Why This Crypto Cycle is Over | Michael Nadeau's DeFi Report #7
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Bankless nation today, we're gonna talk about the crypto cycle. Is it over? Mike Nato thinks it is, and, he joins me today. Mike Nato, of course, is from the DeFi report. Usually, we put these episodes out every month or so. We're doing this one a little bit early because there have been some big changes that, Mike, I want to get your take on. How are doing?
I'm doing great. Great to be here, Ryan.
Alright. So, things feel pretty uncertain in crypto right now. Feels like it could go either way. Either we get a resumption of the bull market, or this has been the end of the cycle, and maybe we're into a bear market. If this cycle is over, though, I will say it will be different. It will have played out differently than previous. But if it extends into 2026, that's also different. And I know your position is basically you're now risk off in crypto. So primarily overweighted, risk off, and I believe this is the first time you've been risk off in crypto this cycle. So, like, the first time si
That is correct. Yeah. We've been probably too long for a very long period of time and have been kinda, like, scaling out of the market a little bit as, you know, as we go through the last few years, particularly q four, q one of this year. And our view has been that we would top sometime in q four, And there we've been sort of evaluating both, you know, sort of left tail risk of cycle being over, roll things rolling over, and also potentially right tail risk of sort of a meant a melt up. And we can kinda go through how I've been thinking about sort of the risks in both directions kinda as we
Yeah. I wanna talk to you about that because you actually you called the flash crash. So I got a notice from the DeFi report, and this was, like, earlier in the morning on October 10. This is before, like, shit really hit the fan that day, and you were like, hey. I'm risk off. So you saw some things before the flash crash. I actually wanna get in your head and find out what you saw and, hear why you are primarily risk off right now. And I think, like, just before the crash flash crash and then kind of doubling down on the risk off position post crash flash crash. I also wanna hear you respond
That is right. Yeah. That is absolutely right. I mean, it's actually kind of interesting that, you know, when I when I got into investing, when I learned about investing, it was through the lens of Warren Buffett, Charlie Charlie Munger, and I do have sort of a focus on fundamentals and deeply understanding also the the macro cycles and sort of what drives the price of Bitcoin. I think the philosophy is really deeply understanding what drives the price of Bitcoin, what is fair value for Bitcoin, what do we want what that is the price that we wanna pay for Bitcoin, and we're pretty disciplined
Okay. And so I think it's really important to understand Mike's decision making by understanding Mike as a as an investor. And a big list listener, you might play this differently. So you might be a trader. You might be doing things that they Mike's not doing. You might be deeper on the risk curve into alts. You might be someone like me. I would consider myself a long term investor that doesn't really play these cycles too well or too much. So I tend to kind of buy and hold more across cycles. And the reason is because I'm terrified that I'm gonna miss, you know, one of those days where you wa
Yeah. So thinking at the October was that, you know, sort of anchoring to this idea that, yes, we are late cycle, and the base case is that you're gonna have a q four top. So October tends to be a pre
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