[ { "i": 0, "speaker": "Speaker 1", "text": "the next sort of 12 months is if you're I think if you're smart enough, you're going to accumulate in this market and buy the top quality assets that are positioned for the aentic future that" }, { "i": 1, "speaker": "Speaker 2", "text": "we're moving into." }, { "i": 2, "speaker": "Speaker 2", "text": ">> What's up everybody? It's LG Ducet here and welcome to the Milk Road Show, the daily crypto show. They can't afford the nice sunscreen this summer, so it's just going to have to stay inside and pray" }, { "i": 3, "speaker": "Speaker 2", "text": "for a pump. Today is June 2nd, 2026." }, { "i": 4, "speaker": "Speaker 2", "text": "We're recording on June 1st. All of us crypto people have the same question right now. Is it time to accumulate or is this the final dip? And is it better to just finally bite the bullet and jump" }, { "i": 5, "speaker": "Speaker 2", "text": "over to the hotter assets in the current narrative like privacy and stable coins?" }, { "i": 6, "speaker": "Speaker 2", "text": "Today we'll sit down with Jamie Coots, chief crypto analyst at Real Vision to see what the onchain metrics are really saying as we head into an uncertain summer. Today's episode is brought to" }, { "i": 7, "speaker": "Speaker 2", "text": "you by Cape, the privacy first mobile carrier, Nexo, earn interest, borrow and trade crypto, and Kalshi, where your takes finally pay out. Jamie, welcome back to the show, man. Good to see you." }, { "i": 8, "speaker": "Speaker 2", "text": ">> Nice to see you again, LG. Okay, let's dive right into it because you always give us a lot of great insight. You're one of more our our more popular guests." }, { "i": 9, "speaker": "Speaker 2", "text": "The last time you were on, February 12th, just a week removed from a dip that seemed unimaginable and definitely wiped a lot of people out that were leveraged uh and and and kind of seemed" }, { "i": 10, "speaker": "Speaker 2", "text": "like a lot of despair. What what has changed in the vibe since then? We're actually not that far off in price." }, { "i": 11, "speaker": "Speaker 2", "text": "We've gone kind of up and down since then. We've chopped a lot. Uh but we're almost we're almost right back in into that mid60s range, Jamie. So what's happened since then? Like I mean I think" }, { "i": 12, "speaker": "Speaker 1", "text": "we're we're still in a bare market and the way I describe you know a bare market is is very simple and clear." }, { "i": 13, "speaker": "Speaker 1", "text": "We've got a a trend regime indicator at Real Vision which um all the members have access to. You know I look at the weekly chart as really the go-to chart for understanding major trends in crypto" }, { "i": 14, "speaker": "Speaker 1", "text": "and we've been in a downtrend really since January. So you know we spoke as you as you mentioned just after the February 6 I think it was February February 7th where you are February 6" }, { "i": 15, "speaker": "Speaker 1", "text": "where I am major capitulation low and the research that I wrote at that time talked about all the capitulation markers that flashed in that major sell-off in early February. um my dashboards which I've been using you" }, { "i": 16, "speaker": "Speaker 1", "text": "know for a couple of cycles which helped me sort of understand the you know the Q4 low in 2022 a lot of them triggered the onchain measures triggered the derivatives market um metrics that I used they all" }, { "i": 17, "speaker": "Speaker 1", "text": "triggered now the interesting was a totally different liquidity environment um so we can talk about that in a in a minute but like a lot of the capitulation measures onchain and derivatives uh were were flashing. But" }, { "i": 18, "speaker": "Speaker 1", "text": "in my understanding of the way the sort of cycles play out, when you have a major derivatives flush like that, um there's usually a second leg lower. Um there is some still um symmetry left in" }, { "i": 19, "speaker": "Speaker 1", "text": "um crypto markets, even though I think the whole 4year cycle thing is evolving." }, { "i": 20, "speaker": "Speaker 1", "text": "And so what I was writing and have been writing at that time is that you've got to look to the weekly chart to turn to get a confirmation that we're out of this current bare market. And so we had" }, { "i": 21, "speaker": "Speaker 1", "text": "a nice move up, a counter trend rally of like 25 30%. These are normal in a in a normal bare market. What it needed to do was break through 85,000 or the mid 80,000s on the metrics I'm looking at to" }, { "i": 22, "speaker": "Speaker 1", "text": "confirm that trend reversal. It hasn't done it. So we're still in this sort of, you know, this lull in crypto as everything else rips." }, { "i": 23, "speaker": "Speaker 2", "text": ">> Guys, listen. We are at a very crucial point in time right now. AI stocks have ripped. They're going to keep ripping." }, { "i": 24, "speaker": "Speaker 2", "text": "Our analysts on the AI side are up like literally a 100% or more on quite a few calls and crypto is about to boom again or at least it feels that way. If you want all the insight on what we're" }, { "i": 25, "speaker": "Speaker 2", "text": "buying, what our analysts are doing, what's on their watch list, all of that is in Milkroad Pro. So join at the link below. Is that a challenge for you? I feel like it is a common theme and I" }, { "i": 26, "speaker": "Speaker 2", "text": "don't want to stick to it too much because I do want to get into a lot of the technical stuff. But is that is that invoke a a a particular like disdain in a way for you to see just a totally" }, { "i": 27, "speaker": "Speaker 2", "text": "different sector just go absolutely bonkers in a very crypto way, right?" }, { "i": 28, "speaker": "Speaker 2", "text": "Like a lot of the bottleneck stocks AI stuff has they've looked like crypto charts right to start this year." }, { "i": 29, "speaker": "Speaker 1", "text": ">> Yeah. Well, look, it's interesting how what the for me what this is um showing is that you know liquidity can grow like we're all you know if you're following crypto if you're in Bitcoin you're you" }, { "i": 30, "speaker": "Speaker 1", "text": "know either a liquidity analyst or de facto liquidity analyst right um and we understand liquidity is still one of the biggest factors and drivers of asset prices and Bitcoin is especially" }, { "i": 31, "speaker": "Speaker 1", "text": "sensitive hyper sensitive to the liquidity environment But what this shows is that this particular cycle or you know the last couple of years is that you know even though liquidity can expand, liquidity" }, { "i": 32, "speaker": "Speaker 1", "text": "is still finite and liquidity flows into where it's treated best. And at the moment the liquidity is flowing the major transmission mechanism for liquidity is through the banks. They're" }, { "i": 33, "speaker": "Speaker 1", "text": "expanding credit that's expanding capex." }, { "i": 34, "speaker": "Speaker 1", "text": "that's expanding growth in the real economy and that's flowing into everything that's associated with sort of the AI buildout and that makes total sense." }, { "i": 35, "speaker": "Speaker 1", "text": ">> Mhm." }, { "i": 36, "speaker": "Speaker 1", "text": ">> So, is it frustrating for me as a sort of a crypto market analyst? Well, it doesn't help my bags obviously. So, I'm very tilted to crypto, but I have a long-term view in where all this is" }, { "i": 37, "speaker": "Speaker 1", "text": "going. And where this is going is a, you know, a new era of aentic commerce, agentic finance. We're in that era. It started in Q4. The buildout of AI requires real world capex and and and" }, { "i": 38, "speaker": "Speaker 1", "text": "development in order to facilitate the expansion of the models into sort of an agentic world and those and that agentic world must run on a financial substrate that can facilitate the transactions the" }, { "i": 39, "speaker": "Speaker 1", "text": "commerce the velocity that it needs and that is blockchain. So for me because I've got that longerterm view I can sort of wait through this and see that sort of next phase of the cycle when that" }, { "i": 40, "speaker": "Speaker 1", "text": "starts to really accelerate be a direct bene you'll see crypto be a direct beneficiary of that. So it's just a you know at the moment technicals and the technicals on the market are negative." }, { "i": 41, "speaker": "Speaker 1", "text": "We can also talk about the fundamentals like the actual onchain activity is very depressed right if that was rising and prices were um still in a lull or falling then there's a very clear" }, { "i": 42, "speaker": "Speaker 1", "text": "fundamental catalyst right now but we're not seeing that so I think you know the next sort of 12 months is if you're I think if you're smart enough you're going to accumulate in this market and" }, { "i": 43, "speaker": "Speaker 1", "text": "buy the top quality assets that are positioned for the aentic future that we're moving into and a lot of that is the blockchain blockchain substrate." }, { "i": 44, "speaker": "Speaker 1", "text": ">> What what is what do you mean by substrate?" }, { "i": 45, "speaker": "Speaker 1", "text": ">> Well, it's the substrate of the the new financial or the new economy basically." }, { "i": 46, "speaker": "Speaker 1", "text": "So, you know, agents will need to move value uh and the traditional system obviously isn't equipped for it. Now you're seeing protocols u evolve through some of the traditional or you know the" }, { "i": 47, "speaker": "Speaker 1", "text": "large tech companies like Google and Stripe developing um agent commerce platforms but I still think that most of the transactions will happen on blockchains >> and so really that is the you know the" }, { "i": 48, "speaker": "Speaker 1", "text": "the substrate for movement of financial value and so therefore I mean we're going to see huge increases magnitudes more um transactions And you know we've never seen apart from you know brief periods of speculative" }, { "i": 49, "speaker": "Speaker 1", "text": "mania on blockchains actual block space get filled up right and at the moment we are overs supplied and there's not enough demand I think that's going to flip legitimately going to flip in the" }, { "i": 50, "speaker": "Speaker 1", "text": "next couple of years even though scaling on the L1's and through the L2s is going to increase dramatically. So that's all ahead of us. But at the moment we're in this sort of um you know we're in this" }, { "i": 51, "speaker": "Speaker 1", "text": "gap between now and then where I think um at the moment capital or liquidity is being directed to where it's been treated best which is anything associated with the AI trade which is" }, { "i": 52, "speaker": "Speaker 1", "text": "legitimate and fair makes total economic and rational sense but that is building the agentic future which then moves onto blockchain rails to be facilitated and I think that's where the opportunity lies" }, { "i": 53, "speaker": "Speaker 2", "text": "if you've got you know 12 to 24 months you know sort of view is this is this One of the reasons then Jamie that we are seeing you know the green shoots on a few alts right now in crypto right and" }, { "i": 54, "speaker": "Speaker 2", "text": "I'm talking about the near the Venice uh Zcash like we we've talked about this ample on the show but is this is this kind of like is this the market or at least the the crypto market beginning to" }, { "i": 55, "speaker": "Speaker 2", "text": "price in this future and starting to invest in some of the protocols that are that are either building that or will be major players in that space." }, { "i": 56, "speaker": "Speaker 1", "text": ">> Yeah, I'd agree with that. But it's also different to the previous instances where you could say that happened also." }, { "i": 57, "speaker": "Speaker 1", "text": "U if you go back to the end of 2024, there was the whole AI crypto uh craze at that time, the creation of agents that really did nothing and a lot of value sort of flowed into these uh these" }, { "i": 58, "speaker": "Speaker 2", "text": "some of them tweeted, Jamie. Some of them would tweet sometimes. Okay, that was very important." }, { "i": 59, "speaker": "Speaker 1", "text": ">> And still I can see them in my feed. Um [laughter] you know, but did they did they deserve the billions of dollar valuation? Uh clearly not. the market's repric them." }, { "i": 60, "speaker": "Speaker 1", "text": "But yeah, the the uh emergence of, you know, some of these newer um some of these newer, I guess, use cases are are phenomenally interesting. You know, I'm about to release a report on the NE" }, { "i": 61, "speaker": "Speaker 1", "text": "protocol, which for you know, I've been fond of the NE protocol and I've had it in my portfolio. unfortunately didn't do very well when I held it, but the pivot that they've made, which I which I knew" }, { "i": 62, "speaker": "Speaker 1", "text": "at the time, but didn't fully appreciate is starting to pay off. And I think, you know, they are positioning for a world that um I'm talking about and therefore they are um they sort of deserve" }, { "i": 63, "speaker": "Speaker 1", "text": "reconsideration even though they've run pretty hard. It's just a question of position sizing, which we'll leave for a different discussion, but is is near positioned for the Aantic future. With" }, { "i": 64, "speaker": "Speaker 1", "text": "Intense really as their primary product, um we're already starting to see huge growth in that area without any agents coming online. If that comes online, the way that they've positioned intense with" }, { "i": 65, "speaker": "Speaker 1", "text": "the the partnering and the networks that they've built already, I think is going to be massive for them. And everything else that NIA is doing, it's kind of like a free option. Like there are some" }, { "i": 66, "speaker": "Speaker 1", "text": "products like Ironclaw, which is, you know, an AI harness that is competing with Hermes and and Open Claw right now." }, { "i": 67, "speaker": "Speaker 1", "text": "Uh, but it's a very very distant third." }, { "i": 68, "speaker": "Speaker 1", "text": "It's new and, you know, I've looked at it. It's it's not that easy to use, but it'll evolve. But all these other silos um are sort of creating a private AI product suite, which I think is going to" }, { "i": 69, "speaker": "Speaker 1", "text": "do very, very well in the future. But at the moment, if you just look at the growth in intents, um they've solved blockchain's biggest problem, which is interoperability." }, { "i": 70, "speaker": "Speaker 1", "text": "I mean, something from one wallet and not bridging assets and and removing that, you know, that system of I guess bridging assets, which is has been, you know, diabolical from a security" }, { "i": 71, "speaker": "Speaker 1", "text": "standpoint um since get since the get- go, um is huge. And so there's going to be competitors come out that's going to um compete with them, but they've got that first mover advantage and because the" }, { "i": 72, "speaker": "Speaker 1", "text": "team is very AIcentric, I think they understand how to evolve the product better than anyone else in the space. So it's really really interesting. So yeah, I think the um that the value has been a" }, { "i": 73, "speaker": "Speaker 1", "text": "like the value's been rotating in crypto away from the majors where volumes and activity are down to where activity and fundamentals are actually improving. And you can see that in Venice's growth" }, { "i": 74, "speaker": "Speaker 1", "text": "numbers. You can see that in intense volumes. You can see that in Zcash." }, { "i": 75, "speaker": "Speaker 1", "text": "Slightly different slightly different situation. More privacy, less AI. But it is I wrote a piece on this as well. Um LG back in early early April um and put it in the RV portfolio. It's done really" }, { "i": 76, "speaker": "Speaker 1", "text": "well. But like it it is an it is a deacto AI play because AI as AI scales the security around uh the security of the of the chain itself becomes paramount. I think um Zcash is you know" }, { "i": 77, "speaker": "Speaker 1", "text": "at the forefront there. So these are all assets that are seeing huge growth in activity which obviously correlates to price. I've also published another report LG which um I'm happy to share" }, { "i": 78, "speaker": "Speaker 1", "text": "with you guys which is I've done crypto factor research. So what pays you in crypto? Is it momentum? isn't the side like traditional equity factors because I came from an from an equity" }, { "i": 79, "speaker": "Speaker 1", "text": "background. You know a lot of investors in the traditional world invest in equity factors. They they invest in growth names. They invest in quality names. Momentum's a big one. size like" }, { "i": 80, "speaker": "Speaker 1", "text": "sizing small caps over large caps and all these different factors that have proven to be statistically significant and building portfolios and done that and applied that in a crypto setting and" }, { "i": 81, "speaker": "Speaker 1", "text": "it's clear that growth is the predominant factor and momentum but like growth is the predominant factor. So you have to pay attention to the growth in onchain activity. Maybe it hasn't been" }, { "i": 82, "speaker": "Speaker 1", "text": "sexy or important up to this stage, but and you know it's very volatile, but like consistent growth correlates to higher prices. And so that's where um these protocols are shining because" }, { "i": 83, "speaker": "Speaker 1", "text": "there is actually growth in their numbers. Whereas in most the other chains, it's been you know they've been bleeding out now for you know 9 to 12 months." }, { "i": 84, "speaker": "Speaker 2", "text": ">> The way we build wealth is changing." }, { "i": 85, "speaker": "Speaker 2", "text": "[music] Stocks, savings accounts, real estate, that playbook is getting rewritten in real time. Nexo [music] is the platform built for what's next. It's an all-in-one digital wealth platform" }, { "i": 86, "speaker": "Speaker 2", "text": "where you can earn interest on your crypto, borrow against it without selling, and [music] trade a wide range of assets all in one place with 24/7 support and institutional grade security. Oh, and by the way, [music]" }, { "i": 87, "speaker": "Speaker 2", "text": "Nexo is back in the US with new US clients getting 30 days of Wealth Club premier access. 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Your phone's network identifier rotates every 24 hours so you look like a different subscriber every day. Call logs are" }, { "i": 93, "speaker": "Speaker 2", "text": "deleted after 24 hours. You get two encrypted secondary numbers for signups and 2FA [music] included in your plan." }, { "i": 94, "speaker": "Speaker 2", "text": "Plus SIM swap protection that puts you in control of your number so no one, [music] not even Cape, can hijack it." }, { "i": 95, "speaker": "Speaker 2", "text": "Use code milkroad at milkroad.com/cait for 33% off your first 6 months. I I have I have a follow-up question on everything you just said, but I do want to say you Jamie, I you know what I" }, { "i": 96, "speaker": "Speaker 2", "text": "really appreciate about you is you always bring a unique vocabulary when it comes to crypto. I've never I don't think in my years of doing this I've ever heard anybody refer to the" }, { "i": 97, "speaker": "Speaker 2", "text": "infrastructure as diabolical, which is how you put bridging assets, but it absolutely is diabolical. It feels like it's been designed by Lucifer himself to to to to enrage you. Honestly, that I" }, { "i": 98, "speaker": "Speaker 1", "text": "never thought about it that way about using using, you know, and look how much it flows in terms of bridge volumes. It's insane. There's so much volume that is being you know that is is being transmitted across chains" }, { "i": 99, "speaker": "Speaker 1", "text": "using bridges. Um so you know the >> obviously the demand is there. It's just the the actual product or the solution has been >> as I said diabolical up to this point." }, { "i": 100, "speaker": "Speaker 2", "text": ">> And there's no there's no greater recurring tragedy that that I hear um from from our community and and other communities I'm in. uh as somebody who sent the asset on the to the didn't" }, { "i": 101, "speaker": "Speaker 2", "text": "convert it before sending it to the right chain or something like that like they sent it it was on this chain and they sent it to Coinbase but Coinbase doesn't see USDC on that chain or" }, { "i": 102, "speaker": "Speaker 2", "text": "something like that like just this absolute disaster of of trying to use um you know custodial non-custodial infrastructure. So, uh, it's it's funny you point out that way is this and and I" }, { "i": 103, "speaker": "Speaker 2", "text": "got to kind of relate this back to everything that you're saying and and you know, we've definitely seen >> in the last few years and and this is even related to hyperlid. We're seeing" }, { "i": 104, "speaker": "Speaker 2", "text": "fundamentals really matter in terms of business, right? Because what you're describing is growth. It's like that's what that's how businesses grow as well." }, { "i": 105, "speaker": "Speaker 2", "text": "That's how equities go up is that you need to show growth. You need to show earnings. You need to show new users, right? And now you're, you know, kind of the picture you're painting for me and" }, { "i": 106, "speaker": "Speaker 2", "text": "that the market is painting is that it's like that's actually what what the market is going to seek out. Do you see that being a trend that continues even once things get more bullish again," }, { "i": 107, "speaker": "Speaker 2", "text": "Jamie, or do you see it still devolving eventually into hyper speculative assets like another memecoins or another NFTs?" }, { "i": 108, "speaker": "Speaker 2", "text": "Or do you think that it's like, hey, next time around the market is not really going to pay attention to these kind of sillier things and it's just going to go for the thing for the the" }, { "i": 109, "speaker": "Speaker 2", "text": "the the protocols that are actually making money and actually growing in users." }, { "i": 110, "speaker": "Speaker 1", "text": ">> Well, it's it's definitely going to be the latter. The maturation of the space will demand a a much more sort of rigid and first principles approach to investing in in in these assets, right?" }, { "i": 111, "speaker": "Speaker 1", "text": "clarity act needs to pass and that provides a better framework for disclosures and protocols. So a lot of the ambiguity and quite frankly for lack of a better word the the [ __ ] that" }, { "i": 112, "speaker": "Speaker 1", "text": "actually frustrates me for being in this space when transparency is sort of supposed to be paramount but you don't get it. Blockworks I'll give a shout out to Block Works. I love the guys over" }, { "i": 113, "speaker": "Speaker 1", "text": "there and what they've done with their token transparency um sort of framework." }, { "i": 114, "speaker": "Speaker 1", "text": "It's something that I was actually trying to build initially in the very early days at Bloomberg Intelligence." }, { "i": 115, "speaker": "Speaker 1", "text": "They've done amazing. They've got this standard now in place. That's without regulatory any sort of regulations being implemented yet. Although clarity will eventually get passed and we'll get" }, { "i": 116, "speaker": "Speaker 1", "text": "that. But like in the meantime, if you're a protocol, you know, make sure that you're following first principles on disclosures and you're aligned with the token and not with equity holders in" }, { "i": 117, "speaker": "Speaker 1", "text": "the background. Um, so all of that stuff is helping shape the market more like a traditional market which will invite sophisticated mature capital to move in and they are going to look at these" }, { "i": 118, "speaker": "Speaker 1", "text": "protocols in a way that they look at equity businesses. This is are they robust? Are they growing uh through organic growth and not through incentives and how are they converting that growth" }, { "i": 119, "speaker": "Speaker 1", "text": "into value acrruel for the token? And so the the world of onchain analysis which has you know grown up leaps and bounds over the last couple of year is going to accelerate even more so. Um and there" }, { "i": 120, "speaker": "Speaker 1", "text": "will always be narratives especially in a high liquidity environment like 2020 2021 was crazy. Excess liquidity AI wasn't on the scene. It all flowed into crypto. It chased all sorts of silly" }, { "i": 121, "speaker": "Speaker 1", "text": "narratives." }, { "i": 122, "speaker": "Speaker 1", "text": "This cycle it was very clear that you know onchain metrics drove performance." }, { "i": 123, "speaker": "Speaker 1", "text": "If you look at the L1s that outperform Bitcoin, you know, BNB and uh Tron, which no one likes to talk about and like quite frankly, they're they have their issues, but in terms of just the ability to" }, { "i": 124, "speaker": "Speaker 1", "text": "actually grow revenues, grow fees and convert that into token acral, help their token. It's very simple. So going forward, that has to be the way in which all tokens look at things. And if you" }, { "i": 125, "speaker": "Speaker 1", "text": "look at the success that's coming through now in the you know take Zcash out of the equation cuz it's proof of work chain but in the L1's and protocols um L1's and apps then that mechanism is" }, { "i": 126, "speaker": "Speaker 1", "text": "differentiating the performance hyperlquid obviously you know and and now NEO has basically cut its inflation turned on a fee switch you know all of these things build confidence in" }, { "i": 127, "speaker": "Speaker 2", "text": "investing in in a token and not in vaporware right [clears throat] >> that's a good way to put it. I I do want to save a bit of time today, Jamie, to talk about um the majors, which we've" }, { "i": 128, "speaker": "Speaker 2", "text": "briefly discussed, but um you know, looking at your last few reports, and you put these out every month, the Alpha Alpha Crypto Pulse report, which is honestly a really fantastic piece. uh" }, { "i": 129, "speaker": "Speaker 2", "text": "you've kind of I've looked at your last two from end of April and end of May and you've kind of painted a bit of a different picture where I believe that I I believe that most recently in your May" }, { "i": 130, "speaker": "Speaker 2", "text": "27th which is just a few days ago you have recently become a little bit more bearish on some of those and and let's talk mainly just Bitcoin, Ethereum and Salana. Uh but it seems like the" }, { "i": 131, "speaker": "Speaker 2", "text": "rejection from the that late that low 80s number uh has made you kind of bearish and obviously we're seeing a lot of that play out of the market now." }, { "i": 132, "speaker": "Speaker 1", "text": ">> I would actually reframe that. So the the case is that we've been in a bare market and really what we've seen is a counter trend rally and what I was looking for was a break higher through" }, { "i": 133, "speaker": "Speaker 1", "text": "resistance for Bitcoin specifically in the mid80s. And the reason why that's important is not only is that typically the level of normal counter trend bare market rallies where they fail but also" }, { "i": 134, "speaker": "Speaker 1", "text": "if you just look at the onchain data and you look at all the exchange traded volumes that is where a lot of distribution and a lot of volume traded." }, { "i": 135, "speaker": "Speaker 1", "text": "And naturally that is a huge ceiling for the price that it needed to break through. And so I was prepared to flip and my trend chameleon indicator which is um you know some of the tools that we" }, { "i": 136, "speaker": "Speaker 1", "text": "use at real vision um would have indicated that as well. So it's it's based on a framework that we apply bearish in a sense that like we've been in this bare market and we're still" }, { "i": 137, "speaker": "Speaker 1", "text": "waiting for confirmation or reversal that just has not arrived yet. Then you look at below Bitcoin and look at the majors. Um, you know, most of the activity on these chains has been" }, { "i": 138, "speaker": "Speaker 1", "text": "declining uh in the I I now sort of delineate activity on an L1 between what I call sort of like the structural uh stable coin flow and then the speculative flow. Speculative flow, you" }, { "i": 139, "speaker": "Speaker 1", "text": "know, obviously ramps up into a bull market when there's excess liquidity and we see that from time to time that drives that definitely drives token price. The problem with that is very" }, { "i": 140, "speaker": "Speaker 1", "text": "cyclical and tends to be very short-term. Whereas you got this structural um bid now coming in through stable coin use. And so even though stable coin transfers uh and stable coin assets up on the year but has slowed" }, { "i": 141, "speaker": "Speaker 1", "text": "dramatically, everything else has basically gone down. So it's in negative growth and that is sort of that's the fundamental rationale for why the price is going down as well. And so yeah, the" }, { "i": 142, "speaker": "Speaker 1", "text": "majors have basically been um been doing this for a while. Um and then there's been a few bright spots in the market which have actually seen um you know activity improve and that's reflected in" }, { "i": 143, "speaker": "Speaker 2", "text": "their prices. Hyperlquid >> and and NEO being examples." }, { "i": 144, "speaker": "Speaker 2", "text": ">> Where's the bottom, Jamie? How [snorts] do we know how do we know we get back to a bottom here?" }, { "i": 145, "speaker": "Speaker 1", "text": ">> In given the volatility of the asset, we've already seen a 50% decline which, you know, in volatility adjusted terms is probably on par with like previous bare markets. um we might get one more" }, { "i": 146, "speaker": "Speaker 1", "text": "flush lower in in my estimation, but looking ahead too, so I think that is basically the it's it's front running the liquidity that's going to have to come in 2027. And I'll tell you why. The" }, { "i": 147, "speaker": "Speaker 1", "text": "IPO is calendar is obviously grabbing all the headlines. $250 billion. We got these mega IPOs. In terms of nominal um value, these are the biggest we've ever seen. Um, but in terms of market cap," }, { "i": 148, "speaker": "Speaker 1", "text": "the percentage of market cap, they're actually a lot lower than the IPO boom in 1999 and 2000 which sort of topped the market. And I would argue that from a sentiment perspective, it's fair to" }, { "i": 149, "speaker": "Speaker 1", "text": "say that when you see large IPOs hit the market all at once after a long bull market, it can be it can be a a topping signal. But I wouldn't rest everything on that. where I'm seeing the biggest" }, { "i": 150, "speaker": "Speaker 1", "text": "concern for um a liquidity is not only that like the the amount of debt that's being raised through the um hyperscalers, but because they're using free cash flow now to to build out the" }, { "i": 151, "speaker": "Speaker 1", "text": "for the AIA buildout, they are 30% of all buybacks in the S&P 500. They effectively as a group go to zero next year in terms of growth. Now you take that marginal bid out of buybacks, that alone is not something to" }, { "i": 152, "speaker": "Speaker 1", "text": "be super bearish on. But if you add the IPO stuff and you add the buybacks to the third factor, which is the most important factor, which is a huge amount of treasury issuance ramping up through" }, { "i": 153, "speaker": "Speaker 1", "text": "this year into next year, which is going to stress the channels that can absorb it. Um, that's when I start to get a little bit worried. Now, how would I position for that in terms of like, you" }, { "i": 154, "speaker": "Speaker 1", "text": "know, a liquidity cycle top? You know, I I can't help but think that the US government being as acutely aware of this as they are with Besson in the in the Treasury already trying to manage" }, { "i": 155, "speaker": "Speaker 1", "text": "liquidity through, you know, changes to the bank um regulations through the ELSR changes and whatnot. And um you know, we'll they'll have to they'll have to add liquidity through some measure um" }, { "i": 156, "speaker": "Speaker 1", "text": "which they're currently not talking about." }, { "i": 157, "speaker": "Speaker 1", "text": "I can't see how they continue to neuter or for like for lack of a better word but like kneecap or constrain the Fed from doing more because it's only through the Fed that they can basically" }, { "i": 158, "speaker": "Speaker 1", "text": "get the liquidity that is going to be needed to absorb all the supply that hits next year because they can't afford they're running budget deficits that are at wartime levels right in terms of the" }, { "i": 159, "speaker": "Speaker 1", "text": "the percentage of GDP deficit they're If tax receipts go down because of a massive market decline of 30%." }, { "i": 160, "speaker": "Speaker 1", "text": "That deficit blows out to extraordinary levels and yields blow out. Yields are already back in terms of like the interest costs to GDP are back at the all-time highs of around 3.2% I think from last check which was" }, { "i": 161, "speaker": "Speaker 1", "text": "from 1990. So they like they have to manage the year the they have to manage the long bond yield. They have to manage yields across the curve. In my view they're already doing that through" }, { "i": 162, "speaker": "Speaker 1", "text": "issuing a lot of bills. So there is a lot of liquidity coming in next year due to I think a major overupp issuance and and also um changes to the the composition of the equity market" }, { "i": 163, "speaker": "Speaker 1", "text": "through IPOs and and the hyperscalers not buying back as much stock. You know, I think we're, you know, potentially going to go for maybe another leg lower." }, { "i": 164, "speaker": "Speaker 1", "text": "I don't know. But this is for my mind, and I said this back in February, anything in the 60,000s for Bitcoin is an amazing accumulation zone um on a long-term horizon." }, { "i": 165, "speaker": "Speaker 2", "text": ">> Mhm." }, { "i": 166, "speaker": "Speaker 2", "text": "So, so basically, is this why, and just to kind of go back to the stock market for a second, is this is this one of the reasons why, you know, you have three giant companies rushing to IPO? Well," }, { "i": 167, "speaker": "Speaker 1", "text": "you'd have to you'd have to question their motives as to why they all want to go at the same time, right? Um, so there is definitely that's a bit of a a red flag, but these are these are" }, { "i": 168, "speaker": "Speaker 1", "text": "unbelievable companies that are have got huge revenue. Now everyone can sort of debate whether a ARR is like the number you want to rest your head on and um you know what is the underlying profit" }, { "i": 169, "speaker": "Speaker 1", "text": "profitability and and cash flows but I think you know over the long term these companies are going to be extraordinary wealth creation factories. I just you know question like whether they're going" }, { "i": 170, "speaker": "Speaker 1", "text": "to be the best buyers from the from the get-go or whether you want to wait a little bit. But yeah you you do have to question the motives to go all at once." }, { "i": 171, "speaker": "Speaker 1", "text": "Now, I think that they're probably going to spread it out. Like there was I think they were like Open AI and Enthropic were aiming for the second half of this year. I think maybe AI is pushed out a" }, { "i": 172, "speaker": "Speaker 1", "text": "little bit further or maybe vice versa um to try and spread it out a little bit. Um so we'll have to wait and see." }, { "i": 173, "speaker": "Speaker 1", "text": "But yeah, um anecdotally we've seen in the past that when you see a glut of IPOs that it has coincided with with market tops. Um but I don't think in this case the percentage uh the" }, { "i": 174, "speaker": "Speaker 1", "text": "representation of this IPO um supply as a percentage of market cap is the issue." }, { "i": 175, "speaker": "Speaker 1", "text": "The issue is Treasury debt issuance which is ramping up massively in 2027." }, { "i": 176, "speaker": "Speaker 2", "text": ">> You're listening to the Milk Road Show which means you've got takes strong ones I bet. But where do those takes actually go? Do you [music] tweet them into the void, argue them in the group chat? Or" }, { "i": 177, "speaker": "Speaker 2", "text": "do you try to express them by buying a stock? The thing is stocks move on like 50 other things at once. And that's where Koshi comes in. It's a CFTC regulated prediction market where you" }, { "i": 178, "speaker": "Speaker 2", "text": "bet directly on outcomes like Bitcoin [music] hitting 100K, Fed rate cuts, GameStop buying eBay with a clean yes or no. We did a full deep dive on why prediction markets might be crypto's" }, { "i": 179, "speaker": "Speaker 2", "text": "third product market fit moment. Check the show notes for the full report [music] and claim $10 free when you trade $10 on Cali." }, { "i": 180, "speaker": "Speaker 2", "text": ">> Got it. Okay. Okay. That's a unique take. We haven't really I don't think we've heard specifically that perspective. Maybe on our on our macro podcast with John Gillan, we've heard" }, { "i": 181, "speaker": "Speaker 2", "text": "that, but this that's that's a really good take. Jamie, the last thing I want to ask you, um, and this we're bouncing a little bit all over the place here, but I think, you know, you're a" }, { "i": 182, "speaker": "Speaker 2", "text": "fantastic analyst, and I think we always want to get a bit of everything from you. U, you also mentioned to me before when we were preparing the podcast that you did have a few trade ideas. And I" }, { "i": 183, "speaker": "Speaker 2", "text": "think that that is definitely what people are looking for right now. What are the few assets you actually like?" }, { "i": 184, "speaker": "Speaker 2", "text": "Uh, given that, you know, the majors may be looking for another leg down. We're in very uncertain times. There are some narrative pieces that have already run as well and that's up to the listeners" }, { "i": 185, "speaker": "Speaker 2", "text": "to the audience if you guys want to get into those. A lot of great compelling cases even even made by Jamie today uh for some of those protocols but um I think you had a few others uh that you" }, { "i": 186, "speaker": "Speaker 2", "text": "mentioned that maybe are not so much under the spotlight. We already talked about Zcash but perhaps you mentioned circle and even derive as as interesting >> ideas here." }, { "i": 187, "speaker": "Speaker 1", "text": ">> Yeah. So, first thing I'll say is that look, if we're if we're going for another leg lower and like that's at this point, um, you know, there's enough weakness there that I think we'll see" }, { "i": 188, "speaker": "Speaker 1", "text": "Bitcoin trade sort of down to the mid60." }, { "i": 189, "speaker": "Speaker 1", "text": "That could be the low. But like I think that the um I think that the the assets that have run hard like Hyperlquid Zcash and NIA Venice if the rest of the market is selling off then they will they will naturally start" }, { "i": 190, "speaker": "Speaker 1", "text": "to see some profit taking but in terms of like sizing um like sizing in I think that they are going to they deserve sort of a place in the portfolio. Um, and I'll be writing about this for for real" }, { "i": 191, "speaker": "Speaker 1", "text": "vision in terms of what that actually means in terms of my portfolio. I took some profits in Zcash just recently." }, { "i": 192, "speaker": "Speaker 1", "text": ">> Congrats." }, { "i": 193, "speaker": "Speaker 1", "text": ">> And some of the de some of the uh demar indicators that I look at are starting to show exhaustion in those names as well. But in terms of like man and the problem is it's it's a lot of rotation" }, { "i": 194, "speaker": "Speaker 1", "text": "like it's there's not new capital coming in right that lifts all boats. It's sort of rotation out of names that are underperforming into the names that are performing and that becomes a momentum" }, { "i": 195, "speaker": "Speaker 1", "text": "trade. So if the underlying market is a little bit weaker for the next couple of weeks and they'll probably sell off in my view. Um but they are very interesting. They're interesting names" }, { "i": 196, "speaker": "Speaker 1", "text": "that I think um you know deserve a place in the in the portfolio. Derive is an interesting one just because I think the onchain options vertical is very underappreciated and that's because like" }, { "i": 197, "speaker": "Speaker 1", "text": "the legacy options protocols um have been you know they've been disasters. Um the infrastructure behind them just didn't work. am AMM structures. Derive has got the central limit order book" }, { "i": 198, "speaker": "Speaker 1", "text": "engine running like similar to Hyperlid and they're all ex options traders working at large um option houses like Susana and and whatnot. And so I think they've cracked the code on how to build" }, { "i": 199, "speaker": "Speaker 1", "text": "options on chain. So they've been doing some pretty strong volume numbers in the last really since um end of last year." }, { "i": 200, "speaker": "Speaker 1", "text": "And you know it's a small cap name so you know it's definitely something that you would want to size appropriately given the volatility but um if onchain options grows into a legitimate vertical" }, { "i": 201, "speaker": "Speaker 1", "text": "they are 70% of all the volumes right now and they're taking they're starting to take a little bit of market share away from the um you know the traditional crypto options market of of" }, { "i": 202, "speaker": "Speaker 1", "text": "Derit. So it's definitely worth having a look at but it's you know highly speculative. Are they are do they have an aggressive buyback similar to Hyperliquid or anything like that for" }, { "i": 203, "speaker": "Speaker 1", "text": "their token?" }, { "i": 204, "speaker": "Speaker 1", "text": ">> Yeah, so not an I wouldn't say an aggressive one. I think they're buying back 35% of the fees. 65% is going to the treasury for an insurance fund, which I think is critical for an options um" }, { "i": 205, "speaker": "Speaker 1", "text": "platform to have. So that seems that seems right to me. They've just issued a ton of new coins um for to pay out sort of partners. So there is a supply overhang but that doesn't kick in until" }, { "i": 206, "speaker": "Speaker 1", "text": "um the price rises to a certain um level. So it's you know about you know 100% from here has to go up 100% before a lot of that liquidity starts hitting the market. So there's you know" }, { "i": 207, "speaker": "Speaker 1", "text": "definitely check it out and look into it. So it's it's not straightforward but um it's just it's really more so a like are there are the token incentives aligned? I would argue yes. Are they as" }, { "i": 208, "speaker": "Speaker 1", "text": "aggressive as Hyperlquid? No. because they're so early stage that they have to build up the the insurance fund, which makes sense. But can you see with real world options and tokenization that" }, { "i": 209, "speaker": "Speaker 1", "text": "traditional players coming into the market will need an an onchain um options facility aligned with per aligned with spot? Yeah, I I'd say that's kind of like just makes sense." }, { "i": 210, "speaker": "Speaker 2", "text": ">> That's awesome. Okay, I like that. I like that's a good take. And if anybody wants to learn a little bit more, um, we actually did a I had Nick Foster, who's the founder or one of the co-founders," }, { "i": 211, "speaker": "Speaker 2", "text": "on the show a few months back, so you can check that out. Uh, just search it in the Milk Road YouTube or or or anywhere else, wherever you get your shows. Um, it was a very good it was it" }, { "i": 212, "speaker": "Speaker 2", "text": "was an excellent show and and I really like the platform and and from what I understand as well, you know, learning a lot about stocks in the last couple years is a lot of people are options" }, { "i": 213, "speaker": "Speaker 2", "text": "traders. A lot of people prefer that over perpetual. So definitely something to watch as not I wouldn't call it like a beta play to to Hyperlid but I like I like this kind of little gem here that" }, { "i": 214, "speaker": "Speaker 2", "text": "you've got uh Jamie. So appreciate the I let's not not going to call it alpha but the idea the idea is a good way to put it. U Jamie it's been a pleasure man." }, { "i": 215, "speaker": "Speaker 1", "text": "What let's say we don't see you for another 3 months. Where do you think we'll be >> in three months time? So on the [clears throat] other side of the of the northern hemisphere summer [laughter]" }, { "i": 216, "speaker": "Speaker 1", "text": "it's hard to say. I I look I wouldn't rule out that the equity market tears even further from here and that could and that that could actually lift uh crypto. So look I 3 months out I'm not" }, { "i": 217, "speaker": "Speaker 1", "text": "really I don't have a sort of short-term prediction. um I'm accumulating in this market um in the assets that I think are going to be well positioned for the future that is rapidly coming towards" }, { "i": 218, "speaker": "Speaker 1", "text": "us. So, you know, any dips will be hopefully taken taken um advantage of with any any money that's lying underneath the sofa or the couch." }, { "i": 219, "speaker": "Speaker 2", "text": ">> Excellent. Okay. Well, Jamie, uh thank you as usual for your insight, man." }, { "i": 220, "speaker": "Speaker 2", "text": "We'll keep an eye on the research and always good to talk to you, man." }, { "i": 221, "speaker": "Speaker 3", "text": ">> Always good to see you, too. Thanks, LG." }, { "i": 222, "speaker": "Speaker 3", "text": "Want insights on what's moving crypto markets and [music] how we're trading each event? Subscribe to our channel and join the Milkro Daily and Pro newsletters and start investing like the" }, { "i": 223, "speaker": "Speaker 3", "text": "[music] top 1%. This show is for educational purposes only. Nothing we say is financial advice. Investing is risky. Never invest more than you can afford to lose." } ]