Bitwise's CIO called the bottom on Bitcoin. Days later it ripped 20%.

when you're looking at Bitcoin, what's the ultimate signal to you that we're potentially ready to make a bottom and move out from there? >> Yeah, it's it's a Bitcoin or any other asset. It's the moment when the asset stops responding to bad news. In a deep bare market, if you get even a sliver of bad news, the bottom just falls out and you cascade down. That's the world we were in in Q4 of last year. It was the world we were in in Q1 and Q2. Interestingly, that's not the world we're in in Q3, right? We've seen Michael Sailor start to sell Bitcoin and Bitcoin hasn't cared. We've seen the odds of the Clarity Act pass go from 40% to 14% before bouncing a little. Uh, Bitcoin didn't care. We saw the cold storage hacks. Bitcoin doesn't care. To me, the best signal that you're near a bottom is where bad news stops affecting you. It means all the sellers are out. The sellers are exhausted. And then you just have to wait for a little bit of demand to get the upside price. I think that's where we are. That doesn't mean we don't go down to 58 or whatever. It just means we're generally around the bottom. I think it's probably more up from here by the end of the year. We'll all be pretty happy if we had bought Bitcoin today is my guess. >> What about when you look at the underlying metrics? I'm curious if you do look at them whether maybe it's, you know, number of holders, time length of people holding uh Bitcoin strength compared to other cryptos or SECPs like that. Do you factor any of those in or is it for you more about the new side? >> No, 100%. We definitely factor those things in. Let's actually start with the big dog in the room, which is momentum. The only academic factor that's been proven to sort of accurately forecast Bitcoin or other crypto assets direction is momentum, which is not surprising, right, Gav? If I told you Bitcoin is a momentum driven asset, you'd say, "Yeah, duh, Matt." But actually, the academic literature proves that. So, we look at both short and long-term momentum. My favorite short-term momentum indicator, which right now is sort of neutral, is the 10day moving average versus the 20-day moving average. My favorite long-term momentum indicator is the one everyone uses, which is the 200 week moving average. You want, if you have both of those working in your favor, that's a pretty good sign. On the fundamental side, we really like to look at long-term holders. Are they selling or are they accumulating? That's historically been a good tell on the supply side of the market, right? The price of Bitcoin is set by supply and demand. The unknowable factors are will existing holders sell and will new buyers buy. Will the existing holders sell is really best captured in my view from that long-term holder accumulation or deumulation statistic. Right now, that's in a pretty good place. And then net new demand, we look at all sorts of things. We look at ETF demand. uh you can look at overall volume and activity maybe from my view ETF demand is the best statistic. So stack rankom news flow and how it responds momentum indicators and then look at both supply and demand side from the long day of holder accumulation demand from ETF flows. I think if you put those signals all together you have a pretty good dashboard. U there are other ones but those are the ones that I primarily focus on. I definitely want to dig into the ETF side a little bit more as we get further in. But taking just kind of a step back for a second, we're talking about the asset and what could make it move up or down, but what is, you know, in your eyes the base case for even owning that asset regardless of where it sits price-wise? >> Yeah, look, I think Bitcoin provides a service that the world wants. The service it provides is the ability to store wealth in a digital format without a government or a bank. Gold provides the same service in a physical format. Kevin Wars says, you know, if you're under 40, Bitcoin is your gold. I think that's true. And so the case for owning it is if even a small fraction of the world decides they want to hold some wealth in a digital format without a government or a bank, the price of Bitcoin has a long roam to run on the upside. At Bitwise, we think it gets to about 1.3 million by 2035. I can walk through the math if you're interested, but I think that's the base case. Look, we live in a world where we just crossed $40 trillion in debt. The US added more debt in the last year than we did in the first 211. We printed more money in the last quarter than we did in the global financial crisis. It's sort of crazy. A small portion allocation to Bitcoin, I think makes a lot of sense. And as I mentioned, I think there's a huge amount of upside still left in this asset. Yeah, the case that you mentioned in terms of monetary printing, devaluing of the dollar, that seems to be a big thing that a lot of us grasp on to as the bull case here. When you talked about the ETFs though, there sometimes people point out is all this demand in ETFs, people actually buying Bitcoin or is there some artificial inflation here? How do you look at it? >> Well, the there I don't think there's paper Bitcoin in the sense of look, every Bitcoin ETF owns the Bitcoin that it says it does. We publish addistations. Other people don't necessarily do that, but I do believe it's the case that they own the physical Bitcoin. But you can't look at the absolute number because there are two things that complicate it. The first, and we've seen this a lot recently with the cold storage hacks, is sometimes people take held away Bitcoin and move it into a Bitcoin ETF. You can do that in many cases without tax. And so you can imagine some people who had it in cold storage feel a little uncomfortable today with a series of hacks. you're seeing some of those people move it into Bitcoin. That looks like inflows, but it's not net buying, right? It's just Bitcoin transferring from one thing to the other. The other false signal is depending on the time in the market, somewhere between zero and 20 or 30% of Bitcoin ETFs is used for the basis trade. That's where people buy the Bitcoin ETF and sell Bitcoin futures because the Bitcoin futures are trading at a premium. That's not net demand for the ETF. that's actually satisfying net demand in the futures contract. But make no mistake, by and large, when you see money going into Bitcoin ETFs, that tells you a picture that over time people are accumulating. You can get too precise on any one day. It's not that precise. In fact, even reporting can be multiple days off. It drives me nuts when people report things on a one-day basis. Like look at a week. But mostly it is real net new demand. It's mostly coming from net new investors who have never touched Bitcoin again before and I think you're going to see a lot of ETF flows over the next year. >> How do you think about someone holding their Bitcoin in cold storage versus via an ETF just as you know in a general concept? >> I love them both and I think many people should do both. Um look, cold storage is the original way to own Bitcoin. It's core part of the philosophy. It's really important that we all have the capability to step outside the system and custody our own wealth. I think that's important. You're taking on significant risks. You're taking on risks as we learned recently about product quality of those cold storage offerings. You're taking on risk of losing your password. It's not easy to pass down. Uh you're taking on some personal physical wrench attack style risk. So there are risks. ETFs you're working with the largest institutional custodians in the world. Many have insurance in place. You have audits from big four auditors. They fit into brokerage accounts. You give up a few things. You're not self-custodying. You don't have access to trade on the weekends, but you get a lot of protections from it. Again, I think for many people, the ETF is the easiest choice, and I think it's a great choice. For some people, cold storage is a reasonable choice. They're both better than the thing in the middle, which is trusting a centralized exchange with an omnibus wallet. I think that's where the biggest risks historically in crypto have been. I know cold storage risks have been getting a lot of headlines, but there's been more Bitcoin lost in sort of that middle unusual bucket. I like either institutional storage from ETFs or cold storage if you have good security hygiene or a mix of both is a is a good idea for both for a lot of people. >> Yeah, well said. And obviously you guys have some some products. I don't I mean how much you can talk to them, but I'd love to hear like what are in Bitwise's world the products that you would point people towards as great options here. >> Yeah, I mean we have a Bitcoin ETF BITB. It's priced at 20 basis points a year. So the annual fee is 2%. That's 25% cheaper than the offerings from big firms like Black Rockck and Fidelity. We think it's a great offering. We're proud that we also donate 10% of the proceeds from that ETF to Bitcoin core developers. That doesn't that comes out of our share of the profits of that ETF. So that's included in that 20 basis point fee. You know, you're supporting the network that's supporting the asset that you're hoping will acrue value in the future. So I think that's a great offering. But we have 20 30 ETFs in the US and Europe. We have index funds that hold not just Bitcoin, but the top 10 assets. That's a ticker called BITW. We have single asset funds covering uh some of the assets that are most popular right now like Hyperlid and Salana. uh chain link etc. So we're we aim to be a fullervice shop for people who want to allocate to this space. >> Makes sense. A lot of people talk about mining of Bitcoin and how majority of Bitcoin is going to be mined by 2040. There's that last 100 years very small amount. Do you think that these next kind of 13-ish years are pretty pivotal for Bitcoin? >> Look, I think every year is pretty pitiful pivotal for Bitcoin. We're we're new into this moment, but we're already at the point where, you know, 95% plus 98 a huge percentage of all the Bitcoin that will ever exist is already owned by someone. Uh so like the easy era of accumulating Bitcoin is behind us. Now you're buying it from someone else who made a decision to buy it previously. Um I think that's a pretty good supply demand setup. So, uh, you know, it is we're we're still in a fast growth period in Bitcoin. It's still important that we see institutional adoption. Um, but it's doing really well. I I think the case for Bitcoin being on the path to being a legit competitor to gold, a global digital alternative asset. I think it's checking every box along the way. I think it's in good shape. >> Thanks for watching today's video. If you enjoyed it, go check out the Wool Financial Newsletter. Did you know that we make a ton of content? We host 60 plus hours of Twitter spaces and live streams every single week. We're posting on the timeline over and over and over. We put up YouTube videos and one of our prime gems is our newsletter. And it's free into your inbox multiple times a week. We mix it up. We give stock picks, market headlines, research info. It's a great way for you to stay in touch with the stock market and your portfolio without having to spend eight hours a day staring at your brokerage screen. So again, link is below. It is free to grab and you're going to love the content in