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The Honest Money Show is your guide to understanding what money really is — and why today’s system isn’t working. Hosted by Anja Dragovic, this show cuts through the noise to explore how money shapes our lives, where it’s gone wrong, and what a better future could look like. Along the way, you'll discover how Bitcoin fits into the bigger picture — not as hype, but as a serious response to a broken system. Whether you're curious, skeptical, or already down the
James: Welcome to the Honest Money
Show a big thanks to our sponsor.
Shop Bitcoin Australia for
making today's episode possible.
Anja: Hello.
Joining me today is James Check, also
known as, uh, check, check Matey.
Um, James Check, uh, has a
website called check on chain.com,
and he does on chain analysis.
You guys probably already know of him.
Uh, he's world famous.
And over to you.
James.
Welcome to Honest Money.
James: Thanks for having me on.
No, it's good.
It's, uh, it's good to be here.
And yeah, I mean, my, I guess I, I
consider myself a Bitcoin analyst.
Um, the, the on chain side is definitely
where I've specialized over the years,
but, uh, in many ways, like Bitcoin has
so much transparency in terms of its data.
Uh, we can see spot markets,
we can see derivatives markets,
we can see on chain markets.
We can see the ETFs now we can
see treasury companies and all
of these different elements just
construct the interesting world.
That is the Bitcoin economy.
And, uh, I consider myself an observer
and analyst of all the people.
And I think that's the
most important thing.
It's the humans behaving in futures
markets or buying and selling
in spot markets, hobbling their
coins, not hobbling their coins.
Um, taking profits, taking losses.
At the end of the day,
Bitcoin is a story of people.
Uh, it's a very strange asset
because people love it and hate it.
And it really is on one of
those two bell curve extremes.
Uh, very few people are
kind of neutral on it.
And, uh, as a result we get a really
interesting dynamic of people making good
decisions, bad decisions, um, expressing
how much they hate it, expressing how
much they won, um, hobbling because they
believe in it and selling 'cause they've
just had enough for the bear market.
So, um, to me it's fascinating.
It's a study of people as
much as it is the asset.
Absolutely.
And a love what's happening
in Bitcoin at the moment.
I think this opens up a great, uh, you
know, gate for, for this conversation.
So we know there's been a drawback
because a lot of the people in
my life who refuse to talk about
Bitcoin, um, with me have come to me.
Anja: It's like, did you know
Bitcoin has had a drawback?
I'm like, yes.
It's almost like there's
a sense of smartness.
Yes.
James: And did you also know that it's
up 110% two back to back years in a row?
Did you know that as well?
Yes.
Uh, funny that
Anja: I know, but it's, it's
so bizarre because like.
Because it's this new asset class and
it's so different to anything else,
uh, people just lose their manners.
It's like, imagine if Australian real
estate dipped by 10% or 20% in a month.
I would be a dickhead if I went
to How, how are you going not
James: paying your mortgage?
Anja: Like, right.
Can
James: you imagine that?
Like, can you imagine it?
Anja: No, it would just be considered
the rudest thing, but somehow it's
perfectly okay to do that with Bitcoin.
James: Totally.
How, how do you feel now that your
superannuation's been cut in half?
How does it feel, you
know, you can't retire now.
Is that like, does that feel good?
You know, I told you
you should have sold it.
It's like, get outta here.
But you're right.
It is a strange asset where
people feel this like.
They're allowed to, to make noise
about it in a way that they just
wouldn't with any other asset.
So it's a strange thing, but again,
it's also why the journey of the
Bitcoin is interesting because you
have to build, maintain, and hold
conviction when literally the whole
world from the government down to
your auntie is telling you that
you're an idiot and you are wrong.
So that takes a very special, uh, it, it's
a character building exercise for sure.
But I've got this, uh, this, this thought
process I've had recently for folks
who've been, let's just say from the
previous cycle onwards, 2020 onwards.
If you went through that period
of time, like if we look at
the regulatory environment for
Bitcoin right now, it's basically
embraced by the US administration.
Uh, you know, we've got ETFs.
They're the most successful ETFs
of all time Wall Street's on board.
The banks are coming on board.
We're not early anymore, but
it's now acceptable to own it.
Asset managers are
allowed to recommend it.
We're slowly getting
to that point in time.
I don't think we go back to the world
where it's as hated and like, you
know, actively being attacked by the
regulatory regime for the Bitcoiners
who survived previous cycles.
You lived a once in a lifetime experience.
We will never have a time where the
whole world tells you that you are wrong.
Only people who are wrong are gonna
tell you that you're wrong now.
So we are now in this environment where
if you live that and you survived it,
the conviction that you built of riding
an asset down 80%, when the whole
world tells you that you're wrong,
that's a once in a lifetime journey.
So you gotta take that conviction
as a tool in your belt because it
has shaped you in a way that no one
will ever experience that again.
I can't imagine an asset like
Bitcoin going through multiple 80%
corrections and ripping back to all
time highs, time after time, after time.
At any point in our lifetime.
I can't imagine an asset coming out
that's gonna beat the Bitcoin ETFs.
Like what on earth could it possibly be?
So you've kind of lived a very unique.
Period in Bitcoin time, and you should
take those tools and really, you
know, look after them be, and, and put
them to good use because you've got a
skillset that most people do not have.
Anja: Yeah, I love that.
And it, it, it's funny because,
you know, I'm only new to Bitcoin.
I've entered Bitcoin just before
the halving last year, so I've
been here for just over a year.
And there are still people that are, you
know, vocal about it, even on LinkedIn.
And these people now, this, a handful of
them and we all know kind of who they are.
It's kind of a bit of a
brand building exercise.
Like you almost expect them to come out
with a comment, especially with where
there's a drawback, um, calling it a scam.
And it's just really funny because
these people are, it's kind of, I have
ha secondhand embarrassment for them.
Like totally, you know, it is a bit,
it's not the same as criticizing it back
in, you know, 2014 or 15 or whatever.
Like, it's a bit different in 2025 to
have that opinion and have it so strongly.
Um, yeah, a few people flipping,
James: but have you, and, and something
that I often do when you've got those
particular like tradify analysts where
they like to say like, oh, Bitcoin's
gonna go to zero, it's gonna go to zero.
Like, and we're not
talking about Peter Schiff.
'cause Peter Schiff, I think he's
just a meme at this point in time.
Anja: Yeah, yeah.
James: But there's, there's
genuinely still tra fi analysts
who think it's going to zero.
And, you know, my, my, my line
these days is like, okay, based
on what, like what is your thesis?
Gimme your threshold.
And this is the most important thing.
'cause if you're an analyst.
You want people to take you seriously.
You need to know what your
threshold for being wrong is.
So if you just keep saying it's a
scam, and next thing you know it's
at a 5 trillion, then a 10 trillion,
then the 30 trillion, then it flips
gold, then it actually becomes money.
If you actually look at those like
milestones, one of those on that journey,
you have to admit that you are wrong.
And if the analyst cannot give you
a very clear threshold, and then
we've got a target, we say, okay, 2
trillion wasn't enough, but 5 trillion
is I'll see you at 5 trillion.
And then you just come back with the
receipts and you say, well, are you wrong?
Have you accepted defeat?
What do you think you missed?
And what you actually find is that
most of these analysts, they do
not have a threshold because they
haven't thought about it properly
and they aren't serious analysts.
And that's all you need to know.
So just ask people, what is your
threshold at which you would
perhaps reassess your priors?
They can't come up with it.
That shows you how much thought
they've actually gone into.
Anja: Yeah, I do keep screenshots
talking about keeping receipts.
I have been taking screenshots,
especially on LinkedIn.
It's quite funny.
Um, like I remember speaking
to Ethan at the time.
I was like, why am I
being attacked so much?
I'm just posting about Bitcoin
and I, I wasn't even been
aggravating or anything like that.
Um, and yeah, a few people, like lots
of CEOs, lots of people with a SX
listed companies like, uh, people in
traditional finance, um, quants that
own companies that like really, um.
Coming at me and I've kept screenshots
and there's some really funny exchanges
that maybe I'll do like a, a yearly video
of hate mail that I've been receiving.
James: A montage.
Yeah.
Anja: Yeah.
It's like since they commented
publicly, I'm sure, um, they will
feel very comfortable with me,
um, making fun of them online.
Totally.
Um, but I would love to know, uh,
James, is what's happening at the
moment, uh, where do you see the market?
Like I've seen a few different,
uh, hypotheses as to what's
happening, potentially three.
One that it's just a minor drawback and
we're about to resume the bull market.
The second scenario is that we're
gonna continue to chop solid for
another extended period of time.
And the third one, which is the bear
case, is that we might've actually
seen a top, and now we are going back.
James: Sure.
Yeah.
And, and look, the truth is,
the first thing is first, no
one can predict the future.
And I think that's a really
freeing exercise in markets.
People love to pretend that they've
got their famous indicator and
it's gonna tell 'em the future.
And it, it just doesn't work that way.
So everything you think about
has to be in probabilities.
Now, the way that I think about
things, this cycle has been different.
It, it just measurably has been different.
The volatility is different.
The drawdowns are nowhere near as
severe as they've been in the past.
We take a lot longer.
So, um, if you go back to 2017, for
example, you go on holidays, like
to the beach for a weekend, you come
back, the price has gone down 40%
and it's back at all time highs.
You missed it completely 'cause
you were too busy swimming.
Now you can be swimming the whole year
and you'll be at the exact same price
and that is a whole different kind of
pain because the market going down.
It's funny, I think there's, for
Bitcoin is, in particular because
we love this asset so much, we,
we like, we wanna buy more of it.
A five, 10, 15% dip is just hell
because it's not enough of a discount
that you are like, oh yeah, I'm
gonna step in front of this thing.
But it also, like, if it's just down
15%, it's not enough to step in.
But it also feels a bit expensive.
It's not the top, but
it's also not the bottom.
You're like, what is this
thing I don't want it to do?
When it goes down 30%, everyone's
like, oh yeah, here we go.
Like selling chairs looking
under the couch for, for coins.
Like, I'm just gonna go
buy as much as I can.
So you need like, enough of a
downside move for Bitcoin is to
really go, okay, now I've gotta
step back in front of this thing.
Now in the current market structure,
I mean this is, it's a very complex,
I I would say it's the most complex
market structure we've ever seen.
Much easier to understand.
'cause it was purely just like
organic adoption back in 2017.
There's a bunch of stuff with
leverage and derivatives going
on in 2018 and, and, uh, 2019.
2020. This cycle is.
It very different.
We've got the ETFs, which change things.
We've got treasury companies,
which are, are a minor factor,
but they do train change things.
Institutions, they behave very
differently to individuals.
Individuals smashed by
panic sell institutions.
They sit there in the order books and
they allow the market to sell to them.
They don't chase the
market, they don't fomo buy.
They allow people who are
scared to sell to them.
So they're patient, they're
sophisticated, they're hedged,
and they just sit there and wait.
And they have all the time in the world
and they've got all the money in the
world, so they behave differently.
We've got options going
live in, uh, for the ETFs.
That's a huge thing.
That's, it's nuanced in detail, but
that changes market structure as well.
And right now in terms of that dip
in the pullback, um, my current
odds is about 70% bull, 30% bear.
And I do think that people should
take the bear case seriously.
Uh, and it's simply 'cause it's
the most bearish like set up that
we've seen in Bitcoin of this cycle.
Now then I also come back and say,
well, if we go into a bear market,
uh, I don't think we go down 75%.
I just don't, I don't think
we have the explosive uplift.
And the reason why you need a really
strong, like unsustainable move to the
upside to create the downside of 75.
Is hyper, like hyperbolic
prices make people do dumb shit.
That's just like people get so over levied
and they buy way too much with money
that they shouldn't have spent and they
buy it all when it's the most exciting,
which is the perfectly wrong time.
When the market's been like grinding
like this, people have so much longer to
like, oh, okay, I'm gonna de-risk there.
All right, I'll go and hedge over there.
Maybe I'll go and buy this other thing.
There's no momentum here so I won't
over like no one's over leveraging
in a market that's going nowhere.
There's no excitement.
The pullback, if we think about
this from US dollar terms, we're
about a hundred K right now.
I think if we sell off, we
probably go down to like 80
K, 85, something like that.
That's kind of where
I think we bottom out.
I'd be amazed if we go below 75, uh,
and if we do all of those prices I
still think are just unbelievable value.
Anything under a hundred K.
So then you go, well, if your
downside is 20% from here.
Like I'm a Bitcoin or I've
been through 80% drawdowns like
five, six times in my time.
Like I don't care about 20%
pullback, I'll buy that as well.
So then I'm like, but the
upside is just infinite.
So I have a feeling that we are getting
right now, the, the, I think most of
the sell side pressure is coming from
existing holders and we can measure this.
I've been calling it um, more
recently the great rotation.
There's a lot of people who believe
in the Bitcoin four year cycle
and they are selling right now
'cause they believe the top is in.
There's a lot of people who are
disappointed with the market
cycle 'cause it hasn't gone up
enough, which is code word for
their expectations were completely
unrealistic and it didn't get met.
And now this sad, um, I think a lot
of people got absolutely destroyed,
speculating on shit coins which
didn't go anywhere and treasury
companies, which went down 90%.
So I think a lot of people lost a lot
of money on not Bitcoin things and
they blame the market cycle for it.
Uh, and there's also a
hundred thousand dollars.
Like, if we think about how far Bitcoin
has come in 16, 17 years, if you tried
to cash out, we saw one guy cash out
80,000 Bitcoin back in July, 80,000.
He bought them in 2014.
No, no.
2011. He held them for 14 years.
He cashed out $9.6 billion with a B.
What do you do with that kind of money?
But like, imagine if he had a sold $9.6
billion worth of Bitcoin a year ago when
the previous US administration was in, he
would've had his bank account shut down.
Like the dude would've gone to prison.
The feds would've been at
his house in 10 minutes.
Now he actually has the ability because
it's no longer, you know, um, being
attacked actively by the US government.
He now actually can safely sell
for the first time in his entire
life that he's held Bitcoin,
he can finally, actually exit.
So a hundred K has been a
psychological stretch target
for so many people for so long.
It's just a period of time where
the old money who bought Bitcoin
when it was gonna die and it had no
chance of success, it has succeeded.
They're wealthiest.
They're wealthier beyond their
wildest dreams, and they finally
have the opportunity and the buy
side to actually exit their position.
So honestly, my views at the market
is just going through this rotation.
We're getting a changing of the
guard old money to new money at
retail, primarily to institutions.
High net worth individuals
are buying this thing.
Institutions are buying it.
I guarantee you there's gonna
be some news in the next 12,
24 months of some big sovereign
nation that's been buying in here.
Because here's the thing, the sell
side pressure we are watching right
now is in the hundreds of billions
of dollars just in this year.
Hundreds of billions of dollars.
The amount of sell side that Bitcoin
has absorbed by my estimates is as big
as the market cap of a top 100 company
in the world, the whole market cap.
So who the hell is buying?
Because that's the real interesting
story for me as an analyst.
I can see when people who
bought five years ago sell.
Speaker 2: Yeah.
James: What I can't tell
is who they sold to.
We can only find that out later on.
But if you are coming into this
market with like in aggregate, there's
not one dude here, but like lots
of entities collectively bringing
hundreds of billions of dollars and
being willing to buy this thing above
a hundred K, these are not small fish.
These are giant allocators who
just take supply off the market.
They're not looking for a 10% pump.
These guys buy this stuff and
they put it into a vault and
they never talk about it again.
So there is going to come
a point where there's just,
there's just no sellers left.
And to me that's a
really exciting concept.
So even if we go lower, it's
just an opportunity of the ages.
Anything below a hundred
K is a gift in my view.
Anja: I would love it.
Just really,
James: I know it's a, it's a psychopathic
thing that we have as bitcoins.
We're like, I want the price to go down.
People are like, people
are like, it's a draw down.
I'm like, I know it's great.
I love it.
I can, I can actually buy more.
Like what?
Are you insane?
I'm like, probably, but like it's working.
You know what I mean?
It's working.
Anja: Yeah.
And that was my reaction.
'cause when a person in my life
that said to me like, oh, did you
see dip in a kind of smug way?
And I didn't even register how
they meant it at the time, but
I was like, Hey, it's on sale.
Yep, totally.
And there must be, they must be wondering
like, what is wrong with this chick?
But, um,
James: well there's a psychological theme
because markets are a very unique beast
because CEOs in particular, like people
who are very competent in business,
actually suck at markets because they
think that they can solve it the same way.
Markets are actually a
very interesting dynamic.
Uh, humans are naturally geared to
be bearish in markets because we're
always afraid of getting, like, if you
go back to like a instinctual level,
no one wants to get eaten by the lion.
So we're always looking for like the
negative things in our environment
to like protect ourselves.
It's why doom scrolling is a thing.
'cause people like, we gravitate
towards negative energy because we're,
we are geared for looking for it.
So being an optimist is actually the
not the norm for people in markets.
We fear loss and we also, it's, it's
actually scientifically and, and
psychologically shown the fear of a loss.
So when you buy an asset and
it goes down, that hurts.
But what hurts a whole lot more is
when people wanted to buy and it goes
up and the train leaves without them.
That fomo fear is actually way worse
for most people, and what happens is
they wait because they wanna feel safe.
The price is going up and it's
going up, and then they finally feel
safe when everyone else is buying
and when everyone else is buying.
That's usually the
worst time to be buying.
So, uh, there's a, a good framework here.
Whenever the, like if you go to
buy Bitcoin or any asset and your
stomach is churning, like you
just feel sick to your stomach.
You're like, I'm making
a horrible decision here.
Press on, do it, carry on.
Do not stop when you go to buy
and you're like, I can't wait.
Like, I cannot wait for my
money to hit my bank account.
I need to send it to
the exchange right now.
Stop.
Go for a walk.
Go for a walk.
It's the exact wrong time to buy.
Never ever buy something.
Uh, if you're a daily
DCA holder, who cares?
But never buy something when it feels
great because you're probably buying
maybe not the top, but you're certainly
buying at a, at a relatively high price.
Anja: Mm. I've seen recently that
river in the US has released a product,
like a buying feature where you
can double down on those drawbacks.
So if you've got a limit order, and
you know, you've said it, I don't know.
It's something if I don't exactly know
how it works, but I understand the concept
that you can basically add more to that.
Order so that you can buy more if you've
got cash sitting, sitting in that account.
I thought that was quite like a
clever feature, um, which got me
thinking then it's like, I wonder if
it would be a cool idea to somehow
develop a, a product that actually,
um, buys on, on the Fear Greed index.
So the more fearful the
market is, the more you buy.
James: Totally.
Did
Anja: that work?
James: And in many ways, this is how
I, this is how I try to structure.
I mean, for me, when I do my analysis,
uh, I use my own analysis to try and
work at where I wanna buy, and I've
got a couple of tools that I use.
So the Fear and Greed index is kind of,
it's, it's okay, but there's other tools
that actually show you when people who
bought the local top it, it's amazing,
like human psychology is so consistent.
A bunch of people always buy the local
top and then they huddle and they
huddle and the dip keeps dipping and
they keep dipping and then eventually
they go, oh my God, I'm done.
I bought the top, I'm an idiot.
And they all sell at the exact same time.
So when you see coins that were bought
high, being sold low and locking in
the losses, that's when I step in.
That's when I'm like, thank you very much.
Now I know that I'm not buying the
top, it may not be the bottom, but I
know I'm not buying the top anymore.
So it's a very similar dynamic.
Show me when the dumb money who firmed
in at the top huddled all the way
down, show me when they capitulate,
because that is more likely to be
some kind of meaningful low than not.
Anja: Mm-hmm.
Are we seeing like dumb money this
cycle as much as previous cycles?
Or do you feel like overall, um.
Like buyers of Bitcoin are starting
to be more savvy or is it still kind
of the same tourists coming in and out
even though it's kind of consolidating?
Like what, what's, what are you seeing?
James: Yeah, um, uh, it's a very good
question and the answer is there's
always going to be dumb money.
So a lot of the signals I was
just describing will still occur.
However, I would say that the average
Bitcoin holder is significantly
more serious these days.
And there's a few elements to this
in just about every market for all
history, you'll often hear people
say like, retail is the dumb money.
And historically speaking they are
retail, generally are the dumb money.
Bitcoin is actually a little bit
different because retail, and you
can see this as a great chart that
I've got that it shows like the 90
day change or the 30 day change of
small balances, we call them shrimp.
So this is looking at all the
wallets that are under one Bitcoin
now in 2017, that was just.
Through the roof.
The biggest buying that we've ever
seen from retail, buying the absolute
pico top, that's when I first bought, I
bought the absolute top of that market.
So we saw a huge swell of people going,
oh my God, get me into this thing.
We never saw that level of buy side hit.
So that was at 20 k, 2017 until we got
to 2022 at the bottom of the bear market.
When FTX blew up, we're also like 15
K, so we're below that 20 K level.
Suddenly shrimp start buying like crazy.
Now that period was my like
formative years in Bitcoin.
I bought the 2017 top kind of learnt about
markets, didn't understand Bitcoin really.
In 2018, late 2018, my shit coin
portfolio has gone from $10,000
to 10 cents and I've gone, all
right, fuck, I did something wrong.
I gotta go back to basics.
And then I read the Bitcoin white
paper and I was like, ah, okay.
Right.
This is, now I get it.
Bitcoin's actually the important part
and I've made all that, all those
mistakes, but I learned about markets.
And in that time, from 2018
till 2022, the podcast circuit
for Bitcoin really exploded.
Lots of people talking about it,
lots of thought leaders, lots of
essays, lots of thinking, lots of
thinking about what Bitcoin could be.
Mining started to get
integrated in the energy grids.
We started seeing it like using
humanitarian environments, like it
started to form and be like, holy shit,
this thing's really coming together.
So the education dynamic of Bitcoin,
that is really the, the, the all
time high of when people were the
most interested in learning about
Bitcoin in that 20, 20, 21 period.
So when you actually go, like, retail
is dumb money in every market, and yet
here we are five years later and these
guys are buying the bottom, not the top.
That is an interesting story
that is actually showing you
that the shrimp leveled up.
They worked out that I actually need to
buy as much as I can right here, even
though it's scary, even though it's dead.
Even though everyone's telling
me Bitcoin's over for a decade.
I'm gonna step in front of this thing.
Like literally polar opposite behavior.
So we don't have as many
tourists this cycle.
Um, certainly not in Bitcoin itself.
We've got a lot more sophisticated
institutions, that's for sure.
But also retail is actually not dumb.
People who are in Bitcoin and
are Bitcoiners, all the dumb
money is kind of in the shit.
Bitcoin world trading all the meme
stocks and meme coins, and they
got rinsed time and time again.
People who are in Bitcoin,
like they've got the patience,
the resolve, the resilience.
They're kind of happy to
just stack SATs, right?
Stay humble, stack SATs.
And these are actually smart people.
So we've got tourists enough to read
their signals, but more importantly,
there's a big pool of people who really
know what they own and why they own it.
And that's, that's pretty cool.
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Anja: Yeah, I know quite a few
people now that are transitioning
and wanting to sell their shitcoin
portfolios and move it into Bitcoin.
But again, there's still that
sort of behavior where they're
trying to time the market.
They think, oh, maybe if I hold
towards the end of the year
it'll go up and it's gone down.
So yeah, totally.
It's interesting, like I think people
are getting smarter, um, but that's
just my impression at least of like the
people who I've seen starting to invest
in Bitcoin and they're not trying to
trade, they're trying to really hold, um,
James: use as a savings account.
That's how I
Anja: view it.
Yeah.
I wanna go back to something you
said 'cause it was really interesting
and I wanna dig a little bit deeper.
So, at the start of the conversation,
you said that, you know, on chain
you can tell ETFs and institutions.
Who are buying.
Um, but then you've also mentioned
something that you believe
there's nation states also buying,
but we don't know that yet.
And I know people like Prince Philip
of Serbia has mentioned that, you
know, there's definitely nation states
that are buying on the down low.
At what point do you think will.
Know that.
James: Oh, anyone, anyone's guess
because, and this is another thing,
like over the years, Bitcoiners
have talked about the game theory.
And the game theory is if you're a nation
state, you're buying, you actually don't
wanna tell anyone because you want to
fill your position before that happens.
Um, and again, that is speculation.
So, um, when we talk about the
on chain side of the world, we
can see existing holders, um,
we can't see who they're right.
Um, and, and I, I strongly
encourage people, don't worry
about whales, don't worry about
trying to like track big holders.
You're really just looking
at aggregate behavior.
Um, uh, primarily the main actual
tool that I use to track holders
is how long they've held it for.
Because statistically speaking, the
longer a coin has been held, the
more likely it's gonna stay held.
Uh, so we generally look at like,
who's held their coins for two
years, three years, five years?
Show me those guys because they all
generally start spending and selling
their coins in the late stage bull.
Now this is what's so interesting
about this current market
structure, because right now
that is exactly what's happening.
The bear case is that we are
currently seeing sell side that
would've killed, buried and just
incinerated every bull of the past.
And yet we're going sideways, not down.
And this is why I just have to look
at this and go, 'cause every sold
Bitcoin is a bought Bitcoin, right?
Newton's third law, equal
and opposite forces.
There is a huge pool of
buyers, huge pool of buyers.
That is the interesting part.
We don't know who they are.
We'll find out eventually, but they're
bringing tens to hundreds of billions
of dollars worth of capital to buy.
And the market's just not going
down, even if it goes down.
By the way, this concept still
makes sense because we haven't
gone down given the sell side.
That's already happened.
So it's a fascinating dynamic.
Um, I don't, honestly, I spend all
day in the data analyzing this and I
don't have a, uh, a thesis on who the
buyers are that I'm satisfied with.
Uh, but in all I know is that
they're big, they're patient, and
they have to be sophisticated.
That's the only way that works.
Anja: Yeah.
Can you tell geography, like from on chain
data, like where the buyers are located?
James: Not easily.
Yeah.
Not easily.
And the main reason is that, um,
you, I mean, in theory you could, by
looking at like time zones when the
coins are moved, you could potentially
do like some really deep, dark
work, trying to track like metadata.
But it's, that's a whole, that's
like forensics type level, um, and
really very challenging to scale.
So, and honestly, I don't think
you need to, I think you just look
at like the general flow of funds.
How long have people held it?
If he happens to be German or
he happens to be American or he
happens to be Australian and they
just hold for that long, who cares?
They all, they're all Bitcoiners
and you know, they're kind
of the same holding pattern.
Anja: My very unscientific hypothesis
would be like, for example, when you look
at the hash rate, um, heat map, it looks
like us, China, and Russia are really like
the three kind of leading superpowers.
And I wonder if.
Like, I would just assume it's, it's them,
um, buying the Bitcoin on the download.
But who knows, like maybe
like the odd, small, it
James: makes sense.
And, and
Anja: yeah.
James: Yeah.
There, there's kind of on the
sovereign level, there's, there's
two types of sovereigns that
this makes the most sense for.
The really small ones, right?
Yeah.
Really small ones where like they
can get an outsized advantage and the
really, really big ones where they're
like, this is national security,
they're the two that really matter.
Um, I don't think we're gonna see
anything coming outta Europe because
like, it's just, you know, they,
they regulate themselves out of
existence as a, as a business model.
Um, so I don't see them making
any of these moves anytime soon.
Um, I don't see Australia making
any of these moves anytime soon.
It's gonna be your small countries that
have an outsized advantage and the big
ones that need to maintain dominance.
That's really how I see it.
Anja: Hmm.
Yeah.
Interesting.
Very interesting.
Um,
James: very,
Anja: but I'll complete new, like I
don't look at on chain data at all.
And if I wanted to start.
Doing that?
Where would I begin?
James: Uh, well, I mean, we've
got every chart under the
sun on, uh, check on chain.
But look, the, the, the general framework
is you have to ask yourself why you
would wanna look at data, because
for some people, and honestly, um,
even with some of the most advanced
models in the world, it is extremely
hard to beat daily DCA, extremely
difficult to just like daily DCA.
It's just a tried and trusted method.
Works all the time, weekly,
monthly, whatever it is, just like
regular dollar cost averaging.
Um, the smaller your granularity.
So if you're doing it daily and a lot
of platforms do service daily, uh, it's
just really hard to beat truthfully.
Um, so that's kind of the first point.
The reason that, I mean,
I, I, I love data, right?
I, I kind of studied this stuff,
but the reason why I use it is
to just know what's going on.
So I'm a big advocate for,
um, the volatility is tough.
And imagine right now we went
to 80 k our, or we go to one 50.
In both of those two scenarios,
completely di different directions.
Every person looking at the price chart,
your uncertainty level is gonna go up.
If we go to 80 K, you're like, holy
shit, what happened If we go to 150 K?
You go, whoa, what happened?
My, the way I use data is to
help people think through those
scenarios, why they might happen.
Why would we go to 80 k?
Because I can see all of this selling,
I can see all these people staying
at, you know, it's just overwhelming.
Profit taking is bigger than we've seen
in the past compared to past cycles.
Oh look, we've now got 50% of
all the buyers are underwater
starting to get worse.
You can profile and help people
understand, if we go from 126
down to 80, why did that happen?
So that when we go to 80, 86 K, and that
doesn't mean that we will, but if we
do, every single one of my subscribers
is gonna say, yeah, makes sense.
Like, like, I don't like that
we're at 80 5K or 80 k, but
I can kind of see it coming.
And likewise, if we go to one 50.
If we go to one 50 and stop and
top out there, that is also a very
likely zone where we're gonna set
a huge amount of sell side come
in and oversaturate the market.
So just helping people think
through the scenarios in advance.
And at the end of the day, the
only constant in markets is people.
And the a hundred thousand year old
hardware that sits between our ears, the
emotions that we feel during fomo, fear,
greed, all that, it's never gonna change.
We are gonna get to a threshold at some
point to the upside, where people are just
way too profitable and they're gonna cash
out and they're gonna top the market out.
And there's also gonna be a point in
time where we are so down and so fearful
that there are no weak weekends left.
The only people who remain
are the hardcore HODs.
So I try to just map out where are
those inflection points ahead of time.
So when we get there, we go to 80 K,
the average guy is gonna be panicking.
I'm gonna be stacking SAPs like
crazy because I've thought through
that scenario ahead of time and
I know exactly what I'm gonna do.
Anja: Yeah.
So it's kind of like, if I'm hearing
it correctly, the benefit of of,
of kind of following this is one is
to alleviate any anxiety you might
have around not knowing Correct.
Why certain things are happening.
And the second would be essentially,
you know, if you do expect a potential
scenario where there's a drawback,
you can actually plan for buying more.
James: Totally.
And, and not be afraid when it happens.
Never be a deer in the headlights.
But also I think there's just,
you know, I mean, I don't know
about you, but I literally look
at Bitcoin stuff every single day.
Could be a podcast, could be
the price, could be charts.
I'm doing Bitcoin things
literally every single day.
Anja: Yeah.
James: It just is kind of interesting
to just know what's going on.
You know what I mean?
It's watching my Bitcoin news, it just
happens to be in the data and it's like,
you know, I'm just exploring what's going
on because it's kind of interesting to me.
Um, it's really interesting that
suddenly we've got options and futures
of this big, and, you know, the ETFs
are the most successful in the world.
Like just understanding all the incentives
and bits and pieces just gives me a
better understanding of how the world
works, how the bitcoin world works.
You know, I think for a lot of
people, certainly for me, I mean,
Bitcoin is like my life savings.
So like, do I wanna know what my
life savings are doing day to day?
Probably, you know, that's
just understanding is actually
a really big motivator.
Anja: Yeah, absolutely.
I, and I do also follow Bitcoin
things every day, and sometimes I
get distracted by community stuff.
Like, for example, recently Sydney has
been having a two week knots versus core
war, which is just, it's just been going
James: across there.
There couldn't be a bigger nothing
burger or a battle of the nerds
anywhere in the world, ever.
It's just, it's un no one cares.
And, and the thing is about that debate,
even if it was important, which frankly
it isn't, even if it was important.
They've lost the audience.
Both sides yelling at each other.
No one cares anymore.
Go and fight in the corner.
Please get your room.
I don't wanna hear it anymore.
No one cares.
You've bought us all to death.
We're not gonna make any progress on this.
We'll be arguing about this in 2100
when the block reward runs out.
Move on.
Anja: Is it as bad as the block
size wars, or is it like less?
Oh, God, God,
James: God.
Oh, it's not even close.
Just, no, it's, it's not even remote.
We've seen this
Anja: before and everyone's like,
okay, it's a nothing burger.
Yep.
James: It's a total nothing burger.
It changes absolutely nothing.
And this is the thing, like, you know,
my, my general view, I'm a pragmatist.
I just look at things from a
very practical perspective.
The JPEGs on the chain don't
actually change anything.
Like, sure it's not ideal, but
also permissionless system.
There, there is no technological way,
and they can argue and complain that we
should build fences and close windows
and use whatever analogy they want.
It's like, that's fine.
You will never stop.
So therefore you can spend the
next 100 years talking about how
you're gonna stop it and never
actually do anything about it.
So as a pragmatist, I'm like,
what are you wasting our time for?
Because there is no solution.
And then they do a hard fork proposal.
It's say, or a soft walk proposal.
It's like, guys, this
is ridiculous, insane.
Nothing about this is a good idea.
Just let it go.
Let it go.
Because like there's no ground
to be made in any of this.
We're just been fighting
about this forever.
You're wasting all that time.
Anja: Yeah.
Yeah.
I mean, I don't understand the
technical details enough to have an
opinion on it, but it's interesting
to listen to both sides nonetheless.
Um, but yeah, I wanted to ask you a little
bit more about the on chain analytics.
I think if I heard you correctly.
Is it the best strategy to DCA
daily rather than weekly or monthly?
James: Uh, if you do, so basically
the, the finer your resolution if you
do monthly, you might buy on the first
of the month, for example, and then we
have a big dip and then by the end of
the month we might be at the same price.
But you kind of just, the, the
odds that you are gonna time miss
time, that volatility is higher.
If you do weekly, you'll
probably get a nice even price.
If you do daily, you literally get the
most, even price you can, in theory,
the one second, DCA is the right way
to do it, but it's ridiculous because
it doesn't make sense too small.
So don't overthink it.
But like it's the same
as if you do like yearly.
If you do a yearly DCA, you're probably
gonna miss a lot of the opportunities.
Monthly, weekly daily's kind of the,
the best, um, because it is truly the
most average price you can possibly get.
But I did run the statistics, um,
to try and understand like what
is the best time of the best day.
The, I'll try and get my, I'm
pretty sure it's on, I know
Australian, um, Eastern time.
Yeah, yeah, yeah.
No, I've, I've done the STAs 1130
Anja: on a Friday night
James: 11.
So 1130 on a Friday
night is the worst time.
Yeah.
So therefore you actually
wanna buy just after midnight.
So you want to buy just after midnight
on the Saturday morning, because
then you're gonna get after the
worst time, statistically speaking.
Anja: Yeah.
Nice, nice.
I heard you say that and you just
like stuck in, stuck with me.
Um,
James: and then daylight
savings comes along and I
don't know what time it is now.
Anja: Yeah.
I don't know either.
I just, yeah.
Plus,
James: plus or minus an hour.
Anja: Yep.
So I think as a new step number one,
I'll subscribe to your newsletter.
I haven't done that yet.
Um, 'cause I just, yeah, I just sometimes
get intimidated by certain things and I
was like, 'cause there's so many different
rabbit holes to go down and you just
don't know which thread to follow next.
But I think, yeah, I, I read part of
the report that you've recently done
with Unchained, the 62 page report.
I read the executive summary
and understood that really well.
And then I started reading down and I,
I got to a section, I was like, whoa,
I have no idea what he's talking about.
So JP was like, you need to
read it, read it a few times.
It's really like intricate and you
need to like go back and forth to
understand things at a deeper level.
So I'm gonna do that
'cause I promised I would.
Um, but what would be kind of like, what
would be a natural progression in the
journey of someone who wants to learn
more about like the on chain world.
You might like start, you know?
Yeah.
I mean there's, and subscribe
and just read and absorb,
but how would you level up
James: for sure.
Yeah.
I, I think, look, at the end of the
day, it's um, it is full of jargon
and it is a strange data set that
we don't have for anything else.
Like, I actually feel blind when I
look at the gold market or the equity
market because I don't have my tools.
I can't see transparently what's going on.
So the way that I think about
on chain data, it's like sitting
in a game of Texas Holden Poker.
Imagine you could see.
Like everyone's cards were
holographic so you can see what
everyone else is holding, right?
They might be a little bit blurry,
but you can kind of see the outline.
These holding looks like a
heart that looks like a queen.
You can't see the deck, so you
can't see what comes up next.
And that's what I like.
You can't predict the future, but
what you can see is, I know that guy's
bluffing and it could just be you're not
even a player, you're just an observer.
You can see everyone's cards.
I know that guy's bluffing.
I know that guy's, um, uh, played
and won the last four hands and he
looks like he's gonna play this one.
Just having that inside of like x-ray
vision of what everyone else is doing.
So, um, are they taking profit?
Are people in a lot of profit?
Are they locking them in at losses?
Like looking for those incentives is
really what, it's human psychology.
What are people doing and what's
their incentives and drivers?
Um, and really the first step,
there's a, there's one metric that
is the backbone of all of, it's the
most important metric in my opinion.
It's the most important metric in Bitcoin.
And it actually recently
hit an important milestone.
So I'll talk about this 'cause this
should, this has been the hook for me.
It was the hook for most of the
analysts that I've worked with.
They're like, ah, the
realized cap was that unlock.
So the realized cap, it's
different to the market cap.
The market cap.
We take the entire Bitcoin supply and
we compare it to the current price.
And we say that is the market cap.
But the reality is that not
every coin transacts every day.
A lot of coins are lost.
Some are hod, some are old, some
are new, some are in exchanges.
It doesn't really tell us an
import like the market cap.
Okay, it's 2 trillion.
But like, is it the realized cap is a,
uh, a metric that every single coin in
the supply we price when it last moved.
So Satoshi's coins are worth zero.
He's got a 1.1 million of them,
but they have a price of zero.
'cause there was no
price when he mined 'em.
Uh, a miner may have mined it back
when it was $15, but lost his keys.
Those are priced at $15.
The, so the, the, the, um, ut XOs that
I bought back in 2019 are still saved
at that, whatever it was, $10,000 or
$12,000, $8,000, they're saved there.
The thing that's really interesting
about this, back in 2019,
let's say I bought one Bitcoin.
Um, if I bought one Bitcoin for
$10,000, I invested $10,000.
That's my, like input money.
And that's, for me, that's
my proof of work as a human.
I literally worked in a job earned 10
grand and I bought one Bitcoin with it.
If I then sell that Bitcoin, um,
today at a hundred grand, I've
locked in a $90,000 profit, but
the buyer had to bring in $90,000.
So by valuing every coin at the time when
it last moved, we achieved two things.
One, it actually captures how much wealth
Bitcoiners have saved in Bitcoin and this
metric this year, like two months ago.
Um, and that'll be in that
report you were referring to?
Crossed a trillion dollars.
So whenever you have somebody tell you,
oh, Bitcoin's worthless, there's no
intrinsic value, no one trusts it, you can
say, well, I can see right here measurably
that Bitcoiners have trusted this thing
with a trillion dollars of our savings, a
trillion dollars of our hard earned money.
We have invested in this thing
and we still hold it today.
So that's the first one.
But then we can see how much profit
are people in because if you can,
if those coins I bought in 2019,
the cost basis is 10 K, so I now
know that I'm up $90,000 in profit.
That's my incentive.
If that goes up more and more
and more, my incentive becomes,
I can probably buy the house now.
Right now I can actually like cash out
and, and do something my with my life.
And if you look at that across the whole
market, we can see where people's cost
basis are, where the price would have
to go to make people feel really good.
Where do we have to go for
people to feel really bad?
Um, how much money have
people saved in this thing?
How much profit are they taking?
How much profit are they?
How much losses are they taking off?
So.
It's this really amazing idea
where you can just see where
everyone's incentives are.
And that metric alone, like the, the raw
savings power, there's about a trillion
dollars that Bitcoins have invested.
And at the market caps 2.3 trillion,
that means that bitcoins are sitting on
$1.3 trillion worth of unrealized profit.
And I love this 'cause
Berkshire Hathaway, right?
Um, uh, Warren Buffet has said that,
uh, Bitcoin is rat poison squared.
I'm like, well sir, your market
cap is a trillion dollars.
Bitcoin has invested a trillion
dollars and we're up 1.3.
So how does that feel?
Right?
We've got more profit in our
system than you do in the entire
market cap of your company.
Anja: That is so interesting.
That is just wild.
Fascinating.
I love how you
James: explain, explain,
and that's one metric.
Anja: Yep.
That's
James: just one book.
Yep.
That's book just one metric.
And it's just all we're doing is showing
how much Bitcoiners have saved and
where they saved it, and then everything
else is a knock on effect from there.
Anja: Yeah.
Yeah.
That is wild.
Like this is just really, you've,
you've hooked me and now I'm like
interested in going down this rabbit
hole, but I wanna ask you something.
It's cool, isn't it?
That I, I got asked, uh, by someone
in the community and I didn't really
like, have a solid answer for them.
But in the case where Satoshi's coins
move, what would that do to the price
James: they will move?
So there's, there's another
controversial opinion.
They will move eventually because at
some point in time when we run the,
the human experiment for long enough,
uh, one of three things will happen.
Satoshi will come back and move
them or his inheritance or whatever.
I think that's an unlikely scenario
at some point in time, cryptography is
going to break on those earlier coins.
Could be quantum, could be
some other computing form.
But if you run the human
experiment long enough, we will
eventually break that cryptography.
'cause technology keeps going.
So those coins, if they're lost, they will
come back to market via that mechanism.
The other way they can move is
that the community can freeze 'em.
And I don't think that's going to happen.
I know some people want to do that.
Um, there's, you know, proposals and
thoughts about freezing the coins.
Uh, I don't think that's ever
gonna pass as a pragmatist.
I think it's ever gonna happen.
'cause it just degrades bitcoin's,
um, uh, property rights concept.
Um, and that's a whole topic
to itself, the quantum thing.
Now, there's no question that the
market will panic at that point in time.
But then at the same time,
this is inevitability.
The market's gonna price
it in ahead of time.
And I can't help but think,
like, I don't know about you.
If Satoshi's coins came back to market,
let's say for example, like who's
actually gonna develop a quantum machine?
Let's just call it quantum.
It could be any cryptography
breaking system.
Uh, we don't know what the future's
gonna look like, but something like
that, who's gonna develop that?
It's not gonna be you or me, right?
It's gonna be the Chinese
government, the American government,
or a high flying text company.
What's IBM gonna do?
IBM breaks quantum and the first
thing they do is steal Satoshi's
coins and mass market dump them.
They'd be sued out of outta business.
The, the probability that it's gonna
get collected by some like benevolent
dictator type, I don't know about you,
but I would like, if they auction those
coins off, I'm gonna buy some of those.
I want some assis coins.
That'd be hectic.
That's awesome.
That's like a great little souvenir.
I would totally buy those at
whatever the going market price was.
So I think, yeah, the market will
spasm out a little bit at the time,
but I also just think that it's, I
think it's kind of overblown and.
You know, if those coins come
back to market, it's kind
of the law of the jungle.
It's just how these things play out.
So, you know, I, I kind of like the
chaos, like, let's just see what happens.
Speaker 2: Just love, that's
such a psychopathic answer.
James: Totally
love of fun.
You know, like people get caught up in
like, they want number to go up all the
time, but like, markets go up and down.
Like they never go up in a straight
line, but like, we're at a hundred
grand, you know, people are calling
Bitcoin debts, like, yeah, it crashed
to a hundred thousand dollars.
This was a meme years ago.
We're like, oh yeah, at some point
Bitcoin's gonna crash to a hundred grand.
Well, we're right there, right now, we're
crashing to a hundred thousand dollars.
And I know, and there's like,
dudes on Twitter are like, oh,
it's the worst store of value ever.
Like, it's terrible.
I'm like, yeah, it's, it's, you know,
it's only a hundred thousand dollars.
It was $10,000 five years ago.
What a terrible store of value.
Um, we, we saw Gold
recently went to 4,400.
And the amount of Bitcoiners who were
like, oh man, I think Bitcoin's failed.
Like dude, Gold's been
outperforming Bitcoin for,
since August through to October.
That window is the only
time where that's happened.
And by the way, Gold's been
going nowhere since I was a boy.
So like, you know, give the gold bugs
their three months of joy, you know,
they've been waiting decades for this.
Anja: Yeah, yeah, for sure.
Um, oh yes.
I wanted to, I mean, that concept around
the lost coins being added back to
the circulation is an interesting one.
'cause that's something
I hadn't considered.
Like obviously it doesn't make sense.
Like it's completely nonsensical
for us to ever increase.
The 21 million cap.
'cause there would just be
no consensus around that.
Like, I can't see that reality.
But it's also interesting to think like
in, in that same case of like coins being
added back to the circulation, that would
obviously devalue the existing supply.
So do you see, what's my question here?
Do you see like that proposal to
potentially freeze those coins like
being made and being, I don't know.
Do you know what
James: I mean?
It can be made, but I
don't think it will happen.
Yeah, yeah.
No.
Um, someone will propose it for sure.
Um, that's definitely gonna happen, but
I don't think it will, it will pass.
And the main reason when, when I like
rationalize this, if you freeze Satoshi's
coin, so again, um, people talk about
qu a Q day, like the day when quantum
finally starts breaking cryptography
and it will be a binary event.
It'll happen and then suddenly it
can start cracking cryptography.
If we, we don't know when that's gonna be.
So if we freeze somebody's coins and
say that you didn't upgrade in time,
we're gonna freeze it as this date.
We made the decision for somebody
else that you can't spend your money.
If, on the other hand, we allow
the market to do its thing and
eventually quantum comes by and it
does steal those coins, that person
made the decision to not upgrade.
Could be 'cause they're dead.
Could be 'cause they're
lost, whatever it is.
But they made that decision.
We don't know.
And, and here's a good example of this.
This year in July, we saw those 80,000
Bitcoin they were bought in 2011.
By all measures, people would've
assumed those to be lost coins.
And yet this dude shows up and just
one day decides, yeah, I'm gonna
cash out nine and a half billion.
Just like.
Comes outta the blue.
There are guys out there who have
coins that many coins for that long
and they've held it for 14 years.
And not only has he held it for
14 years, he didn't even spend it.
It's been sitting in the original
wallet that he had for 14 years
and he finally moves them.
Fascinating dynamic, but like you can't,
I just don't think we are ever gonna
reach consensus to steal people's coins.
And the tension, the tension is
gonna be if quantum can break the
cryptography and take people's coins.
Is that a breaking of Bitcoin security
assumptions or is the community decided
that we're gonna take your coins off you?
Is that a breaking of the, the, the
concept, in my opinion, the second
one is worse because Bitcoin as an
idea, if we can socially agree that
we can steal these people's coins
and freeze them, to me that's the.
That's human governance decision.
Stepping in because we're
afraid of the price.
I don't think the price should be a a
factor in the consensus rules honestly.
I think generally speaking
we should like what?
When a quantum computer can crack that
cryptography, what they're actually
doing is they're getting the private key.
And the rule of Bitcoin is if you have the
private key, you have the coins, right?
Not your keys, not your coins.
If you lose the private key because
you didn't upgrade 'cause someone could
attack your coins, you made that decision.
It's the same as leaving your seed
phrase on your desk in the office.
If someone takes your coins,
sure legally they're stolen
but you no longer have them.
And possession is nine tenths of the law.
So I'm of the view that we will never
come to consensus to freeze and therefore
rule of the jungle will most likely apply,
will create the quantum secure system.
People can upgrade if they
want, if they choose not to.
They're also choosing to have
their seed phrase on their desk.
Anja: Yeah.
Yeah.
That's interesting.
Makes sense.
Okay.
I'm glad I asked that question
'cause it just really needed
James: Yes.
Anja: To be cleared up.
James: Oh, it's a complex, it's a very
complex puzzle and like quantum is a,
that whole field is also full of a gaze.
Like the only industry that's got
more scamy in there than the crypto
industry is the quantum world.
So it's very hard to decipher fact from
fiction in both of those industries.
Anja: Yeah, it is.
Hmm.
We'll see what happens.
It's such an interesting time to be alive.
Um, but I also wanted to ask you another
future focused question is, um, and
that is more on like the adoption.
There's obviously the two dominant
theories is one that will have an s-curve
adoption and another one is that it's
gonna be more, um, you know, gentle more.
Yeah.
It won't be going exponentially.
It's just gonna be very slow and steady.
What do, do you have an opinion
on that and does any on chain
data support your thesis?
James: Yeah, good question.
So I have a feeling that we're gonna get
a bit of both because I'm of the view
that most individuals like you and me, who
kind of really get Bitcoin and actually
want to go and buy it, custody it.
I think that we are getting towards the
end of people who are gonna do that.
You know, if we go through Bitcoin's
timeline, it started with the Cipher
punks moved to like the libertarians,
then it started to move to more
of the investor types and then
the gamblers and the speculators.
And then you got this like pool of
Bitcoiners who really like ideologically
believe in it, run nodes, you know, even
know that people are arguing over returns.
All this stuff, like that's a
very small subset of the world.
The vast, vast, vast, vast majority
of people, they just want a pool of
assets and they want to go to the beach.
They don't, they don't want to
think about any of this stuff.
So the S-curve side, I don't
know if it's gonna be like just a
massive retail, like individuals
coming in and buying this thing.
I think a lot of people will get
allocated it in their retirement accounts.
'cause it will just become, you
know, it's normal to have a 5% or
a 2% or a 1% allocation to Bitcoin.
Like that's just a normal thing that
everyone just has and their financial
advisors just does it for them.
That's gonna be a big part of it.
But I think the S-curve,
that is really interesting.
We can talk about it on
a per capita perspective.
I think we've gone through a large part
of that where individuals adopted it.
But there's another S-curve,
which is all about the capital.
We, in a world where inflation's
gonna get worse, we're seeing the
reason gold is going up is because
the monetary system is changing.
The bonds are no longer safe.
Like that's a whole thing to itself.
Really.
There's only two assets in the world
that are neutral, scarce, and have
the properties required to replace
the bond as the base level of savings.
Gold and Bitcoin and gold,
the one that's big enough.
So that's why gold is
doing what it's doing.
So the fact that Bitcoin, after 17 years
is being talked about at the highest
levels of sovereigns companies, the
whole lot as being a potential contender,
as a savings asset in the future, that
alone is a wild concept after 17 years.
So whilst we may not get the
S-curve of individuals, the S-curve
of dollars money coming in, that
is very, very much on the table.
Because as Bitcoin gets bigger, like
the reason that gold is able to go
from, I mean it gold has added $12
trillion to its market cap this year,
just this year, and we're in October
or November, it's added 12 trillion.
That's, I mean, Bitcoin's 2
trillion, that's six Bitcoins.
That's six entire Bitcoin networks when
like a very, very, very small point.
Part of the world goes, you know what,
we need to allocate 2%, 5%, whatever.
It's just the, the amount of
money is just tremendously big.
I think the S-curve, and that's gonna
show up in the price naturally, so it's
gonna go through waves of this thing.
I don't know how it plays out, but
I, I, I can see this wall of money.
That's how you can have hundreds of
billions dollars of sell side and
the price goes sideways, not down.
Anja: Yeah.
Bitcoin's a funny thing because, you
know, sometimes it really feels like it's
growing really slowly and other times
it just, you know, when you take a step
back and you realize it's actually like
the adoption's growing ridiculously fast.
And the best analogy I can give,
it's almost like your kid, you
know, you see them every day.
You don't necessarily see the
height difference day to day, but
then, you know, you might measure
them once a year against the wall.
You realize they're growing like 10
centimeters and that's kind of what
Bitcoin feels like, don't you think?
James: Totally.
And it goes through growth spurts,
you know, like there, there's
periods of time where, again.
If you wind back the clock 12
months, we were trading at 60
K and here we are at a hundred.
Like the, the moves just suddenly,
it just comes outta nowhere.
And I, I also ran the statistics
on this on a daily basis, 40% of
the time Bitcoin, Bitcoin goes
less than 1% in either direction.
40% of the time it goes nowhere.
30% of the time it goes up.
30% of the time it goes down
more than 1% or less than 1%.
Uh, if you wind that back
to a quarterly basis.
So that's like a beautiful bell
curve on the daily side where it kind
of goes nowhere most of the time.
On the quarterly basis, it has a massive
skew positively, where again, a lot of
the time it goes nowhere, but then some
quarters it goes up a hundred percent.
And, uh, I ran this study saying in
each of the previous cycles, 20 17,
20 21, um, and this current one, I
think I ran this study in BID 24.
Basically I showed that if you miss
the 10 best days, just set all the
10 best days of that cycle to zero.
You actually are flat to
down on the entire cycle.
This is a four year period.
Those 10 days are so powerful to
the upside that that is where the
entire return profile comes from.
So when you get all these day traders
who are trying to like get in, get out,
trade around this thing, what they're
trying to do is avoid the 10 worst days.
And there's no question if you miss the 10
worst days, you know your returns go from
a a 10 x to a 20 x, that's great, but if
you miss the 10 best days, you get a zero.
So like you lose your 10 x
that you would've had if you
just sat there and did nothing.
So for the average ler, stay humble and
stack SATs is just the tried and trusted
method because you're gonna get those
10 days and like who knows when those
10 days are gonna be, they're all over
the place, but sometimes they happen
and they're just big green candles.
And if you miss it,
you're kind of outta luck.
Anja: Yeah.
Yeah.
I mean, this is my first and only bull
run, so I'm like completely selfishly
just wanting to have the experience
of like, some of the prior bull runs,
even if there's a massive drawback.
I just wanna experience it.
James: Totally.
As
Anja: silly as that sounds.
Totally.
James: Yeah.
Yeah.
No, it's, it's, it's, it's a real thing.
And like it's, this
bull is very different.
In 2021, it was just one, it was like
three or four months of just straight
up, and then it was just down only.
So that was like a whole thing.
But this is like up sideways
for a year, up, sideways for a
year, up, sideways for a year.
So it's a very different animal.
Um, much more structured,
much more stable.
Um, and the bear market in my opinion,
is gonna be far, far less severe,
um, without some kind of major runup.
So, you know, even the downside
is not that, not that bad.
Um, and I use this good example.
Um, my old man's been
in Bitcoin since 2020.
Uh, finally got him in.
He rode the bull, had a great time,
told me all about the bear market
every day about how shitty it was.
And now.
In this current market structure.
Bitcoin is like me who've been
around for a long time are
like, where's my volatility?
It's so boring.
Oh, Bitcoin sucks.
And my old man's like,
Hey, should I buy more?
Like, I really like that
it's not going down anymore.
So like you can see the two different
high octane Bitcoin as a disappointed
and my old man's like, Hey, I should
probably buy some more of this thing.
Like it's really doing very well.
So like two very different perceptions.
Anja: I mean, I like it all.
So, yeah, it's just, just interesting.
Like you, you wanna experience, um,
this, yeah, there was definitely like a
drawback earlier on in the year that went
back like 30% and that was my first Yeah.
Drawback in Bitcoin.
And I remember going to one of my friends,
I'm like, he's gonna keep going down.
They're like, oh, princess,
welcome to Bitcoin.
And this time around I'm like, whatever.
James: Totally.
Anja: Yeah.
James: And, and as as an example like that
period in um, early, it was like March and
April we went down 32%, um, that period.
So on the way up this time last
year, so the elections happened in
the US and we went from about 70 5K
just we zipped straight up to 85.
Like it was instant, very, very
few coins, trade at hands in
that like 75 to 80 5K zone.
And in about January it was
about like 105 K or something.
I started writing a lot.
I called it the air pocket.
And I was like, look, I know no one
wants to hear this and I can't predict
this is gonna happen, but just be aware
that down there between 75 and 85, no
one knows how much demand is there.
And we're seeing a lot of buying
up here at 95, a hundred, 110.
And I was just again, trying to
prepare my subscriber and say, look.
Just be prepared that we might go
down and just test that zone and just
find out who wants to buy down there.
And lo and behold, we went
exactly down to 70 5K.
That was the level we zipped straight
through it chopped around at 85 for a
month or so, and then up we go again.
So that was the way that I was
thinking about like just be
prepared in case we go there.
I dunno if we will, we ended up,
but be prepared that air pocket,
it's just asking to be filled.
Anja: Yeah.
Love it.
Anyway, thanks so much for your time.
Do you have any last, last thoughts
that you wanna share with the audience?
James: Honestly, the best
advice in all of Bitcoin ever
is stay humble and stack SATs.
Just like don't get distracted,
just keep stacking away.
This asset is so well positioned
for the future that's coming.
Just buy and hold.
It is the best savings account
that you're gonna find.
Like you do not have to worry about it.
Sure.
Price are gonna go up and down.
But this thing is rock solid.
Like this is the most powerful
computing system that's ever
come, ever been invented.
It's just a force of nature
and the cat is outta the bag.
It's, and, and there are no shit
coins that are gonna beat Bitcoin.
Bitcoin is just the thing.
It's Bitcoin and gold.
And like for me, I'm
90% Bitcoin, 10% gold.
And I don't think about
my holdings at all.
I don't even think they're
investments or assets.
They're just my savings account.
Um, you know, Fiat's going to continue to
get worse, inflation's gonna get worse.
You've just gotta sit tight
and there's a trillion dollars
worth of other people who agree.
So just stay humble, stack sa.
Anja: Love it.
Thanks so much for your time, James.
James: Good.
I know.
Thanks having me Ellen.
Anja: Thanks.
Speaker 2: That's it for this week
on The Honest Money Show, a big
shout out again to shop bitcoin.com
au for making this episode possible.
Until next week, stay smart with
your money and stay decentralized.