 After several months of trending downward, we finally saw some bullish price action in January. It seems that markets were anticipating an imminent central bank policy pivot. However, the Bitcoin rally has already cooled down and it looks like the Federal Reserve has no intention to lower interest rates anytime soon. So how should we interpret these signals? Is Bitcoin bound for new lows? Or is this the beginning of the end of the bear market? And most importantly, how should investors prepare for the next parabolic bull run? I tried to find out in my conversation with Mark Yusko, founder and CEO of Morgan Crip Capital. I'm Giovanni. On this show, we challenge the ideas that shape the world of crypto. In each episode, we assess a crypto narrative, a macroeconomic outlook, or a potentially disruptive technology. Only the most solid ideas will make it to the other side. So the first month of 2023 was unexpectedly bullish for crypto, Bitcoin, but also equities. So what do you think? Is this the beginning of the crypto summer that you were talking about last year? Ah, great. So no, it's not the beginning crypto summer. It's a short squeeze, a good old-fashioned short squeeze, both in the equity markets and the crypto markets. Everybody was getting short towards the end of last year. I mean, it was just a horrific market, right? Bonds had a horrific market, stocks had a horrific market, crypto had a horrific market. Everything was negative. And what happens when everything's negative, people start selling for tax purposes towards the end of the year. Then what happens is you have to wait 30 days for wash sale rules, and then you can buy these things back. And so what happens, it used to happen all the time, Giovanni, in January. So everyone would do their tax loss selling in December. They'd wait their 30 days. And sometime in January, they would buy these assets back, and you'd get this big move in the things that had done the worst the year before. What I'm trying to say is, big short squeeze, hugely overbought, hugely overbought. Bitcoin says overbought as I've ever seen it. That is not a condition to start a long-term bull run. That's a condition for short-term weakness and a retracement, and then the start. But the pattern we need to look for, and we talked a little bit about this last time, is even though there's CHOP in spring, what you're looking for is a series of higher lows. Now, you like higher highs too, but that's not as important as higher lows. If you keep making higher lows, that means there's accumulation pressure in the market. And I think we're going to be range bound in this, call it 20 to 24 range for a while, then we'll be closer to that summer period. And I think that's just time, place and events, April-ish. And again, seasonally, Q2 and Q4 are the most positive for Bitcoin. So it's setting up to have a pretty nice move April-May-June this year. We are already noticing that this rally is losing steam. We are seeing that the price of crypto tend to remain quite depressed as long as there is this increase, this hike of interest rates. What do you think? When are we going to see a pivot finally? I think zero chance they cut rates anytime, anytime soon. The Fed clearly is not loosening, right? They're not tightening as quickly, but they're still doing QT, they're still shrinking their balance sheet, and they're still raising. But the PBOC has unleashed a huge wave of liquidity. I mean, they are flooding their market and Chinese stocks are up a ton, Chinese markets are rallying, economic activity is surging, and China drives liquidity around the world. So used car prices are now plummeting. Because there's more cars coming in, China's reopening, all that good stuff. So I think by the end of this year, CPI is going to be close to, it could be zero, it could be negative, month over month, quarter over quarter. But trailing number is probably around 2%. That's not a situation where you need to be tightening. There will be a tailwind, I think, for digital assets. The market is saying by the middle of this year, the Fed's going to be cutting. Now, I think that's too aggressive, I don't think that's going to happen. It's possible, certainly possible. But I don't think it's going to happen. What I do think is very likely, very likely, is the Fed signaling that, okay, we're good. But that will be interpreted as we're going to cut, and then risk assets will explode again. I would like just to mention a survey by Bloomberg, according to which 70% of the investors that participated in this survey believe that the stock market has still to reach a bottom this year. And even around 30%, 35%, so the biggest cohort in this survey thinks that this bottom won't be reached until the second half of 2023. So basically, we saw that the crypto markets are highly correlated to the stock markets. And so if that survey is sort of correct, that means that the crypto market will also follow and touch a new bottom. Again, just totally disagree because crypto markets, particularly Bitcoin, are very uncorrelated to stocks other than for very short periods of time during deleveraging. The only time correlation rises is when Bitcoin is being forced to be sold because there's too much leverage. There's not as much leverage in the system as there was. We had a big deleveraging. In the crypto market, I'll argue there's very little leverage left, very little leverage left. So the idea there's going to be a bunch of unwinding in crypto, not very likely. Now, is there still leverage left in stocks? Yes. Could that deleveraging cause people to sell Bitcoin? Less. Why? Because they're already sold. So now what we have is a holder base that's very different from the holder base of stocks and bots. I would like just to make sure I understand. You can accept a scenario where in April, May, we're going to see this crypto summer getting the first movements while stocks are keeping on falling. I think Bitcoin and equities are going to be very, uncorrelated this year. And I think this is a big year for Bitcoin. There are some pessimistic views on 2023. So you seem to see it more as a sort of spring where things are going to start moving. For others, it's going to be an year of apathy. So according to Jason Yanowitz, who is the co-founder of Blockworks, basically 2023 is going to be the last phase, the last year of the bear market, which is the worst part because the previous part was the most dynamic part where everybody gets basically pushed out from the market. While the worst part is the apathy. So where prices are flat, prices are not moving and so people start losing hope. According to this vision, the real movements in the market are going to happen not earlier than 2024. What do you think about this vision? I love Yano. I talk with his partner every Friday on the margin. I don't think that view is technically accurate, that the last phase of the bear market is the toughest part. My belief is we start out of that cycle a little bit earlier. I think the market always anticipates the halving. So if the halving is, maybe you're right, maybe it is March, April, but sometime in that Q1-ish zone of 2024, nine months before that is usually when the beginnings of summer start to, the crocuses start to pop and the buds are, this year, there's going to be a lot of taxes paid because last year was so crappy. So I think there's not going to be a lot of downside pressure in March, April this year. So my guess is we'll probably start earlier rather than later. If I have an early summer, as opposed to a late summer would be my guess. Okay, and that's interesting because now I would like to go more into the numbers. So basically, looking at the price dynamics of Bitcoin historically around the halving, what I notice is that the big move is happening not before the halving, it happens usually after. In the last cycle, during the year prior to the halving, the price of Bitcoin raised of about 17%, while the big move, the big price movement happened right after. So in the year after the halving, we saw around like a 550% increase of the price. So if history is going to rhyme, as you said, that means that, yes, we are going to see probably some price movements from now to the halving, but that's not going to be like an explosion. It looks a bit unlikely that we're going to reach the 100,000 mark by the end of the year. If the halving number is 100, all right, if that's the target, and then we back up from that, we say, all right, well, where are we today? We're at 23,000. Where should we get by the time the halving occurs? Could we be back to 50,000, 60,000? That's a pretty good guess. Then as we approach the halving, we start to accelerate into the target, and then we parabolic past it. The fair value is 100K per Bitcoin. How close we stay to fair value is the question. Do I think we get there by the end of this year? Probably not, but could be surprised, right? Let's see what investors should do in terms of building their crypto portfolio. Just give a couple of tips on how to build this portfolio for people that just went into the market, and they are basically waiting for the next crypto summer to start. Don't wait. Don't wait. Buy. Buy some today. Buy some tomorrow. Buy some the next day. Buy some next week. Buy some next month. Don't buy it all at once. Pick a number, right? I say three to five percent, whatever the number is. If you're younger, that number can be higher. I'm talking a three to five percent core position Bitcoin, higher if you're younger. That's what I'm talking about. Now, beyond that, you want to invest in Ethereum as a platform that builds out the infrastructure around the digital future? Great. You still believe that the most significant portion should be in Bitcoin and not in Ethereum. I'm asking because there are a lot of people that actually think that Ethereum will outperform Bitcoin this year. Law of small numbers says Ethereum will outperform. It's a smaller asset base if there's a bull market, it will likely outperform. History tells us the smaller market cap assets outperform in bull market. If you want to own a core asset forever, accumulate Bitcoin. If you want to have a portfolio of other technology investments that you think have a higher upside potential, own some other things. Own Ethereum, own Avalanche, own Polkadot, own Cosmos. Mark, it's always a pleasure to discuss with you these issues and I'm really looking forward to see how your outlook plays out in 2023. Probably you're going to talk again in the next few months and see at what point we will be. So thanks again for coming on our show, Mark. No, thank you. I really enjoyed it and look forward to the conversation in the summer.