Bitcoin Is Up 40% This Quarter - History Says Q4 Gets Even Better

Scott Melker (0:00)

Bitcoin is up 40% this quarter, and history says that Q4 gets even better. It's historically the best quarter that we have for Bitcoin. It certainly feels like we've had a regime change, and we are entering a new bull market. I'm going to talk about that and everything else with my friend, Bill Barheit from Abra. Let's go.

What is up, everybody? Welcome to the show. I hope that you're all having a wonderful Wednesday. Apparently, I'm in the Caribbean in a place that's not at all AI generated, considering that it appears that that wood deck is going into the ocean. Bill, AI can be pretty powerful. Obviously. But it can also miss.

Bill Barheit (0:58)

Right. Well, it depends. I mean, is it a miss? I don't know.

Scott Melker (1:02)

I don't know. That's fine. I don't know if you saw my McGlone image when he said, Mike McGlone this week said that Bitcoin's glory days were over.

And I quickly whipped up a Mike McGlone image of him as Bruce Springsteen. It was good, but it did put his band in the crowd.

Bill Barheit (1:22)

Oh, nice.

Scott Melker (1:24)

I can't say I can miss, but there he is. Do you think Bitcoin's glory days are over, Bill?

Bill Barheit (1:30)

What are glory days? I mean, Bitcoin doesn't care.

I think Bitcoin is going on another epic run at some point over the next 18 months. And we won't be having these discussions anymore. And then we'll have forgotten that it can go down again. And then the cycle will continue.

Scott Melker (1:48)

Yeah.

So, I was one of those four-year cycle doesn't exist anymore people last year. Then I guess we magically topped on the exact day that we were supposed to. And we've had extended bear markets since, although shallower, I would say, than previous ones assuming that we're out of it, which I think you would expect because we also had a less upside on the bull market.

Bill Barheit (2:17)

Yeah.

Scott Melker (2:18)

So, now do you think that the four-year cycle is just fully intact and maybe we just preempted it by a month or two? And here we go again.

Bill Barheit (2:26)

I have absolutely no idea. And anybody who says that they do, I mean, I can see the same charts as everyone else. I can see that we're catching up now. We appear to be catching up to this Global M2 chart, like close the gap, which we've had before. We've had a gap before and we've closed it.

We've had the four-year charts. We've had the rainbow charts. Are they going to be the same for the next three years as they were for the previous 10? I have no idea. They look nice. I mean, but look, here's what I know. Okay, let's stick with what I do know. I do know that Bitcoin is guaranteed scarce. I do know that we're basically increasing the money supply at an ever-increasing rate, which is abundance. Money is not supposed to be abundant, okay?

Its distribution might change over time, but the very idea of money, wealth is different, okay? Wealth is different. Wealth can be a number in a database based upon the value someone's willing to pay, but the actual physical money is not supposed to be abundant. It's supposed to be scarce, right? So my mantra lately has basically been invest in scarcity and create abundance, except for the government, right?

Scott Melker (3:49)

Unbelievable. So yeah, and I mean, just to put a quick note on that when talking about the market, I mean, I didn't know that my face would be on that article, but Bitcoin is headed for its best quarter in nearly two years, but traders are using less leverage. So generally, we're down in Q3, right? This is usually when things are bad. This is the best quarter in a vacuum in nearly two years, even versus Q1s, 2s and 4s. And historically, if this was the right time in the cycle, you know, we get October, and that's when things start to ramp up. So if you do care about historical data, it feels like things are moving in the right direction. And of course, you know, Bitcoin is trading above every meaningful moving average, it's made a higher high, all the reasons you would think that we're ramping up, and there's still people who are like 40k.

Bill Barheit (4:36)

I would guess, I don't know for sure, but I would guess the available traded supply for Bitcoin has shrunk while the available traded supply for certain, you know, the broader all client space is probably increased. And so my guess is, is that probably tracks the leverage change. In other words, you know, the available Bitcoin relative to the overall pool of Bitcoin is much lower, which means that the blended leverage in the system is much lower, whereas it's probably where it's ever been on alts. I would, that would be my guess. I mean, I haven't looked at it.