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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:
[0:10] Welcome to the DeFi report. It is January 21st, 2026. Mike, I am so excited about this particular DeFi report because it was fantastic. This is how to construct a portfolio. I feel like this is what everyone really wants to know. The assets we like is the subtitle, the prices we'd like to pay for them. The assets we like, the prices we'd like to pay for them. You say in this report, get your assets right, get your entries right, and trade the big cycle. That is the message here. And got to let listeners know, you've got to stay tuned to the end in order to get Mike's entry price targets for some key assets like Bitcoin. What does he think is fair price for Bitcoin, ETH, Sol, Hype, BNB? There's almost 30 assets on the DeFi report watch list right now. Mike, how are you doing?
Michael Nadeau:
[1:01] I'm doing great. It's an interesting time in the market right now. And I think it's a really good time to start to go through this exercise. We've been preparing a lot of data sets and preparing ourselves so that we're ready to buy when we think it's time to go risk on. So excited to get into some of that this week.
Ryan Sean Adams:
[1:19] I love it. The timing is perfect. This is the time to consider how to construct the portfolio, right? And it doesn't mean you rush all in. This is a very methodical process and it will go through your mythology. But let's set this up, OK? So at the time of this episode, Bitcoin is down 29% from its all-time high. ETH is down 39%. SOL is down 55%. Another asset you like, HYPE, is down 63%. What do you think about the market conditions as of now?
Michael Nadeau:
[1:50] Yeah, it's interesting setup. Last week, we were seeing like a lot of strength in the market. And it looked like we may sort of get up to that 100K spot. That's where the 50 week moving average is. We've been expecting, you know, kind of a retracement move sentiment had been pretty wiped out to start the year. And we saw that move. And I think the key thing is watching that to see if it had, you know, durability to really kind of push through 100K or so and start to establish that as more of a support zone.
Michael Nadeau:
[2:24] Haven't seen that just yet. We've seen a little bit more weakness. You know, there's been, you know, the news cycle just won't stop. And, you know, that's definitely, I think, playing into it. There's, you know, potentially some stuff coming from Japan and just their bond market, which has caused a little bit of a sell off and even the traditional markets as well. So Bitcoin, I think, down 89K or so. And it's been our view that we are in, you know, sort of a bear market here. I think that still, you know, remains to be seen as the year goes on here. But it's our base that, you know, we're in a base case that we're in a bear market and the data is really telling us that. and that's really what we're relying on. And so, you know, we need to get a couple things right. We got to get our entries right. And we got to get our timing right. And we focus on Bitcoin for that. We think Bitcoin really drives the crypto markets historically. Basically, you know, altcoins are more often than not going to bottom after Bitcoin does or around the same time that Bitcoin does. And so we want to have a view on Bitcoin primarily. And then we always want to be doing ongoing research on other assets that we think have a chance of outperforming Bitcoin so that we're ready sort of when the opportunities present themselves to us.
Ryan Sean Adams:
[3:39] Right. So you are seeing long term holders continue to exit the market. I think you're seeing that non-chain data, also social interest at six-year lows, which feels kind of bad, but seems to be accurate. So we're doing the work now, as you say, so that we can be greedy when others are fearful later, because if you're right, there's more fear ahead and there's
Ryan Sean Adams:
[4:00] going to be lower prices than even where we are right now. So let's talk about constructing a portfolio and how you think about it. And of course, for TDR listeners, your mileage will vary. I'm sure you could adjust this in certain ways, but it's very useful to get Mike's framework to understand how he constructs his portfolio and how he views things. So you can follow along with us. Give us the construction notes. So you talked a second ago about establishing a core position in Bitcoin first. Risk, that's always what you do when you go risk on. And I'll remind listeners that as of now, Mike, I think you're in a cash position, about 82% going into this episode, so heavily skewed cash, made those decisions a few months ago in October, fantastic timing on that. So now you're in cash mode and you're looking to go risk on at some point to enter the market and you do so via Bitcoin. Why Bitcoin first?
Michael Nadeau:
[5:04] Yeah, Bitcoin first. Again, Bitcoin leads the market. You kind of think of this as like the dog and the tail. And I think sort of Bitcoin is the dog and the tail is sort of the rest of the crypto markets. And so Bitcoin tends to drive the market. it. The other reason for this is, you know, we still think Bitcoin has lots of upside, right? I still think Bitcoin has, you know, 10x upside from here. I know sentiment is not great out there right now. And people are coming up with all different, you know, narratives for why, you know, Bitcoin hasn't, you know, held pace with gold and things like this. But I just think right now we're in a period where there's not a ton of demand for Bitcoin. That's okay. We've seen this before. But my base case for Bitcoin in the thesis hasn't changed at all. And I'm just as excited about it as I've always been. And the volatility of the asset to me is a feature. If you have the right tools to sort of understand kind of what's happening around the hood, and that's a lot of the data and the work that we do is to take advantage of this volatility and play these cycles. So I'm just as excited about Bitcoin. I still think it's a better asset than gold. I know gold's getting quite a bit of attention these days.
Michael Nadeau:
[6:23] You know, I think to put that into perspective a little bit as well, I think gold's up less than 2x or so from the lows that it came down to in 2022, early 2023, it's up around 2x. Bitcoin went up 6.5x or so from its lows up to the highs that we established in October. So I still think Bitcoin is a far superior asset, and that's why we're anchoring the portfolio, and it's also because it leads the markets.
Ryan Sean Adams:
[6:53] Anchoring the portfolio on Bitcoin because it leads the markets and because,
Ryan Sean Adams:
[6:57] Mike, you still believe in a million dollar Bitcoin and above. OK, so that's the Bitcoin piece of this. And as a percent of the total of the invested total. So there's a non-invested total, which is cash. We'll leave that aside. The total that you're deploying when you're ready to deploy, what percent do you want to be in Bitcoin?
Michael Nadeau:
[7:17] It's a majority position, so it's probably going to be somewhere around 65% or so. None of this is written in stone and we'll sort of use our instincts at the time when we make these purchases, but likely at least 60% is going to go into Bitcoin initially. Part of the reason for that is... It's really hard to outperform bitcoin right um you know this past cycle i think a lot of people you know learn that the hard way um maybe wasn't as as hard back in you know 2021 or prior um but it's hard it's hard to outperform bitcoin something that's going up six you know point five x from its lows to its highs in a cycle um that's a tough benchmark uh to compare yourself to so we want to have you know a large allocation there and we want to be really strategic about sort of filling out the rest of the portfolio. And that's the benchmark. That's the threshold. You've got to be able to potentially outperform Bitcoin. And so that's why it has the largest allocation in the portfolio.
Ryan Sean Adams:
[8:20] So you start with Bitcoin, you go big, though gradually, you go heavy when there's blood in the streets and when you're really feeling like it's a risk on environment and time for you to deploy, let's say. So when you decide to go risk on, that doesn't mean the market has decided to go risk on, right? And you're going to do that. We'll talk about price targets for Bitcoin in a little bit, but let's flesh out this portfolio more. So that's the majority position is Bitcoin. Let's talk about the next sleeve, which is core assets. So what is this and what's inside of it?
Michael Nadeau:
[8:54] Yeah. So after we kind of have our core position in Bitcoin, we want to be ready, right? So we're doing ongoing research. We're constantly looking at all the top L1s, top DeFi projects, things that we think we can hold, you know, for a cycle, stuff that we can have strong conviction on. And this is going to be like three to five assets or so that we're pairing with Bitcoin that we think has the potential to outperform Bitcoin, you know, through a cycle. And so that's typically going to be roughly 20% or so that we'll put into those assets. Listen, that's really, that's the foundation of the portfolio is Bitcoin paired with a few high conviction.
Michael Nadeau:
[9:36] That's um in the last cycle we were fortunate to to get into seoul you know pretty pretty early on and that was one of the key investments that that be that we made back in late 22 early 2023 and that sort of can make your cycle if you can get if you can have conviction around something like that that can you know really outperform something like bitcoin um that's something that we want in our portfolio. A few other assets that were part of our core holdings last cycle were crypto equities. So Coinbase, Coin, and Hood actually were part of that allocation in the last cycle. And we're going to be looking to do something similar. We don't know exactly which assets just yet. We've got a pretty good idea. Like I said, we're constantly doing research.
Michael Nadeau:
[10:25] But once we think Bitcoin has hit that bottom and we've made an allocation there. We want to be ready, right? We don't want to start doing research on other stuff at that point. We want to be ready to go.
Michael Nadeau:
[10:37] And so that's kind of the core asset sleeve of the portfolio here.
Ryan Sean Adams:
[10:42] So when we get to the watch list, we'll talk about names for those core assets that you're considering and they're all on the watch list. That means they're in consideration mode. They've not yet entered the portfolio, of course, but the only criteria you say for the portfolio is it's got to have for core assets it's got to have more upside than bitcoin more risk more reward has to have the on-chain metrics that support that leadership adoption fundamentals all of that and also is something you're willing to hold for a three-year period of time okay so that's the core asset position sleeve we've talked about the bitcoin sleeve the next is long-term holds sleeve this is roughly 10 of the portfolio so as compared to core assets is 20 you say long-term holds are 10% of the portfolio. What are these and how are they different from core assets?
Michael Nadeau:
[11:29] Yeah, a few assets here, you know, that we will be likely adding to the portfolio. And this is stuff that is even, you know, sort of higher risk, higher reward than the core asset part of the portfolio. So this is typically going to be newer projects, stuff that is, you know, a little bit less, you know, understood by the market. We're looking for stuff that, you know, we feel strong about the leadership team. You know, we're tracking fundamentals. We have dashboards to support a lot of the research. So we're making sure that they're a leader in their sector. It's a strong use case. It's got narratives. It's got a community, right? Strong token economics. We're looking for things that, you know, potential comeback stories here. Crypto tends to appreciate a good comeback story. So sometimes this can be assets that maybe did well in like their first cycle and got really, really beaten up. We've seen that. We've seen this with ETH. We've seen this with Sol last cycle. So there can be these kind of comeback stories. It could be something that's just a little bit newer. It could be something that's maybe a really strong use case, but there's other risks related to it. Maybe it doesn't have a strong enough token economics to warrant a larger allocation of the portfolio, but we still think it has a potential bullish narrative to it. But so just a higher kind of risk in this area, but potentially higher rewards as well.
Ryan Sean Adams:
[12:58] Fair to say long-term holds a little bit different from the core assets in that they are even farther on the risk curve in terms of risk reward. Also, it's generally likely that they're going to be a bit newer. Maybe they've gone through fewer cycles as the core assets. And what's the holding horizon for these assets? Is it similar to core in that you're willing to hold these for the long term for three years or at least until the end of the cycle?
Michael Nadeau:
[13:27] It can be. It can be in some instances. It can also be stuff that is more of like, we think we're in a risk on market. We think there's an interesting narrative that's forming around that specific asset. And it could be even, in some cases, less than a year or so as far as holding that. So it's more of a bull market play, I would say, and something that's specific to the current setup that we're seeing in the market.
Ryan Sean Adams:
[13:54] Lastly, you have risk on assets. These are the high beta assets. I think you've called this the hot sauce that you add to a portfolio toward
Ryan Sean Adams:
[14:02] maybe toward the end of the cycle or when you're really deploying risk on. This is 5% of the portfolio. Talk about this.
Michael Nadeau:
[14:10] Yeah. And people that are, you know, members of TDR Pro will probably recall we were, you know, a little more active later, you know, in the cycle, especially once we got into, you know, summer of 2025, we had, you know, that season and there was there was just like a lot more going on in the market. And so we were actively, you know, trading some of this. And we also, you know, part of the reason we had a pretty good cycle was we were in a few meme coins that did well. Most of the meme coins, you know, outperformed earlier in the cycle. So you kind of had to, you know, identify these things, you know, early. And a lot of them have sort of been in a, you know, somewhat of a bear market for the last year. But this sleeve would include things like, we call them blue chip meme coins. And what we're referring to there is just things that have plenty of liquidity.
Michael Nadeau:
[15:04] We actually track a lot of on-chain data with meme coins to try to understand the holder base of these assets. We look at the sort of social indicators and sentiment, things like that. But this sleeve is just going to be much more higher risk. You know, this is where you get the potential 10x, you know, gains over a shorter period of time. We want to have like sort of these high beta assets that we can pair up with, you know, an L1, for example, like if you're in Ether, if you're in Sol. It can make sense to pair that with something like the culture coin of that network. It's going to be interesting to see how this plays out for the next cycle. Memecoins really kind of came onto the scene in this past cycle, and it'll be interesting to see if there's multi-cycle memecoins or if potentially there's something new that comes out in this next cycle where we're allocating into this sleeve, we do have a few that we're constantly tracking that we think are somewhat interesting.
Ryan Sean Adams:
[16:11] All right so just to recap um of the construction the invested portion bitcoin 65 core assets 20 long-term holds 10 risk on assets five percent can you say a word about cash and the timing of this so that that is a hundred percent of the portfolio invest that i just went through you're gonna set aside a portion of of cash through this cycle and you kind of what do you spend this down you sort of invest slowly and gradually through the cycle up to i think you said somewhere in this report up to 90% of all your cash that you only have 10% remaining. What's the timing of this and how does that work?
Michael Nadeau:
[16:48] Yeah, it's not like I'm going to just jump in and do all the buying at once. It'll be, we will scale into these things. You know, we've kind of got, you know, price targets in somewhat of a range. So we know when, you know, we're kind of rubbing up on that range, we may start to allocate and then kind of sit back and watch how things go. And maybe we get a lower entry. But I think it's a process. It's not, we try to be patient, you know, with how we approach the research and just our investment process. But also, you know, when we're scaling into an asset or scaling out of an asset, it's definitely a process.
Ryan Sean Adams:
[17:25] So you want to get the entry right and the asset selection right. And all told, you're going to have probably into this cycle, 10 to 12 high conviction assets. So that's kind of the range.
Ryan Sean Adams:
[17:37] Okay, Mike, let's get into them and run through each sleeve in just a little bit more detail including some uh price targets for each sleeve so we've talked a lot about bitcoin and why the position in bitcoin why that's the majority uh what is the price target for bitcoin that's very important because that basically dictates when you go risk on for the rest of your portfolio that is kind of the the uh hallmark of the the cycle time that you want to get right what's the price point what are you looking for
Michael Nadeau:
[18:09] Yeah. And nobody can predict prices. We kind of have an idea. And the reason we think Bitcoin is likely to trade back down around 65K or so, that's kind of the fair value target. It comes back to just a lot of sort of high time frame analysis that we're doing where we think the sort of average cost basis of the network is where we think the you know 200 week moving average is moving towards cost to mine one bitcoin and a lot of stuff that we see with with market structure with long-term holders exiting we want to see them establish establish a base and so you know we think it's around 65k i think there's going to be an interesting wall.
Michael Nadeau:
[18:50] Probably around 70K or so, or right around sort of the highs from 2024, and also sort of last cycle, prior cycle high, 66K or so. So I think that's like a really strong area of support potentially for Bitcoin. And we'd be happy to buy in that range. I mean, I generally think that this bear market is probably not going to be as deep as prior cycles. We came down about 75% or so last cycle. If we get into the 65K range, that's less than like a 50% drop, right around 50% from the highs in early October. So that's kind of where we're targeting. We're definitely going to be paying much closer attention if we start to go down below, you know, 80K or so.
Ryan Sean Adams:
[19:45] Yeah. And so that number can change if I understand your approach correctly. So it's 65K now, maybe it's a target range based on what you're seeing. But based on other fair value metrics like MV, RV, which we've talked about, cost of mine, the 12 month RSI, we've talked about some of the weekly moving averages, that number could change. So if you see things on chain and in the price action, volume, et cetera, to dictate otherwise, you might actually be a buyer higher or lower than that 65K. And that number is going to change. Is that correct?
Michael Nadeau:
[20:19] Absolutely. Yeah. And, you know, that stuff's going to change the sort of, you know, what's happening with macro, what's happening on, you know, the geopolitics, the world stage, like there's just so much going on. So, you know, we kind of have an idea of where we think we're going, but certainly watching the market, watching the data and, you know, adjusting our views as we go.
Ryan Sean Adams:
[20:40] What's nice about this is this pierces through the narrative. So narrative aside, whether it's just like, oh, gold is crushing Bitcoin, Bitcoin's never going to recover, that's noise to you. You pay attention to the kind of the on-chain signals. There's other things
Ryan Sean Adams:
[20:53] like quantum, quantum attack. There's some, I think, FUD lately in Bitcoin. Some of that's reasonably valid, but I think your approach is just like, whatever, that's aside, that's just a narrative following current poor price action, and you're looking at the on-chain fundamentals. Okay, let's get to core assets now. So again, this is the 20%. You've got top candidates as of the writing. I'm just going to run through them. Then I'll ask you briefly about them because we're looking for entry prices for each of these, at least given what you're currently seeing. So you've got Hype, you've got Sol, you've got Coin, you've got Hood, Coinbase and Robinhood, of course, Galaxy, three of these are equity so far, ETH, the asset, and BNB. Okay, those are top candidates on the core asset list. You haven't entered those positions, but you're evaluating them. And you've got entry prices for each. Can you give me for each of these what the entry price is and why they're on the watch list?
Michael Nadeau:
[21:52] Yes. So hype is the first one up here. So hype is trading around, I want to say around $21 or so right now that is like around 63, 64% off its high. I tend to think, you know, anything that's new, like there's, I sort of have like a base case of where I think something that's brand new, first cycle, first correction, where is that typically going to sort of, you know, bottom out at.
Michael Nadeau:
[22:22] I think this is still has a little bit of a ways to go. And I think where people can get tripped up a little bit is when something is down, you know, 60, 70, 80% in a, in a bear market, it can look like an obvious buy, but where you get tripped up a little bit is like the move that move from 60 to 80% decline can be like a 50%, you know, drop. And so that's where I try to try to be careful here.
Michael Nadeau:
[22:47] And I want to see what I think is like, we're selling, you know, sort of like, you know, somewhat of a washout that that looks like clear that that we're hitting a bottom, I don't think we've we've seen that just yet. And again, I try to anchor this stuff, primarily to Bitcoin, like I'm really not too focused on specifically what's happening with, with these other coins, because I think I mean, equities can be a little different. But for crypto assets, specifically, it would be somewhat rare for something to just not to bottom at a totally different time than Bitcoin bottomed at. And so I tend to anchor to Bitcoin in terms of where I think these are going. And then historically look at what have they done? If we have history on it, what is it typically done in a bear market? If we don't have history, what are other similar assets like that, you know, typically go through in their first sort of bear cycle. So the target for hype is between $12 and $18. That gets you... Closer to like us, you know, 75%, you know, bottom, you know, at $15, you're down about 75% from the peak. So I think that's like a pretty fair, you know, zone to potentially be looking to allocate.
Michael Nadeau:
[24:05] And then, you know, if you can get in at that level, and you have conviction that you're going to get back to all time highs, then you've got a lot of room there for upside, Never mind if it actually can go to much higher all-time highs in another expansion era. So that's hype. For Sol, Sol is trading at about somewhere around $130 or so. It's roughly 50% off its peak.
Michael Nadeau:
[24:34] An interesting thing with Sol and ETH, this cycle, and even BNB, which is on this list, is these assets, you know, and the way that I measure this stuff is primarily from the, is with a cycle outlook. So I'm looking at how did the asset perform from its, its trough, its bottom in the last bear market to where it peaked to in this cycle. And then I'm, you know, comparing that to Bitcoin. A lot of these things didn't, didn't outperform outperform Bitcoin or didn't get to like really durable new all-time highs. So Sol, you know, outperformed Bitcoin quite a bit because it dropped so much in the last bear market, but it actually didn't really establish like durable new all-time highs in terms of the price of the token. So it's something to pay attention. Same thing, same thing with ETH. And ETH actually, you know, from, from, from bottom to peak, you know, underperformed Bitcoin in this cycle. So something we definitely need to be paying attention to. But I think for Sol, you know, it traded down, had a really, really, you know, aggressive bear market in the last cycle. I'm not expecting that in this cycle. I do think Sol's sort of going through or Solana's going through a little bit of a, you know, a reset right now. And if you can get down to like $75 or so, you know, that's, again, it's putting you around 70, 73 to 75% off the all-time high. I think it's pretty interesting, you know, once you get into that range, that's kind of the the target zone for, for soul.
Ryan Sean Adams:
[26:04] Let's actually, while we're doing that, let's, let's cover ETH and BNB, and then we'll circle back to coin. So your target entry for ETH is a 2000 to 2200, which that would put it at about 60% off all time high. It's still on the watch list.
Michael Nadeau:
[26:21] Yeah. And it's, it's, it's interesting to me that we're starting to see these assets show a lot less, you know, volatility. And we're seeing that early in this, you know, what I think is a bear market. Bitcoin down about 30%, ETHs down about 40% right now. And, you know, we got almost to 5K or so. You know, over the summer months, late summer. And I think, you know, 2K would be a great spot to potentially buy ETH. That's 60% off. So it's not, it doesn't have too much farther to fall there. But again, we're going to be paying attention to what Bitcoin's doing. And that's going to, you know, drive a lot of this. So that's the ETH part. BNB is an asset we've never held, actually, but we've been watching it. And, you know, there's kind of like an interesting perception, I think, over here in the U.S., and I've been guilty of this myself, and just sort of like looking at these other chains that are out in Asia, things like Tron, things like Binance, as sort of like these scammier chains, or they're just like, they're not like our assets.
Michael Nadeau:
[27:32] But what I think is interesting with Binance is one of the only smart contract networks that, that did establish durable new all-time highs in this last cycle, it's constantly coming up, as a leader in all of the key metrics that we look at when we're comparing L1s. And when you think about just what Binance has going there with the exchange, the centralized exchange, and then the chain, it looks like they're essentially doing what Coinbase would love to do with base, right? And Coinbase is doing a good job with this with base. But Binance is like a massive success story in terms of the way that they built out an exchange. And that's become sort of the on-ramp for on-chain. And so we want to have exposure to this. The Asian market is a massive, massive market for crypto. And we're looking at potentially, you know, allocating to Binance so that we have some exposure to what we're calling like crypto, the crypto East market.
Michael Nadeau:
[28:39] The token economics of BNB are pretty strong and it bottomed. It didn't have as deep of a correction in the last bear market as a lot of the other layer ones. And so we think that's possible that we're going to see a similar process play out in this cycle. and we're targeting somewhere around 550 to 600 or so as a potential entry into BNB.
Ryan Sean Adams:
[29:06] Let's group CoinHood and Galaxy together just so we can burn through these because
Ryan Sean Adams:
[29:11] I know we've got a lot more that we want to cover. And of course, if listeners want full access to everything here, you got to go to the DeFi report.io and unlock this with a pro account. But CoinHood, Galaxy, these are equities. You're bullish on ETH, on ETH, also ETH. But at what target price for each of these assets?
Michael Nadeau:
[29:35] Yeah, so coin is an interesting one. This is a pure crypto equity. They don't do anything in TradFi or anything. So this is a pure crypto play. We view coin as sort of like an index on access to crypto. You really get exposure to almost every sector within crypto. You get exposure to Bitcoin. You get exposure to all the L1s. So we like coin for this reason. And it was actually more volatile than Bitcoin itself in the last bear market, which presented some interesting opportunities, came down about 90% in the last bear market. And then it actually outperformed Bitcoin from its bottom to its peak of about $420 or so. Where is it potentially going to trade down to in this cycle? I don't think we're going to get that same, you know, 90% drop like we saw last cycle, but a 70% or so decline gets you to, you know, $120 a share or so. It's trading at, you know, $227 right now. And I think earnings are coming out. Q4 earnings will be coming out pretty soon. So we'll have a look at how they perform for the quarter. But that's coin. That was a, you know, core holding for us this cycle. We still hold some of the coin. We did sell some of it, but we'd like to get in again at really nice entries again.
Michael Nadeau:
[30:59] For Hood, for Robin Hood, Sort of a similar story here. Robinhood did really, really, really well this cycle. It dropped about 82% in the last bear market. And part of the reason I think Robinhood's stock is so volatile is its user base is mostly speculative traders, millennial, Gen Z type audience. And so it's going to sort of, it's going to have some volatility with the markets themselves. And so a bear market for, you know, crypto, which is increasingly a large portion of their revenues, and also potentially, you know, traditional finance can really impact, you know, just the amount of activity on there. And I think that's why it had such a big drop in the last bear market. You know, we think, you know, it's trading at about $105 right now. That's about 30% of its all-time high. So it's already come off, you know, quite a bit. We think it could, you know, potentially come down to like $40, $60 or so if we do see like a pretty, you know, a bear market for crypto and just sort of less, you know, speculative activity, you know, generally in the markets. So that's hood. And then the third crypto equity here is Galaxy.
Michael Nadeau:
[32:16] Galaxy is a project we were in during the last bull market, kind of came in somewhat late, made some money on it, but it was more of a trade for us. We would like to establish it as a more core position. and we like Galaxy primarily because it's kind of like the Goldman of crypto. They have a profitable financial services business, really strong balance sheet. In some ways, they almost operate somewhat like a DAT because they have so many treasury holdings. So they're kind of like a DAT, a financial services business, and then they've converted most of their Bitcoin mining operation into AI infrastructure. So kind of three interesting prongs to this company. We like the leadership and we're we're hoping we can get into this at around like ten to fifteen dollars. Again, you know, because Galaxy is so tied to crypto, we expect the stock to be, you know, volatile, almost like it's a crypto asset.
Ryan Sean Adams:
[33:13] All right those are the core positions we also have some long-term holds i don't know that we'll be able to get to the the target prices for each uh i think folks can go unlock this at the defy report afterwards but your long-term holds are pump uh athenaena the token tia still which is interesting and world wld so these again are on the watch list so their potentials they haven't quite entered the portfolio but you're watching them and you have different target prices for each some of those are kind of interesting like some of those i'm like okay mike i totally get and i um agree on others i'm like okay you're gonna have to convince me i'm gonna have to read the reports here and here are the cases of course you're going to issue reports on each of these assets individually and i think you uh publish those every friday and then the risk on assets so right now you've got some candidates here and these are mainly meme coin candidates which is interesting so spx 6000 useless bonk pepe these have different target prices as well i have to ask on the risk on assets and i realize that's a ways away right first you're going to establish your bitcoin position then your core position so things might change including the categories but the the category that you're watching right now is like meme coins and i have to ask like are you sure Or the meme coin cycle is going to repeat because it seems like every crypto cycle has a new narrative that catches on last cycle, the God's blessed meme coins.
Ryan Sean Adams:
[34:40] But the cycle before it was NFTs and the cycle before that it was ICOs. And so why meme coins or are you flexible? Are you open to seeing another category on which to capture that high beta aside from meme coins as we go into the next cycle?
Michael Nadeau:
[34:56] Definitely flexible on this. And I agree with you. It definitely remains to be seen whether or not meme coins are going to have, you know, staying power. I think, you know, what I've observed so far is that there was a pretty strong balance from some of these meme coins when Bitcoin started to show some strength. So, you know, I'm really looking at the holder base. I'm looking at the communities. um xbx 6900 is it's it's it's a joke it's like the whole thing is about you know flip the stock market and you know it's it's it's a total joke but um it's also very real and it's like the the community is very real to me the the belief that people have in these things is is very real that's the one that um murad who you know has a very large following he sort of adopted this this community.
Michael Nadeau:
[35:45] And in some ways, I think through the messaging that he puts out there, he sort of like memed the actual like, like sort of like HODLer type behavior from this community. So this is something I'm monitoring. We don't know for sure, but I think observing how it trades, not only in a, through a bull market, but also through, through a bear market, I think will give us a pretty good glimpse of into this. And that's really how we're approaching this with, with meme coins right now, you know, the, the, you're, you're absolutely right that every cycle there's some new thing that, that comes in. That's like a mechanism for, you know, getting more hands onto crypto. And so there could be something that's, that's, you know, very different in the next cycle. I do think people love meme coins. I know meme coins are sort of controversial subjects, but at the end of the day, people like them, people like to trade them. They're kind of a game. And I don't necessarily think that's, that's going to go away.
Ryan Sean Adams:
[36:42] So let's talk about your process, because there's currently just under 30 assets on the watch list, and they all have fair value targets associated with them, meaning with Bitcoin, which, of course, we talked about fair value target for Bitcoin is about 65K. How often are you switching this up? And what sort of analysis are you doing for every asset on the watch list? And when I say switch it up, I mean, how often are you changing the fair value target? Yeah.
Michael Nadeau:
[37:08] So this sheet here is changing over time. So not only the fair value targets, but the assets that get included here. And what we're trying to do is really get to what we think is the universe of investable projects. There's about 30 or so on this list. We'll probably add some to this. We could see some of these fall off. But the goal here is to identify what we think are the strongest projects that have potential to outperform Bitcoin 10.
Ryan Sean Adams:
[37:41] To 12, right?
Michael Nadeau:
[37:42] 10 to 12, it could potentially, you know, be less. You know, one of the things that we continue to observe is just how hard it is to outperform Bitcoin. And I don't think that that's necessarily going to change. So it's possible that we can only get conviction on an even smaller subset. And that's what we go with. But yeah, this is constantly being updated. And, you know, our pro members will continue to continuously be updated with that sheet. And we're building data sets. We have dashboards that pair up with all of these. We're sharing those reports go out on Fridays through the watch list. And that's available for everybody to access those reports and also the data dashboards that go with them.
Ryan Sean Adams:
[38:23] Amazing. There'll be links to those resources in the show notes.
Ryan Sean Adams:
[38:25] And of course, Mike and I will be doing this on a weekly basis. So every Wednesday, you can catch an episode where we talk about the latest DeFi report. So let's summarize all of this. You say, get your assets right. This is where we started the episode. Get your assets right. Get your entries right. Trade the big cycle. So you want to have the right asset selection. And that's where the watch list comes into play, right? You're evaluating all of these constantly. The entry price, getting that right. You're looking at both the fundamentals on an individual level for each of these assets. But then you're also trading and timing the big cycle. And this is how you played things the previous cycle. Worked out pretty well. And you're playing it in a similar structure in a similar way this cycle you don't think that this cycle will be different than previous when it comes to kind of the the big sweeping way to play this is that correct what would you leave our listeners with
Michael Nadeau:
[39:20] I think that's right i think that's right um you know for all the talk about how you know this cycle is going to be different and um we're going to extend or it's going to be a super cycle like everything to me looks pretty standard um so i think it makes sense to sort of anchor to you know the way the way it's been um is probably the way It's going to play out in the future. Obviously, it won't be exactly that way. We're going to continue to monitor things. I think that's that's our base case. And like all of this work that we that we're constantly doing in terms of, you know, understanding cycle awareness, understanding, you know, Bitcoin fair value, all the stuff that we do on macro is to get our entries right. And then all of the work that we're doing in the watch list and all of the assets that we've initiated coverage on and that we're tracking, that is to get the assets right when it's time to make those entries. And all of this is to prepare ourselves so that the volatility of this asset class can be a tailwind for you. We think the volatility is a feature, but this work is required to sort of get yourself in a position where that could potentially be a tailwind for your portfolio. And so that's the approach.
Ryan Sean Adams:
[40:32] Mike, this is my favorite portfolio construction in crypto, and you've given us a fantastic way to approach it and to think about things. So thank you so much. Of course, listeners know none of this has been financial advice, but thanks for following Mike and I on the DeFi report journey. We'll see you next week.