2026 Bitcoin Slump Mirrors 2022 Crypto Winter: Catalysts for Bulls to Regain Traction

**SPEAKER_1** (0:00)
Let's welcome in Michael Willis, co-founder, CEO, Cyber Hornet ETFs. Thank you so much for being with us. What's front and center in the crypto market today?

**Michael Willis** (0:11)
Nicole, we're right in the middle of a Bitcoin winter, a full-fed crypto winter. It's summer, the Clarity Act is stalled. We have a cold card hack last weekend. This past weekend, we had a soft fork. So I think there's a number of reasons that we're seeing lows right now in the crypto space, and this particular crypto winter mirrors 2022's crypto winter to a T.
If we continue tracking the 2022 crypto winter, we're looking at potentially pushing into the fourth quarter before we see the uptrend that we're expecting.

**SPEAKER_1** (0:56)
Look, Bitcoin had five straight days of inflows. In fact, from late July until just recently, we started to see some inflows, and that reversed the trend that we had seen of outflows from June into July. And a lot of that may have been dependent on looking toward the Clarity Act. We'll talk about that in a moment, but also we have AI spending and margin calls, and so there's a lot going on here. When you compare the crypto winter back to the year 2022, we did see Bitcoin fly. Do you see that again? And what would be the catalyst? The highest point was 127,000, I believe.
Where do you see a change that would happen? What would be the catalyst?

**Michael Willis** (1:42)
When I look at Bitcoin, I see more of a cryptocurrency. So Bitcoin is more digital money than some of the other cryptocurrencies. So I think you can really track it technically. And technically speaking, Bitcoin every four years goes through a washout. Much like we're seeing now, you can expect a down 50, down 60, down 70%.
And OG Bitcoiners know that's par for the course for crypto. That's one of the reasons that we don't think most investors, average investors cannot hold through. Typically, down 35% is a threshold that we found that investors start to lose their comfort level. If they're down 40 and 50%, they tend to sell a lot of those positions. So what we do is we take 75% of the portfolio, and we anchor that in the S&P 500, and then we move 25% Bitcoin or crypto, whatever the position is and rebalance that in monthly. So in terms of the catalyst for taking it higher, we simply see all the fundamentals that made Bitcoin great are still there. In fact, they're increasing because adoption is coming. Some crypto clarity act will eventually make it through, and that will give institutions more clarity. Investors don't have to have that clarity, but institutions do. That would speed it up, certainly, but we see Bitcoin as does what Bitcoin does, and we're in the digital age. It's digital money.
We like to liken it to digital gold, but it's more portable than gold. When you look at the US dollar and the current financial system, hundreds of trillions of dollars in debt, Bitcoin is a hedge to the current financial system, but historically, it's done quite well in performance over the last 10 years, so you get to have your cake and eat it too. But in a down market like this, this is showcases why we do the 75-25 methodology, because whereas Bitcoin is down 45% over the last 12 months, our flagship 75-25 ETF BBB, which is 75% SMP 500, 25% Bitcoin is up 1% during that down 45% period.

**SPEAKER_1** (4:04)
Just quickly, your thoughts on the Clarity Act. I mean, you have at least one legislator who thinks it's still going through.
It seems that, look, they go on recess. I don't know what you think, but you are except expecting more adoption for crypto. Do we need the Clarity Act first, or is that adoption happening regardless? A quick answer, please.

**Michael Willis** (4:26)
The adoption's happening regardless.
We are not, but Bitcoin is not held hostage by the politicians. It certainly would help give clarity to the institution, so the quicker that happens, the better. But whether it pushes through this quarter, next quarter, or even first quarter of next year, we believe it will make it through at some point, and that's going to give the institutions a bigger push.

**SPEAKER_1** (4:51)
We've been in somewhat of a range. There hasn't been extreme volatility. What would you attribute that to quickly?

**Michael Willis** (4:59)
Yeah, I think when you see Michael Saylor, basically, the top spokesman for Bitcoin and one of the largest holders in the world, selling off 3,000 coins a couple of weeks ago and another 1,000 coins plus in the last week, and really Bitcoin shrugged it off. This is something that's actually exciting to see when you see $40 billion worth of volume in a day with Bitcoin, on heavy days up to $80, $90 billion in volume. This is what you like to see in an asset class that is now in the top 10 of market cap if it was in the S&P 500 We're seeing everything that, the excitement that Bitcoin originally brought and the reason it took off is because people saw it as better engineered currency than the US dollar. But as it's evolved, I think a lot of people are buying it as a new technology, as a new asset class, and they don't really know the original reasons that what made Bitcoin great.