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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 Report. It is August 5th, 2026. Today's report is entitled, Is the Fed Letting the Market Do the Tightening? Of course, we're going to talk about the Fed.
Ryan Sean Adams:
[0:22] I think the main topic is NASDAQ versus Bitcoin, though. So last week, as we were recording, the NASDAQ was down 10% on the month. And some of the frothiest corners of AI, the memory stocks, they were hit the hardest. They were down like 30 to 50%. This week, we have a whipsaw event with the QQQ regaining a lot of that loss and nearing on all-time highs. So the dip was bought. We got to talk about why that happened and what this means. And the question is, was this just a bump on the way to new all-time highs for the NASDAQ? Or does this equities pump look a little fake, look a little October 10th in crypto.
Ryan Sean Adams:
[1:06] Also, we're going to do a Bitcoin cycle awareness check just to see how that time-based capitulation that we've talked about, how that's going. And I think we want to answer the question, is it time to buy Bitcoin and exchange QQQ stocks that might be in your portfolio for Bitcoin. We're going to look at the Bitcoin to QQQ ratio and ask the question if we've bottomed or not and which will outperform the other in the months to come. So stick around to the end for that. Mike, I got to be honest, this whipsaw took me by surprise. So NASDAQ down 10%. We were talking about that last week. And then we had a Fed FOMC meeting. It didn't seem to recover based on the back of that. And now suddenly, a week later, we're nearing on all-time highs for the NASDAQ.
Ryan Sean Adams:
[2:01] What the heck happened in the last week?
Michael Nadeau:
[2:04] Things are definitely getting interesting out there for sure. We spent some time last week talking about macro and rate hikes and the FOMC meeting last week. And yeah, interesting reaction coming out of the meeting, you know, yield curve steepening. You've got the QQQs up here now. And, you know, we've seen it. We saw almost a 10% correction. And it looked like, you know, maybe we were going to start to see a little bit more of an unraveling there. As you mentioned, some of the kind of like frothier names, memory stocks, things like that were down 30 to 50% or so. And we've kind of just like V-reversed right out of that this week, which is interesting. I think part of that has to do with the Trump administration postponing some more offensive attacks on Iran and maybe putting that aside for now because of some of this volatility that we saw in the markets. But, yeah, it's definitely an interesting setup. And I think we've got a lot to talk about just with NASDAQ, Bitcoin. And, you know, we're going to do a quick cycle update in terms of all the data and the KPIs we're tracking there as well this week. But definitely a lot to get into.
Ryan Sean Adams:
[3:16] Yeah. So what do you have a take on what this actually was? Like why this happened? So was this sort of a deleveraging type event? You know, you had the Leopold hedge fund sort of that unwind story. And then just did buyers buy the dip here? And does this imply some strength in the NASDAQ that maybe you hadn't or we hadn't seen previously? Or, are there still the fault lines here that we talked about from last week?
Michael Nadeau:
[3:47] We will see. I mean, S&P 500 already back to all-time highs. NASDAQ not quite there, but pretty close. And yeah, you know, when I kind of just observe kind of what we saw, if you go back to really the May-June period, NASDAQ rallied 30% over a two-month period. This was coming after that initial, you know, initial spike and a lot of concerns around the war, the ceasefire, and then we rallied 30%. And that's a really big move for the NASDAQ index over a two-month period. And for that to happen, you really have to get a lot of leverage into the system. And you really need to pull a lot of people off the sidelines into the market that were not in the market that are sort of chasing that move. So that felt like probably peak speculation. Situation, we've seen a V bounce out of this, almost similar to the first V bounce that we saw back in February when Bitcoin had its first kind of sharp sell-off and a quick bounce out of that. So the bounce is not super surprising to me. I mean, it is a pretty big move, like almost already retracing like all of that 10%.
Michael Nadeau:
[5:01] It shows just kind of the inertia, you know, in these markets right now. But I think there are some kind of forces under the hood that may just make it more difficult for this to continue. And when you just think about what it takes to move 30% in two months, for us to get back up and keep pushing higher, it's just going to take a lot. And one thing that I always kind of think about is just like, once you kind of like break the momentum of a market, I mean, for people to come in to a market, you know, rising 30% in a few months,
Michael Nadeau:
[5:39] The only way that can happen is people think there's no risk, right? It's almost like lots of people make lots of investments when it feels like there's really no risk in the market. Now that some people are down on those positions, it sort of breaks the spirit of the market a little bit. And I think that's the main thing that I'm trying to pay attention to is like, are these animal spirits, has that spirit actually been broken? And if it has, and we'll get to sort of the macro here, you know, what does that look like for NASDAQ kind of heading into year-end here?
Ryan Sean Adams:
[6:13] Yeah, I got to think kind of a V-shaped spike out of this makes the bulls jubilant and makes people on the sidelines say, oh my God, another like V-shaped recovery. I'm going to miss out on this. I got to plow money into the stock market today.
Ryan Sean Adams:
[6:28] But we'll get to Bitcoin versus the QQQ a little bit later in the episode. Let's do a cycle awareness update on some of the core numbers to see if anything has changed. So what are you seeing from some of the cycle awareness metrics you regularly look at on Bitcoin? Where are we?
Michael Nadeau:
[6:48] We're at the stage of the bear market where these numbers are not changing right that much. You know, if you look at the 2026 KPI low column there, we're above all these numbers now. So we really set the lows at the end of June when Bitcoin had its last kind of move down to 58.5K or so. And that's really what those numbers represent. We've come off of that. Bitcoin has been trading in this range between 65 and 60K or so for a while now. So these numbers... Are not moving too much. I think the main takeaway here is that we're in the time-based, you know, capitulation stage of the cycle. And the main metric that I'm looking at that really hasn't kind of come into sort of where I think it could come to is that decline in the realized cap. It's only down about 5.8% from the peaks. And, you know, we'll see if that has to come down
Michael Nadeau:
[7:49] Maybe between 8% and 10% or so, I think for that to happen, you probably have to have another capitulation possibly, or this time-based capitulation just kind of drags on and we slowly start to get there. When we look at the market structure data that you pulled up here, this is where we're assessing top buyers and the rotation of coins throughout the cycle, that 92 to 108k cohort has been bumping up, right? So this is the time-based capitulation playing out about 20% of those coin holdings that were purchased in that range have rotated to new hands. I still think that's going to rise up more as well, just based on time-based capitulation and potentially some more fear and uncertainty hitting the markets. And so the big question is like, what's the catalyst for that type of move? What should we be looking for as that starts to play out? We could probably get to, you know, some of that coming up here. But I think, you know, in terms of like the high level data, you know, it's not changing too much right now. The thing that I'm looking for is like a more of a rapid rotation of coins, which I don't think we're going to see unless we get another 10 to 20 percent correction or so.
Ryan Sean Adams:
[9:13] OK, all right. So you still think there's some unfinished business when it comes to the cycle metrics and what you see in the on-chain data. Maybe I want to ask you this question. As I was reading through this and looking at the numbers, and they're relatively kind of unchanged. We had the 2026 lows in all of these numbers. I guess, did that happen in June?
Michael Nadeau:
[9:34] That was late June, yeah, June 30th.
Ryan Sean Adams:
[9:36] That was late June. Now, if you were to look at this table, and take a look, Mike, at the 2026 lows here, okay? Let's say the lows are in. I know you think there's still unfinished business ahead, and that could be true, but you're also open to the possibility that June 2026 was actually the lows on some of these numbers. If this does turn out to be the lows, when we come back and we look at the cycle, two or three years from now, would you have said that given these metrics, like the cycle has played out? I mean, is there a world where three years from now you look at these numbers and you're like, oh, well, it's higher lows, but they're still low. This is still some semblance of the cycle. Like, does it feel like it's complete? And if you were to look at this three years from now, would you be like, oh, yeah, that was the 2026 cycle. Of course it played out.
Michael Nadeau:
[10:31] It feels like this is complete. And I think, um, I can't remember if it was last week or a few weeks ago where you were kind of, we were assessing this and saying, yeah, we're roughly 80% of the way there. And then we're looking at the macro and kind of folding that into the analysis. And I think if the macro looked better and, and that setup looked good, I would be more comfortable, uh, saying this is all played out. And I think, I think, you know, if, but to answer your question, yeah, if you came back in three years, I think that column there looks pretty normal. It's pretty typical for sort of a macro cycle low in terms of some of those stats we'd be looking for.
Ryan Sean Adams:
[11:11] Okay. All right. That's what I wanted to ask. And yeah, that's a good take there. So we're also, when it comes to the flows, we're not seeing much volume in ETF flows. So this still looks like apathy market.
Michael Nadeau:
[11:23] No demand. No demand.
Ryan Sean Adams:
[11:24] No demand. For the spot volumes, kind of the same. Yeah. Long-term holders. Tell me about this chart. Why is this in the report? And what does this mean to you?
Michael Nadeau:
[11:36] Yeah, I'm paying attention to this a little bit. But it's typical to see that orange line there, the long-term holder supply. That's the total supply of coins held by long-term holders. Long-term holders defined by coins that haven't moved within wallets for over 155 days. And what we tend to see in fair markets is that line will rise pretty fast. The reason for that is smart money is coming into the market and buying Bitcoin in these fair value ranges. But the other piece of it that maybe isn't talked as much about is that you have some of these top buyers, these people that came into the market at higher levels, or maybe they sort of chased dips. You know, they never got in and they were chasing some of the dips early on. Those holders then age into the cohort. Right. the long-term holding cohort as the cycle goes on. And so that leads to that line going up. And what we've seen in the past is like, That line drops sort of as you get to the cycle low. I think it's because some of these newer buyers, they've been holding on time-based capitulation eventually catches up to them or you have that final correction, that final bout of fear and uncertainty in the market and they end up capitulating. So it's something I'm sort of watching for. If you look at the far right up there, it looks like that's starting to come off a little bit. We're starting to see a little bit of that.
Ryan Sean Adams:
[13:05] It's a tiny drop.
Michael Nadeau:
[13:06] It's a tiny drop. It's a tiny drop right now. But something I'm just paying attention to sort of give me that confirmation that like, okay, that's another one I can sort of check off.
Ryan Sean Adams:
[13:17] How about strategy? So they are one of the long-term holders. There's been some more updates on the week from strategy, I should say. Over the last week, the firm sold another 104 million Bitcoin, this at a purchase price of 64K. I think that's below his weighted average, Michael Saylor's weighted average.
Michael Nadeau:
[13:40] Yeah, 75 or somewhere in there.
Ryan Sean Adams:
[13:42] Yeah, taking a loss on that. What's going on in the world of strategy right now? I know that's been on your radar, just on the back burner. You haven't been super alarmed at it, but you're going to watch it on a week to week basis to see if there's some more of a forced unwind happening. This still looks like a gradual unwind process, but has anything updated your view on this?
Michael Nadeau:
[14:05] Yeah, something where I'm just following sort of all the announcements that they're making and trying to get a sense of just, you know, how urgent they are at addressing the situation. I feel like they have been addressing this. And yeah, they sold another $100 million worth of Bitcoin. And they're using some of that to fund. Actually, they're buying that STRC product with some of those proceeds. Some of them are also going to pay the dividends for this product. So, I mean, it's just kind of amazing how much dilution is coming from MSTR to sort of stitch this all back together.
Ryan Sean Adams:
[14:42] Is MSTR, by the way, under NAV right now?
Michael Nadeau:
[14:46] I think it's, I don't, I don't think he can actually issue shares when it's under NAV. So I think it's probably just a hair above or just around there. And so, yeah, I think, I think the chart is, you know, improving, you know, it's kind of moving up a little bit there. That's the highest level I think it's been since mid June or so. So it looks like some confidence is being restored here. And I think what I'm looking for just moving forward is if we do have another correction for Bitcoin, I would imagine that just the correction itself would potentially cause this STRC chart to drop more. And then you end up in the same spiral where Saylor has to sell more Bitcoin to try to restore confidence in this. Maybe he has to get the runway on those dividend payments. I'm not sure what the market is looking for there. He's got about 2.2 years right now of runway to pay those dividends. I thought that would probably be enough to calm things down. So we'll see. I just think this is kind of interesting because of the reflexivity that gets baked in. That chart goes down. The market starts turning to a sailor. Does he have to sell? More Bitcoin at a steeper, you know, loss than his average cost. We'll see. And then, you know, how that kind of feeds through and just like
Michael Nadeau:
[16:02] sentiment and everything else out there. Just something to watch for, I think.
Ryan Sean Adams:
[16:06] One last crypto native chart here is Bitcoin dominance. And so you say this Bitcoin dominance has been rising recently, but has been rising over the last several months to year, I guess, but recently has turned over. And is this a signal that the end is near. So that, you know, I guess the end of the bear cycle is near. So we're currently at 58% Bitcoin dominance. So what signal do you get from the Bitcoin dominance number?
Michael Nadeau:
[16:38] Yeah, I mean, this is interesting. I mean, the dominance, Bitcoin dominance has historically dropped to around 40% at the bottom of bear markets. I am not expecting to see that in this cycle. And this kind of speaks to just, you know, the dominance, I guess, of Bitcoin and just maybe lack of competing projects that have really taken market cap and things like that, which is kind of interesting that in some ways the sort of Bitcoin maxi thesis is sort of playing out a little bit. I think if you just look at the dominance here. So I'm not looking to see that number drop significantly, but I do think it'll drop into the cycle loads. And I think the big takeaway here is that So altcoins, you know, some of the major L1s, I mean, it's hard to say which ones, but I think a lot of the sort of altcoin space, I'm just kind of broadly saying everything that's non-Bitcoin, it's an altcoin. That space looks like it's probably more likely to already bottom to me than Bitcoin, things like E, things like Sol.
Ryan Sean Adams:
[17:46] Why? Just seller exhaustion in those assets?
Michael Nadeau:
[17:49] Yeah, they had kind of pretty significant drawdowns, obviously more than Bitcoin. And if Bitcoin dominance drops on weakness, then I think those assets would drop as well. But I don't know if they would drop more than Bitcoin and go down to their cycle lows. I think they would have to drop more than Bitcoin to get back down to the levels they established late June or so. So that's kind of the takeaway for me is like, even though maybe I'm leaning towards more, you know, potential pain for Bitcoin. I think the markets are so oversold. There's very little going on out there right now. There's very little on-chain activity, you know, desire to speculate. I think you can get into some good positions, you know, in all coins, like at these levels. And, you know, Bitcoin's in fair value as well. So I don't want to, you know, pretend that it's not a good time to be buying out there.
Ryan Sean Adams:
[18:45] So as you mentioned in previous cycle lows, Bitcoin dominance has decreased to actually 40%. And right now it's, you know, 58%. It's been on a massive incline. I just want to zoom out and ask a question to you about whether this is a healthy signal for crypto or not. I know analysts that I've followed for a long time, people like Chris Bernitsky, have long preached the message that Bitcoin dominance would actually fall over time. And for the many cycles he's been in crypto and I've been in crypto, it's kind of fallen, right? Bitcoin used to be the only crypto asset. That it was just like the first and the only.
Ryan Sean Adams:
[19:25] And then dominance has fallen in all previous cycles to lower and lower numbers. This cycle, it has risen. It has gotten to like over, what, 60%, almost 65% this cycle. And now it's just off that high, but it's 58%. And so there's a Bitcoin maxi bull take, which is like, oh yeah, Bitcoin's going to outperform all the other crypto assets and suck in all of their value. And those assets will be worth nothing and Bitcoin wins everything, right? But then there's another take of just like, well, is the only use case in crypto Bitcoin? I mean, if dominance continues to be at these levels or even increase, then what does this say about our other tokens and our other assets? So I guess my question to you is like, do we actually want Bitcoin dominance to go up or does that speak poorly about the use cases in crypto?
Michael Nadeau:
[20:20] Yeah, you know, that's a great question. And, um,
Michael Nadeau:
[20:25] I don't know if I have a take on whether this is good or bad for crypto, but I think, you know, maybe some of the reasons that this is happening, I would say, is maybe a few things. So earlier in, or maybe in the previous few cycles, there was more venture capital, you know, that came into the crypto ecosystem. And that obviously, you know, creates more opportunity for people to speculate on other things. And I think that there was more interest, there was more, there was more innovation actually happening, I think, in the 21 cycle, I think you could argue, than in the current cycle. And things are starting to consolidate around Bitcoin, stable coins. In the last cycle, we saw like the meme coin narrative. And part of the reason that the meme coin narrative came up is that people are frustrated with sort of unlocks and the token economic structures of a lot of these altcoins, which I think you could also look at that and point towards regulation and lack of regulation, lack of standards around some of these things. So I think there's a lot of factors that have sort of played into why Bitcoin dominance, you know, was basically much higher in the 2025 cycle than it was in the 21 cycle, especially here in the bear market. So I wouldn't write off the idea that this can't actually still come down in the future, especially if you get regulation and you get new.
Michael Nadeau:
[21:51] And we actually, I still have the belief that like there's going to be all these new business models that can use tokens and different incentive structures. We just haven't like cracked the code on how to do it properly and create standards around of it. I think part of it is the regulatory piece.
Ryan Sean Adams:
[22:08] Yeah, I think I view it similarly. I think Bitcoin dominance is sort of a reflection of the use cases that are working in crypto. And Bitcoin, of course, is primarily the store of value use case. And that's a use case that was working. I think in previous cycles, we had a list of all sorts of other things we thought crypto would do. And the market had hopes and was speculating on. And some of those use cases
Ryan Sean Adams:
[22:33] have turned out not to be product market fit, essentially. And so we've winnowed down. But I do see that that could change in the future, too. Let's get to the main event. So there's a lot of listeners with equities in their portfolio, I'm sure tech forward equities, things like the NASDAQ, things like.
Ryan Sean Adams:
[22:55] S&P 500. So you have a chart here, Bitcoin versus the NASDAQ. This is the ratio and it tracks it over time from 2017 to now. And in previous cycles, in previous crypto bear cycles, we've seen declines of Bitcoin relative to the NASDAQ. So 2018 cycle, 2017, 2018 cycle, there was a 75% decline in the 2021-2022 cycle, a 68% decline. And right now, we are at a 62% decline the bottom of this cycle. I think we hit that bottom probably in June as well, June 30th as well. Okay. So the question is, have we bottomed on this ratio yet? And the implication, of course, is if we have bottomed, then it means you should be selling your QQQ for Bitcoin maybe, or maybe cash for a while until everything bottoms. But let's say Bitcoin would be, if we have bottomed, a better asset to hold versus the NASDAQ in the months to come. But it hasn't been like that for a long time, Mike. So what's your conclusion when you look at this chart? Do you think we have bottomed on this ratio or is there more pain ahead on this ratio?
Michael Nadeau:
[24:13] I am leaning towards that we bottomed actually on this and that that 630 low where we dropped right into that white line there, that that is possibly the low. We are off that level right now. So Bitcoin has been outperforming NASDAQ since June 30th. And yeah, I think the big question here, and actually maybe just to come back to those declines, what's interesting to me is the 62.2% is 90% of the 68.5%. So it's like a 90, it's symmetrically sort of dropping down. So it feels like this is a pretty good level for the bottom to be in.
Michael Nadeau:
[24:55] I guess the question then comes back to, okay, well, if that was the low, then what can this potentially, what are some of the scenarios that can start to play out from here? Um, and, you know, I think, I think they can both, my sort of take on this is that there's, to me, the probability points to them both potentially falling into, into year round. I don't know what's going to happen in the near term here. We could certainly go back to all time highs and there's still a lot of inertia and it seems like some, some desire to speculate out there for sure. Um, but when I think about, you know, when I went back and kind of looked at what happens with NASDAQ in midterm years, especially at the sort of tail end of midterm years, we've had corrections in the past. So in 2018, we had a 23% decline in the last few months of the year. Bitcoin dropped 47% over that same period. So they both dropped together. Bitcoin bottomed first.
Michael Nadeau:
[25:59] And then if you go to 2022, Nasdaq had a 14% decline starting from August and Bitcoin dropped 26% around the same period. Again, Bitcoin bottom first. Back in 2022, we did actually set a lower low on BTC Nasdaq. And the chart, if you go back up to that chart a little bit, actually kind of looks sort of similar. So if you look at, it's sort of right above the 1-3-2023 there. You can see that we were kind of coming up a little bit. and then FTX happened and we went down, we actually set a lower low. So I'm kind of thinking that we went up and we may come back down. The question is, do we set that lower low?
Michael Nadeau:
[26:44] But yeah, I think just kind of putting it all together, I think if you can come to the conclusion that peak speculation has occurred in NASDAQ, then I think you can start to look at sort of what we saw with the yield curve last week coming out of the Fed meeting. And I think this is kind of really why I think that, you know, there's a probability starting to point towards weakness from NASDAQ is it's starting to become a little bit more clear to me, like what's happening with the Fed? What does the Fed want to happen? You know, how is the market starting to adjust to a new Fed share? Like this is all starting to come together. We've had two meetings now. The new Fed has a different policy as it relates to forward guidance and sort of like how they message to the market. And so what seems clear to me is like the new Fed share war, she wants the market to just be the market. He doesn't want to say what they're going to do and then let the market reflexively price off of what he says. I think this is like really important. It's like this subtle thing that we haven't really been talking enough about. It's like the Fed is just steering the economy. He wants the economy, he wants the market to just react to the economy itself. And then the Fed will react to that. And so I think he wants the yield curve to steepen, to be honest. If you want inflation to come down,
Michael Nadeau:
[28:10] Which, you know, he's been coming out saying that they're going to get back to target.
Michael Nadeau:
[28:16] You would just kind of let the market do its thing. And what the market is saying is that, in my opinion, is that, you know, there are concerns about inflation. There are concerns about these wars and there are concerns about the fiscal spending, new trade and like sort of structural inflation getting baked in at a time that we're running these massive fiscal deficits. So I think that is the reason why the long end of the yield curve wants to go steeper. And if this continues, then you have to think that, you know, a higher interest rates that gets factored into discount rates, valuations, it typically will lead to slowing growth, right? That's why the Fed, you know, hikes rates in the first point to kind of slow growth, tamp down inflation. And so, yeah, I just think, you know, he's kind of letting the market do the tidying. There's the old saying, like, don't fight the Fed. And I think this is sort of a situation where you want to not fight the Fed. But it's a little different because the Fed's just kind of letting the market do its thing. And it looks like the market wants higher yields. It makes sense. The economy is running hot. Inflation is above target. The question is, you know, we talked about it last week, is there sort of some weakness under the hood with the labor market, savings rate, the consumer,
Michael Nadeau:
[29:37] Where they would have to kind of reverse, you know, or sort of step back into the market and possibly add liquidity or cut rates if things started to spiral out. So that's kind of the setup. And if that setup wasn't there, I think we could come back, as you mentioned earlier in the show, like looking at those metrics, you kind of say, okay, maybe we have bottomed, we're just going to have a sort of time based capitulation, and then start the next expansion phase. Because of this setup, I just, I'm still kind of anchored to the fact that this does not look great.
Michael Nadeau:
[30:12] And we may have a little bit, a few more bumps in the road here heading into the year end. In the near term, I have no idea what's going to happen. But what's kind of interesting too is like, if NASDAQ bottomed and, you know, we're just kind of, that was just a bump on our way to new all-time highs. You know, we're seeing, you know, that trade come back. when I look at crypto, it's dead. It is just dead. Everything on chain is just really dead. And that's signaled to me So broadly, I think that's, you know, as a crypto native investor, I think we tend to have a little bit of an interesting view on liquidity, sort of broader liquidity conditions that impact crypto first. And we're really not seeing, you know, a lot of liquidity out there. Real rates have been rising. That's obviously liquidity negative. And so, yeah, that's kind of a bit of a ramble, but that's kind of my take is this is, it's not a great setup for risk assets and I don't want to fight the Fed right now.
Ryan Sean Adams:
[31:15] Okay. So, understand, I think I understand that, but this paradigm shift of how Warsh is running things is taking a minute to sink in for me and I'm still trying to get adjusted to it. Sure. So you think that this means the 30 year keeps running up and it's at 5.17 right now. And that is the highest it's been since I think you pointed out 2007. So it keeps ticking up. And what does that drain capital out of other areas of the economy, particularly risk assets, because now they're seeking that higher yield? Is that part of the second? Secondary effect here?
Michael Nadeau:
[32:00] For sure, yeah. You know, if you just made a bunch of money on some AI stocks, And you're looking maybe, you know, you're looking at what are the returns going to be moving forward from these levels. And then you look over and you see that you can get a much higher yield on cash. It impacts, you know, sort of investor allocations. So that's part of it. It also impacts the discount rate and how we think about valuations. And so those are the two things that I think if this continues, I would expect that it would not be good for risk assets.
Ryan Sean Adams:
[32:39] And so Warsh is just letting that, your take is Warsh is letting some of these long-term duration yields just run, let the market dictate them. So the 15 year and the 30 year. However, doesn't that get to a point where something else breaks and we have to rein that in? So the U.S. government still has to pay interest on these bonds, has a lot of debt to sell. There's more debt every year to sell to the world. Where are the buyers going to be and what are the interest payments on this debt? What does that do for the deficit? How hot can you run yields or let the market go before something else breaks?
Michael Nadeau:
[33:23] Something will break. And yeah, this is impacting mortgage rates and the real estate market is a massive, big part of the economy. So I think he can talk tough and sort of say, yeah, we want a smaller balance sheet and we want to let the market kind of dictate this. But I do think something will break and, um, you know, that's when Trump will, you'll start seeing Trump just getting a little unruly and they'll have to cut rates. And, you know, this happened in 2018. Um, With Powell in Trump's first term, midterm year, markets started to unravel a little bit, August, September period. There was Trump was all over the media asking for rate cuts. Powell held off for a while and then eventually cut rates and the market ripped after that. So I kind of think that's the setup here is like, yes, if you want inflation down, let the yield curve steepen. That should help. But also it's going to slow growth and you're going to have to deal with that on the other side of it. But that's what opens it up for him to cut rates and
Michael Nadeau:
[34:35] deal with the interest payment issue and all that and appease Trump.
Ryan Sean Adams:
[34:40] So your message today, don't fight the Fed. You are fading this equities market rally. You don't think it's persistent. And you are thinking the weight of probability is that we have bottomed on the Bitcoin versus Nasdaq ratio. As far as the portfolio goal goes, Mike, on the week, are you just kind of holding steady? Are you remaining patient at these prices?
Michael Nadeau:
[35:01] I am staying patient right now. I think that's the name of the game at these levels. And yeah, I mean, I think I'm happy with sort of how this bear market has played out. Some of the execution could have been better, but I think I'm sort of prepared for the portfolio to drop a little bit here into year end. And hopefully we get some more fat pitches. We can get into some positions and sort of average into some of our positions and get a better cost basis. And we'll see where we land. I think if you can sort of like get to the end of the bear market and have a portfolio built out and be a break even, I think that's a really pretty big win, especially if you were able to stack some cash at the highs.
Ryan Sean Adams:
[35:47] You mean break even on your cost basis kind of thing? Yeah.
Michael Nadeau:
[35:51] Yeah. As long as you're not down, like if you're, if you, if I can get to the end of the, the bear market where I've built out the portfolio, high conviction, have been able to buy some of these capitulations, get into some good positions. And even with all that good work, I'm not up right on the portfolio, I'm okay with it because I think we're in a really good spot. I think a lot of people, when you get to the bottoms of the market, you're down significantly on a lot of positions. So I think it sets you up in a really good spot for when the market turns. So I'm sort of prepared for some weakness here, but I just view that as a buying opportunity. And short term, I don't know. So it's going to be interesting to see if this momentum just goes here for the next few weeks or so. It's been September where the weakness has come for like the S&P 500 and NASDAQ in the past. So we could keep going for a few weeks here.
Ryan Sean Adams:
[36:49] Well, I've heard you say on previous weeks, you like that number around 55K. That would be maybe a place to set the limit orders. I should remind folks that 63.5K is the 200-week moving average. So we're just a hair above that. But if we get further dips in the future, we should dip into the 50s. We'll see how it goes. Got to remind you, of course, none of this has been financial advice. This is an Investor Journal. We're on the journey right alongside you. Until next time, stay curious.