Why bitcoin investors shouldn't expect a 'rapid recovery'

Obviously, the price action lately has been downward. Um, and I think people are sort of trying to grapple with what happens now, whether Bitcoin's found a bottom and what could potentially turn things around. How are you thinking about that issue?

Well, so historically when we look at Bitcoin price action, uh outside of uh very narrow examples like the Covid stimulus, usually Bitcoin doesn't have V-shaped bottoms. Usually it it hits a floor, goes sideways for for quite a while. Uh I I think we're in more of that range now. Um in November it tried to find a bottom and and did so for maybe two months before falling over again. So we can't guarantee there won't be another cascade lower. Um but I I I wouldn't expect like a very rapid recovery uh because I don't really see any sort of like massive stimulus on the horizon. Uh so I think it takes time. and really the the mechanism that it finds the floor is you get kind of the the more like, you know, the the the term is like diamond hand holders. Like they they kind of come in, very value oriented, they really know what they own, uh and they don't want to sell and they start uh scooping up cheap coins. and because the new supply is so low and because the market cap's not that big, it only takes a a fairly small number of them to start really kind of putting a floor in.

Is is there any catalyst, potential catalyst you would see coming from a news perspective, you know, that would get people back in the market? Or do you think it's more a question of like the price is low enough for long enough to draw buyers back in?

I think it's more of the second one. I think low low enough, long enough and eventually just the the the coins rotate from fast money to just more strongly held. And then it only takes a small influx of new demand whether it's, you know, a different cycle. Uh and at that point the coins don't want to leave where they are until they have a much higher price. Um, from a new standpoint, I mean, there's always the possibility of a large buyer comes in that that we're not expecting, some sovereign entity for example. Um but I try not to base around those. I'd rather be surprised to the upside than surprised to the downside. I said the same thing about the uh sovereign Bitcoin reserve concept uh early last year. I was saying I'm not going to, you know, base any price predictions on that happening. Fortunately, I did I didn't, you know, I assume that's not going to happen or other than ring fencing there's coins, or to the extent that they do, I I'd rather be surprised to the upside than expect that in my model.