Source: "What Bitcoin Did"
Compiled by: Felix, PANews
Former Glassnode Chief Analyst Checkmate appeared on the "What Bitcoin Did" podcast, where Checkmate explained why the surge to $60,000 seems like a genuine capitulation event, noting that the probability of the current bottom forming is 80%, and we are in a bull market phase, but it will require a long period of consolidation. He also discussed the rising bond yields, the collapsing fiscal system, the end of trust in government debt, ETF fund flows, and more. Lastly, he explored the proposed capital gains tax reform in Australia. PANews has compiled highlights from the podcast.
Host: Are we currently in a bull market or a bear market? Because to me, the worst day of a bear market often marks the start of a bull market. But is it too early to say we have entered a bull market? Or do you believe we have already entered a bull market?
Checkmate: That is the correct framework for thinking about this issue. The worst day of a bear market often marks the beginning of a bull market. As I have always described, it often takes several months or even longer to know when the bottom has occurred. We talked when Bitcoin touched $60,000 in February, and I called that the "price pain capitulation" phase where everyone sensitive to price was almost simultaneously desperate and gave up. You could see massive losses, token transfers, and panic in the market at that time; my inbox was flooded. It felt like the crash in June 2022.
Looking back at past bear markets, after bottoming in 2015 and 2018, there were long, slow increases over months. During the collapse of FTX in 2022, that was the only time we fell below the previous "pain capitulation" low. Many people, due to recency bias, thought we would certainly set a new low, but that may not be the case. We could retrace to $65,000 and bounce back, or set a higher low at $75,000. From my perspective, I believe the probability that the bottom has formed is about 80%. In other words, we are in a bull market. But consolidation takes a long time, just like in 2016 and 2023, it took a whole year to break through $30,000. A full year of grinding, everyone was afraid that every sell-off would drop the price even lower. You need to build confidence. Unless Bitcoin drops to zero, we can certainly say that at some point, we will return to a bull market.
Host: If there is an 80% certainty, what specific indicators make you so confident? Do institutional investors really look at these technical indicators?
Checkmate: First, let’s look at the technicals. I am not a technical analyst, but I know what institutional traders using Bloomberg terminals are looking at. Bitcoin's weekly RSI touched 26, which is a historical low. Historically, every time this indicator falls below 30, that marks a bottom. Many institutional traders only look at Bitcoin's position relative to the 200-day moving average; they pay attention when the indicator turns from red to green, not caring about daily noise and fluctuations. I have a mean reversion model of my own that incorporates nine models, including on-chain, technical, and trend analyses. Dropping to $60,000 belongs to the “Q10 event,” meaning historically, only 10% of days have prices below this relative level. I have seen many bears say it could drop to $45,000, but in my model, that only happened when Bitcoin was $2 in 2011, so I won’t use it as a benchmark prediction.
Host: You often mention "realized price"; why is it one of the most important indicators right now?
Checkmate: “Realized market cap” is calculated based on the value of each coin at the last time it moved, rather than based on the current spot price, which can be used to measure the holders' cost. For example, Satoshi's coins are numerous, but in the realized market cap calculation, their USD value is zero. To reflect human investors' behavior more accurately, I developed the “real market average price” framework with Dave Puell. If we exclude lost coins and dormant coins and only look at active investors, their average cost is currently around $78,000. The average inflow cost for entities like Strategy and ETFs, as well as miners' production costs, are between $75,000 and $82,000. $85,000 is a crucial midpoint in a supply-dense area. Once surpassed, market sentiment will flip, and people will start to "buy on the dip." Prior to that, $78,000 is the first major resistance (short-term cost basis, real market average price), $85,000 is the second (200-day moving average, large cost clusters), and the third resistance is $95,000 (around the 50-week moving average).
Host: How long do you think it will take to break through $85,000 and $95,000? Who is driving the market price now?
Checkmate: Currently, my mean reversion index is at 33, still in the bottom third range, it’s still a good price, but people are no longer in that blind buying state. We are currently encountering a ceiling around $80,000 and need to go through a correction; the market needs to transition into a fully “buy on the dip” mode.
The upward price push actually relies on continued incremental capital inflows, likely due to people buying more as they age and their income increases, or due to larger corporate sizes. For institutions, I previously conducted research (though outdated) showing that 20-25% of ETF holders are institutional investors and many are small institutions or Bitcoin hedge funds. Large institutional allocations are still very low. Even a shift from 0.001% to 0.002% represents billions in capital. Once the price breaks $100,000, those institutions that are currently too afraid to enter will start to come in. In terms of fund flows, current buying volumes for ETFs and Strategies are roughly equal. They are very strong buyers relative to the selling pressure from the sellers. Now, realized profits and losses on-chain are very low, which is a typical feature of the late bear market/early bull market, and the market is in an "extreme apathy" stage.
Host: Speaking of Strategy, if Saylor holds some Bitcoin in Coinbase, does that add risk? Shouldn't he be keeping those coins himself? What if there is a hack at Coinbase?
Checkmate: There is indeed a tail risk; any bets involving such a strategy are essentially heavily long Bitcoin. If Coinbase has problems, it would be catastrophic for the entire industry and everyone would be affected. But regarding Strategy, there is another serious risk often overlooked: When Bitcoin prices drop, if you subtract its debts and preferred stocks, its net asset value might reach zero much earlier. This threshold for the asset's liquidation price is actually much higher than what Saylor claims (might be around the $50,000 range). Although the likelihood is very low, this represents one of the most easily observable risks specific to Bitcoin.
Host: Let’s talk about the macroeconomy. Government bonds seem to be a cornerstone signal for all assets, and now the 30-year government bond yields in the US, UK, and Australia have all exceeded 5%, with the UK even nearing 6%. Are rising yields and the declining value of collateral, which underpins the entire system, telling us that the system is in trouble? Or are they worried about inflation and uncontrolled deficits?
Checkmate: Both. The market is essentially declaring that they no longer trust the government. Interestingly, many assets aren’t trading as people expected. For example, oil prices are unexpectedly stable despite geopolitical conflicts; gold, as a geopolitical safe haven, has also performed poorly recently, certainly because it was previously overbought. Similarly, the dollar index (DXY) was expected to rally due to safe-haven demand, breaking the 100 mark, but now it’s fluctuating between 98 and 99.
Host: Does this mean that a crisis is about to break out, and the government will have to print vast amounts of money? How would Bitcoin perform in that environment?
Checkmate: The current trend indicates that both inflation and interest rates will rise, and this process will be very painful. When you realize that the debt obligations of the fiat currency system outweigh the assets, you will want to transfer assets outside of the system and search for assets that cannot be devalued, such as gold and Bitcoin. We are in an era of significant change in the monetary system. The world will be completely different after this transformation. The globe is separating “global reserve currency” from “global reserve assets.” The dollar will continue as a medium of exchange (like stablecoins), while Bitcoin and gold will serve as stores of value. When the system's debts and obligations become too large, people will want to hold hard currency assets outside the system that cannot be devalued.
Host: I have never quite understood your reasoning for holding gold. If you believe Bitcoin has more upside potential, why not just hold Bitcoin?
Checkmate: This is primarily due to considerations of asset duration. Gold tends to have smaller fluctuations in the short term, and if you plan to save money for a down payment on a house within the next one to three years, gold is a suitable tool; however, Bitcoin has a longer-term growth dividend, making it suitable for saving for long-term expenses ten years down the line, like my son's tuition or paying off a 30-year mortgage. Having both allows you to find balance while enduring fluctuations over different time frames, as we need to live normally in addition to seeking investment returns.
Host: Recently, Iran has started using Bitcoin for payments to circumvent sanctions. Do you think this could be a pinnacle moment of historical change?
Checkmate: This is not a true pinnacle moment; the real turning point occurred when the US froze Russia's foreign exchange reserves in 2022. Since then, everything has shifted towards the pursuit of hard currency. Bitcoin perfectly addresses the difficulties of transporting physical gold and the inefficiencies in cross-border settlements. The digitized Bitcoin offers high liquidity and multisig protection, making it far superior to hoarding tons of immovable metals.
Host: Let’s discuss Australia’s policies. You seemed very frustrated when you came in today. Can you explain to the audience what has been happening?
Checkmate: The past two weeks have been absolutely terrible. Since 1999, there has been a rule in Australia’s capital gains tax (CGT): assets held for over a year can enjoy a 50% tax discount. This has taken inflation into account and helped regular people accumulate wealth. Recently, the Labor government proposed a reform in the budget: under the guise of "helping young people save for a house," they actually removed the 50% capital gains tax discount on all assets (including ETFs, stocks, Bitcoin, etc.).
They switched to the "indexed calculation method." This means your cost basis rises only at approximately a 3% CPI inflation rate. Australia is currently experiencing an extremely severe real estate bubble, with a median home price of AUD 1 million (about USD 720,000), while the median annual salary is only AUD 74,000. An ordinary person needs 40 years of saving in the bank to afford a down payment. To catch up with this bubble, young people must invest in high-growth assets (like Bitcoin or startups).
Host: What does this specifically mean?
Checkmate: This is essentially a scam, a veiled currency devaluation of the national savings. They let your asset cost base rise according to a 3% CPI, while the remaining substantial appreciation will be fully included in your income, taxed at your highest marginal tax rate, and they are not indexing your tax brackets concurrently. As a result, your actual tax rate that you should have paid around 25% could now soar to 40% or even 47%. Imagine if you established a startup and successfully sold it, due to your initial cost being zero, you would not be able to benefit from indexing, and the government would directly take 47% of your profits, becoming your largest shareholder without assuming any risks.
Host: Do they think people can just save money in the bank to buy houses instead of investing in assets? These politicians are so out of touch.
Checkmate: Absolutely correct. Australia has one of the most ludicrous real estate bubbles in the world, with median home prices soaring to AUD 1 million while median wages are just AUD 74,000. Young people could take 40 years to save enough for a down payment by keeping their money in the bank at 5% interest. If they want to buy a house, they have to outpace inflation through investments in assets. The government claims this policy is to help young people buy homes, but in reality, it severely hurts those young people saving through high-growth asset investments (like Bitcoin). I calculated with a large language model that this tax reform policy will not only delay ordinary people's ability to buy homes by 2 to 5 years, but it also equates to depriving children of 1 to 2 years’ worth of private school tuition savings. This is not at all about helping young people.
Host: This is absurd. If you currently hold Bitcoin, will the previous gains still be subject to the old policy? What should those who don’t plan to leave Australia do now?
Checkmate: They operate under what's called “partial grandfathering,” which is a rogue practice. Before July 1, 2027, your unrealized gains can benefit from the 50% discount under the old policy, but any asset growth thereafter will all be strictly taxed at new high rates under the indexed policy. Those who don’t want to leave Australia should first find a good accountant because the tax system is highly interconnected, and knowledgeable people can often find new tax-saving opportunities in system changes. Second, they should download a protest letter template from Australian Bitcoin industry organizations and write to their local MPs. Just because you don’t want to move overseas doesn’t mean you have to passively accept this.
Host: Does this mean the government is trying to steer the economy towards some form of austerity policy?
Checkmate: Yes, that's why I refer to it as throwing a “weather balloon” to the world (note: meaning a "behavior to test public reaction"). True austerity policies should not look like this; the current approach is a type of egalitarianism that makes everyone poorer; it is purely a scam against the wealth of ordinary people. They are trying to test how tolerant the Australian people are towards this robbery policy. If there is no strong backlash, this policy will spread globally. Young people must understand that to climb the ladder to homeownership, they must first climb the ladder to asset accumulation, and the government just doubled your asset taxes, which is absolutely unacceptable.
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
