170. Crypto Market Analysis, Altcoin Season, and Our Updated Strategy

I'm also reminded of the juxtaposition here, Ben, where I did a post where Bitcoin doesn't care about politics, regulation, deregulation, promises. It doesn't care about your feelings. It'll keep being Bitcoin. It'll keep being bitcoin long after you're dead. It doesn't care who uses it as long as it base the consensus rules. As long as the code still runs, it is there forever. So while we've got all of these bullish things kind of happening, you've got that juxtaposition of bitcoin is what it is. Use it as the tool that fulfills what you need to do in your life. But now we've got this synergy bend of things like really lining up. And when you get mainstream people like politicians talking about it, it just brings more attention to crypto at a very critical time.

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 me is Bergs, 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 bull market as well as behind the scenes view of our scaling a fully remote subscription research business here in Australia. And if you like the podcast, we'd love for you to leave us a follow or a subscribe on your favorite podcasting app or on YouTube. It is how we grow the podcast and bring this to you each every week. Completely free advertising, free affiliate free bullshit free to where you get the crypto insights. Now today we are talking crypto markets. Where are we going? What period of the cycle are we in? Is this still a good time to buy? When will the peak of the cycles be? These are all million dollar questions that we all have in our minds. We've got some data we're going to share with you here today. Now before I get into that quick little exciting announcement, we have just been announced that there will be a live Ben and Bergs in person in November at the Australian Crypto Convention in Sydney later this year. So if you are coming along or if you're not coming along, grab a ticket. Now you can use the code Collective Shift on the checkout to get 10% off bergs and I will be there live doing a Bennett Bergs in person, our first ever live audience podcast. Bergs. It's gonna be fun.

This is gonna be wild man. I'm really looking forward to it. Everyone will get to see us. You'll get to see a little light roasting, mate.

Little light roasting.

We might even show them how the show's put together, mate.

Look at the secret sauce. Yeah, so, yeah, we'd love to see you guys there anyway, in November. So where are we now? We're heading into a bit of a unique period in the cycle now that a lot of the major events are behind us. So, you know, the Ethereum ETF an hour live, we had some really good volume first two days we had over a billion dollars each day. Bitcoin 2024 conference recently over with obviously we had some very bullish sentiment from Donald Trump and a lot of the big sell pressure from the likes of Germany is over. Mt. Gox distributions are done and we're kind of now figuring out where we're going to go next. Now zooming out, you know, this cycle compared to previous cycles, we, we're kind of the precipice, if that's a word of. Or are they Precipice.

Yeah, it's a word.

Yeah, there's a word. I'm using big terminology here. We're at the start of the same period of time in the last two bull markets where we really started to gather momentum after the bitcoin halving. Now really, the first six months after bitcoin halving can be a little bit of choppy sideways, but it's really when phase two of the cycle starts, when really altcoins start to outperform and we get a lot more money into the, in, into the industry and usually that lines up with macro global liquidity increasing as well, which we haven't really seen to date either. So right now, you know, I think Bergs we're probably, you know, a few months away from really starting to kick into gear, especially when we head into the US election historically, November, December is a, is a, is a really good time to get into the market. And with a lot of the. For selling that's, that's sort of finished from, you know, the likes of Germany and the US government and et cetera, et cetera. I think we're starting to probably position ourselves, you know, pretty well for the, for the, you know, the later quarter.

Of this year definitely, man. And I've been seeing quite a buzz on Twitter. Even though capital isn't cheap at the moment, there's a lot of money out there, particularly in the VC space. Like some of the valuations and funding rounds I've seen have been crazy. So don't be fooled by all the macro things going on there's. A lot of people that still have a lot of money out there and things are really lining up for crypto.

Yeah. And the on chain metrics really back this up. So you know, as you know, if we love on chain, this is a big value prop that or an edge that we have in the market is, you know, on chain and fundamentals and know the MVRV ratio is a, is a great indication that we've always looked at and this is the market value to realize value ratio. We have seen in the past that, you know these periods of time when it comes time to sell, we go over this MVRV ratio of about, about, about one and right now we're still well below heading into that, that overvalued territory. In fact we're still really in that buy zone in in contrast to previous cycles. So that's basically telling us that there's still a lot of people in the market that are not in a lot of profit with their bitcoin. And ultimately the peak of the MVRV ratio is usually a good metric of when the bigger whales start to sell down on their bitcoin and rotate into the other assets. So that's one area and then the other tailwinds. Ultimately as I mentioned before, you know, Germany finished selling all their bitcoin. They sold nearly 50,000 bitcoin in just a matter of weeks. Mount Gox have nearly distributed all of their bitcoin to their creditors. I think they've got about 50% to go. And then we've also got the rates potentially starting to come down. We saw Jerome Power come out recently talk about how rates at this high is not going to be helpful for the economy. China has just cut rates overseas. And then also the global liquidity as we know, as that increases and the money printers start, that tends to find its way into risk on assets. And the US just recently hit all time high debt of $35 trillion which is another reason of bitcoin. Yep.

They're printing roughly a trillion every hundred days, which is crazy. Yeah, I saw you post that and I was like, whoa, it doesn't matter anymore. And it was only a few years ago, it was like 21 trillion, you know, and we're like, whoa, how are they going to pay this back? This is, this is looking crazy. On the flip side of that you got people like Michael Saylor coming out and he's got, he did the bitcoin conference, he did his projections of what bitcoin will be, which were fascinating. The rate of return minimum like bear case was 22% compounded yearly, which is fantastic. But Ben, he's going to start releasing courses on how companies can use Bitcoin as their Treasuries. And we've already started to see pension funds in the state at Bitcoin as well. So this is the other side that you're talking about where there is a lot of liquidity on there. Pension funds and companies are on the buy side and they need something to buy that product. Michael Saylor is telling them it is Bitcoin. It will solve their treasury challenges a hundred percent.

And we're seeing more and more institutions buy Bitcoin because of, you know, the continuing devaluing of their cash and the balance sheet and, you know, as rates start to come down and, you know, micro probability, you know, analysts are looking at here we're expecting maybe two or three more rate cuts by the end of 2024, which is really good. Obviously, as money becomes easier to loan and, and take out, it finds its way into risk on assets like Bitcoin, you know, and, and even that, that chart of looking at the central bank balance sheet, you know, as we see money printing, it finds its way into Bitcoin. It's super bullish. So, you know, and then also you got Donald Trump at the bitcoin conference, you know, screaming out from the rooftops that he wants to create a US Government strategic national bitcoin stockpile if elected. That needs to be a T shirt. National bitcoin stockpile on day one, he's gonna be firing Gary Gensler and appoint a new SEC chairman, which the crowd just erupted.

When that went, it was, people went nuts, mate. They were jumping around.

Yeah, they loved it. And then also the US government to keep 100% bitcoin it owns. Now the very next day, the Biden administration moved their $2 billion of Bitcoin into, I think it was Kraken wallets. I'm not sure they've started selling yet, but complete opposite of what, what Trump said. But look, I think if, if Trump was to be elected, I think it'd be very, very bullish for, for crypto.

And that was always backed up. I think RFK preceded him in the talks and, and he was saying the majority of his wealth is in bitcoin. He would make sure there's no tax on bitcoin and the government would buy like 550 bitcoin per day more than is actually created just from the organic mining supply. And then up to a certain number which was like 10% of the supply. These are just.

Honestly like.

Really, really bullish things. And I'm also reminded of the juxtaposition here, Ben, where I did a post where, you know, bitcoin doesn't care about politics, regulation, deregulation, promises. It doesn't care about your feelings. It'll keep being bitcoin. It'll keep being bitcoin long after you're dead. It doesn't care who uses it as long as obeys the consensus rules. As long as the code still runs, it is there forever. So while we've got all of these bullish things kind of happening, you've got that juxtaposition of bitcoin is what it is. Use it as the tool that fulfills what you need to do in your life. But now we've got this synergy bend of things like really lining up. And when you get mainstream people like politicians talking about it, it just brings more attention to crypto at a very critical time.

Yep, spot on. I was talking to a platinum client yesterday. He's got maybe, I don't know, 2, 300,000 in crypto. He's got a lot of other investments and asset a lot of cash on the sidelines. He was talking about whether or not now would be a good time to buy a hundred thousand dollars worth of bitcoin. Now for context, he's got, I don't know, 7, 800,000 in cash, right? So he's very cashed up. He's looking to just offset that cash and put it in bitcoin. And my always my question when someone's trying to figure out market timing is how long are you looking to hold this asset for? Are you trying to get in and out with these 12 months or is this a long term play? And for him it was a long term play. Well then for me a long term play. I'm price insensitive for a long term bitcoin player. I'll continue to buy bitcoin into the hundreds of thousands because I believe in the next five, ten years time bitcoin will be in the hundreds of thousands in US dollar terms. So price sensitivity at 65 or 60 or 73 really makes no difference to me. But if I'm looking at a 6 to 12 month return, it does. You're a lot more price sensitive, especially if you're looking at altcoins. That's where you look at something like dollar cost averaging. But for me, we're continuing to buy bitcoin when we have excess cash. I'm putting that in bitcoin for My long term hold, I don't give a flying for who's what price is because I know in 10 plus years it's going to be a lot higher than where we are right now.

That's it. And even looking at price, think about future potential and rate of return. For every dollar I put in, what percentage am I getting out? Not the current price of bitcoin, what is it potential for it to do? And even when I was with you in Melbourne and I was buying bitcoin at like you know, 33,000, I'm still buying it today at 65,000 and I'm not like oh I bought that one cheaper at 35 and this one is 65 because I'm holding this for five to 10 years. When it's 200, 300, 400,000, the cost basis isn't going to matter too much. I'm not going to be like oh that coin got this and if I bought it there, I'm not going to think like that. I'm going to be happy that I got great returns.

Yeah, yeah, 100%. Now a lot of listeners and you guys listening will probably want to know like when, when altcoin season, when AM altcoin's gonna come back? I know a lot of you probably bought at the Meech Meech March highs and probably a little bit excited when things got really toppy. You know, I think we're still a little while away from a real altcoin growth period of time. Like retail investors still are relatively, you know, non existent. Especially compared to like 2021 highs, we're down 70 or 80% in terms of YouTube views. And ultimately you know, if you look at the data, altcoin season doesn't tend to happen until bitcoin hits a like a multi year dominance high. So in terms of the amount of percentage that bitcoin is dominant in the market, you know, which you can look at on something like trading view with the ticket btc.d which is the bitcoin dominance. If you look over the last two bull markets, the Bitcoin dominance peaked in 2017 and 2021 and sharply dipped just after. And that's when altcoins ran higher and faced with the bull market. So if you look at, you know, in previous cycles, it takes Bitcoin in 2019 and 2020 leading into that altcoin season, bitcoin dominance got to approximately 74, 75% both times. And that's when we went on a basically a 12 month long altcoin run in the previous two cycles. So right now the bitcoin dominance is sitting just about 55% roughly. I think we're going to need to see bitcoin dominance continue to, to take the, take the capital, take the growth Bitcoin, maybe to get to $100,000 level, a psychological level that gets the excitement, that gets the fomo. Then the money starts to trickle down. People take profits from bitcoin and try and leverage up the old coins. Then the retail arrive and that's when we see an altcoin season which may be late this year, maybe it's next year, you know, who we'll see. But I think that's how it's going to play out.

Spot on, man. The mechanics behind it, you just rotate down the stack to higher risk. And people listen to this podcast, people that are investing in crypto, you've got your BTC stack, you got your E stack, you're going to make it and when you make it and you need to take some profits. And if you decide, hey, I want higher risk, you rotate down the stack, you go into alts. It'll still be before your Uber driver and your mates that you're having dinner with, loading up like whatever exchange app and talking about PI Coin or you know, XYZ Coin. You know, you'll be ahead of that and you'll be able to sell into that and build up your BTC and A stacks. You're in a very good position.

Yeah, and I think a lot of people are still looking too short term, like crypto for whatever reason or there's a number of reasons why, but really brings out this really short term driven, you know, fear and greed out of us as, as humans. It trades 24, seven, it's very volatile. You hope to make money very quickly. But I think a lot of people are thinking too short term and you know, cycles are going to last longer than this bull market. So many people are just thinking this bull market, like what about beyond that? Something like crypto is just going to end, you know, the end of this bull market, we're going to dip, we're going to go in a correction and then we'll go again and most likely we'll go a lot higher than where we are this cycle. So I think for a lot of us, we need to think about not only maximizing the returns of this cycle, but how we can build a long term portfolio beyond this cycle and compound our assets for future years. Because it's not just going to all wrap up at the end of this cycle. Like, there's a lot more time to come.

It's a very important lesson and one that you and I have learned time and time again over the last three cycles that we've been in. And investing is an infinite game and the goal is to stay alive. You know, don't carry the risk of ruin, don't risk too much capital, stay alive, have money to invest, have some money on the sidelines so you can take advantage of those market cycles when they come along because you're going to be investing for the rest of your life. It's not just, hey, I invest some money, I make whatever, I take it out and I go retire on a beach. Life's not really like that. You know, you're going to want to do other things. You're going to want to be active, you're going to have capital that you need to do something with. You're going to invest for the rest of your life. So think in multiple cycles. And then Ben, cycles within cycles, the barbell within barbells.

And that's spot on burgs. Like I was speaking to another platinum client the other day who's got 5.5 million in crypto and a lot of other assets outside of crypto. And we're talking about, you know, the reality is you don't need to compound all that risk continuing year after year when you've got that level of wealth. You know, talking to a high net wealth advisor recently, which I think I might mention on the podcast around, like, once you get to $10 million in liquid investable assets outside of your primary residence, life gets really easy. And the. One of the biggest mistakes that he sees people make in the, you know, in the stock market and business space with high net wells is that they continue to have the same risk profile as their wealth increases, which dramatically increases the risk of ruin. And, and for a lot of people.

It can wipe people out. And you ultimately don't need to do that. Like, once you've got a significant amount of wealth, it's more about preserving it. Bergs. Right. And thinking about boring investing as you talk about versus continuing to just barrel in and try and pick the next altcoin. Exactly.

Because you've got size, you don't need to get the maximum out of every dollar. You want less risk and more reassurance. And actually, Ben, that figure was less. It was $3 million. So once you get. That's right, yeah, yeah, 3 million, it changes significantly. When you get to 10, it changes a little bit after 10. You're just being silly. And I remember that guy specifically said from 3 million, if you want to go from 3 to 10, your life's not going to change that much. But for every million of risk, it's going to hurt you more to lose a million than to make a million.

That's so true. Yeah.

Because you have all, you have your house, you have all your needs sorted, you have multiple years worth of living expenses in the bank and you just don't need to take on that level of risk anymore.

And we were talking about this pre show bugs like, you know, for a lot of people, including us that, you know, during this cycle it's going to be about diversifying out of, out of crypto. Not completely obviously, but you know, once you've created wealth, it's really about diversification to preserve that and thinking about other assets and other industries and, you know, maybe de risking your crypto portfolio to.

Then preserve that spot on the classic one. You, one of our analysts and Checkmate have all said that they want to buy a house. So you are using crypto to take advantage of this cycle to then buy property and then you can, you know, borrow against it, you can make money, you can make rent. That doesn't mean you're leaving crypto completely. You're taking advantage of cycles and you're de risking or increasing risk depending on what you want to do in your life.

Yeah, spot on. You use crypto, you use businesses, you use your income to build the lifestyle that you want and you're going to have different risk profiles at different stages of your life and also the goal. So yeah, I think, think, I think that's spot on, mate. I think that's some good insights for folks.

Definitely, man. And things are really lining up. I'm still expecting fireworks like within the next few months, mate.

Like, yeah, we're nowhere near it yet. I agree. I think there's a lot more to come. So strap in folks, make sure your strategy's dialed in, get those assets lined up, get the exit plan starting to think about. As always, if you need some help, you can book a call with us in the link below. Chat to one of our team. We'll see how we can help and answer any questions you have about the way we work with you and hopefully we can all crush this bull market together. Awesome. We'll wrap it up there, guys. Thanks so much. Speak to the next episode.

Thanks so much, champions.