Bitcoin: The Beauty of Mathematics (Part 42)

Hey everyone and thanks for jumping back Into the cryptoverse today we're going To talk about Bitcoin the beauty of Mathematics Part 42 if you guys like the Content make sure you subscribe to the Channel give the video a thumbs up and Also check out the sale on into the Cryptoverse premium at intothe Cryptoverse decom link is in the Description below or the pinned comment We're going to go through a few charts In this video we'll of course touch base On the normal ones that we look at in This video series but will also talk About a few others it is the first of The month but it is also the first day Of the year of 2024 and so it might be Nice to just take a look at some other Charts within this video to get a better Grasp on where we potentially are within The current market cycle so every month On the first of the month generally Speaking I try to make a video where we Take a step back from the short-term Price action and look more so at longer Term trends to better understand periods Of Undervaluation and overvaluation that is The general purpose of these of the the Beauty of mathematics series and as you Can see the blue line here is the actual Total market cap of the entire asset Class and we go through periods of Overvaluation and undervaluation and

Often times when we are overvalued we Can be overvalued for a year or more and When we're undervalued we can be Undervalued for a year or more you can See that we first entered into the Undervaluation territory in June of 2022 So it's been about a year and a half now As of January 1st 2024 the total market Cap of the entire asset class is coming In at a modest 1.69 5 trillion with a fair value Logarithmic aggression trend line at 2.24 n trillion this represents an Undervaluation of approx imately 24.6 5% now the general idea that we've Discussed is that as the market goes From being undervalued to being Overvalued there can be rotations of Capital and one of the things that we Mentioned going into 2023 is that the Bitcoin dominance will likely go up for The entire year as capital rotates from The altcoin market to bitcoin in Overvaluation territory what often Happens is the Bitcoin dominance can Start to come back down over o Especially after that initial move but We're still well you know we're still Well in the undervaluation territory Right now we can overlay the risk metric Onto this chart this is the total Summary risk metric that takes into Account not only the price risk but also

The onchain risk and the social risk and When you combine all those and you color Code the current price action by that Risk metric you get a chart that looks Like this and so you can see that we've Been at relatively low risk levels back In in late 2022 ever since then the risk Level has been a little bit higher and Recently the total risk has has actually Been trending trending up quite a bit Given the onchain risk has gone up so Much and of course the price risk as Well but with transaction fees soaring The onchain risk has gone up a Considerable amount one exercise that we Can do is take the percent difference Between the total market cap of the Entire asset class and the fair value Logarithmic regression trend line which As we've said before is a monotonically Increasing function the reason it's Monotonic is because we assume that Adoption is always taking place even Though the the current valuation of the Market cap of the asset class does not Always reflect that because we go Through periods of greed and fear and so It's important to remember that if You're an investor within the Cryptoverse if you take a look at at the Percent difference that you get a chart That looks like this and you can see That we've gone down to about 50 you Know maybe a little less I mean about

50% undervalued or so um last cycle I Mean if I just sort of draw the line Across last cycle during the pandemic Drop we went a little bit lower the Cycle before that we were a little bit Lower you can also see the highs from This last cycle were somewhat tempered Compared to the prior highs even if you Account for diminishing returns so the General idea and and I've said this Before and I and I this was a prediction That I made in early 2023 was that for The entire year we will spend the entire Year below the fair value logarithmic Regression trend line the red line but Above the lower green regression trend Line so despite all the price action all The ups and the Downs mostly UPS Honestly in 2023 the total market cap Still Remains Below the fair value and above the lower Regression trend line the lower Regression trend line right now by the Way is just south of 750 billion or so Approximately 750 billion you can see Previously when we when the total market Cap was dropping back in late 2022 it Went down to about 800 billion so the Lower regression ban right now is Actually still Lower than where total market cap was in Late 2022 but by the time we reach Approximately halfway through the year

The lower regression band will have met Where we previously were in late 2022 in Terms of where that lower regression Band is so that's an important to an Important distinction to remember now Often times I don't go too much further In to these discussions within this Video because I like to keep them Somewhat succinct but this is also the First video of the year of 2024 I do Want to show a couple of other charts Just to get you know just to get us all Thinking about where we are within the Current market cycle I think there's two Valid arguments to be made as to where We are within the market cycle and I Would like to present both of them to You if you've watched this channel you Should not be surprised by either of These two presentations but if you're New it might be useful to view the Market in both of these ways so that We're not potentially caught off guard The first way is is the more bullish way The second way is the more bearish way The more bullish way just looks at Roi From cycle lows if you were to look at The ROI of from from bit of Bitcoin from Bare Market year lows from late 2014 Late 2018 and late 2022 I guess in 2014 Was actually January 2015 you get a Chart that looks like this and if you Zoom in to the current market cycle this Purple line it's basically right in

Between the orange line which is cycle 3 And the green green line which is cycle 4 so up until this point we haven't Really deviated from what we've Historically done it often seems like we Have but we haven't right I mean this is This is what Bitcoin has historically Done in Prior Cycles now there is a Distinction though between the last two Cycles in last cycle Bitcoin continued To Rally even at this point it did not Get a cool off period of 3 to four Months like it did in 2016 it just Continued to And then we had the pandemic drop Basically you know we got too overheated Too early on in the cycle and then we Had a pretty big drop now yes it was Caused by the pandemic it's not like we Can say hey that's going to happen again It it very well might not there are Risks involved with the market we have An inverted yield curve I think it is Important to consider that that is a Risk considering that it has a pretty Good track record it's also impossible To know when that's going to get Resolved whether it gets resolved next Month six months from now 12 months from Now or longer we are we are entering the Window or we have entered the window When it normally gets resolved around This time but we'll still have to wait And see just how much longer that's

Going to take if the market continues to Climb for the next couple of weeks then It could signal a potential risk off Period as we get further out into the First quarter of 2024 as the market will Likely need to at least go through some Type of cool off period if it stays Relatively flat then it could just be a Grind for several months without getting You know a larger dip so it kind of Depends on on potentially what happens Over the next few months with the Potential spot ETF news I would say There's still a risk that the that the Greed sticks around for a little bit Longer and if Bitcoin does grind higher Then it would potentially set us off for A larger pullback later in the first Quarter there's another way to look at This as well wow okay this is the Obvious way to look at the market and I Think it's IR relevant way to look at it And I I think it's foolish to look at This and say that this time is different Because so far it's not it really is not But there's another way that we can look At the chart that I I I feel like I I Have to continue to show it mainly Because if I don't show it and the Market respects that view then I might Wish that I had spent a little bit more Time on it and it's the view that you're All familiar with but it essentially Says that

Bitcoin goes up until we get to the Point where rate Cuts Arrive and when you look when you think About rate Cuts we have to ask ourselves Why did Bitcoin find a local high why Don't we call it a a midcycle high why Did Bitcoin find a midcycle high in 2019 Now you might say well Ben that's Because of the pandemic and you should Not think about the pandemic as Something that we need to be concerned About this cycle and I would agree with That however Bitcoin found this local High at which it did have a 50% Correction before the pandemic was even A thing that I think was on any of our Minds Bitcoin topped out right here and Then fell over 50% by the end of 2019 okay this is a 50% drop and you'll Notice again that the local high came in Just before rate Cuts began now I think That's fascinating I wonder why that is Well I think you could argue there's two Arguments that I think come to mind for Me one of which is that there is such a Thing is you know the FED when they cut Rates they're likely doing so because They think the economy is weak do we Really think they were cutting rates in 2019 because the economy was strong Probably not and so if they do cut rates In early 2024 it might be an admission By the Federal Reserve that the economy Is kind of weak despite the headline

Numbers right you know there there there Could be some softening up of the labor Market and perhaps they would like to Get ahead of that and so that might be Why the midcycle top came in just before Rate Cuts began another potential reason Is that when rates are going higher you Might argue that their counter that Counterparty risk goes up a lot of Zombie companies go under in Traditional Bank in the traditional financial sector And perhaps Bitcoin is a hedge against That and as you go back to lower Interest rates uh perhaps at least a Immediately that counterparty risk is no Longer as big of a deal Bitcoin gets that puts in that midcycle Top cooling off until QE returns and Then going on on a larger Bull Run so I I I feel like I have to show this view Because we have been following this view For a long time we've also been Following this view as well and you Could still have something where they Both more or less play out like where You look back at this in two years you Get some type of riskof environment that Leads the FED to Print something similar to what we saw Last cycle and then Bitcoin goes on um You know it it continues to Rally so That is something that I I think we have To think about if you look at the total Market cap of crypto one of the things

That I've mentioned is that I think 10 Trillion is a is a possibility uh in the Future this is something that I've said I think since 2019 okay total market cap Right now of crypto is 1. 652 trillion What's interesting is there are some Things that line up here and and it's I Don't know how much weight we should put Into this because I often think that Logarithmic regression models are better Suited for cryptocurrency than just Making a parallel Channel but for a Moment let's suppose that a parallel Channel were the correct way to to sort Of plot out potential price action for The total market cap of the Cryptocurrency aside class if you take This high right here from late 2017 You'll actually notice that it connects The the the peak in in May of 2021 and The peak in November of 2021 quite well What's more interesting is if you if you Pull this down to to the December 2018 Low which notice is that it sort of Connects here to the pandemic selloff at Least at the weekly close there was a Wick below it you can see there was a Long Wick that went down but in terms of That scare that led the FED back to QE This is what happened right we got a big Scare in the market QE returned and then The asset class rallied back up what's Interesting what what's really Interesting interesting is when you

Connect the dots when you connect this Dot here to that dot and that dot and You extend it down to the 2018 low the 2019 midcycle High occurred right in the Middle of that trend line right in the Middle of that trend line you can see Right here that the middle of that trend Line was at about 380 something billion Which is essentially where the total Market cap of crypto topped out at that Midcycle high Which again Coincidentally happens to correspond to When interest rates started to go back Down so as much as I would like to not Look at this view on the market because It's you know because I know it's it's Not a popular view until it deviates I Think it's relevant to follow I also Think that this one is relevant to Follow right if the model's not broke Why do we try to fix It but I also look at it like like this And I I look at this and say well you Know last cycle we hit this High Here and then we hit the high again and Then we hit the high again and then we Hit this low and then we hit the low Again right here at least on a weekly Time frame with a wick below it just as The last rate cut arrived and then I Look to the current cycle and say huh is It playing out in a similar manner where The potential not guaranteed but the

Potential midcycle Top occurs at the midpoint which is Where it occurred last cycle as well Which by the way is also where interest Rates started to go back down the market Is currently suspecting that the First Rate cut might might arrive by March There's a chance it could happen in January there's a chance it could happen In May but currently Market expectations Are that the First Rate cut arrives in March and so I do wonder if we are at All repeating what we saw last cycle With a potential cool off period Sometime after putting in this midcycle Top which again might correspond to Approximately the first interest rate Cut so that is something that is on my Mind what's interesting is if you take The low from Total market cap and just Draw a trend line across the Screen you'll see that where we Previously were finds the bottom of this Channel by Q3 of this year by the third Quarter of this year but you'll also Notice that the trend line here would Still be lower than the prior lows up Until about that time now remember by This point it gets you to around 750 760 Billion which by the way is not that Different from where this lower Logarithmic regression trend line is Remember I said before it's currently at Around it's it's currently between 7 to

800 billion and it would take until About halfway through the year for this Logarithmic aggression trend line to be Above the prior lows from late 2022 which is also kind of in agreement With this chart even though it's a Completely different model and looking At a slightly shorter time frame because This model over here is fit to all data Going back to 2010 this parallel channel Is just looking at at the last couple of Cycles going back to late 2017 so I do Wonder if if there is a risk if of the Market playing out something like that Where you get some type of midcycle top Around the time that rate Cuts arrive And then by the time that you get to the Last rate cut and real QE coming back in Perhaps that's where we get another Explosive move back up to the upside one Interesting thing about this chart is You can put some price labels on it and You can see that's around 700 800 Billion this one's around 100 billion Maybe a little bit less 90 and then you Have 2.5 trillion and 3 Trillion so far we've gone down to about 750 billion okay the the low right now Of this parallel Channel at this at the At the bottom of the channel would Correspond to 574 billion but we're not Right we're not there right now right And and the chances that we were to go To that level in the next week are are

Pretty small and so the long longer that It takes to ever go back to this channel Assuming that we ever do the the higher That it would eventually go for instance By April that would actually be at 659 Billion by November it would be at 841 Billion which again is above the prior Lows from late 2022 so it all depends on When it happens if it even Does if it even does so just to throw a Couple of numbers on the chart what's Interesting Is if you then come back up to the top Of the channel by 2025 by the way let's Just say April of 2025 which is when Bitcoin topped out last cycle that Actually puts you at 10 trillion at at Approximately $10 trillion now again I Don't know if we're going to make it to 10 trillion this cycle or not I don't Want to go into it deterministic um I I Think there's a chance that we could but I also think that even if we do there There could be a period between now and Then that leads the FED to print so far We know that the fed's main two mandates Right we know that their main two Mandates are price stability and maximum Employment for the last couple of years The FED has raised interest rates very Quickly higher for longer has been their Has been their Mantra in order to bring Inflation back down up until recently The labor market has been relatively

Resilient it hasn't really moved a whole Lot in fact if you were to go take a Look at the macro side of things if you Look at the unemployment rate it is Still relatively low I mean it's at 3.7% so far the labor market has not Been an issue for the Federal Reserve The labor market has been very tight They've had really no choice but to Raise rates to get back to price Stability which would then theoretically Lead us to another phase of economic Expansion But I think there are some cracks Starting to appear and that's why in the Last fomc po came out and said that we Should expect you know a few rate Cuts Next year if you were to take a look at The number of job openings per Unemployed worker you can see that it's Actually coming down pretty quickly the Reason it's not yet expressed in the Unemployment rate is because for every Unemployed worker there's 1.34 job Openings so there's actually still more Job openings than there currently are Unemployed people the problem of course Is the trend right the problem is the Trend and back in April of 2023 this Ratio was at 1.82 so it was essentially you know Almost two job openings per unemployed Worker that's dropped a lot now it's Down to all the way you know all the way

Down to 1.34 the issue of course is over the Next 6 months if the FED does not cut Aggressively there's a good chance that This metric could continue to drop to The point where there's no longer enough Job openings for every unemployed worker Which would sort of represent the idea That the FED has achieved their their Their goal of loosening up the labor Market and getting rid of all that Excess right you can see that the Pre-pandemic trend there was only about One job opening per unemployed worker Which was not bad I mean like that was Not a bad time for the labor market it Was about one job opening per per per Unemployed worker you can see that it Dropped down a lot but then then they Overshot it right and now we've been Paying the consequences with higher Inflation for the last couple of years And so this continues to come down and I Think that the FED sees these sorts of Metrics right they see things like Contined claims versus the unemployment Rate and and they know that continued Claims as they go up it can lead the Unemployment rate as we can see right Like it's not this is something we've Historically seen as continued claims go Up normally the unemployment rate starts To go higher not in a linear fashion it Is a stochastic process and all prior

Business Cycles were a stochastic Process where the unemployment rate Would start to Trend up and then maybe Pull back for a couple of months and Then continue higher so there are risks In the labor market um and I do think The FED has identified those risks and That's why they've advertised three rate Cuts in 2024 and I think that they do Need to cut rates in 2024 in order to Get fully ahead of all the lag effects From all the interest rate hikes Remember we were near 0% a couple years Ago and now the FED funds rate is at 5 a Half per. so when we think about charts Like this one over here when we think About Roi after the bare Market gear low We can see that it still lines up and if We only looked at last cycle or sorry Two cycles ago it would look pretty okay I mean like it it hasn't really deviated From that cycle at all but last cycle Shows us there are always risks involved Right if last cycle taught me anything It's that we should not get ahead of Ourselves we should not assume that There can't be pullbacks because there Can be and I know I know it seems like You know I know with price action Recently there's been a lot of you know A lot of upward momentum and and it and It certainly seems like that kind of Stuff can't happen to some people but uh It can and it doesn't mean that it will

And I know that you know I I get some Flack for pointing out the downside RIS Quite a bit but I don't want to ever Stop pointing it out I want people to at Least understand what it is I'm not Saying like you know don't be an Investor in an asset class that you love What I'm saying is that there's a risk Involved the way that I navigate the Cryptoverse and the way that I've Navigated it for the last couple of Years is to keep my portfolio mostly Just Bitcoin and missed out on some Pretty epic gains in the altcoin market Because I chose to do that I also argue That I've minimized some of my losses Especially in 2022 and a lot and for a Lot of altcoins in 2023 just by Following the Bitcoin dominance Trend But that is something that I think is Worthwhile to consider is the idea that You know we can look at it like this Roi From this low we can also look at it Like this which is do we get a mid cycle Top around the time that interest rates Begin to be cut and if that does happen Does it tag this trend line sort of the Middle part of the trend line just like It did last cycle last cycle that Midcycle top came in the summer of the Prehab Year this cycle we've already Gone a lot higher than where we were in The summer of the prehab year but again We also haven't had rate Cuts yet which

We were starting to get by the midpoint Of the prehab year in 2019 so this is an Important way I think to look at the Cryptoverse and it kind of gives you two Ways of viewing where we potentially are Within the market cycle if you think We're more based on monetary policy if You think the the the the the the Cryptoverse more depends on monetary Policy then I Imagine this would be more interesting To you if you think that it exists Outside of monetary policy and that it's Just details that we don't need to worry About out then you're probably more Comfortable just looking at charts like This and saying yeah you know there can Be moves to the downside just like there Were last cycle but the general Direction has you know has still trended Upwards from this point in the cycle Even though there was a pretty big Selloff in the last cycle so a lot of Different ways to view the current Market cycle if you want to even call it A market cycle a lot of people think There aren't even such things as a Market cycle which I can respect that View too I mean you know while while I Think a lot of us sort of look at at the At the cycles and say well this peak Occurred in late 2013 this was late 2017 Most metrics really do say that this was The top and that this while technically

A higher price wasn't really supported By anything Else but at the end of the day price Action is king So I mean to hell with The indicators if price goes higher Price goes higher right I mean who cares If the indicator didn't say that it was Going to another way to look at the Market That could give more Credence to the Idea of where of of the process of Finding some type of midcycle top could Be the social risk right so if you were To go look at the social risk what You'll see is that in in May of 2019 it Actually went up to about3 risk and then Had a pretty big drop to below 0.2 risk Which is actually what just happened Right it just went to above3 risk and Then it just dropped down to less than 0.2 risk and that actually marked the High for social risk for a little while You can see that it did go back up after This High here did not even correspond To the high in bitcoin price bitcoin's Price actually went a little bit higher And the social risk put in a lower high Right around the time that rate Cuts Began and so if Bitcoin were to get Another move to the upside going into a Potential spot ETF then I would say Let's keep an eye on on this trend line Right here let's keep an eye out on that Trend line and what's fascinating about

This this trend line this blue line that Goes to the middle of the page is that It's essentially right at two trillion Right at 2 trillion you can see it's Like right here by February the first Week of February it would correspond to Approximately $2 Trillion which is also interesting the Reason why $2 trillion is interesting is If you look at where it topped out last Cycle it topped out just below that dead Cap bounce that occurred in the first Half of the bare Market year this area Right here that 2 trillion would Correspond to just below this dead cap Bounce from the same from that same Prior cycle so just something to think About um and again I don't know if Bitcoin's going to push higher into the Spot ETF if the spot ETF is rejected Then I imagine that would be a very big Surprise to the market and and you know The market would likely sell off in the Short term if if news came out that the Spot ETF were rejected if the spot ETF Were accepted uh then then perhaps you You go into this process of of putting In a a midcycle top one other aspect to Bitcoin that I think is important is Ethereum I think ethereum is fascinating To understand where Bitcoin is within Its Market cycle and the reason why I Say that is if you look if you think About the market if you think about like

The the cryptoverse in terms of Liquidity the the the place in the Cryptoverse that has a lot of liquidity Besides Bitcoin is ethereum and what's Fascinating to me is that this is Playing out in an almost identical Manner not in terms about the time it Took to get to you know to this level But take a look at it like this just Just look at this for for one minute and And I I think ethereum can give us some Insight into potentially where we are if You look at this low right here and you Go across the screen you'll see that I'm Going to shift this up just to sort of Connect to these to these points right Here and what you'll see is we put in a Low and then the ethereum Bitcoin Valuation sort of flirted with that low For a long time before it eventually Broke down it eventually broke down and What's fascinating to me is that when it Broke down from this Wick it broke down After 83 weeks so the initial Wick took 83 weeks to durably break below Now let's do the same process this cycle You can see that there's this initial Wick down here and then the ethereum Bitcoin valuation keeps you know trying To go below it but it hasn't done so so Far and and seasonality now that we're In the early part of the Year isn't as Bad for ethereum as it is in the last Part of the prehab Year be that as it

May if you take a a a time like a a Range here from this low here and you Were to go out say 80 83 weeks it would Put you the week of January 15th the Week of January 15th and so I really do wonder and again Like I I think we're going to know very Very soon if this is the correct way to View the market or if it's not I think We should know very very soon we've been Following this forever I would feel Remiss if I didn't follow through with It especially considering where the Ethereum Bitcoin valuation is right now If there is some type of Bitcoin move Over the next two weeks as we get into The spot ETF news finally breaking and If Bitcoin were to break up and go to Sort of the trend line here which might Mark a midcycle top and if it breaks Ether Bitcoin down off of this this Trend line which it also broke over here What you'll be interested to know is That when the ethereum Bitcoin valuation Finally broke last cycle it also Corresponded to when interest rates Started to come back down so you'll see Right here That the breakdown of ether Bitcoin occurred right before rate Cuts Arrived and we're likely about we're We're on the verge of rate Cuts again Probably within the next two to three Month two to four months we're probably

Going to get rate Cuts so I do wonder I'm not I'm not discounting the you know A a potential um I'm not I'm certainly Not discounting ethereum Bitcoin from Bouncing I mean even even back over here It got it got several bounces before it It finally broke down and so I'm I'm I'm Aware that a bounce Could Happen by the Ethereum Bitcoin valuation and if it did I would still keep keep my eyes on the Bull market sport Band you know which is currently at Around 0056 to 057 Right but it does seem like monetary Policy is at least relevant to follow Considering that ether Bitcoin broke Down just before rate Cuts arrived Considering that total market cap found A local high before cooling off for a Period just before rate Cuts arrived and Considering that when you look at last Cycle there was a an accelerated move Going into the next two weeks we're Currently on day 416 Uh or sorry 417 of the cycle last cycle Bitcoin found a local high about 10 days From now before going risk off for a few Weeks again it was a higher low right it Was a higher low but that is something That at least at least did happen so I Will continue to follow this model here The basically the model that that looks At this larger Channel potential Midcycle top at around the same time

That interest rates begin to be cut We'll take a look at the ethereum Bitcoin valuation as it continues to be Really between a rock and a hard place You know the the bull market support Band is squeezing it down but it also is Is fighting to stay above this trend Line here perhaps the spot ETF or or the Having will be enough to to knock ether Bitcoin down if it's going to and if it Doesn't then then we're deviating from The prior cycle and then Also to think about the social risk is It you know are we going into a period Like this is where we you know while While some momentum has come back in Terms of sentiment it still doesn't go All the way back up to the higher risk Bands right because you have to have I Mean to get back up there it takes a lot Right I mean you think about all the Price action that we've seen and there's Still a lot there's a lot of people that Haven't returned go look at YouTube Views go look at YouTube views doesn't Really look that different from what We've seen I mean in fact if you were to Look at a 30-day moving average the Number of YouTube views for these these YouTube channels including my own it Still is a lower high right there still Haven't been a lot of people that have Come back even though Bitcoin has Exploded this much to the

Upside how do we get people to come back How do you get people to come back to The cryptoverse if higher prices haven't Done it well one thing would be if Bitcoin were to break to a new all-time High that would probably bring a lot of People back but the Counterpoint also is That the way you bring people back is You go back to looser monetary policy Where people feel like they can actually Start speculating on higher risk Investments again I know there's a lot Of people watching this Channel right Now that are like well what do you think We've been doing for the last 2 years Right but you also have to remember that Right now these channels right here are Averaging you know 6 to 700,000 views a Day but at the peak of the bull market These channels were averaging over 2 Million views a day so while you might Be looking at this and thinking like Well we've been speculating dubiously For the last two years there are a lot Of people that have left I mean you can see it right you can see YouTube views you can see just how far Down they've gone and I do think Eventually people will return I just Wonder if in order for them to return do We need to get back to quantitative Easing I would think so I would think so I think QE would likely need to come Back um and I think that the way QE

Comes back is you get some obvious Softening up of the labor market that Gives the Federal Reserve an EXC excuse To start printing and if they start Printing aggressively that's when risk Assets go back up and perhaps that's When we'll finally reach our 10 trillion Dollar but even if we do go to 10 Trillion it's still several years away And as I said before well likely several Years away I guess it could happen Anytime I mean these models are are of Course all models are wrong some are Useful right um but I'm still I'm still Thinking that there's is going to be a Period at some point likely this year Where the yield curve un Inverts and we have to deal with the Fallout of that right the the Uninversity that is forcing them to do So they're seeing something that makes Them want to cut and they've already Advertised that we're likely going to Get rate Cuts here on the next few Months and then we'll see how the market Responds and if the market responds Negatively then that would likely bring Back quantitative easing and if Quantitating if quantitative easing Comes back then that would likely bring Back these speculators back to the Cryptoverse um because monetary policy Isn't as tight as it has been for the Last you know year and a half or two

Years or so but this whole exercise that We you know these these beauty of Mathematics videos the whole point is to To just give you that that thousand foot View right to say look the market the Asset class has been undervalued since June of 2022 and despite that it could Become more undervalued at some point I Mean like we've we've basically just Been in this range for a long time and And maybe we'll continue to be in it in This cycle over here we dropped below This in January 2015 we didn't durably Get back above it until 2 and a half Years later if you were to if if this Cycle were to emulate that two and a Half years later for this cycle would Correspond to basically the the the Beginning of 2025 to durably get back Above it if it were to play out like the 2016 cycle which is still another year Away so we'll see if that happens I do Hope you guys enjoy the content I I do Hope these the the beauty of mathematics Series has been useful to you in naviga The cryptoverse trying to tune out the Noise and just showing that the asset Class does go up as a function of time There are risks that we have to consider And and failure to consider those risks Could be Detrimental if you if you consider the Risk and you invest anyways and the Market goes up hey you took off you took

On the risk and it paid off Congratulations if you don't take on the Risk and the market goes up then you Didn't take on the risk right so We'll see over the next year if we do Get some type of of of larger pullback Like we did in the last couple of Cycles Or not and we'll see if that midcycle Top comes into play or if we just blast Through it I do think it's important to Have invalidation criteria I mean I I Don't want to just put out a model like This and then just not talk about it in The future but I would say that if the Total market cap blasts past two Trillion then it's it's deviating from What happened over here okay because Over here it it went up to the midpoint Of the channel and then it got a larger Pullback and so we'll see if that Happens again or not and if it does Happen I mean if there if if Bitcoin Were to Rally up and and and lift the Asset class higher again Then then I I would I would just look Towards that $2 trillion milone and by The way $2 trillion from this level it's Still it's about 20% higher than we Currently are and what's interesting is If you zoom in we actually already Tagged it back in August 2022 I mean you Can see we came back down and we bounc Right up to that trend line which is Where we are not too far away from right

Now so I will continue to look at the Market through the lens of monetary Policy I will continue to look at the Market through the lens of the ethereum Bitcoin valuation and through the social Metrics and through the ROI high from The cycle Lows at least the bare Market low the Low from the bare Market year we'll look At it throughout all these different Ways and hopefully it can help some of You guys navigate the crypto if you guys Like the content make sure you subscribe To the channel give the video thumbs up But again check out the sale on intothe Cryptoverse premium at intothe Cryptoverse decom links in the Description below I still do think that The market cap of crypto will eventually Go to 10 trillion uh probably within the Next few years um plus or minus a few Trillion as we go to sleep at night we Cannot help but wonder what's a few Trillion dollars among friends


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