The Everything Rally Is About to Begin | Joe Carlasare

**Joe Carlasare** (0:02)
I think there's plenty of indications that the bottom is in. You're about to do a monthly close over the 10-month moving average, which historically has marked the end of every single Bitcoin bear cycle since Lydie's 2016-2017. You have a very compelling case that this was the most muted, mild drawdown in Bitcoin history. That is extremely persuasive. I think the vast majority of people will have exposure to Bitcoin in one form or another without even realizing. You have a situation where you get back over 100K. You have an economy which I think is starting to turn up and start to be humming along here. You could have a massive cycle here this time around that will shock people. And you have this industrial revolution 2 with AI, which is going to have huge effects on our economy that we can barely feel. And to me, the consistent picture through all commodity markets is higher structural inflation.

**Danny Knowles** (0:55)
Joe Carlasare, how are you doing, my friend?

**Joe Carlasare** (0:58)
I'm doing excellent. Good to see you.

**Danny Knowles** (1:00)
Good to see you too. One of my favorite people to speak to. You always have a bit of a…
I don't want to say contrarian because I feel like Bitcoin is a contrarian, but you have a different view to the normal Bitcoiner on the state of the economy, what Bitcoin is doing. So I'm excited for this. We've got a lot to talk about.

**Joe Carlasare** (1:14)
Lots to talk about. So where do you want to start?

**Danny Knowles** (1:17)
Well, I think we've got to start with the price. So Bitcoin has absolutely ripped in the last two weeks. We're just under $80K now.
This kind of came on the back of the Treasury announcement, the buybacks. How much do you think that played into this?

**Joe Carlasare** (1:31)
I think it was sort of the match that lit the fuse. But to me, I think Bitcoin bottomed effectively in February when we hit that $60K wick down. Yes, it is true that we went slightly lower. I think it tested $58K gain, came through and held the board strong, which I thought was great. I love memes. Bitcoin is so sentimental that memes narratives really do control. But if you look, just take a step back.
For one, I was a big person, as you know, I think it faded this four-year cycle theory because I didn't think fundamentally there was any reason for it, especially given the economic data, which I look at pretty closely, as you know, stock market, which has been doing really well, just consistently all year, many other asset classes ripping. That being said, that was wrong, right? The idea of the four-year cycle, whether it is a self-fulfilling prophecy, whether it is something that is just something that is traded upon by Bitcoiners, sort of becomes that self-fulfilling prophecy, doesn't really matter. It is what it is. So everybody that was fading that narrative was wrong.
That being said, I think there's a lot of green shoots you can look at with the Bitcoin price, that show you that fundamentally at this time is different, at least with respect to the mutedness of the drawdown. So if you go back and look, we had that cycle high in the fall, where Bitcoin was at roughly 126, 127, or thereabouts. And then you sold down hard very quickly. You were at 80k in November, and then you had to rally back, and then you had the whole sort of slow grind lower until February, we just basically went down. And then really we've been bouncing around between 60 and 80, roughly for the entire year. Right now, as we record this podcast, Bitcoin is at $79,000 after that big run. So what do you take away from that? You take away that to me, you had one of them, because I think personally the bottom is in. I think there's plenty of indications that the bottom is in. You're about to do a monthly close over the 10-month moving average, which historically has marked the end of every single Bitcoin bear cycle since at least 2016, 2017
If the bottom is in fact in, you have a very compelling case that this was the most muted, mild drawdown in Bitcoin history. That is extremely persuasive. The fact that Bitcoin roughly fell from peak to trough, a little over 50 percent compared to prior 70 or 80 percent drawdowns, that's really encouraging. So yes, I thought that, I thought this was sort of a, I used the term artificial sell-off. It sort of like it felt like it had to happen. Like people just didn't want to get burned again. So they had all these profits above 100K. They saw that nice run up since the 2022 bottom. So they felt like a prudent thing to do was, don't fool me again. But I do think that the vast majority of Bitcoin, Twitter and Bitcoin traders were waiting for much lower numbers which they may not get. And that's exactly what market does. Over time, the market evolves. It changes sort of the patterns that people come very familiar with. And whatever worked in the past tends to a lot longer work in the future. It certainly worked for people that sold in Q4, right? But when you sell, Danny, the difficult thing why I sort of rage against people trying to trade and sell Bitcoin is that, not only do you have to nail the top, you have to account if you're in certain jurisdictions for taxes, but you also have to nail the bottom. And there were plenty of people sitting at 60k where we were at for a very long time saying, Bitcoin is going much lower, Bitcoin is going much lower. If the bottom is in and Bitcoin heads up from here, your ability to take advantage of that trade is very challenging. I know a lot of people now, since we had that big move up into the high 70s, they're saying, when are we going to get a pullback? When are we going to get a pullback?