167. Bitcoin Strategy, Creating Your Edge, How To Not F*ck It Up & The Winning Mindset w/ Checkmate

I went to one of the bitcoin bush bashers, which if you haven't gone, by the way, in Australia, you should definitely go because they're fantastic and Tim is one of the guys who hosts them. He had this great line, he goes, what do you spend your bitcoin on? And he had the perfect line, whatever you want. Because it's your savings and you should spend it on whatever you want. So don't fall into the trap of believing that you need to hold this thing forever. And I know most people who hear this, I'm not talking about selling the whole stack. No one's going to sell the whole stack. Once you understand what bitcoin is, you can't, you physically can't do it. Now we're going to have to pry it out of your cold dead figures. But 10%, 5% to improve your life and reach that savings goal that you needed, do it. Because that's what it's there for.

Welcome back to another episode of the Ben and Bergs Podcast. I'm Ben, your favorite high school dropout and founder of collective shift alongside Ms. Burgs, your favorite MBA and CEO of Collective Shift. Join us as we bring you world class crypto research and strategies to help you dominate this crypto pool market as well as behind the scenes view of us scaling a fully remote subscription research business here in Australia. And if you like the podcast, we'd love for you to share it around. Share with a friend. It's how we grow the podcast and we are super pumped to bring back one of the best analysts I know in the space, Checkmate James from Check on Chain. He's now the lead on chain analyst and founder of Check on Chain and he's a strong advocate for onchain education. He has a background in civil engineering and has been a pioneer in the world of bitcoin on chain analysis since its inception in 2018. He started producing educational content for on chain analysis in 2019 and has been a student of markets ever since. He's also our lead on chain analyst at Collective Shift and we're super excited to have him on board today, mate. Thank you. You're over, over north. You're in, in Texas, mate. How is it?

I am, man. I'm on the other side of the equator. Thanks for having me on.

No man, it's good to, good to have you on, mate. I know the, the barbecue over there is pretty good and you know, you're speaking at a few events and you're pretty busy, man. So, so thanks for finding the time for us.

No worries. No, it's been good. So we're, we're in Texas at the moment, on our way to Nashville for the conference. But no, it's been great. We haven't got the barbecue yet. That's, that's, that's the next step in the, in the journey. Now we have done the rodeo though, so we've seen the rodeo in Dallas, which is pretty hectic. The most American thing I've ever seen in my life. Guys riding around in a pen with, you know, American flags and the anthems going. It's, it's a whole thing. It was fantastic.

It's a bit like the crypto market, I think, mate. Just like people screaming at animals and riding down.

Oh, no, it's great. It's very. Reminds me of markets, right? That's what. It's pure chaos all the time. But we all get involved and it's great.

I love it.

And mate, you're speaking at a conference. Tell us about the conference. And there may be a special guest.

Yeah, no, so, so I got an email this morning which went up to all the speakers saying, okay, so for this from the Bitcoin 2024, like, yeah, we're going to be shuffling around a couple of speakers because we've got a very special guest. And I was immediately like, I mean it's, I know who this is. And of course they announced it today. It's, it's, it's Mr. Donald Trump. Now we're talking before it's like, I mean, look, I don't particularly care too much for politics, but what I am here for is the circus. Because we're all in the circus. We can't get away from the circus. It is what it is. I'm just wanna go and see it. I want to go and see the zoo.

It's gonna be a zoo, mate. It's gonna be. You still have the content, right? It's great.

You know, all I hope is I'm not talking about on chain by myself and some back alley, you know, stage that no one's at because, you know, there's false presence talking. Yeah, exactly.

You do know that if that happens, the, the real, the real believers made, the true degenerates will be in the crowd for you.

If anybody, if I am on at the same time as Donald Trump, if you are in the audience, you get a lifetime free subscription to the user, hands down. That is, I mean, that is, that is a guarantee.

Those are true friends, mate. Yeah, well, we got, you know, a lot to Talk about today and for those listeners, like, you know, I've been working with, with Checkmate for a long time now, honestly the best on Chain Analyst, you know, going around in the space. It contributes to our membership platform. So for those members that listen in, you know, you've obviously listened or seen some of his content today. We really want to dive into like where we are in the market. There's a, there's a little bit happening. Right. We've obviously had a pretty big correction. We want to talk about that, we want to talk about why that might be the case. We want to talk about the impact of some, you know, an entity like the German government, you know, offloading billions of dollars of Bitcoin and then also just talking about this, I guess this, this differentiation of sentiment and how we've gone to real, you know, levels of fear that we haven't seen in, you know, probably 12 months. But yet fundamentals still seem quite, quite positive. The S and P ripped new highs over the last sort of 24, 48 hours. So it seems just this like real differentiation of, you know, what's happening in outside of crypto versus happening inside of crypto. So let's start with the current correction, mate. Like what's your sort of take on it? You know, for me and the way we're looking at it, very normal. We had these corrections in bull markets. Are you seeing anything that we should be concerned about or you know, just any insights?

Yes, I mean, so we started the, the Check on chain newsletter in April, mid April. So I've only been kind of analyzing this correction right now. What's quite interesting is, is yes, we definitely had a run up that I would classify as a top. It was a meaningful top that came in, in, in March, you know, 73K, whatever it was, this is a non trivial top. And you know, if you think about what actually happened, we went from the ftx bottom at 15k to 73k with basically no corrections. Right. 20% at most. This is nothing in a bull market. 30%, 40% are regular. All right. And we've had a couple of them where you actually have these like big nasty drawdowns like 2019 where it can get to 50, 60%. So in many ways the fact that up until most recently we'd only had a 20%, it's telling you that the market is actually really, really robust. And I've been calling it quiet and trending. When you look at the market from a volatility standpoint, it goes up and it goes sideways. It Goes up and it goes sideways. Now that is really, really stable. Now if you, if you Contrast that to 2021. 2021 we went from 10k to 64k with basically no pullback. It was just a rocket ship straight up. Huge spot bid from GBTC, 660,000 bitcoin, like four months. Just insane stuff. When you have vertical moves like that, it builds basically no support on the way up. So more than likely you're going to backfill that at some point in the future, which we did 2022. Now what we're currently doing is building. It's all. I mean, you literally take a leg higher, pour a new foundation. Take a leg higher, pour a new foundation. Really, really stable price action. Now within that context, this current correction is the deepest. I think we got like 35% or 32% or something. It is still really, really structured. And you mentioned the fear. The fear is very real and it's palpable. You can see it. People are panicking. And I'm looking at this thing being like this looks like a really structured uptrend, guys, like on a monthly scale. And this is where I think a lot of people, it's very natural. So a lot of people do this. They get a new piece of information, right? They hear about a cool story, they listen to a bull talk about the market. They talk, they hear a bear say it's all over, whatever it is. They get a new piece of information. And once you like go, you know what, that makes sense. People start expecting that to occur on the next hourly candle, right? They expect that information to be happening. But what happens is these things take a long time. So too many people are looking at the daily and hourly time frame and projecting that to the monthly time frame. The monthly time frame is like a, an aircraft carrier. It, it takes a lot of time and a lot of effort to turn that thing around. The trajectory of the monthly is up. It is just heading higher and generally speaking, the monthly will continue that like that is the momentum. It's immune to the, to the waves, but it takes a long time to turn around. A monthly uptrend has weekly scale corrections. Now here's something that I found is a really nice grounding anchor. Markets have to go down to go up. And it sounds stupid, but if you have a market that doesn't go down, you run out of fuel. Now you can also go sideways, right? You can just grind sideways and kind of reaclimatize people. But there is, there's a lot of things that can Stimulate higher prices. And there ain't nothing quite like the market selling off, washing out all the people who never wanted to watch the end of the movie anyway. Giving all those coins to people who belong here and then who's left to sell? Then it gaps up to the next price zone. Because I know that the coins that I've acquired during this correction, you know, I'm not trying to be the ultimate bottom buyer. I got a couple of coins that are underwater, not by much, but I'm not buying coins at 60k US or 53k US for 70 or 80. That's not what I'm buying them for. Right. They're going to be a much higher price point. So these things are a process. I think getting that time frame component, the monthly is doing just fine. You're looking at too many hourly charts, if you're concerned, is my view.

Absolutely. I saw a tweet of yours recently and I'm so happy to hear someone take this long term view because people freak out, like you said. They get one piece of new information and they use that lens and they expect to see it everywhere. And one of your recent tweets was the narrative will be, oh, it's strong hands and people are accumulating, but in reality it's ETS for the last five months that are accumulating and you've looked at the data and you know exactly what it is.

Yeah. So that's the, the long term holder supply metric. And this is one of those on chain nuances, which to be fair, there's a lot of them. You've got to spend a lot of time in proof of work to know what you're looking at. But long term holder supply is a very popular metric. It's very useful, but it has two modes when it's climbing and when it's declining. And they have very interesting nuance about it because long term holder supply is a. It's the amount of supply held for more than five months. Why five months? Because statistically speaking, once a coin is held for five months, it's less likely to spend. So it's kind of been taken off the market, doesn't matter, it's not coming back. But it's probably not yet now, what happened five months ago? Right. We're in early July. So five months ago we're seeing the ETFs are now live, those initial waves of coins are being acquired. Long term holders sell into the peak and we saw a big decline. And here's the nuance. When a long term holder Spends their coin goes from five months, six months a year, two years to zero. That the age of that coin. So it's immediate. The moment they spend it, long term holder supply will decrease. But the guy who bought that coin, he may be a hodler, but he's not going to show up as an increase in long term holder supply until he hits that five month holding period. So when you see long term holder supply, a bunch of people are going to be out there and it's going to happen in about three weeks. There's a bunch of people who are going to go look, long term holder supply is increasing, they're accumulating. It's like no, they accumulated five months ago, they're just crossing that age threshold today. So yes, it's not a bearish sign because people long term holder supply climbing means that they're not selling but that doesn't mean that they're buying, means that they did buy and they didn't sell. So it's like a, there's like a time delta between these two things and that's important.

This is a very important thing with statistics as well. So if you model this out and then you have, you know, that tipping point of kind of five months, you're more likely to hold onto it for a longer period of time rather than, you know, sell. That's like the tipping point. You go into another bucket. Like that's super important. And the nuance that I get from you that I don't get from anyone else.

Yeah. And it's really cool. I've been trying to break down and simplify on chain data. I did a piece a little while back which kind of breaks it down to like this three by three grid matrix. You'll see it on my website. There's like a big button there you can't miss. And it basically like how do we. What is on chain data? It's slicing and dicing the supply. And I broke it down to three axes. The first one is are the coins moving or not? Right. Because guys, long term holder supply, these are coins that people hold holder weights how many coins that people hold. Then you've got spending because spending is people who are buying, selling, depositing, withdrawing. They're coins that are mobile. That's the dells of the change. You then got another axis which is in profit, in loss. Are they holding coins that are really up on their position? Right? Are they in profit? That's gonna be good for mood, good for sentiment. If there's a bunch of people who are holding coins at 70k and prices at 53. They're probably a bunch of people who aren't so happy. So you've got this like sentiment baked into are they in money or out of the money? People take profit or they capitulate at the bottom. But all of those give you different signals. And then the last one is cohort because we can also say, well, who, who is buying coins? Who is selling coins that are really fat? L. Who is like taking profits? Are they people who've held their coins for two weeks, six months, four years? Right? Are they the German government? Whoever it is, we can use that cohort access to go well. And who is that? Right, so you can kind of get a bit of a cross section. What is the fast money doing? What are the smart money doing? What are the dumb money doing? What are the government's doing? You can kind of see all these different angles and get a bit of a read on stuff. It's great.

And what's your take mate on just this recent correction like who, who are the, the folks that are selling? Again? You know this, this might be obvious to us, but I think for a lot of maybe our members and our, and our listeners, like people forget that there's so many different dynamics in, in bitcoin and crypto. Like, you know, I, I had a message the other day of going oh, but there was a hundred million of you know, bitcoin bought on the etf. Like why is it going down? It's like, well you know, that doesn't really work like that.

Yeah, no, this has been a world of nuance. So there's a whole lot of different angles. We recently, probably about, I think it was June or May, I think, yeah, we kind of came back towards the all time high. We didn't quite get there, but we were going that second attempt and there's a whole lot of ETF inflows. Now A lot of people obviously go, hey look, ETF inflows number up good. But the reality of what was actually going on is at the same time that ETF inflows were occurring, CME open interest was rocketing higher. So this is what's called the cash and carry trade futures. When they traded a premium to spot, you can buy spot and sell the future and just hold that position. Now at the time they were locking in 10 12% premium. Now a lot of these big dogs know that we're in a consolidated. You can't go up for 18 months and then just keep going. You need like 18 months of upside, six months of sideways to correction probably feels about right. Six, seven months. So it's just like on a scale of timing, they know they're going to have to wait, so they get paid to wait. I know markets are going anywhere. I'm going to buy spot sell Future funking at 10%. That's twice the risk free yield on a Treasury. That's great. I'm getting double my return. I might as well just sit here and cash essentially, it's more or less a risk free trade. So when you look at these different dynamics, that's why ETF inflows aren't necessarily bullish because there's a short on the other side and then when they unwind the position, they've actually got to sell the ETF and long the future. And there's all these dynamics. You've then also got these, these big sellers, right? There's been people who are talking about miners. Oh no, the miners are capitulating. It's like guys, the miners capitulate all the time. They're just like an endless business that never makes money. They're always capitulated. What are you worried about? So there's miners, there's the German and the US government have been selling. There's been people worried about Mt. Gox. There's people who are worried about Mt. Gox sellers and they haven't even got their coins back yet. It's hilarious. So my like big picture take, I don't remember it might have happened, but I can't remember the last time I interviewed the person I bought my coins off. I don't care. So like people worry about all these specific entities. Like guys, one bitcoin sold is one bitcoin sold. I had a whole bunch of people in the, in the run up being like, no, it's not GBTC outflows. They're just rotating into another etf. So I did some quick numbers. I'm like, well gbtc, even if they were not just, they rotate the whole lot, not a single GBTC coin was like sold. They only represent 20% of the market. Hodlers are the other 80%. So as an engineer, I don't really care what the 20% is doing. It's kind of useful. But I care a lot more about the 20% of guys that like give me the dominant factor in the market. Now this is not to downplay the fact that yes, miners are sellers, yes, German government is selling, you know, whatever, a couple of billion dollars. There's all these factors. These are real. It is clearly and obviously A headwind. But what is actually more important is the fact that we're only down 30% and people forget the demand side. Why we aren't higher is the demand hasn't been high. We mentioned equities and things climbing as well. That's maybe the next pivot point. But we've seen a lot of money. The whole world is a relative game. People have been buying Nvidia because it's a 2017 Bitcoin parabola, right? It's going up faster than everything, right? Not even shit coins are going up as fast as Nvidia. So it has been sucking the life out of every single market and money just goes to where it's best treated. And Bitcoin, after 18 months of upside treated people really well. That money's gonna go and look for somewhere else and get paid to wait by holding other stuff, doing cash or carry trades, whatever, until all these headwinds go away. Then that money will come pouring back in. Right? Same as gold. Gold's been going sideways. Unfortunately gold bugs don't have the voice that bitcoiners do. So that's, that's on them.

You make so many good points and I think going right back to where you first started and this is what something we really drill in, you know, in our content. It's just people are so impatient and they're so short term thinking that you know, the market's down 5% in one day and you know, people are wetting the bed. It's just like crypto's so volatile, like you just can't be looking at, you know, even the monthly like for, for, for, for most people, unless you're full time tradition trading in this space, you should in my opinion be looking, you know, months if not years into the future. You know, in the, in the short term these markets are volatile. You've got traders, you've got governments, you've got individuals, retail OG whales, ETFs. You got so many different dynamics in this space that it's just always going to be constantly going up and down. But the, the sentiment, mate, like just human psychology is so fascinating. Just, you know, we, we've gone from 15k to 70, pull back to 60, chopped around and then, and then we dropped to 55 and it's just like, oh my God, it's all going to zero. Like that's amazing how things switch so fast.

And this is what on chain data is really good for because you know, there's a very easy angle which I think is, is lazy. But it's easy which is to say oh just have a long term just zoom out bro. Just have a good long term view. It's like okay that's, that's very sound advice but most people like what the hell am I paying you for if you're just telling me six times enough right as an analyst like what so so yes the, the broad picture is don't lose view of the monthly chart because it's, it's heading higher. That's. That's what's going on here but also we want to be how do you find edge in this stuff? And you mentioned sentiment and this is what on chain data is just so good for. The truth is and we've all been there where you buy and like within 30 seconds of you completing your order you hit the green button. It sells off like immediately and you're like you've all done it right.

And it's usually every, every time bergs it's the buy it's down.

Yeah exactly. So so you buy market sells off. You then hold it. You're like don't worry it'll come back goes down another 5% it'll come back and eventually you go it's not coming back. I'm going to buy back lower and you sell and then it goes right back to your previous cost basis. Right. We've all been there. Now when we look at my fate one of my favorite metrics is sober. You'll see me use it all the time. You'll see a big red candle of at we're specifically looking at short term holders people who recently bought and all those guys who bought 73k. The truth is most people are shit traders. That's just a fact we want to watch when they buy off some guy who's selling at a profit you'll then see them collapse and they'll sell everything at a loss. So within the scale of this monthly uptrend what on chain is really powerful for is helping you find I want to buy as much corn as possible. Help me DCA at the right time. I probably don't want to buy when there's a whole bunch of guys who've held for two years selling into strength and taking huge chips off the table. At some point that sell side is going to form not maybe not the top but a top at some point because the market has to come down to go up. So when lots of guys are taking profit, don't buy. Just wait when those guys who did buy because they weren't looking at these this data and they weren't listening to this podcast. When those guys buy and then they hold and they hold and they hold and they finally capitulate and go, stuff it, it's going to 10k, right? I'm listening to my favorite trader. He's bearish. He says it's going to 4K that when they sell. And usually this is a time when you get a bunch of people getting squeezed out of their longs. And you see it in futures, too. On chain of futures tell the exact same story. Guys will. And we actually saw this. This cycle. They shorted from the moment that the ETFs went live. They shorted all the way in a 73k top. They then continued to short into that second high in May. And at the absolute pico top, right before we sold off, they go, all right, this short strategy isn't working. It's going up. I'm going to go levered long. And they did. They started going levered long. And of course it's been down ever since. This is how markets work. So what do you. Within the context of a monthly uptrend, we're going higher. But if you want to maximize your dca, look for when the guys who aren't listening to this podcast, who aren't listening to any of this content, and they're buying high and selling low, buy their blood. Because, I mean, back in, I think it was April, we had that first correction, like 53, I think we tagged. And I released a report which basically said, this is how I'm thinking about this dip at the start of a bare market. It looks exactly the same as the bottom of a bull market dip. So it's like, what, what bet am I going to take? Right? It looks like we're in a monthly uptrend. I'm probably betting it's going to go higher. So the, the kind of call was like, well, at least I'm buying it at a discount even if it goes lower. Bitcoin, I'm not going anywhere. That where we currently are. We've been chopping around for another like two months. Yeah, we're sold down, we're sold up. But it's only ever gone like 5, 10% below my cost basis. It's like 25, 30% below the top buyer's cost basis. It's like 5 or 10% below mine. I don't care. I don't care about 5, 10%. I've done 75 three times now. I don't care about that. So it helps you huddle because your cost basis is always going to be better than everybody else. Even if you're underwater on a couple of your coins, you're much less underwater. And that's where the magic comes in. So, yes, monthly scale uptrend, but you can still optimize how you survive within that context.

It's brilliant, man. I think we should get out on a T shirt. Buy your blood.

Yeah, buy their blood. I love that. I wrote that down for a clip. It's so good.

No, you got it. I mean, most people are shit traders. So do what they. It's like a friend who's always wrong. They're great. Do they do the opposite of your friend who's always wrong? It's basically the same as being right.

What, what percentage? If I'm not, and I'm not sure if there's actual number on this, there probably is of bitcoin traders or investors. However, look at the market actually makes money. Right. Like how? Like what, what are your thought? I don't know if you've got data to make this up or just a general predict prediction, but like, from my observations of conversations I have with people, I would estimate somewhere between 70 and 80% of people are not making money.

Like, Yeah, I would say so.

The worst. Like, not the worst, but they're just making. Literally doing the opposite of what you should be doing. Like you said, shorting. Shorting all the way up and then longing the top. It's just like even some of the projects we've seen mate with people in the space that we know launching, you know, crappy, you know, shitcoin protocols at the literal local top of these cycles because they want to get in on the making the money. It's just like, it's just so fascinating to see people get ahead of themselves.

Yeah. So I would answer that question in two ways. The first one is, I would say if you just look, I think this industry, there might be three ways to answer this. Most folks eventually get tempted to go into like out in the long tail of crypto. I would say the statistics of people who go into crypto, generally speaking, I don't know if you just take like people who trade on Etoro, let's just take whatever that like benchmark people who trade, you know, what do they call contracts of difference and all that kind of stuff. I think the stats are like 95% of people lose 90%. Right. So we're in that ballpark just from like traditional markets. 90 to 95%. I would say people who go out in the long tail of Crypto that would be much closer to 99%. I think people in crypto do far, far worse because everything is going to zero and most of it does right. The further out you go just, it's just junk. So I think that that is probably one element within the world of bitcoin. There are people who come and go as like the speculators, they'll go on futures exchanges and they'll do all the same trading behavior as the CFDs and you know, etoro folks probably not too dissimilar, but they're also trading in an asset that is programmed to go higher. So in a way, if they were hodling, they'd do better. But I don't think they're going to trade any worse or better than another shitty trader. But I would. The third component to this is there are people who just buy and hold. And I believe that they have not only I think the failure rate of them in their first two years is high, but after a period of time and they become an investor, right, they become a community member of bitcoin. Once those folks are in for long enough, I think that they're not only would their success rate be much higher in the statistics, their performance is much better than the best hedge fund managers. So in a great irony like the bitcoin Hodler is the exception to that rule.

Yeah, I couldn't agree more. And we talk about this a lot, right. And I wanted. There's so many things to. I don't want to get your thoughts on. But like my overall strategy that I share with our members and the public is that ultimately I want to stack as much bitcoin and property long term as humanly possible. They're really the only two assets I want to hold for long term. Now, whether you like them or not, I think some old coins are going to outperform this cycle, which I invest in to ultimately leverage my position to buy more bitcoin and property. But beyond this cycle, at the top of the cycle, I don't want to hold any of that. Right. All my old coins I basically want to sell down Bitcoin will outperform everything else for the long term. But with a retail market, you know, you can, if you find the right ones, make a lot of money. However, in saying that there is multiples of shitcoins in this cycle compared to previous cycles that we are literally in, I think we're in if not the tens of thousands, the hundreds of thousands of like, like altcoins down.

Coins. J. Unbelievable. Unbelievable. Right now what I see most people do, to your point, Checkmate, is that they chase, they. They're not getting the returns, they're in the wrong coins. They listen to influencers and they start selling their corn or they sell their eth. And now they've got this portfolio of shite and they've, you know, trying to chase returns and. And the market goes down. And I had messages the other day. The market goes down, one coin's down further than the other and then, shit, I need to sell this coin to, to minimize my, my losses to, to jump in this other coin. And now they're getting chopped out in both. Like, it's just guys, chill out. Buy bitcoin, right? Yes. Have a percentage of altcoins, but ultimately that is only to build your bitcoin property stack. In my opinion, that's the only reason you want to hold that in the short term, is to build out that stack and just hold. Because you will outperform most people by holding than chasing and trading and doing all this. This crazy stuff.

Yeah. And I often say, like, what is your edge? Like, honestly, sit down and write down on a piece of paper what advantage you have in the market for whatever asset you're looking at. And if you struggle to put anything on the page, you probably shouldn't own it. That's just like a really, really sound piece of advice. Now, something that I found quite interesting is it's like there has been two, two cycles that's going on at the moment. Bitcoin is doing a very different thing this cycle to everything else. Alts have not performed in the same way as bitcoin. We've had this very strange, like, bitcoin and like Geo Bowden meme coin. Right. So it's. It's this like insane barbell strategy of just madness. And I've been processing and thinking about this quite a lot. I think it's really interesting. So I don't have a lot of crypto stuff on my feet. I kind of got rid of it all. I'm not. Not just not. It just doesn't interest me. So I just removed it from my feed because I don't particularly care what all these projects are doing. And I start seeing, like, occasionally you follow a character, right, an influence or whatever, and you know that they're into crypto. And occasionally I got this, like, lens like it's a bloodbath out here. I'm like, what the hell is going on? And you open up the curtain like, holy shit, he's back away. I'm going in there like you real. I didn't realize how, why sentiment was so destroyed. It's because a lot of people, a lot of people were way too exposed to alts this cycle. And I've heard from more than one source, several sources over the last six to eight months. So many institutions bet on ETH because their immediate reaction was why would I buy bitcoin? Because Ethereum is going to run. It didn't run faster, it went way worse, it's still doing worse. So a lot of investors, including institutions made the same bet is that they assumed that the rules would be the same. And this is something that I've been thinking quite a bit about because this cycle's been quite unique. In 2021 we got to see the full like shitcoin waterfall. Bitcoin into Ethereum, into L1s, down into DeFi, down into memes, down into NFTs. This was the like complete capital waterfall start to finish. You see the whole movie here. Everyone expected that we were going to go straight to the NFT and this time we actually jumped past the NFT and we went even further than that and did one of a hundred thousand meme coins that get printed out of slider every 15 minutes, right? So no one, no one honestly write down your edge on meme coin trading. I don't even know what it is, I don't even know what it looks like. I don't know how to do this. So I think very, very few people have actually succeeded in the altcoin trade. And I've got this like idea I'm playing with. We kind of said it out loud I think is the right way because we actually know that so few projects like I truly take an honest look at what crypto has built and I struggle, I struggle to be like this is going to work, change the world, right? When I look at even Ethereum, I look at all the defi stuff, I'm like, I mean Ethereum, it's as soon as tether and USDC get turned off, it's not really decentralized. Then you look at Solana competing with Ethereum, you're like Ethereum's actually, and here's a contrarian bitcoiner opinion, Ethereum is too decentralized because all of its built, all of its layers and the stuff built on top of it doesn't need the level of decentralization they've optimized for. So as a result they're non performative as like a network. They don't have the performance and you don't really need the decentralization anyway because if you're putting real world assets in it, well then it's a centralized ledger anyway. It's just like a convenient transfer protocol. It's like Tron is super successful for Tether. And why Solana is super successful because it's the right level of decentralization for the problem at hand. So Ethereum's in a really nasty spot too, because it's actually like. I keep asking this question, if Ethereum launched today, would anybody buy it? And the answer is absolutely not. And I think that as a result, it's just a bleed. I don't see Ethereum getting any kind of upside because it's just not competitive. Even with the, with the ETFs, they don't stake, they don't earn any kind of yield. Like there's a whole bunch of things like, why would you own it? It's just not an attractive product. So in many ways, I mean, Ethereums have been crowdsourcing their narrative for the last like six months. It's been hilarious to watch. Like, guys, you've been around for a decade. What do you mean? You don't know what you are like, come on, work this shit out. So I think the alt cycle has been a real mind bender for people because it hasn't done what people expected. People jumped straight to the answer, which was memes. The final like post NFT thing. And the whole middle of crypto, every token, every L1, they went up a bit, but not really right. If you held bitcoin, you probably outperform them. So like the whole middle just hasn't worked. And I think that's, that's breaking people's heads quite a bit. And when I look behind the curtain, I'm like, oh my God, it's going to pin that back together and not look again.

I like that. The final boss's memes, how good. And I think they're right as well because there's nothing. Yeah. You describe the technical perspectives of kind of, you know, Bitcoin, Solana and Ethereum and where they fit in. You mentioned the decentralization. And then there's also like, you know, the real proof in the pudding, like the customer side of things, what are people actually going to use? And we've seen people buying bitcoin using bitcoin with ordinals. There's a lot of activity on Ethereum, but people have kind of skipped that and gone straight to meme coins on Solana. And that's got all the attention and the majority of customers, so, so kind of midway point, like you do have an ETF and like, there's heaps of activity going on there. But even myself, I've done very little on Ethereum. It's mainly been buying Bitcoin and then experimenting in Solana.

Yeah, no, it's, it's a really tricky scenario because a lot of people are not. When I honestly look back, I've used Defi many times, right? I've. I was using Uniswap. I mean, it was one way, if you can, anybody can remember that. And when you really look at, like when I honestly look back at what I used Ethereum for, I used it to put collateral in to borrow money to buy more of that collateral to put it in to. I speculated. That's all I did. And when I honestly say, would I ever use that to buy a house, which is actually what I want to do, that's the one thing I'm trying to save for. If I wanted to buy a house, am I going to use compound? No, I'm not going to go to a bank. I don't want to explain why $400,000 laid into my bank account from, you know, coin spot. I don't want to deal with that problem. It's just, it's just not a real thing. It's just not going to happen. Stablecoins are a real thing, but having all these defi protocols just like punt on shitcoin, it's just. Nah, I'm good. I don't need it.

Yeah, yeah. I tweeted this the other day. It was like cryptocurrency, like the crypto market is basically, you know, we have, you know, maybe 10 maximum problems that perhaps need solving at some point in time, right? And there's hundreds of thousands of solutions trying to solve these like, maximum 10 problems. And I think to your point, mate, like, I think the jury's out on like, what will be and what won't be used by normal people in the future. Like, the reality is the user experience across the board is still disgraceful.

Honestly, if you really, if you honestly want to like, make a case for crypto long term, ask your parents to send you a coin. As soon as you do that, it's over. You realize that the average person will never, ever, ever do this. And in many ways we have, in my opinion, we have saturated the number of people who will ever buy a ledger. I struggle to believe there are more people out there. If you aren't already self custodying your coins. The tam of that. The edges of this TAM are so small, I just don't see it.

Yeah, and this is, and honestly, that is how I discovered my competitive advantage in the market. After two and a half cycles, after trying to trade by with DO, ICOs, NFTs, all this sort of bullshit, right? Lost all my Ethan and a heap of bitcoin doing that bullshit. And that is how I found my advantage. Because I fucking hate using my hardware wallet. I'm a big security guy, got my hardware wallet. I hate cracking that thing open. I even hate doing my fucking taxes and reports with it. I have a heart attack every time I gotta update, I've gotta do software. Am I being fished? I gotta check a contract address. Yeah, get the fuck outta there. So my competitive advantage is I've got diamond fucking hands where I'll buy something on an exchange and then send it to my wallet and not touch that fucking thing because I'm too scared every time.

Yeah, no, 100%. And that's like the more time I spent doing this, I just, I accepted that I'm okay just holding bitcoin. I don't need to outperform anything because bitcoin does so well compared to everything else. As long as you just buy in opportune times, don't sell it and don't gamble it away. If you can achieve those things and just believe in the monthly uptrend, you're going to be fine. And like a lot of people, you have to get rich. Not even slowly. Kind of get rich with bitcoin relatively quickly. Yeah, much quicker than everything else. But don't go for the thousand x because it's, it's, it's just not there. And a lot of people, a lot of people expect previous crypto cycles to work again. And I think crypto natives have learned the rules. That's why they went straight to memes. They've learned the rules. You can't play the same game again because otherwise we'd all be billionaires. Markets are always different and we're just running out of people. And another, here's a weird concept maybe you guys have got a thought on. I had this kind of like conception because bitcoin is special. I'm seeing a lot more institutions like making a very clear decision. There's bitcoin and there's crypto, which is, which is the correct framework. But I've been thinking about like all the alts and the crypto natives who've been here for a couple of cycles. They got big bags of defi. Tokens and all this stuff. And we're basically asking. Well, I say we even. I'm not probably in the, in the bucket. That we're basically asking the next generation of buyers who are probably younger than us. And you know, I mean, I don't think Boomer's gonna be buying shitcoin number 5,000. I guess mostly like Gen Z. And is that any different to the boomers saying what's wrong with the inflated house and stock market? Why are you guys complaining? It's like, what are you so upset about? It's like because your prices are ridiculous and you're selling me like a one bedroom dog box for the price of your, you know, it's insane. Aren't we asking Gen Z to buy the same steaming piles of whatever for inflated prices? Like, I think there's more savvy that they don't want it. No one wants this stuff. And I think that's like a realization that people are coming to. It's the same energy. It's exactly the same energy as Boomer saying, buy my, buy my one bedroom investment house. It's only $4 million. It's great, it has a bath.

We say this a lot, don't we Ben, to our members where we're like, okay, you're holding all these things, you're down like 90% or you're waiting for the next cycle. What has to happen for someone to come along, believe in that and then buy it at those crazy prices? Do you genuinely think that thing is going to happen or should you take a big dose of reality and reallocate to better assets and cop the loss and carry it forward?

This is like a really good, like it's such a, you know, right. Real deep on this. Right? Because then we go into the discussion of why do people get into crypto? Because, because my, my thought on the property piece because I'll be in a similar boat too as well. James, like looking at like, you know what, you know, for me, I want to build property and Bitcoin, right. I look at some of the, especially in Sydney, right? You look at the steamy pile of horseshit that you have to pay for 1.5 million, it's like, get the fuck out of here. Right?

Yeah.

But arguably property has a lot more fundamental value than a lot of the shit coins that people buy. Right.

Why into the culture the narrative has gone for like, yeah, hundreds of years.

Why do people get into profit gold.

Like in that regard.

Yeah. But why do people get into crypto? I think is, is different. You Know, I, I believe people get into crypto because, you know, they, they want to make money really fast. They may not have much money to begin with. They like to speculate, especially us Aussies, we love to punt and gamble. So people will buy these things. You know, a property is a property, right? It's got a door, it's got windows, you've got rooms, you go sleep in it. What does shitcoin 4972 do? No idea. But it's got a cool logo and my mate, you know, bitboy, supposed to YouTube. So I'm going to buy it. It's going to go up.

So I, and I think this goes to what Travis Kling was saying. People buy it without any pretense that it's ever going to do anything, ever. They like, there's like this fun. This is the counterpoint to a lot of the stuff I've just said. Financial nihilism is, and I love this point. It's like I could go to the horse races and put 500 bucks down. I could buy a shitcoin that could go up a thousand eggs for 500 bucks. That 500 bucks isn't going to change my life if I lose it. But neither is $5,000. So there's this like nihilism of I gotta get somewhere because inflation makes everyone poorer. And these things are kind of competing narratives. I think they're both in play, but they ebb and flow between each other.

Yeah, yeah, yeah.

This is another all or nothing thing with gains and taking profits. We talk about this a lot where we know a couple of people. Like one specific guy where he wanted to get to 2 million to buy a house and he only put in maybe 10k, got an old coin, wrote it up to like 1.8 mil. That was the top. Didn't sell any of it. Wrote it all the way back down to about 50k. And this is the thing, like when you put money in and you invest, it's like putting 500 bucks get to 5,000. It's not going to change my life. But still, that's a 10x, right? And in any other market, wherever you're putting your money in, anything above like 15% or whatever is amazing. Still take those profits and building slowly is okay. Like build like slowly over a longer period of time and you will get there.

Yeah. You only have to round trip four or five, six, seven, eight times before you realize I probably should start selling some of this. But you have to round trip a couple of times. It's part of the journey.

But this is what I've been speaking about this a bit more recently around this idea of, I call it psychological warfare, which is right in crypto because you are competing. Your biggest competitor, in my opinion, to make money is your own mind a hundred percent. Because the problem is we live in a digital world where we're all comparing our bags with other people's bags and we only hear the good stories. We only hear that guy that bought Pepe at that price or that guy that bought Whiff or. And that's why people buy memes, because they hear these stories. It's like people winning the lotto. They hear these stories of their dreams coming true. Some other guys lived it out, now I need to do the same. But the reality is 99% of people don't make money, they actually lose it. You only hear the 1% and that's when people make the 10x. I've only made a mil, I could make 1.5 and end up round tripping it. When you look at in the bear market and you look where I was three years ago, what the was I doing? Like, look where I was at, what was I thinking? But at the time, you're, the only thing you're thinking is I could be doing more, I could make more, I could be doing this. And that's why people lose 100%.

And I think another useful kind of pointer is, yeah, I 100% agree that you are your biggest enemy in the market. Because when you look at a price chart, when you look at the data, when you look at the market, it's the best analogy is it is the tide. You cannot change the tide, you can't swim against the tide, you won't fight the tide, you can't argue with the tide, you can't convince it to turn around. You can't do any. It is just information and the information is coming at you all the time. The only thing that you have control over are your decisions. That is the only thing you have control over. Know what your edge is, know what you're good at. And like, for me, a lot of people ask me, like, obviously I analyze bitcoin for a living, like, oh, you must like be a great trader. So I can trade, but I made a very conscious decision back in like 2019 after learning many lessons. I can trade, but it consumes so much of my mental bandwidth and I just dislike it. I really dislike it If I put $100 per bond because sometimes you just want to have a punt. You put $100 perpetual swap on, right, with 50x leverage or something because you just want to play around with it. My entire net worth is bitcoin, right? This hundred dollar stupid position that's down $30 is going to keep me up at night. That's the thing that I think about, right? I just don't. It's so irrelevant but it consumes so much time. So I came to the realization for me my best strategy is to actually understand the market much, much better and actually like provide value for myself, build a business, provide value for other people. And a huge like cornerstone of what we do at check on chain. We're not actually targeted. A lot of people do like a trading newsletter, calls, buys, sells, alerts. We don't do that. What we essentially do is we want to help people huddle because we know most people, most people are us, literally us. They are probably our age bracket, right? They've probably been around for not dissimilar to us. They've got probably similar process and how they think about things. They listen to the same podcast, they're not here to trade. They actually just want to not blow up. So in many ways they want to understand. I mean people don't even care that it's sold off. They care about, oh, I want to understand why that happened. Is it good, is it bad, is it indifferent? Should I buy, should I not? Like, should I be concerned? They just want to understand. When they understand why things happen, it's easier for them to huddle because they know why it's going on, right? And I have the same kind of concept. If you wake up tomorrow, because at 30k or you wake up tomorrow, it's at 100k, your emotions are going to be the exact same thing. Holy shit. I need to find out what just happened. And essentially what, what I try to do is say, well guys, here's where it's likely in terms of like where it looks like we're going to go. If we're here at the same price in six months and we've gone up, down, sideways, don't be surprised if we fall down. Here's where we could potentially get to and this is where I would like we'll reassess it when it happens but that's where I'm looking at value and just like help people understand what are the big boundaries like bound the problem. So when it happens they're like, well I was prepared for that. I thought about going to 45 before we got to 45. I thought about going to 80. What I'm going to do. What are my decisions going to be when we get to 80k or 100k or 150 or whatever when we get there. Having thought about what you're going to do before that happens means you're going to be able to do something when.

It actually happens, mate, that's a, it's a huge thing. I think being proactive, it's something that we teach a lot. Being reactive in this market is probably the worst thing you could be doing.

That's why 95% of people lose in all markets. So that's why they're reactive. They go looking for a headline and they read what the. When something happens in the market, Bloomberg goes to the lowest paid intern in the business and says, go and write an article on what happened. That's honestly, that's how financial media works. They get the lowest paid intern to go and find out what happened and write a shit story about it. If you are reading in the headline it happened two weeks ago, you are so late to the party, it's irrelevant.

That's it. And I remember talking to a guy and he had like, I don't know, 50 or 60 coins. This was at like a business thing that I went to and I was like, mate, what are you doing? How do you start across it? And he's like, oh, well, I wake up in the morning, watch a little bit of YouTube, read some headlines and then I do my trading and I'm like, bro, what the fuck? Like the amount you could actually scrape, not looking at data, not being proactive and waiting for trades, waiting for setups, things that are going to happen, but doing it that day based on historical stuff that you've seen that interns have reported, there's just a recipe for disaster.

Write down your edge. That's it.

And I, and I want to talk about this just really quickly because I think a lot of people probably sitting at home listening this guy. Well, fuck, I don't have an edge. I work full time, I've got three kids, I've got a mortgage and like, I don't have an edge. This is literally why the folks like Amazing James. Checkmate Check on Chain has the newsletter that can be your edge. You know, actually listening to someone independent that knows their shit and you don't listen to all the crap online, right? Same with Collective Shift. That's why we do what we do. Like that, that can be your edge, right? Working with people that, you know, have the right incentives. Not to say we have all the answers, but you really Want to align with someone that has the incentive to back you and they're not incentivized to bleed you out. Like they're not trying to sign you up to some affiliate link or sell you a coin or you know, trying to sell you a crappy course to learn about trading. That's not really what you should be doing. Like someone that's genuinely there to help you. That's probably why, you know, you've got your own accountant or your financial advisor or like, you know, a lawyer. These guys are incentivized to help you succeed. And that's, that can be your edge. And it's why Check on Chain is a brilliant, you know, service for those that want to go deeper into, on chain analysis. That's what we do. What we do. If you want to sit down and look, look more, you know, strategy and, you know, you know, more broader things in crypto, we're here too. Right? That can be your edge. You don't have to be a full time trader to win in crypto.

No. And I think actually accepting that you're probably not a trader because the truth is trading is a really, really, really hard business. Most people are not designed for it. Like just at a emotional level. You have to be of like 0.1% of people. And there's actually two things. There's two types of roles. And all institutional traders have these roles. There's analysts who understand, think, research, study, come up with ideas. And then there's trade executors, people who actually go and they take that information, that distilled information go, okay, I need to buy this asset, I need to put this one size on, blah, blah, blah. They go and execute the trade. They are two very, very different skills. And for some reason the average retail investor believes that they are experts in both of those two things. And they're experts in neither of them. This is why they don't perform. So trade execution is a whole different animal. And that's why I think again, on Chain and you know, what you guys do at collectorship, I think so important to just ground yourself by people who at the end of the day, why would anybody pay any of us? It's because we love this stuff and we do spend all of our time like it's because we're passionate about it. It's not necessarily because we're the best and brightest and was, you know, we're the perfect traders. No, it's because we are so into this space that we've, we've created an expertise. We've created our own edge and it's, it's, you know, we enjoy giving that away as, you know, as part of a business. That is what this stuff is about. You find people who are good at what they do, passionate about it, understand why they're here and the mechanics and all that kind of stuff and just find someone who aligns. And some people are going to want to trade and you've got to go and find someone who can be your market mentor and who operates on your timeframe. Don't sign up to a newsletter who's giving you five minute candle charts. If you're a buy and hold Hodler, right, it's not going to work out well for you. And also don't go and listen to someone who's like got a multi decade timeframe. If you're looking to punt perps, it's just not going to help you. You got to align who you are with the expertise you seek.

That's exactly it. And you know, investing, making money, having some wealth and then looking after that wealth is incredibly boring. It is not an exciting thing. If you're super excited about a trade or money you're investing, step back and think about, oh yes, it is, it is boring. It's analytical, it's aligning with your strategy. It is a lot of crappy work that people don't want to do and it takes a long period of time and constant execution. Just like going to the gym even though you don't want to, you got to put in those reps and then you'll get the body that you want and you'll feel the way that you want. So if you're excited or you've got FOMO or something's happening, that's a signal to you to be like, hey, investment should be boring, right? It's just fine.

Actually, that is a really, really good point. When you feel excited about a trade.

Write down, like actually write down how you were feeling when you put that trade on and then come back and revisit that note when the trade is finished. Because I will almost guarantee you that when you run that experiment, nine out of 10, maybe, probably, probably 95 out of 100 of those trades that you felt fantastic putting on, you will lose money. Because human beings are designed, this is why trading is so hard. The human brain, our apex brain, is like 10000, year old hardware and it hasn't changed. It is not designed to deal with risk. We are actually risk avert, right? We try to avoid risk at all times. You get Trained from like when you're a child, your mother tries to keep you away from. Stop eating the dirt, don't put that grub in your mouth, right? Don't get off the swing, get down from the tree. You're designed to avoid injury and risk. So when do people feel good about something? Like if they're going to put a trade on, when do they feel good about it? When every other man and his dog, as a, as a crowd, you all do the same thing. You're like, oh well, everyone else is doing it, so this must be a good idea. All my friends got really rich, so it must be good for me. What that's actually telling you is that everybody is piling in the smart money. You're getting out at that point in time. So when you feel excited about a trade, write it down, observe how that goes. You will find it's probably not very well. On the flip side, the best trades you will ever do, the best buys you will ever do, feel God awful. Your stomach should be absolutely sinking through the floor when you do it. And it feels horrific when that happens. Just sit, write it down and just sit tight and watch how that goes. Because those are two completely different animals. And I guarantee you, you will see the difference between the two.

And investing hurts. Like that is the price that you pay for your gains. It'll take a long time, you'll learn a lot of lessons, you'll lose a lot of money, but that is the price you pay. You and exactly what you said. Like when I'm buying in the depths of a bear market and I'm putting a chunks of capital in and I'm thinking like, you know, like if I had it, because what's that?

It keeps getting worse every time you make like, oh my God, it keeps getting worse.

So in my rational brain I know that I have a longer time frame, it's over 10 years, it's fine, things will be fine in the end. But when you're putting that money in and you see it going down, you hear the negative sentiment. You work in crypto. That is something you have to battle through, go against every single cell in your body telling you, hey, don't risk that money, go put it somewhere else. And you have to fight that to then, you know, in a year or two, see those significant gains and know that you were right with your long term view.

It puts hair on your chest. It's character building.

Yeah. And, and, and really like I think buying, yes, it is difficult to bear market, but I remember selling a huge Chunk of my portfolio at the sort of near the peak of 2021 and making these sell trades, right? Big six figure sell trades. I felt physically sick, like nauseous, like I throw up, like everything in my body was telling me, do not sell, you idiot, do not sell. It's only going to go up. Don't sell, don't sell, don't sell. And I had my plan, had my game plan, had my targets. I needed to sell to achieve these goals. Did it. And I remember it was such a, such a sick feeling. You know, when I, when I executed the trade, I felt like I was, I didn't done something illegal. It was like, you know, like it's, it's, it's fascinating.

And yet looking back, you did exactly the right thing though. That's, that's what I mean. Case, case in point. This is exactly right. Whether it's bottoms or tops, that is the feeling. If you do not feel sick to your stomach, don't do it.

So good. Yeah, no, it's just real. But also I think you raise a really good point because there's a narrative that a lot of people get stuck on which is, oh, I'm never selling. And whilst like, like for me, and we're talking about this before we, we started ripping the. It's going to be a hard. When I have to sell some corn. It's going to be hard. You'd like, I'll sell everything else, right? I'll be losing, selling my bed and selling my everything else before I did.

So where's checkmate? I was just throwing up at the toilet.

He's selling. Yeah, exactly. So, so it'll, it'll take a long time because when it comes to selling, I am, I always view bitcoin and even gold housing. They're essentially debasement hedges. That's, that's like at the end of the day, that's what they are. And we know that the money printer is coming, but that is also a long term thing. It's accelerating, but it's going to take a long time to play out. So people wonder why bitcoin is decelerating from here. It's like, it'll happen, but these things take a long time to play out. However, there will come a time and it's coming where things are just going to go up so quickly because it's like, you know, we can see the petrol around the house, we can see there's a bunch of kids running around with matches. A match hasn't hit the petrol yet. But when it does. And it's going to happen, right? And they're going to have to just print an ungodly amount of money when it happens. No one's going to sell you their bitcoin. And you have to be there for that moment because if you go, oh, I'll just buy it when, when I need it. All right, but it's good luck with that one. You're going to be in, you're going to be buying a lot higher. Now, the flip side of that bitcoin is, at least for me, it's my savings or it's one of my savings equals. What do you spend? And I went to one of the, the bitcoin bush bashes, which if you haven't gone, by the way, and you're in Australia, you should definitely go because they're fantastic. And Tim, who's one of the guys who, who hosts them, he, he had this great line. He goes, what do you spend your bitcoin on? And he had perfect line, whatever the fuck you want. Because it's your savings and you should spend it on whatever you want. So don't fall into the trap of believing that you need to hold this thing forever. And I know most people who hear this, I'm not talking about selling the whole stack. No one's going to sell the whole stack. Once you understand what bitcoin is, you can't, you physically can't do it. That we have to pry, that you call dead fingers. But 10%, 5% to improve your life and reach that savings goal that you needed. Do it because that's what it's there for. What are you going to do? Give it to your grandkids, grandkid. You know what happens, they will piss it against the wall. This is what all third and fourth generations do. Spend it on yourself and spend more on your kids. That's the way to do it. Yeah, that's it.

With generational wealth, like the first generation, you kind of build it, second will grow it, third will blow it, because they've grown up with money.

And it happens in every culture, in every time frame, from the Victorian era to the Egyptians. It's happened every time. It's just, it's just how it works.

And this is an important point. This is why we invest. You invest to make more money. Why do you need money? Not so you have it in your bank or you have a bigger bitcoin stack so you can use it as a tool to change your life and see, like, change the world into what you want it to be. Like, use that money, whatever that means to you. And Ben, this is why, like, we saw a huge gap in the market where everyone's talking about, buy this, hold this forever, do this. But no one tells you sell. No one gives you a proper sell strategy on, what are your goals? What do you need to achieve? Okay, these are the kind of things you should be looking at. And when you hit them, you should sell those because you've achieved your goals. A lot of people just keep moving the goalposts. They stack more, they won't sell, they miss out. Just remember why you're in this game.

And I speak to so many people, especially in our platinum membership, right? Like, I'll sit down with someone with $6 million of Bitcoin, right? And they're like, I don't know what to do. Like, I'm like, well, okay, well, let's start from step. I always think, like, let's go to the future, and then let's reverse engineer how we want to get there. What are your goals? Like, what are you trying to do? It's like, I don't know. Like, and then, you know, as you start to map out, like, what you want to achieve. For me, like, one of my goals is literally to live a lifestyle where I can enjoy my life, travel, live abroad, right? That's one of my goals. We'll go, oh, yeah, I haven't really thought about that. Or like, okay, how. How about, you know, you can structure it like this, and you can do this, and, you know, what about paying this off and people like, oh, I haven't even thought about that. And as you start to think about, like, where you want to get to, you can reverse engineer and realize that you don't need $50 million to have a great life. Like, you know, you can actually position and structure your. Your. Your investments in a way where you can. You can earn some income through some different investments. You can diversify, you can protect. You don't need to be 100% levered up in crypto forever. Yes, you might be. Now, I know I am. Checkmate. You are like, but that probably won't be forever, right? We'll diversify. We'll protect it. And it's just starting to think a little bit more sophisticated about your investments that I think some people just haven't thought about before. That's really where a lot of value can come in.

I put out a good controversial tweet a couple of weeks back, and it was about 50, 50 in terms of the results. And I said unpopular opinion There'll be a bunch of bitcoiners who sell a bunch of their stacker, you know, 5, 10% and they'll buy gold this cycle, this cycle, next cycle. And oh man, the backlash. There were some people who like 100% thought about this. I think it's a great idea. And other people like, what's wrong with you? Why would you ever buy like a. Why would you ever buy a lesser asset? No, there's no second best. There is no second best. And it's like there. No, you're right. I'm not buying it because it's the best. I'm buying it because I don't need the volatility of bitcoin anymore. Because as we grow up, our dependence change. Our life requirements change. Why do I hold gold today? There's two reasons. One, because when the time comes, I won't be able to sell my bitcoin. So I'll sell the gold instead. That'll be easy, right? Just hit sell. So there's, there's that. It make. I'm actually pre planning my pain threshold when it, when the time comes. So there's that. But the second one is that what if. Because I don't like holding cash, right, Generally speaking because I know it's a melting ice cube. But what if I do just need to like come up with 10 grand or 20 grand. I just like need it. Not, not right now, but like in the next week. Go. It's like let. I don't care if it's up or down 20% having to sell my Bitcoin if it's down 80 just because I needed 10 grand. No way, right. I'd rather sell my stocks. I'd rather. So having that kind of imagine that long term, you've got kids, you've got a house, you've got a mortgage. I don't want to sell my bitcoin in depressed levels because I lost my job. Right. And I, I've. I'm still. I've got my assets but I particularly want to sell my bitcoin at an inopportune time as a forced seller Gold. I'll for sell you any day.

Yeah, this.

Sorry, I've got a question. I got it. Just on this point, have you thought about. So outside of crypto checkmate, like it's very common for wealthy people to be very asset rich and they lend against those assets without having to sell them. Have you thought about that in your strategy long term now whenever that you will leverage your bitcoin assets to lend against it in like a collateralized loan or something like that to do your property or to spend money day to day without having to sell Bitcoin. Have you thought about that?

Absolutely, absolutely. Without a shadow of a doubt. That is the killer app. That is the keep your defi. I'm good. That is the killer app. And I don't actually mind that it's going to be with some kind of financial institution because as much as people want to, you know, claim holier than thou, the banks aren't going anywhere ever. It's not happening. It's never happening. So. So what? Come back to the real world where this is how it's going to play out. 100%. That is, that is the killer product in my opinion. Bitcoin is Pristine collateral stablecoins as dollars for the third world and just payments in generally. They are the killer apps of crypto and I truly don't believe the world needs anything beyond that. I think that solves two unbelievably massive problems. And that collateralized loan thing with pristine, that's 100% what's going to happen.

Financial sovereignty in Bitcoin is just an amazing thing. The idea that you can just build a stack of bitcoin, never have to sell it, loan against it, buy a house, it's like, wow.

Yep. And, and the cool thing about this is that it's, you know, people like, oh, don't give up custody of your coins. You won't give up custody of coins. This is the beautiful thing. Bitcoin is the only asset that really has gone in on multi signature. You can't even do this stuff on Ethereum. You can't do it on any of these other tokens. Multisig and the, the development of multiparty custody. I, what I'm seeing happening is the most bullish thing because you're going to be able to hold one key. The bank will hold one key, the insurance provider will hold the other. Those coins cannot move unless the contract is signed, sealed, delivered in a legal framework. That's how the world's going to work. That's how the bitcoin world is going to work and it's going to be fantastic. Just don't sell your winning lottery ticket. Sit tight, hold it because this is, this is where it goes.

That's amazing. Let's talk a bit about bitcoin innovation because quite a lot has happened. You've got ordinals plus all the other innovation that's happening on bitcoin. Do you get involved in any of that? What do you think about that happening in the bitcoin space?

I am about as bullish as I am on Ethereum on it, which is I. I can't envision a single time when I would ever need it. So I'm glad people are building it. I think it sparked a new like era of.

Discussion and innovation and like the consensus. Like there's this thing that Rusty Russell, who's an Australian core dev, is doing the great script restoration project which is fascinating. Basically there's all these op codes which are like little scripts inside bitcoin which Satoshi disabled way, way back in the day. They're simple things like multiply, add, concatenate. There's a whole bunch of things and the, the idea is to. There was a couple of things that they, they didn't release or he took them out because he just didn't have the time and bandwidth to like think about all the edge cases. Well, now we've got guys who are thinking about the edge case and all of this stuff is super simple. Like it's not, it's not super complex but it's basically bringing all those opcodes back in and it will create more multi sig opportunities, more ability. If you want to do an L2, you'll be able to do L2s, all this kind of stuff. So I'm bearish on alts long term because I think that this good stuff is going to happen on bitcoin even if I don't want to use it. Anything that's useful I almost 100% certain will get built on bitcoin layers. That said, you'll hear a lot of stuff about there will be a Bitcoin L2C, there'll be a whole bunch of. All this stuff will happen. I am very cautious of it, believe it as any other shitcoin altcoin, they're going to do exactly the same thing. They'll go up, down and most are down, I think.

And when I think about who's really using that, I think it's just in my mind. And you might be able to look at this later with onchain data, but just bored whales, like if you're really early to bitcoin, you got tons of bitcoin, you're staying in that ecosystem, you've not kyc'd any of it. What are you going to do? You're going to chase more gains, you're going to play around with it, you're going to be bored. And I think they're kind of the early adopters and People that start using that, I actually don't. I know one person out of all of the people I know in crypto that's actually looking at L2 stuff and playing around with it on bitcoin.

Yeah, I just like I've played around with it. I've tried to test out ordinals and inscriptions and stuff work. The fact that no one's using it today is all the information is. No, it lasted 12 months as all altcoin seasons do. Back at Glassdoor they did this cool report where they basically shows like a, like a HODL wave type chart where it's like different bands but it showed the gas consumption by first it was ICOs. Big Wave died off. Then it was defi. Big wave died off and it was stablecoins. Big wave maintained a stable baseline. NFTs came when everything just comes and goes and nothing sticks around. At the end of the day. What are people using Ethereum for moving stablecoins around. That's what they're using it for. That's, that's like. That's the use case so. And which Tron does better? So it's like just. Is it Bitcoin? L2 is going to be any different? No, it's going to be the same thing.

That's it. Oh mate. And mate, I've got to ask you, got you here. What do you see coming in the market? Like kind of forward looking or how do you think this kind of bull cycle is going to play out? Do you have any targets, anything like that? Walk us through how you're thinking about it.

Yeah. So I think bitcoin is undergoing a evolution. It is separating itself and I believe bitcoin dominance goes up for a long time because I think bitcoin is now past the event horizon and I don't think anything else is. It is getting to the point now where it is now. I mean I think granted they're an amenable crowd but you may have seen the In Gold We Trust report increment them do once a year. This is like the bees knees of macro serious, serious guys who think about this stuff. And they recommended a 3 to 5% allocation to Bitcoin. So granted they're sound money guys but they're thinkers. We are now at the stage where even the gold bugs are conceding. You need to have 5% and these are guys who like they recommend 60% stocks and 40% sound money. And you know they're obviously into, into sound money and that size. So they get it but it's now you need to hold some portion of it and that's going to become the default. So I think bitcoin is going into a new world of a passive bid. It's going to a new world where people actually want to own it because it is benefiting their portfolio. Sharp ratios and however you want to measure it, it is additive to all portfolios. And contrary to popular belief, it actually gives you less drawdowns because the performance is so good. The drawdowns get counted by other things. It's uncorrelated. And I think the world is coming to terms with this. So my view is that we're actually in a extraordinary position. If you think about like market risk, the risk that bitcoin goes to zero because no one wants it is the lowest it's ever been. And there was a great line that Peter Dunworth, my friend, said@bitcoin 2020 bitcoin alive this year. It was an Australian bitcoin conference. And he goes, Bitcoin at 70,000 is essentially completely priced like it is now. Price. Yes, the price is higher, but it has removed all of the risk. The left tail of bitcoin not succeeding is more or less gone. So, yes, you're paying a higher price, but you're getting a much more sure thing. And I think that's a really good way to think about it, is it is a sure thing, right? As far as sure things go, there's never 100% probability. Bitcoin is pretty damn close to 100%. Gold's pretty close to 100% in the terms of it's going to outperform that Right. Housing same. Can I say the same for your average stock? Probably not. And this is why we're seeing like, Nvidia runs. And that's kind of it. Everything else is struggling to beat inflation because their costs go up, their wages go up. There's also. You guys run a business. You know, it's like shit just goes wrong all the time. Doesn't matter if you're public or not, shit goes wrong. And bitcoin, it can't go wrong. It just is. It's just code, right gold, it can't go wrong. It's a metal. That's all it is.

This is why we simplify that to say like, it's on. On your barbell strategy, it's on the property side, it's on the safe side now. It's not on the risk side. And I can't wait. And I don't think it's that far away to when I can log into my super fund and I can allocate a portion to bitcoin. Like, that is going to be the day for me. I cannot wait.

100%. Yep, 100%. That's where it's going. It's, it's evolving. It's crossed the event horizon. And I actually, I was thinking about this again, talking about alts. There's a lot of people who now own. They know, they know that they own the winning. They win the winning ticket. You don't need to do anything else. You need to sit on your bitcoin. You'll be able to borrow against it, lend against it, blah, blah, blah. Why would anybody. Because the argument is the bitcoin money in the ETFs can't rotate down the stack, which is true. But the bitcoiners who get rich, they're like, oh, but crypto natives will sell. It's like, I mean, no, I'm sorry. Now that bitcoin is like, it's the thing I don't need. I don't want to sell my winning lottery ticket for something that probably won't win, right? And buy 50 of these things that probably won't win. It's like, I already won. I don't need anything else. So I think that the, the money that's going to flow down the stack, I just think is going to be less than people expect. And we know this because institutions were positioned for that to happen and they're now nursing pretty nice. I mean, they're still up, but they're not up as much as they could have been.

This is the same argument with.

Boomers and property, where it's like, you buy your property, you hold it for however many years, you get the rent, the price goes up, that it's worth the rent, pays off the mortgage. Eventually. You don't have a mortgage, it's just printing money. And someone says, so why don't you invest in stocks, get a better return or invest in this? They're like, no, I've got the winning ticket. The money just shows up in my account.

It ain't broke. I'm not fixing anything. I don't need to fix anything. It's great.

That's over, boys. Guys, we might wrap it up there. Checkmate. Thank you so much. Can you share mate with your newsletter? How do people get involved? Where do people go? How do they find you?

Yeah, absolutely. So you'll find me on, on Twitter or X, whatever people call it these days at Underscore Checkmatey. The newsletter is over@checkonchain.com it's a substack. We do video, we do written and all that material get through Collective Shift as well. So you'll find me either check on Chain or Collective Shift.

Yeah. So for those of you that want James's analysis, he does two or three bits of content for us over on the Collective Shift platform, so all members get that. And yeah, if you want to just subscribe to his bitcoin newsletter as well, head over to check on Chain Mate. Thank you so much. That was probably one of my favorite episodes so far. That was epic.

It was a pleasure, fellows. Thanks for having me on.

Oh, it was so good. And I said before the episode, I transferred a bunch of money because I knew I was going to buy more bitcoin. I'm going to do it straight after this because I have the winning lottery ticket.

Yeah, yeah.

Well, contrary to that, I was saying before we hit rip, I actually bought physical gold the other day, so I'm going the other way. I'm already planning, planning my exit strategy.

The divergence. There you go, guys. Thank you so much. If you like this episode, we'd love for you to share it with a friend. Send it to a bitcoin ball. Send it to. Not a bitcoin bull. Send it to someone that owns property or maybe someone that's got a bunch of cash with no investments. This is the episode they need to listen to. Please share it around. It's how it goes.

You are the tam.

You are the tam.

Thanks, guys. We'll see on the next episode.

Thanks. Championship.