VirtualBacon: The Next Bull Market Is Here (Full Thesis)

**Robbie Klages** (0:00)
And welcome to the show, good to have you, man.

**Dennis Liu** (0:03)
Glad to be here, thank you for having me. And I guess we're joining live, so what are we talking about today?

**Robbie Klages** (0:10)
Yeah, man, big fan of yours, so thanks for joining. I've been watching your channel for a long time. And we're sitting here at, it's June 30th, Bitcoin's at 58K, folks are very, very worried about MicroStrategy and stretch.
So why don't we just start here, Dennis.
Give us a bit of your kind of broader, holistic view on the major assets in crypto. And then we'll get into some of our theses on the show around stable coins, tokenization, perps, around this kind of like fundamental analysis of token economics and more. But let's just start broad here, get into the nuance. What's your kind of 30,000 foot view on where we're at with the crypto majors?

**Dennis Liu** (0:53)
I mean, hopefully Bitcoin stays higher than 30,000 feet. But I think we're looking at maybe between 3,000 altitude, then I think that's low enough. So at 58, historically, this is way below the 200-week SMA already. And everybody has already heard those moving average levels, so I'm not going to over-repeat them.
Yeah, I'm a net buyer here. I'm heavily allocated to Bitcoin, actually. Not so much alt, but Bitcoin is very, very deep value territory now.

**Robbie Klages** (1:29)
Yeah, and I mean, in the context of this kind of broader AI macro trade, there's been so much happening outside of crypto siphoning attention and capital away. I feel like people are looking for a catalyst to get some attention and capital back into Bitcoin, back into the majors here.
Is there anything that you think that that would be the core driver of that attention and liquidity shift? Or, you know, are we just thinking four year cycle here?

**Dennis Liu** (1:59)
The answer is, it's not so much driven by fundamentals, but I think the, I'm a technicals guy, and I wanted to believe that the four year cycle was over, but the fact that it repeated exactly from October 10th, and now we are about six months, seven months in, and we are basically back to the same, like deep drawdown levels, makes me need to believe that four year cycle is what drives it. Exactly why? I don't know.
You know, I'm a big liquidity guy, and liquidity cycles are usually five years, so this cycle should have been a little bit different, but it's not. Having said that, immediately, you can look at the correlation between Bitcoin and gold, and say that, hey, the two are moving together post-Iran because of the strength in the dollar. I think that's a whole sort of a pipeline of events you can follow. So starting from the war to inflation, and then to the Fed, and to rates to yield, and then Dixie, and now you have gold and Bitcoin going down. So I think we can see some short-term price action come back up once we are past that high inflation, high potential rate hike for the next few months. But after that, I think it is the Bitcoin cycle.

**Robbie Klages** (3:23)
Yeah, I mean, it's been funny how I'm sure you had this experience. Late last year, we had a lot of folks come on our show, and especially from the institutional crowd, and really just say that the four-year cycle is over.
They're like, it's done, it's not happening anymore, and it's just funny, man.

**Dennis Liu** (3:44)
And to be fair, this time around, it's not even that crazy. It's not like anyone's saying Bitcoin is going to 1 million right away. All they're saying is, hey, it's going a little bit more subdued cycles now, and we're going to have less chop, and thus, you probably shouldn't try to sell exactly at the same time and hope for a very long bear market. That was kind of the thesis. Don't hope for under 60K, but we're here. So I guess Bitcoin always gives those chances if they are patient.

**Robbie Klages** (4:16)
Yeah, I think we'll look back at this time period and feel like it's very... We'll feel gracious for having this opportunity again. Sometimes, I mean, well, somehow, you're able to be very early every bear cycle again to the next kind of macro shift here.
So kind of zooming in a bit more, we have this thesis kind of around what I call return of fundamentals. And it's essentially thinking about crypto assets as businesses and looking at actual on-chain businesses in crypto assets and thinking about them as like a profit and loss statement. Like you've got revenue and then you've got emissions, expenses, unlocks, etc. And these are kind of two sides to the same coin. And there's only a handful of crypto assets today that are really like on-chain businesses and like operating in this fashion. And we talk about them a lot in the show. You got hyperliquid, lighter, things like aerodrome, even sometimes pump.