? So if we saw a move down, I would expect traders to get confident that the market's going to keep going down again. You typically get like a big short position at some point towards the macro low. Haven't seen this really at all just yet. I haven't really seen. This is aggregating all of the exchanges. So it's possible you're seeing that one exchange or two exchange. But when you aggregate it all, we're still seeing traders. Traders are net long right now.
Ryan Sean Adams:
[23:42] So you don't have any of the signals that really confirm conviction for this macro low that you anticipate in 2026. What about the fear and greed index? I think the markets, at least on crypto Twitter, looks like people are feeling a little bit better with Bitcoin above 95k, at least at the time of recording. What do you expect to see in the fear and greed index if you get that kind of macro low? And what are we seeing now?
Michael Nadeau:
[24:09] So we're seeing, you know, I'm seeing, you know, a little bit more, you know, renewed, you know, confidence in the market. I'm not seeing like, you know, I would say like, you know, animal spirits type type behavior just yet. But I think there's always there's been a lot of sort of hopium that, you know, cycles not over. There's sort of like a bull burst bear thing playing out in the market right now. People that think this is an extended super cycle type setup versus people that are sort of playing more of the, I guess, the four-year cycle. So that sort of bull versus bear battle, I would say, is still very active. And if we see Bitcoin get back up to 100K or so, I think we're going to, the fear and greed index will probably move into more of a neutral territory, possibly a greed territory. And that will be like the real, to me, that's like what I'm waiting for is like, can we get back up there? And then what does the market look like at that point? Are we seeing like durable moves? Are we seeing flows that make us think something's like really fundamentally shifting in the market, similar to like what we saw, you know, coming out of the tariff, tantrums back in April. If we can see some of that, then we can start to develop conviction that, okay, maybe we're going to actually establish that 100K, that 50-week moving average as support. We're going to flip that into support.
Michael Nadeau:
[25:35] And that would sort of start to shift around how I'm thinking about the market. Are we potentially going to have more of an extended setup here? There's obviously going to be a bunch of new stories that come and the narratives are going to shift here. But this is really like, I think what I'm waiting for is, can we get back up there? And then do we bounce off of it? Or do we break through it? Do we start to establish, can we get a couple of weekly closes, you know, above those levels and start to, you know, start to establish that as more of a support line?
Ryan Sean Adams:
[26:08] So I think you've been consistent that you've been expecting a move back to
Ryan Sean Adams:
[26:12] the 50 week moving average, 101K or so. So I guess to answer the question of, you know, next stop 100K Bitcoin, I guess this post is saying, yeah, could be, it could be now, or it could be at some point this year. but that's still within your case. However, that 100K number or even the 96K number that we're seeing today, you're still skeptical given the data that you're seeing that this is enough to really reclaim a level of support and continue us into a bullish cycle because you say the market is now pricing no further rate cuts under Powell for 2026 and you continue to see the ETF demand. The social interest in crypto is non-existent. We're seeing like YouTube crypto channels at all-time lows. I've seen that data as well. And you still have long-term holders exiting. Again, it's above 1k Bitcoin per day. There's one thing though that we saw in previous cycles that we haven't seen in this cycle, which maybe is a counterpoint to your idea here in your thesis of how to play this cycle. And that is we haven't seen a cycle low and all hope is lost moment.
Ryan Sean Adams:
[27:23] I mean, last cycle, we saw Terra Luna, the collapse, the Celsius bankruptcy, all of that chaos in 2022, ending with Sam Beckman-Fried and FTX. And that was a true capitulation moment. Are we just not going to get a capitulation moment? Or do you anticipate that that is going to come sometime in 2026?
Michael Nadeau:
[27:42] This is, yeah, this is the big crash. And it was almost easier, you know, in the last cycle back in 2022, because there, you know, there was so much forced selling, right? It's just, it's like clear when like there's real forced selling in the market and when you're a long-term investor, you want to buy that.
Ryan Sean Adams:
[27:57] And we haven't seen,
Michael Nadeau:
[28:00] I haven't seen any like true force selling. We did have like a lot of stuff that happened on Binance with all coins and things like that, that was just like sort of auto liquidations and things like that. But we haven't seen, I think like real, real force selling due to some actor in the market who is coughing up their coins. And then that tends to have a reflexive feedback loop on it. So that, that has not played out. And the, the market is just more mature now. And so like, you're not, we're not going to have Terra Luna, like there's no algorithmic stablecoin out there that's going to blow up on us. So you can kind of like remove that as like a potential for selling. We don't have CeFi, right? We don't have the same CeFi set up with, you know, Celsius and BlockFi and these companies that all sort of, you know, blew up back in June of 2022. too. And then, you know, some of this, you know, we talked about reflexivity, but you had Terra Luna as sort of the tipping point. And then, you know, these companies, 3O Capital, Celsius, BlockFi, they were probably already insolvent, right, at that moment, but it didn't come out until later. And so you have this like sort of, you have like three tiers to the like the bear market and for selling activity. I'm trying to think through like, you know, what does that look like this cycle, because most of these things are not in play. CeFi is not in play.
Michael Nadeau:
[29:18] Algorithmic stablecoins are not in play. So where is the risk? Nobody knows. I'm sure there's something out there that has potential for some sort of blowup. But I think when you think about how low could we go potentially if we do have this bear market, my base case is that it's a much more muted bear market and it's closer to that like 50% type sell-off.
Ryan Sean Adams:
[29:47] So if it's more muted and if it's more shallow, I suppose, this time, it's going to be less clear where the bottom is if there's no massive for selling incident. I guess that's part of your base case. So rather than for selling, what do we have to do? Do we have to just wait for fair pricing? And what is the fair price for Bitcoin?
Michael Nadeau:
[30:09] The fair price for Bitcoin, in my mind, is still around, you know, 65K or so. And that's coming from where I think the 200-week moving average typically drops down to, we talk about market value to realized value, cost of production, those types of things. I think that's sort of where we should come down. It doesn't mean that there's some law that says that you have to go to that level. And it is possible that we don't have this like you know force selling and these like sort of like 10-10 type of events this cycle and you know we just end up in this like environment where it's sort of like you know not a ton of demand for crypto people are interested and there's other assets that are doing well and bitcoin's not the thing for a little while and we just sort of chop and sort of slide down a little bit and and eventually like something happens the macro conditions improve, you know, conditions change and narrative shifts. And then we're kind of off into the next, you know, expansion phase. So that's definitely like a possibility. But, you know, the market conditions are all going to change. You know, it's really hard to predict these things. We definitely can't predict the markets. I'm trying to focus what I think the most probable outcomes are.
Michael Nadeau:
[31:25] And, you know, right now, like we thought it would be probable that Bitcoin would go back and test 100K. Looks like maybe we're going to get that move. You know, I think it's probably like 70-30 that, you know, 70%, it probably gets rejected off of that. 30%, maybe we push through.
Ryan Sean Adams:
[31:44] But that's how I'm playing it.
Michael Nadeau:
[31:45] It's just trying to be open-minded to different outcomes and have a plan, right? Have a plan if what I think is going to happen doesn't happen. And that's really it. Nobody can predict these markets all about just using the analysis and arriving at some sort of probability.
Ryan Sean Adams:
[32:02] That's great. So Mike staying consistent on the week, not anything in the market that has changed his opinion on this.
Ryan Sean Adams:
[32:09] Still 80% cash, I believe, and 20% crypto. So still holding firm on that, at least on the week. And Mike, I know you're evaluating some assets on the DeFi report watch list. What's exciting to you as if we get some more like bear market days in the coming year? What assets are you looking at right now and what's going to be upcoming on the DeFi report?
Michael Nadeau:
[32:32] Yeah. So, you know, we've been covering a number of assets, some of the stuff that we actually held in our portfolio, you know, back in, you know, 23, 24, 25, and keeping an eye on these things. So we did an update on ETH last week. So people can check that report out. We have SOL coming this week as well. These are kind of like our year-end reports, doing a lot of quarter-to-quarter, year-to-year analysis. We're going to be covering hype pretty soon here. We're going to cover meme coins. Meme coins were, you know, people probably might find that, you know, surprising that we were in some meme coins in the last cycle, but we'd spent a lot of time actually studying data and trying to find ways to, to like put together fundamentals for meme coins. And we're seeing some interesting action from some of our favorite meme coins like Pepe. Some of these are already up, you know, a hundred percent or so off, off the bottoms just from, from a few weeks ago. And so we'll have some, some coverage there. Cause when we start to build out a portfolio, what we like to do is, is get into like our core assets. And then we like to have a view on a few assets that are more.
Michael Nadeau:
[33:38] Long-term holds, stuff that we think is a little bit riskier, but we think can outperform the core assets, which is typically going to be 70% to 80% of the portfolio. And then there's a little bit of a barbell approach here where we're not afraid to spend some time, do some work, develop a thesis for different meme coins, things that are potentially much more risky, but have higher reward as well. And that's kind of how we like to construct a portfolio. And that's the plan. And, you know, we're doing the work now so that we're prepared for when we think the right time to sort of enter the market. I always sort of refer to this as like just waiting for fat pitches, waiting for the fat pitch to come. And then, you know, having done the work so that you're ready to make those moves.
Ryan Sean Adams:
[34:22] All that work is going to be published on the defireport.io. Mike, great to see you. We'll talk to you next week. Sounds great.