Is This Ethereum’s Bottom?

Yeah I mean I I think that that I think ethereum will start to outperform Bitcoin in 2025 I I feel pretty confident about that again I could be wrong you know I mean again it wouldn't be the first time but I I do think absolutely that it it will start to turn around as we get closer to 2025 my my base case right now is that it it just bottoms out sometime between now and and the end of the Year welcome to bank list where we explore the frontier of Internet money and internet finance and

did today on the show we ask when will eth turn itself around the eth BTC ratio has been down for over 700 days eth first the altcoin markets also not doing so great either when is all of this going to reverse we got Ben Cowen on the Pod today famous Charter who does fantastic technical analysis and also cross references all of his work with macro Forces monetary policy the presidential election QE and QT and he's got some ideas about when eth will turn itself around and he thinks it's actually pretty soon but first a message

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get started you can withdraw as well at any time is non-committal this is an episode you're definitely going to want to like catch the visuals for okay cuz we're talking charts the entire time and Ben is like busy marking up charts uh on screen so Uhu and charts fluence and charting you can check this out on YouTube you get the video uh or actually Spotify video a fantastic place to check this out because you're going to want the visuals that accompany it I would say uh Ben is a chart maximalist in fact we we labeled

him as such in the episode in that's his lens on the world it's basically what are these assets going to do in the future well we can look at what they've done previously and kind of extrapolate For it it's a different lens than you and I David bring to uh the table in bankless podcast which is mostly about you fundamentals and thesis and this kind of thing but there's a certain Purity to just like looking at the charts and just like logarithmically extra like extrapolating them forward and combining with the macro data I think Ben

is one of the best in the biz at actually doing this so it's valuable to hear what he has to say in particular A question that I wanted to ask him at the very beginning where I feel like we got a good answer from him is the fouryear cycle is it dead like have we even entered a bull market yet or like what is going on so stay tuned for that guys we're going to get right to the episode but before we do we want to thank the sponsors that made this episode possible including our

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can concentrate on building your company while toku handles the logistics token launches don't have to be complicated talk to toku today to get a free initial token valuation bankless Nation Ben Cowen is the founder of into the cryptoverse most known for his analyst of various crypto charts looking at long-term trends across crypto Market Cycles Ben welcome back to bankless thanks for having me back pleasure to be here I think we are coming up to some sort of inflection point in the market um maybe I can kind of get that take corroborated by you Ben with

some of the charts here but the first question I just want to ask is the bull market over or did it just start or has it not even started yet uh I'm wondering if you have just from the ways that you interpret all the data that's available to you how Do you interpret that question I like to look at what happened in previous Cycles but I I tend to sort of Veer off from just looking at you know what everyone knows is the fouryear cycle but I look to to see how monetary policy affects the

the crypto markets so what I think that Bitcoin has just experienced and overall you know the overall Market is sort of a a quantitative tightening sort of high interest rate bull market right that's what Bitcoin and and even Ethereum saw for the last couple years and and the trend it looks a lot like what happened in 2019 in fact right I mean a very similar move the only difference really between this you know this bull market we had here and the one from 2019 is the the time it took to to play out but in

terms of the percent gains they were about the same in terms of of what led the market it was Bitcoin that generally led the market so that seemed very similar so I would argue That the quantitative tightening phase of the bull market is is over okay that there there still could be a QE phase of it that occurs later on but my guess is if that occurs it won't be until next year is is what I would I would I would generally guess and so that is where I think we are right now and the

main difference I think and I think it's worthwhile to really understand how the two differ right so in the QT High interest rate bull market Bitcoin leads Where Bitcoin dominance goes up same thing happened in 2019 in a QE bull market like you got in late 20 you know 2020 2021 that's where the the the lower market cap plays start to lead and so that transition might occur sometime you know between now and early next year Ben I just have a general question about kind of like bull markets and crypto and as you see them

so this is a conversation David and I uh had last uh week and um I don't know that we came to A definitive conclusion for like for our own perspectives we might have different hypothesis on this but like the fouryear cycle that's been a thing that has been in crypto since everybody's been in crypto and the like the market uh kind of expects another four-year cycle do you think we are still living in the era of four-year Cycles whether that's driven by the happening or whether it's driven by like you know liquidity you know as

R Paul says but the fouryear cycle is that a thing or is that broken this time around I mean it's honestly hard to argue against it I I think it it's easy to dismiss it but the reality is is you know Bitcoin topped into 2013 into 2017 into 2021 right and it wasn't much more complicated than that and it bottomed you know after the midterm year here after the you know the midterm here the midterm year there and then the same thing right so it seems like there is Some cyclical component to to these Market

cycles and actually if you measure out um you know bitcoin's Roi and we could even look at the uh the same thing for ethereum as well but if you look at at at bitcoin's Roi from the low and we just look at the last couple of Cycles I mean this is where Bitcoin always is at this point in the cycle as measured from the low right so to some degree this time really hasn't been that different I think the the the thing that I think is throwing people off this cycle is the timing of rate

Cuts so last cycle rate Cuts occurred in the prehab year right they occurred in they started in in July 31st of 2019 and that corresponded to this cycle right here where you had this QT High interest rate bull market where you know Bitcoin USD went up and then Bitcoin dominance also went up we've seen the same thing and you can see how it got ahead of the cycle that came before it and then Eventually it sort of bled back down until it got in line with the prior cycle I think you're seeing the same thing

happen again where we had another QT bull market and then it's basically just sort of faded and now it's getting back in line with the prior cycle so to a large extent this does look awfully familiar right I mean it seems like some things are are relatively predictable uh in terms of in terms of the foure cycle but I also think there is another Component right it's not just the fouryear cycle I think monetary policy also plays an important role in exactly how the cycle plays out and at what point in the cycle do you

know some of the other cryptocurrencies like etherium at what point do they start to take over and and we just haven't seen that happen yet this cycle but I think there's know there's plenty of reasons why right we have not yet seen the FED lower interest rates although that's coming up Relatively soon and we also have not seen the pivot from quantitative tightening to quantitative easing and that could also be coming up relatively soon theoretically so I think the cycle is playing out how it typically does it's just that the timing of of rate Cuts

this cycle is coming much later than it did the prior cycle and I think that's throwing people off so so Ben your base case is the fouryear cycle we're having again and we're basically Right on schedule as compared to to previous Cycles so like people should wait I I will make a note in every fouryear cycle that I've been a part uh of around this time when things get flat people start to doubt the four-year cycle always happens right on schedule so we're on schedule in the four-year cycle to be in the period of time

where people doubt the fouryear cycle would that be an accurate sum of your uh your base case here yeah um I do think that You know I I do think that it's it's good to see that the cycle has sort of gotten back back on track where it normally was it you know was somewhat uncomfortable when it was back over here if you measure it from other ways though like if you measure the cycle from the peak which is probably not the best way to measure it because you know the way I think I mean

I we we're going to look at it regardless but the one of the reasons I I like to look at it from the low is Because it's hard to really take into huge consideration what happens during a manic blowoff top right the markets are just irrational so measuring returns from that level not always the best but with that disclaimer if you look at the ROI from the cycle Peak so you go Peak to Peak for Bitcoin we are still slightly ahead of where we would normally be at this point in the cycle what's fascinating is

this is really the first cycle where Bitcoin put in new All-time highs before the having um and and that's actually reflected here on the chart I mean you can see that this is the green line we're still ahead of where we were at this point in the last two cycles so even if Bitcoin were to sell off uh after rate Cuts Like it did last cycle even if it were it could still pick back up in 2025 I mean it it it might just correspond to it getting back in line as measured from the peak

so I mean I do think every cycle is Going to throw us a curveball last cycle right was a pandemic uh you know everyone got annihilated I think you guys I mean you guys were there too I mean we we woke up and and the price of ethereum was back at like a hundred bucks and it I think we had gone to sleep and it was $200 and we woke up the next day it was like $100 like what what just happened so yeah I I do think that there there's something every cycle that that

does try to throw people off and And this cycle has certainly been no exception yeah can I try and be a four-year cycle bear for a moment uh cuz I'm I'm still skeptical uh that the four-year cycle is is intact and and maybe at the end of the day we fast forward in 6 months and and we're totally right and like the four-year cycle is intact but like there's some just some things that happened uh the ETFs I think pulled forward a lot of price action a lot a lot of demand uh And Bitcoin especially

has been exper the benefactor of that demand like it's weird that Bitcoin reached an allnew high but just a little bit and momentum didn't follow and in all previous four-year Cycles breaking alltime highs meant following into like price Discovery and we have not had price Discovery right in this current uh in this current market sector right now like right now Bitcoin touched like $74,000 ahead of like the $69,000 Previous alltime high and it's the only one like ether got the ETF but not the previous alltime high and now we're in like a long a prolonged

crab market and maybe I'm just in like recency bias of being here in this present market and rather than the last foure cycle that I was a part of but this crab market feels real long feels real long and there's also like no new users and no new uh like things to do and so maybe that's just contributing more to the Idiosyncratic nature here but like what what would it take to truly invalidate this four-year cycle because we've got the pulled for the the one-year accelerated like upswing I'm not going to call a bull market

because we haven't had price Discovery uh because of the ETFs and then we've had this extra prolonged crab market that has like is too too long for what I would call like pattern matching into previous Cycles that's kind of my vibe how do you take That Ben no I mean absolutely I think you're asking the right questions I I think that once everyone becomes comfortable with one particular outcome it's probably time for that outcome to change it's difficult because as always normally when Bitcoin hits alltime highs it continues to accelerate from there I think you're

absolutely right I mean I think that you could argue that the ETFs help pulled forward some of those returns and so in 2020 around this time The market was generally trending up right I mean we had the we had the pandemic crash and then the market basically exploded up into the summer a brief pullback in August and September and then it kept going up into Q4 we're not really seeing that this time right the summer has been relatively boring August September haven't been that great but I I I think what's really happening is is and

it goes back to what I mentioned a few minutes ago it's the the Effects of of monetary policy so for instance if if we were to take a look and by the way I mean I will be completely honest with you guys I I I don't I I really think ethereum could eventually go lower from here uh before it really gets back on track and the the reason I say that is because what I think what I think has happened is every cycle there there's this thing that happens with ethereum I don't know why exactly

I always find it fascinating I I Do actually I mean I do consider ethereum to be a blue chip I only consider two blue chips in the industry Bitcoin and ethereum and there's this thing that happens every cycle with ethereum and and it's fascinating and it's basically the eth Bitcoin pair right it's the eth Bitcoin pair and I I think we could learn a lot honestly from the eth Bitcoin pair and basically what happens and and this is why I think going back to your your your sort of Your observation which is absolutely valid is

like what's going on with this Market I it just keeps on crabbing and and frankly it's been going sideways with a slightly bearish bias right I mean ethereum has been putting in lower highs and lower lows same with Bitcoin ever since March but I think the reasoning the the reason for it and I I think why people might be losing their way on this is look every cycle eth Bitcoin goes through this pattern right Here and essentially what it is is it sets a top and then it sets a low and and you can see

that after it does that it puts in sort of like a a lower high right and same thing here right a top and then in between these this bottom lower high and then sort of slowly bleed back down this time has not been different right this lower high right here that was actually going into the merge which I'm sure you guys remember was a pretty crazy pretty big event for Ethereum I mean it had been something that they had been working up to for years and years and years it finally happened but what's fascinating is

every cycle we go through this process where e Bitcoin you know it it it tries to go up it comes back down to earth goes back up again Lower high and then it gets into this phase right here right where it's just above the range low that it set in between the two peaks but it's not enough to really turn it back around and Then what happens is after it sort of crabs in that range for a number number of months it eventually breaks down right it eventually breaks down so you can see that the

first time it broke down in 2016 it had a fake out it was actually in June right so it was actually in June of 2016 it broke that prior range low the cycle after that it occurred in July right the cycle after that you can see it first started to break down really you know right around January there was a wick below it and then it really started to go below it in March around the time that Bitcoin topped out now what's fascinating about this chart is if you look at it through the lens of

ethereum right so look at it through the lens of ethereum and and you can see precisely how it is played out every single time so look at eth and remember the first time it broke support in 2016 was in June right and then if you look At ethereum in 2016 it topped in June and from there eth bled about 7 % before getting back on track and then it went up in the post having year right it went up in the post having year which is normally the one year of the cycle where Bitcoin dominance

goes down right every other year Bitcoin dominance sends to go up it's the post having year where Bitcoin dominance goes down so that was the fir that was the first cycle right that was the 2016 cycle and then if you Look at what happened next right eth Bitcoin in 2019 when did it break down it broke down in the summer right June July is when eth Bitcoin broke down in 2019 ethusd topped out in you know June July right so you can see that both prior Cycles ethusd followed that pattern and after finding that top

it bled about 70% now it's easy to get sidetracked on that and say well why include the pandemic but I'm not right I mean I'm I'm I'm purposely excluding this pandemic crash like we're just looking at what happened going into the end of this year so because of that right because of that when I'm looking at eth Bitcoin I'm like all right well we saw a fake out here in March in April below the range low kind of like 2016 and if you go look at what eth did that's exactly when it topped out right

March right before the Bitcoin having and so far it's already dropped 54% right so to A large extent this time has not been different right it actually is playing out in a very similar Manner and what's fascinating is if you look at at eth Bitcoin the breakdown 2016 2019 after that right right after that that's when ethereum bled 70% and then it it started to to pick back up the following year right the following year and and it bottomed out in both 2016 Ethusd bled until December right so December 2016 December 2019 and then it

picked back up the following year and you could argue that it was picking back up right here in 2020 and then the pandemic happened right and it kind of threw everything off course what's fascinating if you fit the data points these data points with these data points sort of like the non-bubble data points if you want to call them that if you fit those data points together you get a Curve that looks like this right so this is the uh the logarithmic progression band and what's fascinating is every time eth Bitcoin has broken down 2016

2019 and now 2024 every time ethusd bled into Q4 into the regression band and then it had an explosive move the following year right the following year and then that year where it has the explosive move tends to be the um where it starts to outperform bitcoin that Tends to be the the post having year so I kind of that's where we would call it the the bull market the true bull market the the manic market right like the QE phase of the bull market right the the the the phase where Bitcoin is no longer

leading right because I think a lot of people think that ethereum always outperforms Bitcoin in a bull market and I would I would say that is correct when there's lower interest rates and money printing right but when you're in a Phase where higher and higher rates and more and more QT where the fed's reducing the size of the balance sheet that's where people tend to flee higher risk assets and go to lower risk Assets Now I'm not in the grand scheme of things ethereum is number two for reason right I I think it is the

second you know the the second safest one but I still do believe that just by market cap alone and by um the fact that bitcoin's been around the longest right that's Generally going to be a safer play for for most people especially in a high interest trade environment so I do think there's a pivot coming soon by the fed and therefore e Bitcoin should theoretically bottom out sometime between now and the end of the year so the way that that you present this with like we have like three pretty strong data points uh across the

the eth BTC ratio that you're pointing out about the the bleed into the uh the bleed into the Upside it seems like it's all going according to plan at least kind of that's the vibe that I got from you like e the E BTC ratio is in the middle of like this uh starting its like fourth pattern that we've seen for the last three cycles and if you believe in patterns repeating themselves then we are perfectly on track for that and there's like not really much reason to think that we're outside of that bound is

that fa assessment yeah absolutely Actually you know I my my long-term view for eth Bitcoin really since 2021 was that it was going to bleed to about 0.3 to 0.4 so I my you called this eth coming home right yeah yeah it's basically basically it bleeds to the 0.3 to 04 range and that's why I've been so bearish on eth bitcoin is and I know i' I've made a lot of uh eth people mad but it's just it was what I saw happen last cycle and I was like you know what like I I do

think there's a time to be Bullish on ethereum against Bitcoin but I think a lot of people have like you know they they front run it they they they think that it's going to give them outsize gains compared to bitcoin but I I think it was a little too premature and so what's really interesting though is is you know at this point I I think it's far too late right to to make that trade I mean I think the time to make it would have been back over here in 2021 but if you look here

at when e Bitcoin Breaks down like the last couple of times a after the first month that it broke down right here 2016 and then here in 2019 it only down for like one to two more months before eth Bitcoin really bottomed out right and so I think that it's going to turn around relatively soon but the the reason I mean it could still go below 0.4 right it absolutely could still go below 0.4 but I will say this if it does not go below 0.04 before the end of the year then my guess is

It's probably not going to okay but in the short term I would say there still is a chance and the reason why I still remain I I don't really even want to call it super bearish because it's it's it's already hit my target range of .3 to 04 so it did hit 04 so I I remind myself all right like there is a chance that it that the low's already in but the reason why I would still express some skepticism towards that idea is last Cycle we know if we overlay two things if we overlay

interest rates you can see that eth Bitcoin bottomed out after rate Cuts right so it was about a month after the First Rate cut so the first rate cut was in July it was actually July 31st of 2019 and then eth Bitcoin bottomed out like the first week of September so it was basically just a month later um and then also what's what's actually I think a bigger signal than just rate Cuts is the balance sheet of the FED actually so If you overlay the balance sheet of the fed you can see that it was

it was precisely when the FED pivoted here from quantitative tightening to quantitative easing that's what marked the bottom for eth Bitcoin right like right here you see that right where they pivoted that's ultimately what marked the bottom last cycle for eth Bitcoin and that is likely going to happen sometime in the next few months and the reason why is it's not because it's right it's not because the FED cares about ethereum right we know they don't we they don't care about the crypto markets but the reason why we're likely going to see this pivot occur

is because you know just to to to briefly get into the macro side of things right the unemployment rate is starting to look a little scary right it sort of entered into its nonlinear phase where it's moving up a lot quicker than it had been previously um and so when it does something like this right when it I'm Not really sure why this one's a lot bigger but when when it does something like that when when the unemployment rate starts to move up this quickly that's when the FED is going to start to respond so

because the fed's reaction function you know because the fed's likely going to react uh in the next few months it likely means that eth Bitcoin will bottom out in the next few months because monetary policy is about to change Ben I I dream one day to be able To chart like you man this is just like incredible you've never tried Char I have never tried but like if there was one uh you know skill set I I could just like Matrix style somebody could plug into my like neuronet it would be like charting wouldn't be

athletic skills it be charting but I don't want to do the work to get there because there's people like Ben who who've already done it um so we were looking at some charts like where uh Ben was doing an overlay on the Eth Bitcoin ratio of like the fed balance sheet and also uh the interest rate uh and like that's really cool and so I I guess we're getting the picture of the the true driver of these fouryear Cycles it's not really it's not really the having it's more like the the like the fed and

liquidity and interest rate is that kind of the true force behind all of this yeah absolutely because you know I don't even think you can look at even Bitcoin and say that the reason it Went up was only because of the ETFs right the reality is that that Bitcoin is sort of a more volatile version of the NASDAQ and the NASDAQ right if you overlay the nas this is actually really fascinating when you look at the market this way when you overlay the NASDAQ with Bitcoin you know when Bitcoin started to go parabolic in Q4

in anticipation of the ETF the NASDAQ was also going parabolic right so it's not even I don't even think we can Definitively say that it was the ETF I'm not saying the ETF had no effect it absolutely did but my point is that if if the NASDAQ were going down in Q4 of last year then there's a good chance Bitcoin would have as well right but it was because you know we were generally in Risk on conditions but I think one thing to note and and and just another similarity between this cycle and last cycle

is that I think a lot of people have sort of said like Well what's going on like why you know why have have equities gone up while while crypto's gone down and actually what's really fascinating is the same exact thing happened last cycle right there is a period last cycle where you can see it pretty clearly where Bitcoin was going down while the NASDAQ was going up after right that was that was when that was when eth eth Bitcoin broke down that was also when gold broke out was right here gold broke out right There

same thing has happened this time right you know you can look over here and see that the NASDAQ has trended up while Bitcoin has been slowly trending down so I think a lot of the same things are playing out again I think the main difference is that instead of occurring in the preh having year it's all occurring in the having year but you could argue that the fouryear cycle Stood Still could be intact it's just the timing of everything is just offset By one by one year okay and so like let's maybe recap kind of

where we are so uh you think base cases where in the the first part the first part of uh the four-year bull cycle yet again this is only the this is the quantitative tightening uh part of it not the quantitative easing part of it which like could start after po starts to uh you know lower rates and we may be in the probably the the bottoming range of the eth Bitcoin ratio it still could go Lower but like we're kind of close to where where uh you feel like it's it's going how about eth um

you like with respect to dollars so have we seen lows there or are we going to dip below 2,000 um I've gotten in a lot of TR I'll just be honest guys I've gotten in a lot of trouble with my views on ethereum uh who's cost do you trouble it just like uh no the uh the Twitter trolls right no mainly because um like I I've sort of been of the opinion for the last Few years right if you're going to buy anything just buy Bitcoin because eth is going to underperform right and so i'

I've had this like I've had these like be goggles on for ethereum because I I just kept thinking like well why buy eth when I can buy Bitcoin if eth bitcoin's going to go down I'm starting to to to force myself to see the other side of it because I think we're as you just said right I think we're actually near the end of the eth Bitcoin downturn um but As far as ethusd there's actually kind of a pattern here as well you could almost argue that what has happened here is the same thing that

happened in 2019 it looks a lot different because it's taken a lot longer but I think I think if you overlay rates if you overlay interest rates you can see what I'm talking about I believe so do you see how this cycle over here rates only went up to 2 and a half% and then they came down MH this time they went more than Double that right they went to 5 and a half per. but if you look at if you look at the chart like this basically what happened last cycle is that eth formed

this wedge that it it was bounced in around between all right and if you put a price label sorry price label here you can see a bottom bom out around what 80 bucks around 80 bucks this this was uh not this cycle right obviously the 2019 2019 cycle um and then it had a higher low at around around 100 and then it had Another low at around 150 before rallying up and then you can see that it fell back into the wedge right before rate Cuts arrived where it went down to guess what guess where

it went down to it went the wick on this on this return to the wedge the low was n was 190 so this move from 2019 is basically oneth of the move we've seen this cycle right so instead of you know instead of eth bottoming out right at 80 100 150 and then 200 it's been just 10 times that Right 10 times all of that so you have you have 800 right a, 1500 and now this Wick that we just saw went to 1,900 right so it's basically the same thing and the reason I think

it's taking place on a grander scale is because the the the rate hike part of the cycle has taken place over a much longer time frame right so when you look at it like this right so we can see that it's just a 10x move of the prior cycle when you look at it like this you Can see that eth has fallen back into the wedge just like it did in 2019 and what's what's even more fascinating is if you zoom in here it was right after the First Rate cut the First Rate cut last

cycle was July 31st and it was right after that rate cut that ethusd broke to the downside and it occurred in the third quarter of the year it occurred in August and so the Downturn lasted a little bit longer into Q4 and then the and then and then you could argue that was the soft Landing right so that would have been the soft Landing now we ended up getting a hard Landing because of the pandemic but that would have been the soft Landing so like I I have to as as much as you know it's

taken forever right and there's been every reason to sort of you know make fun of these views because it's been it's been taking far longer than I Thought which is fascinating because I I actually thought the FED would raise rates to 5 and a half% I thought they would keep them higher for longer I just I'm I've actually was pretty Amazed by how long the crypto markets held up and I I mean I think it is a reflection that a lot of people do find Value uh you know in in the crypto markets and and

even though ethereum hasn't set new all-time highs remember last cycle it it first e Bitcoin had to break down it had to go home as as as I've said and then after that is what led the rally into new alltime highs and I mean you can see that in 2016 right I mean this rally was an explosive rally out of here right same thing um the following cycle again if you just sort of of ignore the the pandemic drop um it was getting a pretty a pretty strong rally out of that so I think that

that something similar could happen again um I'm not suggesting that People should like you know try to you know time everything right like that's impossible and and frankly I could be wrong right I mean just again just because my views on eth bitcoin have been correct does not mean that my views on on eth USD will continue to be correct at least from March because I underestimate I absolutely underestimated it so I think it's important for people to recognize that right I don't have a crystal ball I'm Just doing the best I can and actually

you know as far as Bitcoin is concerned and and the eth Bitcoin ratio I absolutely think it's time to start hedging those views right and that could just mean you know instead of being like 99 or 100% Bitcoin for your portfolio because of you know the Bitcoin dominance rally it might mean sort of tailoring that back especially as we get closer to the end of the year because that's normally when Bitcoin dominance Goes down so my base case my base case right now is that ethusd you know it still stays up here a little bit

longer above 2K it goes below 2K in Q4 and then starting next year it then bounces out of that and then and then hopefully we'll see if I mean My My Hope Is that the FED has not absolutely wrecked the markets you know for for a long time because I mean you know I think the sort of the caveat to this is as you guys as actually you Mentioned earlier is that you know what happens if we deviate off the fouryear cycle and and that's always a possibility um you know if the FED obviously if

we get a a recession or something that could that could change things right and and then all bets are off um but I I think that's going to be the base case for right now is that there's still going to be some weakness going into the end of the year and and and that is where things are turned Around and by the way when ethusd fell back into this wedge um right here it then it bottomed at 19 at 190 which is where we just bought them 10x 1900 and then it rallied back up to

right around 240 so and and right now it's you know it's right below 2400 so I'm wondering right I'm wondering if it's just going to hang out here for a couple more weeks after rate Cuts fall off everyone freaks out because they're like H the recession's here but in reality that is Just where it was always going to that's the bottom yeah right that's where it was always just going to go anyways and where we were going to find a reason for it and then there I think you could you could make a strong case

that it could get a pretty big bounce out of that I think another thing to that we all have to remember is that by the time even if we do have a recession right by the time it's declared normally the markets have bottomed by then um so I mean you know Like if if the FED comes out in 2025 and like oh yeah we were in recession the markets probably knew that well ahead of time and and one last thing I think actually that one of the really great things about crypto I think it has

a way of sniffing out that weakness before say the stock market does right because I mean crypto's been in a downturn since March um and and maybe the reason for that is in the stock market you have all these like passive 401K investing going On whereas in crypto it's not exactly the same thing so I do wonder you know I wonder if Bitcoin and ethereum have sort of sniffed out that weakness half a year before the stock market you know has has sniffed it out so by the time the markets get back down here it's

all been priced in right and then it just gets a big move out of it just like it did the last two cycles so so Ben you're you're uh your takes on ether from like the prices are are uh complex and I can Imagine how they don't make you um like a a fan favorite among the eth Bulls on uh crypto Twitter at least it sounds like you're saying basically the eth Bitcoin ratio has come home according to your predictions according to the charting that that you're doing and also the eth dollar like price is

like pretty close to home too I mean we're within a few miles of like we could see the front porch maybe like we're pretty close and like if if that kind continues into Q4 Is there a period of time in Q or let's say q1 2025 or in 2025 in general are you going to like full switch on ether you did call it a blue chip asset earlier and you said you you only consider two blue chip Assets in uh in crypto Bitcoin and uh ether can we anticipate a possible uh future of 2025 Ben

where you are like ethereum's biggest bull yeah I mean I I think that that I think ethereum will start to outperform Bitcoin in 2025 I I feel pretty confident about that again I could be wrong you know I mean again it wouldn't be the first time but I I do think absolutely that it it will start to turn around as we get closer to 2025 my my base case right now is that it it just bottoms out sometime between now and and the end of the year but what's fascinating is that doesn't mean I'm going

to go full ethereum like I'm always going to have some Bitcoin one of The one of the cool things we can look at is if you if you do like this there's this modern portfolio Theory tool this goes back like decades and decades for the stock market but if you look at a at a modern portfolio Theory simulation of say just an just a portfolio of Bitcoin and eth right let's just say I don't care about about the altcoin market to for full reference I don't actually consider eth and ALT so when I talk about

altcoins I'm talking about Everything besides Bitcoin and eth yeah and then I I I sort of put Bitcoin what well said I totally agree yeah yeah but but I also think that I I think that Bitcoin is kind of by itself and then ethereum is is somewhere in between it's not it's not the altcoin market but it's also it doesn't actually have the same type of properties as Bitcoin like it we haven't had an eth dominance rally during a high interest rate environment like it was a Bitcoin Dominance rally so but if you look at

just this portfolio the portfolio that maximizes your sortino ratio so your risk adjusted returns that does not punish positive volatility because the sharp ratio punishes POS of volatility is 80% Bitcoin 20% eth okay now for me my portfolio has nowhere has been nowhere near 20% e because I was you know I've been pretty bearish on on the eth Bitcoin pair but I will say that in 2025 there's a good chance I would I Would start to uh get my percentage eth much closer to and I'm talking about my crypto portfolio I'm not talking about my

entire net worth right just my crypto portfolio would much would probably be closer to 20% eth but not until 2025 or at least closer to it than we are right now because I still think again still a good chance that we see Bitcoin uh continue to to eat the altcoin markets lunch for a little while and by the way one more thing about that you know eth Has underperformed uh for a while now uh not only uh Bitcoin but actually also a lot of altcoins but you could argue that that is about to change as

well and I I want to show something that would you know that that kind of makes me believe that and I could be wrong about this but there's a chart if you look at all all Bitcoin so this is all Bitcoin pairs right these are all Bitcoin pairs not so this is not eth there's nothing in this Chart that includes ethereum it is total three which is the altcoin market minus usdt divided by Bitcoin okay so we already saw that eth Bitcoin has already broken down right and and it maybe it has a little m

a little bit more to go but I think it's mostly done I I think you might see it go below 04 but but that'll probably be it you might you might see it print 03 for a month or two or something but the altcoin market has not yet really made that same move and And I don't think it's because this time is different I I I think it's because it just it's about to happen and actually if you look at at monthly candles on all Bitcoin pairs last cycle you can see that it was this

month right here July 2019 July 2019 when the FED cut that was when all Bitcoin pairs started to sell off to the range low and and you can see they're trying to hold on right they're trying to hold on but my guess is that they're Going to come back down here but the the reason why I think we're about to see a pivot probably first it'll be altcoins will start to underperform eth is if you look at the same chart but instead of dividing by Bitcoin right instead of dividing by Bitcoin I want to divide

by eth right so if you do that and we look at this chart here here let me just redraw all this so you can actually see what I'm talking about all coins have been in a downtrend against Ethereum since 2018 right I mean again this is since 2018 right and this is not and and this goes to show you guys right I mean like every cycle there's a there's a thousand new altcoins but most of them just wither and die right there's only a few cryptocurrencies that stand the test of time and so when this

chart is going up it means that altcoins are outperforming ethereum right so you would have to cherry-pick times where alts are outperforming ethereum right Generally alts are underperforming ethereum because this chart is generally trending down every time that this chart has hit this trend line that's when alts start to underperform ethereum so if we think about it eth Bitcoin is getting pretty close to a low I I think right it's pretty close to a low probably within you know 10% maybe 20% maybe not even that right it's probably pretty close to a low at this

point we just looked at all Bitcoin pairs they still Seem pretty far away from a low especially if you believe that altcoins are oscillators at best against Bitcoin which I don't know why you wouldn't you know I mean you know a lot of them a lot of them are are going to just go to zero ASM totically against Bitcoin anyways but if you look at this I could see sort of the reverse happening do you guys you guys would remember this better than anyone you guys remember in early 2021 when Ethereum was kind of just

stuck at like like $2,000 and and everyone like all these alt coins were popping off and everyone was like oh sell your eth for alts and that was like the worst time to do it yeah it was the best time to counter trade right the best time to counter trade right because everyone all they saw was they were like oh all the altcoins are going doing well let's trade our eth for alts and that was when ethereum started to outperform alts I Think the reverse is sort of happening like ethereum has been really underperforming Bitcoin

for a while altcoins have been holding up a little bit better but I think that's about to change and I I think you're going to start to see ethereum outform the altcoin market and maybe the uh the trend reversal could be right around the First Rate cut perhaps right which might occur here in just a couple of weeks um so I do think that's you know I think There's a good chance we're going to see this rejected off this trend line again I I just can't imagine the seventh time is the charm you know or

the six times is the charm uh so if it does get rejected again it means that all alts will start to bleed against ethereum which by the way that would make a ton of sense because there's one more chart i' like to look at as it relates to all this and that's Blue Chip dominance right there's there's Bitcoin dominance Which we probably should talk about but before we get to that look at Blue Chip dominance so Bitcoin dominance plus eth dominance right right before rate Cuts last cycle this is June 2019 this was right before

rate cut really here's July Bitcoin plus eth dominance had a wick down to right around 71 72% and then it exploded up into after the rate Cuts arrived so if this chart here is an oscillator meaning Blue Chip dominance varies between say 58% and 80% so let's just say between 60 to 80% um that means there's still a move here that needs to occur and I think some of it's going to come from from Bitcoin some of it could come from all certain un underperform ethereum but I do think we're going to see that uh

at least part of that move right it it might not go up the entire way because um you know they they stable coins now make up a big component now so you might Not actually see it go all the way to 80 but you could certainly see it go back up into those rate Cuts just like it did you know just like it did last cycle Ben question on this so like what what does it take to get on Ben's list of Blue Chips like Bitcoin and ether are there but like everybody with uh their

you know altcoin uh let's call it says like yeah but we deserve to be in that top slot now we are a blue chip and I I could name this in previous cycles of All sorts of different coins I remember there was a time where BNB was like purported to be sort of like one of the uh eth Killers maybe and we've gone through a lot of uh you know different cycles of this what does it take to become a blue chip do you have to do certain things uh on the charts you have to

survive multiple markets is a longevity thing I think it's a longevity thing I mean I think that the reality is ethereum has been number two for what a Cycle and a half I mean I know at some point in like 2016 I believe correct me if I'm wrong but I think xrp was xrp flipped ether in 2019 yeah as well briefly right for like a week okay yeah I don't I don't honestly don't even remember I just I know that um ether has been number two or Rider on number two for a long time I

think another thing though is a lot of of alts they put in lower lows against Bitcoin right over a long enough period of time right and Actually this is this is sort of an unpopular view but which I'm no stranger to right but you know I've said altcoins are oscillators at best right like meaning they oscillate between par with Bitcoin so where they where the altcoin market cap is essentially equivalent to bitcoin's market cap and then they also come all the way down here to 0.25 meaning they bottom out when alts are 25% of bitcoin's

market cap right so if you if you overlay a um if we just put a Price label here right they bottom out at around 0.25 and they top out around par with Bitcoin okay so that's that's the that's actually the glass half full approach to look at it because and you could and the glass half full is to say this is just a deviation above the Range High and this is a deviation below the range low right but there's another way to look at that and the more pessimistic way is to say you know this

is technically a series of Lower highs and lower lows right that's a high that's a lower high that's a low and then that's a lower low right and you can even draw the price levels I mean even if you don't even if you exclude this Wick way up there just take these Wicks right and you can see it's a series of lower highs and lower lows and so for me the altcoin market collectively is a bleeder against Bitcoin right there's a chance that all it's bottom Lower than they did last cycle for all we know

it's probably not my base case because if they go to 0.25 that's probably good enough you know um but I I'll answer your question right because so your question was why ethereum yeah like why why ethereum like why why is ethereum on the list of blue chips and and not other things all coins collectively it looks like they put in lower highs and lower lows right now if you look at ethereum You look at ethereum there is an There Is An Inconvenient Truth right I think look it's better to address it than to ignore it

right there is An Inconvenient Truth that it's been lower highs since 2017 but that's the glass half empty approach right lower Highs but there's another reality that it's also been putting in higher lows right so so my my actual base case for ethereum is that it it might actually be converging to whatever The fair value is right so you have a low you have a higher low you have a higher low and then up here you have lower highs and you know I got into a lot of trouble because people are like well are you

ignoring the higher lows I'm not I I just you know these are lower Highs but there's also higher lows in here as well and so that gives me a little bit more confidence right you've gone a couple of Cycles now where eth Bitcoin has been putting in higher lows Still been putting in lower highs my argument is this you guys remember the ethusd chart this regression line you see this regression line how eusd kind of comes back to it eventually I almost wonder could you say the same thing about eth Bitcoin I don't actually have

anything fit right now but I think we can imagine right we could we could Envision a um uh where's the curve here we could Envision something like this where there's sort of like a a fair Value associated with the eth Bitcoin pair where it comes down to it sort of the the the good valuation right like the um the the great time to make the trade back if you have it right and I just wonder if that's what's going on like in the same way that that ethusd right in the same way that ethusd checks

back in with it once every few years maybe eth Bitcoin has to check back in with it once every few years and so you could be getting a situation where eth Bitcoin is converging to whatever the fair the quote unquote fair value is right whether it's 0.05 06 I don't know um I gotta be honest right like I'm not really in the camp of it flipping Bitcoin I'm not but that doesn't mean that you can't see ethereum go much higher you know like if if Bitcoin were to go up a lot in the future which

I think we we probably all think it will then ethereum will probably be right there with it you know I mean even at Even if it's still at a fraction of bitcoin's market cap um and then the other thing too is you know the eth Bitcoin pair is great to look at but it's not even probably the best thing to look at market cap might be a better thing to look at right I mean because you guys know I mean ethereum's you know well theoretically it's deflationary recently it hasn't been but I think that's more

so a reflection of monetary policy than anything else if you look at The market cap ratios look at eth market cap divided by Bitcoin market cap and you can kind of see like it it it might just be an oscillator and and and you can even see last cycle around the end of 2017 it actually it went a little bit lower and then it Wicked down and then it went right back up so I'm kind of of the belief that in order for an altcoin to become a blue chip first of all it it needs

to get to the top and stay at the top for for multiple Cycles right Multiple cycles and you know to go back to um just to give an example xrp right that was one that you got I mean what it flipped it in 2019 it flipped it in um uh or it was number two I mean I don't think we can say it flipped ethereum in 2016 ethereum just came onto the market in 2015 so it was sort of you know it was ethereum flipping xrp but if you look at at other charts right like

if you look at like xrp dominance right I mean it just you know once upon a time In in 2017 xrp dominance was like 30% today it's one and a half per. right wow so this this is the way a lot of these charts eventually go um and and that's why you have to be really careful with with individual altcoins new projects are coming online to the mantle layer 2 every single week why is this happening maybe it's because mantle has been on the frontier of layer 2 design architecture since it first started building mantle

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another way Unis swap is helping you swap smarter okay so I really like this interpretation of of eth I think that It's like not even it's not even a eth bear or eth bow take it's just like an eth a disco discovering fair market value is like not something I've actually ever considered for ethereum versus Bitcoin I've always assumed that it would Trend upwards over time and I think some people will have taken the opposite position where they always think it's going to Trend downwards over time like Bitcoin Maxis Bitcoin Bitcoin Maxis just think that

eth is like the Best shitcoin chart in crypto going to zero baby is going to zero over the longest possible time Horizons in which all the other shitcoins have already gone to zero ether is just like holding out until the very end uh me and Ryan of course are in the camp that like the ethereum road map and ether productivity eth is like one of the most productive assets of all time uh not only can you stake it and get yield but you can use it in defi at the same time blah blah Blah all

this great stuff and that productivity is going to like increase in utility and value as the network becomes more valuable and therefore it's going to go up over time but I've never actually considered that like eth hits like 7 6 point8 hopefully higher uh and then like that's its just equilibrium and it just like warps and bends around that randomly destined to be the little brother forever always destined to be the little brother that's an interesting Perspective uh and that's what that's what you believe right you you you believe in like a final a final

equilibrium of the Bitcoin eth uh ratio that it never really goes too far away from that yeah I mean there's it's a market right there's always going to be changes and who knows what happens like 20 years from now um I I'm not going to say that it can't you know I'm not going to say that eth can never go back up to higher levels um against Bitcoin it Could um I I think one thing to think about too is that the longer that we're in crypto theoretically the more mature everyone becomes because I think

a lot of the people in crypto for the last you know decade a lot we're all're we've all been relatively young right sort of growing up into our young adulthood and our you know like our 20s or 30s sort of exploring crypto and I I think we all came into it honestly somewhat immature and then we're sort of learning about Things as we go we're learning about the markets we're learning about sort of like the business cycles and and that sort of stuff and so maybe one of the bull cases for the eth Bitcoin pair

eventually could be if if a lot of the scams out there eventually go away and people sort of focus more capital on on just the the the projects that are actually doing something you know I've gotten into a lot of trouble with eth Maxis over the last few years because You know they didn't like my views on E Bitcoin because of you know they're like well the proof of stake the deflationary aspect all that other stuff that stuff does matter I I do think it matters I just I don't really think ethereum has had a

chance to shine in that way just because of monetary policy right I I think that's what's been holding ethereum back is is monetary policy I sincerely hope that that the Fed can pivot soon enough to help us avoid a bad Recession and and and that's honestly my my base case is not that we get like a a 50% drop in the stock market you know I think a lot of people look back and like well look at the dotom crash look at the financial crisis this is what happens when you get recessions that's what happened

during those two recessions but if you look at the 1990s early 1990s early 1980s there were recessions where the stock market only dropped 20% right um and so that I mean that could be Enough to to send ethereum back to its regression band right if the stock market were show some weakness and by the way I know we're getting a little top off topic here but a lot of times uh in in election years where where you have an open field where the incumbent's not running risk assets tend to do kind of poorly in September

and October just because of the heighten uncertainty and that might be spilling over into into crypto so you might you might get a Situation here where people think that a recession is what's happening because the prices are going down but it could just be due to seasonal uncertainty uh due to you know the election and that that that could be where people start to falter at you know by the end of the year if it plays out like I think it might um but yeah I I think that there's a good case to be made

that the eth Bitcoin pair is converging to whatever the fair value is right and and that People get in trouble both ways right they get in trouble thinking it's going to flip Bitcoin and then they also get in trouble calling for it to go to zero against Bitcoin because again if you're if you're just an un biased person looking at this chart if you don't know what it is you you you you immediately notice two things you you immediately notice lower Highs but you also immediately notice higher lows right I mean you know these are

higher lows and Lower highs and and so for me that just means it's it's converging to whatever the fair value is it's the same thing right I mean if you look at even if you look at at Bitcoin USD you can come up with a a very similar um uh regression band and and see how you know over a long enough period of time it's just sort of converging to whatever the fair value is and and the reason I say that I me like asset prices generally go up that's true but regression Bands more of

the gains come earlier on in its in its cycle right in its life right I mean the the more explosive gains because the market Cap's lower and then as it goes on and on and on the uh the explosiveness sort of wanes some it doesn't go up as much because it takes exponentially more money to move the market cap so it's not that it can't keep going up it's just that the rate at which it goes up goes down and I I think you could be seeing something you know Very similar happening with with e

Bitcoin but again I'm not I'm not on the camp that it's going to flip Bitcoin I don't think it will but that doesn't mean you can you know that doesn't mean it's not a good asset to hold um long term but I really like that there there's like an Elegance in your analysis in which it's just like the shape of Blue Chip charts uh and macro forces and as a result of those two things like you get a lot of different Permutations of things that you can talk about but some things that while we were

going through you were like drawing the wedge on the eth USD ratio in the 2019 um uh upswing and then you were also you know comparing that same wedge to what we're going through now but one thing that wasn't contained in that data was the 2019 plus token Ponzi so like this in idiosyncratic Market event that like isn't really like relevant to either macro forces or the ethusd price except For the fact that this this like massive Ponzi scheme was going on in China that like impacted the markets uh and then so you talked about

um well there's there's the burn that happened that was relevant for the for ethereum 2022 and Beyond but not but not for any of the charts before 2022 and same thing with the merge uh so there are things in like the actual fundamentals of this asset that are only relevant for like you know the tail ends of the chart the most recent years of The chart so how do you consider like this idiosyncratic events that don't really actually have data in the shape of this East chart that are are relevant in my opinion are relevant

or or or do you think that they're not not so relevant how do you incorporate these things into your analysis yeah no I think they absolutely are relevant I I actually do um and I I wish I wish more eth Maxis like realize that I actually do think they're relevant I I just think I think that none of that has been able to get priced in because of monetary policy and because of the weakening in the labor market right I think that you know I look guys when we go to the grocery store today right

you're spending what 200 bucks to get what you used to get for like 80 bucks you know it just means like people don't have as you know it's it's harder to to to to put money I think in in you know risky assets like like stocks and crypto it's Harder to put money as much money now into it at least as a percentage as perhaps in 2019 I mean I I remember the good old days of 2019 those were some some great times because there was no near nowhere near the amount of froth right back

then not that there was int I mean you just identified some but I I think that's the issue it it does matter all that stuff does matter it's just that it hasn't been able to come to the surface and get priced in because it's Just where we've been in the cycle right we've been in the phase of the cycle here's the chart we have to show the Bitcoin dominance chart right if you look at at Bitcoin dominance just look at 12 year candles or sorry 12 year candles 12 month candles right 12 month candles look

at last cycle right I mean it was just it was look 2017 Bitcoin dominance went down 2021 Bitcoin dominance went down and you can see three green you know three green years In between I think that's just what's happening right we're we're getting we're in the Bitcoin dominance rally it's probably going to end within you know within the next three to four months and and then next year eth you know eth Bitcoin will probably go up meaning Bitcoin dominance will likely go down and the reason is I mean eth is Number Two by market cap

so if eth Bitcoin goes up Bitcoin dominance is likely going to go down because you know Just eth takes up a large percentage of the market cap especially compared to to to altcoins or any individual altcoin um so yeah I mean I think it matters I just think that until we get to sufficiently loose monary policy it's not going to and and really what I think we should look at on uh what you know whenever whenever they cut rates I I guess it's going to be what like September 18th um I think the the bigger

story that I'm interested in I know a lot of people Looking at is it going to be 25 basis points it's going to be 50 basis points I think the more relevant story is is what are they going to do with their balance sheet because pal has been before you know like is there a chance you could continue reducing the size of your balance sheet even after rate Cuts began and he said he would he said they they could end up doing that so that might be the bigger story because remember it was when they

pivoted and They started expanding their balance sheet that's when eth Bitcoin bottom last cycle so that's what I'm interested in um more so than you know how much they cut rates by um so that's what I'm that's what I'm looking at I I think that a lot of what you guys what you said about eth you know the uh the proof of stake the deflationary component all that will matter it's just that it it can't matter when people don't care and by the way the proof right the proof That people don't care is this chart

right here I I love looking at this chart this is the uh the social risk right I don't if I don't know if you guys are familiar with this chart that I've I've shown a few times what is this yeah so let me let me show you what what goes into it right so what goes into it are things like um interest in crypto so like look at at YouTube views to a lot of different crypto YouTube channels by the way you guys are on the list right You can see bank right there's us we're

in the index yeah yeah so I've actually been tracking this for a while it takes a little while of load just because it's so many different channels but look at the Mania phase in 2021 so this is views to these crypto YouTube channels the man this is the Mania phase in 2021 these CH when we got one million views on our Mark cubin interview just like randomly right so this is when this is when these channels collectively were averaging Four million views a day a day it's like it's like 20 to 25 channels so it's

a lot of channels right that was like but you can see like you know back in early 2021 at the top there it was about 4 million views today these channels are averaging 700,000 views a day right so the reason why that stuff hasn't been able to get priced in is because people collectively have been leaving the crypto space or at least leaving the YouTube side of it right ALS So the Twitter side right if you look at Twitter and you look or X as they call it today right and you just look at at

you know followers to people on Twitter by the way you're on this chart as well Bank Clos are right there um if you it just takes a while to load but you can see whenever it does load there's some pretty major tops that you'll see occur in 2021 and actually that major spike here it basically caught the top it was when Everyone started to follow everyone on Twitter uh in crypto that's actually what marked the top for Bitcoin but you can see that this time around we're nowhere near that right we're nowhere near that so

in order for Bitcoin dominance to go up right in order for it to go up you have to have new people coming in right you have to have new people because there's a you know there's there's so many different cryptocurrencies and if you overlay if You overlay um uh Bitcoin dominance right if we overlay Bitcoin dominance and I'm just going to look at at it without stable coins and then you overlay on here the social risk if the social risk is going down so if the yellow Line's going down or relatively low Bitcoin dominance is

going up but when the social risk goes up that's when Bitcoin dominance goes down now last cycle last cycle the social risk did not really start to move Up until look right here right December of 2019 or so which was after rate Cuts so again the best chance for people to eventually come back be sometime after rate Cuts If the Fed has not induced a recession right and look there if there is a recession um so be it right I mean we just have to wait a little while longer um I honestly think that if

there is one which I mean honestly at some point we are going to get a recession right in our investing careers like There will be one um my my base case for it though is that it'll just make these assets stronger because I actually do think or at least the the the the useful ones I do think that there's a lot of people out there that will say that a recession would kill off you know the uh you know the cryptocurrencies and and and whatnot but I actually think it would it would if if we

can go through that and survive it which I think we would I think it would just make the Case stronger that it's actually an asset class that's here to stay for the long term and not just a a fluke that occurred when you know when we had sort of like a decade long bull market in the S&P 500 so my base case right now is I don't really see people coming back for the rest of this year which is why I still think Market's not going to really go much of anywhere for at least a

few more months but after you get a few rate Cuts in hopefully next year and I mean It doesn't have to be like you know January but I I do think that that sometime next year the market the market actually could pick back pick back up one more thing really really quickly uh before I forget um this year it actually does look a lot like a combination of 2016 and 2019 for ethereum if you look at um I showed the wedge earlier right so the wedge looks a lot like 2019 right but look at the

monthly candles the monthly candles for 2024 every Green Month in 2024 was a green month in 2016 and every red month in 2024 was a red month in 2016 so you can look at it right so January February March were Green in 2016 same thing in 2024 January February March were green and then April April was red April was red and then yeah and then um May was green May was green and then June Ju July and August were red just like we just had what's really interesting is that in 2016 September was actually green

which you Know maybe it's starting to deviate now because ethereum's down 7% uh but if the if September does close green for ethereum like let's say if if ethereum can rally back up to like 2500 or something um then and then and Q4 ends up being red then you almost wonder is this the same p pattern that's playing out over here in 2016 the reason it's slightly different is because in 2016 it always held these range lows right except for the the last Wick whereas This time it is not right it's actually gone below it

and the reason I think is because it's a combination it sort of looks like 2019 as well I think it's a combination of 2019 and 2016 and in both cases January February of the following year were green um and normally ethereum when it does outperform Bitcoin it it's typically in q1 and Q2 because we know normally Bitcoin outperforms the rest of the market in Q4 right if you think about every major top 2013 2017 and 2012 Was the end of the year um so I I I could see that I I I absolutely could see

that playing out where there's just kind of some weakness like you were talking about earlier a boring Market a crab could still go lower and then next year the market picks back up it's so funny Ben just from a like a Vibes perspective like we're obviously we're uh Bank we're very plugged into the ethereum community I I just put a I tweeted this out last week which is like I have I've not seen I've seen uh eth sentiment this bad in crypto two other times and the one time was after the Dow hack in 2016

and the other time was like 2019 like December it felt like there just like eth would never recover eth was just gas it was just like destined to fall a zero uh you like in comparison to bitcoin and like now now in 2024 so The Vibes line up with that as well I just want people to know like you know if you've been holding on to ethereum And and you're looking at the analysis like don't pretend like I know what the Market's going to do I don't right and again I'm I'm it's more of like

a if this happens then just know it's what happened last cycle it's not this has to happen because me me saying this has to happen has gotten me into trouble many many times um so I'm not saying it has to happen I'm just saying look if by the end of the year ethusd Falls below this this you know kind of like it did right There then it it would really just be playing out like it did in 2019 furthermore one thing to consider right we we've we've seen eth Bitcoin dropping basically every month for how

long now like or every quarter for how long now right eth Bitcoin last cycle it bottomed right here right after ethusd fell below that trend line so if ethusd does fall below this trend line right and and and it occurred after rate Cuts right it occurred right after rate Cuts if it Does is that might be the eth Bitcoin bottom right after it falls below there and then it it could pick back up as soon as as soon as Bitcoin does Ben I want to cross reference uh something that you said and Tai B on

the conversation going going back to the idea of like the eth BTC ratio discovering some equilibrium and kind of just like staying there uh and then also about like uh proof of stake the merge you know eth productivity also being More new in the chart than rather than being part of the chart as a whole uh uh how do those things actually square up uh because we have the the lower highs and the higher lows but we also have these two new like functions in the eth value acral mechanism that actually are not related to

the previous highs uh and so uh I'm I'm just wondering how you kind of can square those things because we have the the converging triangle but we only have so much data about the Actual strengthening of the ethereum fundamentals in like the last 18 months or or so do you think that that means that we could set higher highs than what the actual like wedge is alluding to that is my hope I mean like anything's possible I mean you're not going to hear me say it's not possible because I've seen some crazy things I mean

I I remember seeing when eth almost flipped Bitcoin in in um in uh 2017 it was actually in in mid 2017 I think a lot of People think it was back in in January 2018 but it was actually in the summer of 2017 ethereum almost flipped Bitcoin it came really close and that was why that was actually where the flipping came from because it actually almost flipped it right and ever since then it has it was actually this top right here right it was this top right here June 2017 is where it almost happened um

look my my base case is is going to be that it it it like that it's it's converging To a fair value I get the argument that you know it's deflationary now and it and it didn't used to be and it's proof of stake now and it didn't used to be but I think maybe the biggest Counterpoint to that think King and and I'm not saying you're wrong right but I would say the biggest Counterpoint could just be that it's not like like there has been also improvements with Bitcoin right like the the the Bitcoin

from 2019 when there were no ETFs and and there Was really no I mean there weren't even I mean now there's also ordinals and you know there's other stuff going on in Bitcoin that stuff in 2019 you know Bitcoin in 2019 is a lot different than Bitcoin in 2024 right so you're not you're not comparing the fundamental improvements in ethereum to what Bitcoin was in 2019 we're comparing it to what Bitcoin is today and the reality is is you know the ETF flows for Bitcoin were a lot better than the ethereum ETF flows And now

that might be because it was just a risk-on environment when they were launched as opposed to ethereum it was kind of a risk-off environment I don't know but my my only comment would just be that it could just be simply that there's also things that have improved Bitcoin over the last few years so you're not comparing ethereum to Bitcoin in 2019 you're comparing it to what it is today Ben if you are a maxi of any type you're definitely a chart Maximalist I'll say that and I I think that is a very valuable lens on

the world um you know D David and I kind of like look at your fundamentals the community the projects we don't uh often look at charts in the in-depth way that that you do and I think that provides some great value to the analysis we spent most of the conversation so far talking about like where we are currently in the cycle and where we have been let's talk about the second half of The bull market so let's say we get monetary policy in our favor what happens with the quantitative easing uh phase of the bull

market to these prices yeah so my my thinking here is that so here's the logarithmic regression band right my my base case is that if it if if you know I I was assuming it's going to stay around 2K for a little bit longer but if it does drop down here my base case is that it will get a big bounce out of it in 2025 Which talking about ether here eice e USD yeah eth USD um that would be my base case at this point um I know some people are calling for it to

go you know to just go to zero right um but I I'm still in the camp that it's like you know it could be like that 2016 move that you know that 2015 move this by the way the 2015 move was also in Q4 right so it was in Q4 2015 Q4 of 2016 Q4 of 2019 also Q4 of 2018 right so a lot of times when it goes down here it's in Q4 Of of whatever year it's going to so base case is that it will come down here I don't know how low okay

so don't like squint on here and try to see like where it's going to go I again I I don't know and and also by the way the the regression line is moving up um so like what it is today is going to be different than what it is a month from now two months from now three months from now um Etc and and so my base case is that it'll it'll come down here and Then it'll get a a a move move out of it um and look the Optimus yeah again I I don't

know if it's going to go that low actually my base case right now is that it it just goes home home is the the the middle part of this trend line um so it would it would actually technically be like okay look at look at 2019 ignore the hard Landing for a minute right ignore the hard Landing this low here was a higher low it's a higher low than what It had in the bare Market year so it's a higher low so so you could have something similar right where it ends up putting in a

a higher low and a lot of people think it might go to a a lower low but it might just be like 29 where it ends up being a higher low and everyone could be like oh well now you have a recession and a hard Landing but you know there's there are there's a chance you get a a soft Landing um so again I don't know exactly Where it's going to go I would say that if it goes down there it probably wouldn't spin very long down there right I mean um the last people and

get out of there right I mean the last two times it went there it was only there for like a month if not even that right a couple of weeks if if that um so if it does I I think it would be relatively shortlived and then I would guess that it would get a big bounce out of it in early 2025 kind of like kind of like it did over Here in 2016 kind of like it did right here in in early 2020 that would be my my base case and look it it could

certainly go to all-time highs in in 2025 um my the only the only way that it wouldn't in my opinion is if there's a a nasty recession but I would actually contend that you could even have a recession and and still and still theoretically go to to alltime highs um so like that that that sort of stuff is Is possible um as far as exactly where it's going to go I have absolutely no idea you know absolutely no idea um I'm not going to to to just put out a price prediction on on how high

it could theoretically go I would just say well well let's see let's see if that plays out first right let's see like there there there's a chance that it I it might not even go below this trend line you know um and and it and it might play out differently than it did last cycle I Mean the market always likes to keep us on our toes so I would say if it comes down here and and it looks like the fed's turning the money printer back on and and and it looks like eth Bitcoin is

in an uptrend then I would say I don't know where the high I don't know where the Top's going to be but I would I would certainly want to be bullish on ethereum at that point and no idea where where it actually tops out okay so say we have a bullish 2025 let's say the Recession is either delayed or just like not like not so bad or something like that what does 2026 look like is that you like how does that analog to the four-year cycle is that are we in this 2026 uh you know

2021 or something like this I guess it's not really four years apart but uh yeah what what does that look like my guess is that 2026 would be a bare Market honestly oh we're back to the bear okay so full cycle too soon but I don't know like I I don't know I I Really don't I I mean look uh 2014 2018 2022 all midterm years all bare markets um there there's actually one there there's there's two analoges that might be relevant in thinking about how this could play out one of which is actually what

happened with the S&P in 1980 in 1981 and the other one's from 1946 to 1949 so just briefly in 19 um 81 and the reason why the 1980 1981 I'm bringing it up is because it was also coming out of a period of high Inflation right it was there was a high inflation back then um and what happened was the market right here you see this selloff the selloff right here in the election year it was it it was a recession right it was a recession but you see it was very shortlived right it was

very short lived and actually the better way to look at it would probably be over over here so I'm going to pull up um uh this chart or actually let me pull up Um let me pull up a uh I want to get it with um recessions and everything like that so let me just go to let me just add it really quick just give me a second so I'm just going to go to the macro side we're going to Overlay recessions and you can see with Bitcoin there's only really ever been one um but

if we go over here and we add in the S&P 500 and then what we're going to do is we're going to get rid of bitcoin's price you Can see that in 1980 to 1981 like you see that little that little recession right there and then there was a there was a longer recession later on um so you could get something like that where like you know ethereum does this like it sort of drops into the end of the year rallies up sets new all-time highs in 2025 and then I you know I don't I'm

just sort of go into the end of 2025 and then sort of Bleeds again into a recession right kind of like 1981 and then and then sort of keeps going up from there and that would be a way that it could continue to follow right the logarithmic aggression trend line right where it just you know it checks back in with it every so often but it still generally Trends higher the other analog is 1946 to 1949 um and the only reason I bring that up is because that was also during a period of high inflation

all the money printing that Followed that was in World War II and you know what this reminds me of this chart right here it reminds me of of the altcoin market actually um because if you if you actually again if you if you take a bar pattern here and and then just overlay that this would be the more optimistic view um because you know instead of getting a recession in say 2026 if there is sort of a a one here at the end of 2024 if you look at the altcoin market um and and you

this is The 1940 this this yellow line here is 1946 1949 S&P um you can kind of see like how similar it is right it it is really similar and so you know if there is and I'm not I've not lined it up perfectly but you know I think you can kind of see it right um if it does follow suit you could see the altcoin market sort of sell off you know like into the into sort of the end of the year and then bounce into into 2025 and then that just is the low

right that is The low um and and and then you go up from there so that that's also I think a um a relevant a relevant comparison Ben uh you frequently bring up the uh monetary policy of the fed and and QE and and money stuff uh what how do you wait the presidential election uh much less related to the value of the dollar but still kind of seems to be every everyone's focus at the moment like what what are you thinking about with the US election as it relates to the charts Yeah well I

mean normally as I said earlier right if if the incumbent is not running the the stock market it normally does poorly in September and October and actually this is going back a long time if the incumbent is running the market generally Trends up into election so market so basically incumbent not running Market goes down into the election if the incumbent is running Market goes up into the election why is that because of uncertainty right when The incumbent is running it normally the incumbent usually wins except for when there's like you know if there's a recession

the incumbent can lose but normally the incumbent wins just because right you know as long as the economy is not absolutely crap right uh then the incumbent can often win and so when the incumbent is expected to win it's not that that incumbent is necessarily better or worse for Market the markets don't like uncertainty right so like if You look at at sort of prediction markets for who's going to win this election it seems like it's flip-flopping every couple of weeks or so right and so I think the markets just don't like the uncertainty of

is it going to be person is it going to be that person so what and by the way uh 2016 was an open field election right I mean you know it was um Donald Trump versus Hillary Clinton running back then and if you actually go look at at Monthly returns by the uh by the stock market in in 2016 you can see that August and September were red right I mean and also October right so you can see that the S&P actually trended down into the election and then in November after the election the markets

picked back up right after we knew who the president was going to be so I think my my base case is that you know there's just weakness going into the election because Of uncertainty and then following the election um and especially out in 2025 once there's more certainty that's perhaps when when the markets can can start to pick back up but that's kind of one of the reasons why I just think that you know when you when you don't have when you when the markets are are extremely uncertain about as to who's actually going to

win there's more you know there's more volatility in the markets Ben your portfolio what are you Holding these days man so as far as crypto I've basically just been holding Bitcoin 100% uh for my crypto portfolio yeah well not 100% it's like 99% um I'll call it 100% yeah basically what I did was in early 2022 I converted all of my alts to bitcoin um in like January February so I it took me a couple of months to really recognize that it was over you know from November of 2021 um and then I traded my

eth to bitcoin uh it was actually really funny Um I I traded my e to bitcoin right here and I felt like right before 30's Capital got liquidated yeah so I I I I felt like an absolute genius cuz I was like all right I'm trading my I'm Shing my e Bitcoin at 0749 I remember like you know putting that out 0749 and not all of it but a lot of it and I felt like a genius because it came down here and I was like I was like bragging and I was like oh look

at me and then and then it it ripped my you Know I had this face ripping rally back up and and it really humbled me you know I mean I think the long markets were like yeah the markets humble everyone uh but you know basically what I did was I I think I converted a little bit here I also converted a little bit here and then a little bit more up there um sort of going into the merge and the reason why was because it just looked like a sort of like a secondary distribution phase

almost um but now I think we're You know we're getting into sort of this phase over here where it's just trying to find a bottom and it's just waiting um so yeah I traded my ALT to bitcoin traded e to bitcoin back then and I've just been riding the Bitcoin dominance rally now I do have some other things besides crypto are you curious in that are you just mostly interested in crypto I would say mostly interested in crypto I have I have further qu crypto portfolio related questions sure yeah I Mean it's basically just uh

just um just Bitcoin and I I have some stuff I mean I do have some eth uh you know I I as as bearish as I have been on ethereum uh I I think it's foolish to not have at least a little bit in case you're wrong well but you have been bearish but you're actually bullish on the ratio in the in the future soonish yeah I was going to ask you Ben are you going to get back to kind of the the modern portfolio Theory construction of the Optimal eth which is 20% plus you

have some catchup to do my friend you should get to at least 30 or 40% I would say Let me let me uh let me let me help out here for a second with the with the modern portfolio Theory stuff so back in um uh a couple years ago it would have called for higher ethereum allocation so basically if if eth Bitcoin does bottom out in Q4 or or even you know even in September right it's possible bottoms out in September in fact it bottomed in September of 2019 right so it's possible just Bottoms in

September 2024 um then a year from now this number might actually be higher than 20% if ethereum starts to outperform bitcoin but this number has just been continuing to Trend down because e just keeps going down against Bitcoin right I see so so and so back then I think it was closer to like 7030 like if you had looked at this two years ago it would have said 7030 and it's just slowly changed to 820 my guess is a Year from now or maybe a year and a half from now it'll probably say 30 again

my my guess though for me is I'm probably not going to go above 20% just because I'm I that's just where I feel comfortable well there's also there's also pain in like exchanging one asset for another at least in the US like you have um tax uh you know taxes to consider in the analysis as well right so you have to pay cap gains on on whatever so that that's a confounding Factor that's why I said you know if you haven't you know if people are looking at the eth Bitcoin chart and trying to figure

out if they should trade their eth for Bitcoin now I'm like look even if it does go down a little bit more you're probably going to eat all your gains in in taxes you know right um so it it probably you know I wouldn't I personally I wouldn't make the trade now I would have made it you know I made it two years ago um now I think it's time To sort of look for the reverse trade and and some people have a hard time with that because they don't want to they don't want to

trade in their Bitcoin and I don't I don't necessarily fault them for that you can also accumulate ethereum if it does go to the regression man you want to accumulate you could always just accumulate it with good oldfashioned US dollars right um and and that way you're hedged either way so um yeah those are my views I mean I think 8020 is and by the way there's there's two of them that's the sortino ratio if you look at the sharp ratio it's actually 7624 so it would actually be a little bit more e Ben this

has been uh great a lot of the charts you showed us are actually part of the uh your ecosystem that that you built today into the crypto right which is like fantastic I think there's a subscriber product for that too which uh we'll include a link in the show notes L the people are There's if you guys haven't like gone on to the YouTube and started watching the video by now then you must clearly just love podcasts but there is there's been this like dashboard that's Ben has been uh just like cruising through which he

built a company at his company into the cryptoverse uh and if you want access to that there's a discount code so you can get access to it in the show notes actually one last thing um this is the theorum risk metric um and actually What's really cool is is you can see like in 2016 and in 2019 when e Bitcoin broke down it bottomed out between. 3 to point4 risk right so right there. 3 to4 and then in 2019.3 to 04 so that's where it ultimately bottomed out right now it's at 0.5 0.5 risk so

if in Q4 you see it between. 3 to 04 uh that could be the low you heard it here this has been great thank you so much for guiding us through the charts today uh we appreciate your work and uh we'll see You around thanks for having me thanks guys we'll got to let you know of course in an episode like this none of the were price predictions none of this is financial advice all Vibes it's all Vibes it's Vibes but there are charts backing those vibes as always in crypto you got to know crypto

is risky you could lose what you put in but we are headed west this is the frontier it's not for everyone but we're glad you're with us on the bank's Journey thanks a Lot