Talk is Cheap

In our last issue we emphasized our long term bullish outlook on one of the most boring asset classes known to man. Long term US treasuries. That trade is up nearly 10 points, and while I am still very bullish bonds for the res of the year, the price levels and recent sentiment shift tells me it’s time to start moving on. Now that TLT has become a fear proxy again, I will begin dumping my bags onto the same retail traders who ridiculed the trade back in mid-January. The world goes ‘round…

In this issue, I’ll be looking at a much higher risk trade, which is long crypto, and long US equities, and aggressively so. Long time readers know I’ve had an uncanny ability to pick oversold contrarian lows with TA, Sentiment, and Date Timing. Long time readers also know that this pursuit comes with a proclivity for knife catching, which is often rewarded with a total loss of invested capital.

Trying to pick a bottom in a high volatility selloff is one of the riskiest and most rewarding things you can do in the financial sphere, and this week, that’s exactly what I am going to do.

Trump’s presidency has been tumultuous, and depending on what media you are reading, he is either the saviour of the free world, or the second coming of Hitler. While there are many reasons to be in either camp, as an investor, involving yourself emotionally in these narratives is to do yourself a “YUGE” disservice. Whether or not you agree with the direction of Trump’s policies, it’s important to understand that he is a brilliant tactician, master marketer, and a savage negotiator. His ability to manipulate the economy, stakeholders, other countries, and financial markets is uncanny and not to be underestimated.

That all said, without fundamentals, there are only so many speeches, announcements, and executive orders before the markets price in bullshit. We recently saw the massive short squeeze on a Sunday night in crypto, all driven from a tweet about the “Strategic Crypto Reserve”. The 500 Billion dollar move was completely round-tripped on Monday morning, promptly at market open. News typically gets faded, this is nothing new. Talk is cheap.

Bitcoin is also cheap, are you going to buy? Or are you all talk? We have either bottomed around 80k, or if you’re really lucky, we will get a test to 73-74k for a final low. I think this happens this week, or next week at the absolute latest. Stay away from margin and you will be reward in a few months’ time.

Bigger picture on Total Cap, I still expect 6-7 Trillion by year end. While there is certainly panic abound, we are sitting on massive demand from the 2021 Cycle top. I keep reading traders posting “invalidation levels” and talking about it being “over” if XYZ arbitrary price level is breeched. It’s almost comedic how little sense this makes. If you were bullish on an asset fundamentally at 100k, why would you hate it at 70k? I would be interested in buying more, and that’s exactly what I am doing.

Litecoin also looks like a stellar buy here for a blue chip spot holding.

Speaking of buying, Bitcoin Treasuries gives a really interesting perspective on public markets. Many mining stocks are trading near BTC cash value. Mara is particular is alarmingly cheap, and I have been buying December 2025 $20 Strike Calls for between $2-$3. I will make that bet all day, and add if it somehow drops lower.

While the entire crypto mining sector has been rough this cycle, it’s finally in an area that has me pounding the table…

WGMI/BTC Ratio is one of my favourite charts, this is effectively saying “How cheap are miners relative to bitcoin?”. In the world of excess liquidity, relative value is all that matters, and this is as good as it gets.

While it can always get worse, equities are showing levels of put buying associated with major bottoms. FEAR is here, and we are only 7%~ off the highs. While anything could happen, I am expecting a significant bounce this week, and a major low to be formed in March.

If you asked me to stick my neck out for the IDEAL scenario, should we make one more low, Total Cap bottoms at 2.4T, by March 6^th . We may not be so lucky however…

Why the rush? VIX is sporting a daily TD9, and there are clusters of timing showing up on a variety of assets which tell me a squeeze is coming, and VERY SOON.

Looking at the bigger picture, this is the most wildly bullish political environment we have ever seen for crypto. The halls of government are now stacked with pro-crypto leadership, the SEC has dropped lawsuits and greenlighted stable coins, dozens of ETFs have been approved, and there’s even talk of potential tax exemptions for US crypto.

Want to know something else interesting… the crypto industry is now a top ten holder of US treasures. This data is also old, they are up over $100B now. Talk about skin in the game…

Arthur Hayes, the former Bitmex Founder had some salient points on the Trump “Plan” which I agree with:

1. Trump will debt-finance America First.

2. Trump is using DOGE as a way to cull political opponents addicted to fraudulent income streams, curtail government spending, and increase the likelihood of a US government spending slowdown-led recession.

3. The Fed will respond pre or post-recession with a raft of policies that will increase the quantity and reduce the price of money.

In a nutshell, Trump wants lower rates, he has said that. In order to do that, you need lower inflation via lower oil, lower spending, or lower stock prices. He is pushing on all of those levers now. We wont spend any more time speculating on this, because ultimately, it all ends in QE.

The question isn’t about whether this is bullish, it’s whether you have enough conviction and patience to see this cycle through. If you actually believe in this asset class, ask yourself why you aren’t buying more at 30% off in this environment. A good friend of mine once said “Action is the only truth”. That couldn’t be more relevant right now.

Since talk is cheap, here is what I bought today:

1. MSTR 260 weekly calls for $5 (pure degen)

2. MARA $20 December 2025 calls $2.50~

3. LTC, PRIME, SONIC (spot)

TLDR;

1. The market bottoms sometime in the next week, and we will see new all time highs by May.

2. There is a good chance it can bottom TODAY, or at least have a big squeeze.

3. BTC worst case/ideal buy is 73k

4. Total Cap worst case/ideal buy is $2.4T

5. Buy miners near book value (MARA), and I will hold some TLT as a doomsday hedge