Bitcoin Drops to a 6-Month Low 📉: Is it a BUY Opportunity?
Summary
Bitcoin Outlook: After a 20% pullback and a leverage washout, the view remains long-term bullish with signs that forced selling has ended and fundamentals intact.
Altcoin Season: Expect rotation from Bitcoin dominance into altcoins, with potential for euphoric, parabolic moves; blue-chip projects can still double or triple, albeit with high volatility.
Crypto Adoption: Builders continue to ship products, mainstream on-ramps are expanding (e.g., a US bank enabling crypto for up to 12M customers), and DeFi/infrastructure projects show meaningful traction.
Crypto Regulation: A pro-crypto administration and bipartisan efforts could clarify CFTC/SEC roles, improving the regulatory path and supporting broader institutional participation.
Dollar Debasement: Inflation, rising debt, and global financial shifts underpin a long-term dollar debasement thesis; recent dollar strength coincided with Bitcoin’s dip but the long-run case remains supportive.
Key Companies/Tickers: Bitcoin treasury companies like MicroStrategy (MSTR) amplified buying when trading at premiums to NAV, though those premiums have since collapsed; platforms like Coinbase and SoFi were cited for expanding crypto access.
Risks and Correlations: Bitcoin still trades like a speculative asset and remains correlated with equities, so a stock market downturn could pressure crypto.
Overall Perspective: The leverage flush appears healthy, setting the stage for Bitcoin to resume its uptrend and for altcoins to potentially outperform as the cycle matures.
Transcript
Crypto has gotten pummeled, dropping 20% after a great bull run. Traders got obliterated. Hodlers took a loss. It's been a rough time for Bitcoin after this long bull run. And the big question is simply, what's next? Well, I'm here to tell you, I've been a financial analyst for nearly two decades, and I've been a crypto miner and investor since 2013. And at Stanberry Research, we have some of the best crypto research you will find anywhere. So, you are in the right place to figure this out. Now, to understand Bitcoin's future, you have to understand why this crash happened. True Bitcoin holders have become accustomed to the volatility. But the recent upward climb had put risk in the rear view, at least for some, and crypto seemed to only climb upward. Now, this 20% decline from 120,000 to 100,000 has believers wondering if this is the end of the long bull run. Now, digging in, you'll see that the reasons for the decline were the very same things that drove Bitcoin's rise. And that lets us know precisely what will happen next. And speaking of what happened next, you should know that Stansbury Research has built an AI based system that takes the best businesses in the market and combines them into a simple 20 stock portfolio designed to beat regular market returns. We just launched it and you can learn more by visiting stansberryystem.com or scanning this QR code. Now, back to Bitcoin's crash. I need to tell you about three things that drove crypto higher so you can understand what's happening. So number one, crypto had a great 2025 thanks to dramatically improving fundamentals. Now, as a stock guy, I often say that Bitcoin doesn't have any fundamentals, right? It doesn't have earnings or cash flow or any of the true intrinsic value that you can hang your financial analysis on. But that's not exactly right because Bitcoin does have real fundamental drivers that pushed it higher this year. And I am referring specifically to changes in the political environment and Bitcoin's growing acceptance in the established financial world. So let's start on the political side. Immediately after President Trump's election, I got long-term bullish on crypto. The unclear regulatory environment that was maintained by the Biden administration hung over crypto like a dark cloud. And it was clear to me that any sort of clarity under the Trump regime would send crypto soaring. and I told that to my readers. Uh, now aside from a pause during the global tariff tantrum, that call has been spoton. Bitcoin rose from around 70,000 prior to the election to more than 120,000 in October and then it got struck by this big decline. Uh, and by the way, you can sign up for those updates for free at stansburyest.com. But but if you look at the financial side, the opportunities to invest in Bitcoin through exchangeraded funds expanded. major investment firms started making allocations to Bitcoin. Governments talked about establishing national Bitcoin reserves. So, all of those things were helping Bitcoin out. But the last bit of rocket fuel for 2025 came from somewhere else. And that leads us to the second thing, and that was leverage. Leverage drove crypto higher. And that's also what caused this month's crash. So, you have to know this. Financial markets aren't just driven by buyers and sellers. They are also driven by borrowers. When assets boom, excited investors use margin and leverage to amplify their returns. They do it with stocks, they do with bonds, and more and more they do it with Bitcoin. Leverage bets on Bitcoin rose dramatically in the last year. Now, international exchanges had long offered future contracts as a way to make levered bets on crypto. And then lighter regulations in the US led even more conservative exchanges like Coinbase to offer the same. So starting in July, you can trade futures in a Coinbase account and leverage your Bitcoin 10 times over. International exchanges let traders leverage as high as 125 times over. And certain decentralized exchanges even offered 1,01 times leverage. And traders have been taking advantage. Uh if you look at Bitcoin's open interest, that's a measure of all the outstanding futures contracts. The open interest exploded from just 20 billion at the start of 2024 to a recent peak of $94 billion according to data from Coin Glass. And it's basically a law of financial markets that leverage increases the volatility of an asset. It magnifies moves up and it magnifies moves down. And in certain cases, leverage can lead to a spiral of selling. So here's how it works. At 10 times leverage, if Bitcoin rises $1,000, you make $10,000. And if Bitcoin falls $1,000, you lose $10,000. And when fast moves cause those big losses, traders need to sell to get out of their losing bets. If the losses are big enough, they can get automatically liquidated, forcing them to immediately sell their position. So you can see how this works. Losing traders get liquidated as their positions lose value which increases the selling pressure sends prices down further leads to more liquidations and more selling. And that's how it leverage can create a downward spiral. And there's more and that's the third thing you need to know. Over the last year a new major buyer of Bitcoin came to the market and then it had to back down during this crash. So we covered Bitcoin treasury companies in July. These are publicly traded stocks like strategy that buy and hold Bitcoin and other cryptos. And these companies had a little bit of magic that fueled their returns. And that is that they traded at a premium to the value of their holdings. So back in July, if you look at strategy, it held $70 billion in Bitcoin, but it stock had a market cap of 120 billion. Now, with a premium like that, it makes financial sense for these companies to sell stock in the market and use it to buy more Bitcoin. And Strategy did that again and again, buying more and more. And they eventually amassed 641,000 Bitcoin or or 3% of all Bitcoin outstanding. Now, more than a 100 companies started copying the strategy to various degrees and all told, they owned more than a million Bitcoin. And these treasury companies were a major purchaser of Bitcoin through 2025, driving the price up and then they went away, right? Because this treasury play only works if these companies trade at a premium to their holdings. If instead they trade at a discount, the proper move for them is to sell Bitcoin to buy back shares. And now I had warned at the time that the premium was at risk of eroding as more treasury companies are launched. And that's exactly what happened. So then as Bitcoin started to decline, investors backed away from treasury companies and their premiums collapsed. And now Strategy's premium has declined to just about zero. That means its market cap matches its Bitcoin holdings and many of the less popular treasury firms trade at a discount. Uh so all these companies stepped back from the market as a buyer of Bitcoin. Uh if you look back from January through September, these publicly traded companies bought nearly 50,000 Bitcoin per month. Now since the start of October they bought only 10,000. So those are the three things at play fundamentals leverage and those treasury companies. Now when you pair the deleveraging with the evaporation of these major buyers you get a violent correction. Now the question of course is what happens next? Now I think there's two things you need to know. So first the Bitcoin leverage cascade appears to be over. Most of the leverage has come out of the system or at least a lot of it. The number of liquidations has declined to near zero. And the simple fact that Bitcoin's price has stemmed its rapid decline is a huge sign that all that forced selling has stopped. So that is bullish for Bitcoin. And for longtime Bitcoin holders, I'm confident that this pocket of violent selling has run its course. To make sure though uh that you are an intelligent Bitcoin investor, I want to leave you with two things to watch. two questions hanging over Bitcoin. One I think is bullish and the other might be a little bearish. So first, Bitcoin's fall coincides with a rise in the value of the dollar. So back to fundamentals here. One key reason to own Bitcoin is to protect against the ongoing debasement of the US currency. That's the same reason we like to own gold and silver and gold mining stocks and quality businesses. These things protect you against a falling value of the dollar. And the dollar got hammered for most of the year, driving gold up, driving Bitcoin up, but now it's staged a bit of a bounceback rally since midepptember. And Bitcoin's recent fall mirrors that rise in the dollar. But if you think long term, all the reasons for the dollar debasement trade, that's inflation, rising national debt, uh challenges to America's place in the global financial system, all those are still in place. So expect that to continue over the long term. expect dollar debasement to continue and so stay bullish on Bitcoin and gold. But Bitcoin's not a perfect analog for gold just yet. That's where the risk comes in. Bitcoin's price still behaves like a speculative investment, more like a tech stock. So despite its uh promise as a store of value and a type of digital gold, Bitcoin tends to rise when investors are feeling speculative and it tends to fall when stocks fall. It has not yet offered investors diversification against broader market moves. It still amplifies them. So, Bitcoin and the NASDAQ com composite are still moving together. So, you do want to be careful with what will happen to Bitcoin prices if the stock market crashes. So, that's what you need to watch out for. So, in summary, the leverage decline looks over. Uh the fundamentals are intact as regulation of financial markets still favor a bright future for Bitcoin and the debasement of the dollar will only continue as inflation rages and interest rates go lower. Bitcoin successfully flushed out the leverage and looks ready for some strong performance to catch up to the broader market. But don't forget, it's a speculative asset that thrives in a bull market and hasn't proven itself through a bare market just yet. So to go deeper on Bitcoin, I brought in Eric Wade. He's Stanberry Research's crypto expert. He's a former financial manager. He's been an angel investor of a crypto miner and he's been writing for Stanberry Research for nearly 10 years now with an incredible track record. Eric, thank you for joining me. I I just want to start at the top here. Do these moves in Bitcoin have you excited or panicked? >> Matt, um first off, thank you for having me on my show. After listening to that, I now understand why investors love to tune in and listen to you. That that was great analysis. >> Thank you. >> Um c caught us up on an incredibly complicated market in a really accessible way. Um I appreciate that. >> Now, with that said, I'm going to say something that's probably not going to satisfy anyone who's watching right now. I am neither excited nor panicked right now. Um background on this. This is the fourth correction that we have had like this in a three-year pattern. We saw Bitcoin go from 16,000ish to like 30,000 and then pull back to 26. Then it rallied to 72,000ish and then pull back to 54,000. And we're talking years long, you know, 10 months to 12 months in these rallies. dropped back to 54,000, then rallied to just over a 100,000. If you remember, we were excited, new all-time highs, and then pulled back to 78,000. Most recently, rallied to 123,000 and back here to our 100,000 level. What I'm saying is the floors keep getting higher, right? The floors that we pull back to are marching up like stair steps. and Bitcoin sitting here at $100,000, that would have been at all-time highs we would have been celebrating just eight months ago. So, I'm going to say nothing has really changed from six months ago. I expected volatility, I expected corrections. What hasn't happened yet that I think investors really need to keep their eyes open for is we haven't gotten to that parabolic euphoria stage yet, right? We haven't gotten to that. Your Uber driver is telling you how much money they're making off of their altcoin portfolio, etc. We haven't gotten there yet. And that's also part of every bull market rally, every cycle. And that's why we're still here in this market. So, yes, the leverage, it got flushed. Painful, but healthy at the same time. And you'll notice the system self-corrected without bailouts, without needing money, without tarps, without please inject billions of dollars, Mr. Government. That is uh anti-fragility that we we cherish in cryptocurrencies. That's anti-fragility at work. Uh yeah, just speaking of of froth, Eric, I was at a resort over the weekend and there was a guy next to me at the pool and he had a shirt that said infinity over 21 million and I knew that was a Bitcoin shirt, but I I did not start a conversation with them because I didn't want to get too sucked in. Um so just on the fundamental basis uh the stuff we've talked about you know Trump being more crypto friendly and and Wall Street sort of accepting this more does this 20% draw down change anything that you would have thought about Bitcoin on a fundamental basis you know six months ago >> absolutely not um this is and unfortunately it's it's par for the course with Bitcoin rallies all previous dramatic rallies We have seen 20, 30, even 40% corrections within the bull run. And I know in most traditional assets, you would say, well, 40% correction means you're done, right? You're not still in your bull rally. But with Bitcoin and with uh altcoins, this doesn't change anything. 20% drop does not end the bull rally. >> Yeah. And you know, we say in finance, higher highs and higher lows. That's the That's an uptrending market. And I think kind of your takeaway is, you know, 20% draw down. You're you're long-term optimistic, but it could be a 30 or a 40 and it still wouldn't be out of the realm of of normal Bitcoin movements, right? >> P Yes. painful. I'm not going to I'm not going to deny that. It would be painful and it would shake out even more investors because you you you nailed it. We shook out the leveraged investors over the last 30 days and that was painful but we haven't shaken out that second round of investors who weren't leveraged but were who just you know speculative and most Bitcoin rallies do do that at least once. So hasn't changed anything as the way I'm looking at it. This is this is actually part for the course. And if anything, you could say it Bitcoin had gotten to a point where we were investors were [snorts] so comfortable that they did overleverage themselves and our volatility has stayed lower than you'd think for longer than you'd think, which encouraged that leverage and a lot of that has changed. So investors have changed, but Bitcoin rally hasn't. >> Yeah. It's sort of the the chaos theory of markets that smooth markets lead to choppy markets because people get too comfortable and overlever. >> Yeah. >> Um Okay. So, the truth about your research, Eric, I think, is that you really don't spend a lot of time forecasting Bitcoin's price. You get much more excited about other crypto and blockchain projects that are bringing new technologies to the world. So, what's the what's the state of the industry right now? How are the new blockchain projects going? I would say they're going really, really well. And yeah, of course, we have a bit of a tailwind from this pro- crypto administration. Um, builders are continuing to build. We're starting to see American builders maybe poke their heads up out of the foxhole because you're not just automatically getting threat of lawsuits from the regulators. Uh, SoFi just became the first US national bank offering retail bank customers crypto in their bank accounts and they're saying they could be opening it to as many as 12 million customers by the end of this year. We're not talking about a theoretical by the end of next year type of thing. They're saying our c SoFi is saying our customers should be able to buy crypto by the end of this year. Um, and on the on the tech building side, Injective, which is a a chain that was specifically built to address moving traditional finance onto blockchain, addressing a quadrillion dollar market. They just launched their multiple vol virtual machine capabilities this week. U developers can now use web assembly and Ethereum virtual machine ethereum virtual machine simultaneously on Injective. So if you're going after a quadrillion dollar market, that's a step in the right direction. And then um the the government is even making progress. We were seeing bipartisan drafts of bills. We're seeing potential that the uh CFTC could roll all crypto uh administration in as as uh commodities when it's appropriate and the SEC having uh handling securities when it's appropriate. Believe it or not, we have trillions of dollars in crypto and no clear path through American regulation that could be getting cleared up as well in the next few months. That's fantastic. Uh, Maple Finance, it's something that's in our in our portfolio. We have Maple, they just crossed five billion dollars in DeFi that they're building. So, there there's a lot going on. Infrastructure is being built and adoption is rising dramatically. So, it's a it's a great time to be on the hunt for good projects. >> So, it's taking a long time, but crypto is getting closer and closer to being a part of people's everyday lives, it sounds like. And there's a lot of cool whether they know it or not. >> Yeah. >> Um and so Bitcoin's had this pullback. Still been a great couple years. You've shared with me that you think there's an altcoin season coming ahead of this. Uh can you tell our our viewers what an altcoin season is? >> So altcoin season is defined as when Bitcoin dominance peaks. And I don't mean Bitcoin price. The price of Bitcoin can continue to rally through an altcoin season. But when Bitcoin dominance and that is just easily defined as what proportion of the entire market is Bitcoin because whether people know it or not right now Bitcoin is the oldest coin that's out there and there's been a lot of innovation since Bitcoin launched but Bitcoin is still worth more than half of the entire crypto market cap. So when that dominance peaks and the other coins, altcoins, when they start rising because capital is starting to rotate into these alternative currencies, cryptocurrencies, altcoins, that's what altcoin season is. And the historical pattern is Bitcoin leads the rally, establishes the new range, brings a lot of outside money into the ecosystem, and then altcoins explode. and we haven't gotten to the euphoric phase of that yet. And that's typically when prices go parabolic. Now, you you you be wise to acknowledge the risk of that. Obviously, it can get really really choppy. As I mentioned and you mentioned, we are in year three of a bull market, which is typically the neighborhood where tops start forming. So we are in high risk, highreward waiting for a meltup, waiting for an altcoin season phase. And those those euphoric phases can double triple even more your money. Even on the large projects, even on the blue chips, we're still in the phase where we could get a double or a triple coming up to us. I I'll give you an example. Internet Computer just showed you exactly what I'm talking about in the last couple of weeks. It had bottomed under $3 per coin for Internet Computer. The ticker symbol on that one is ICP. It had bottomed under $3 and then in one week's time, it rallied to $9, above $9. That's more than a triple in about a week time. Now, it's given some of that back because cryptos are volatile. settled in around $6 or so. So, still a double from where it was just a couple of weeks ago. That's the kind of move that happens when the sellers just dry up, when sellers vanish. Because when internet computers started rallying, the sellers said, "I think I'm going to hold on to my internet computer because I know what's coming, right? I higher prices are coming." Obviously gave some back. Some of the sellers said, "Hey, I've tripled my money in a in under a week." So, they started selling a little bit. triples in a week. Not sustainable even in crypto. But think about that. A blue chip project tripling in a very challenging market. That's a preview of what altcoin season is going to look like. When altcoin season really hits and we get to that euphoric phase, then these moves like this are going to become the norm, not the exception. And what's nice about internet computer is it has the technology to back it up. It's not vaporware. It's not speculation. It's not just FOMO. It has the technology to back it up. It's not just vapor. So, my portfolio holds 40ish plus projects for exactly this same scenario. When capital starts rotating into Bitcoin or away from Bitcoin into these altcoins, you definitely want exposure to the ones that have been building this technology that we think the entire world is going to adopt in the coming years. This is the definition of asymmetrical ep upside comparing your risk and reward, right? But you do need conviction to hold it through the volatility like what we're seeing. Okay. So, this is a blue chip crypto that almost no one uh normal people know about. Um, but I know you love it. You've explained it to me before. It's called Internet Computer. Give me the 20 second explanation for a normal person of what they do and why it's so exciting. If you if if you know anything at all about technology, you know technology comes in waves of adoption. Like at one point we were faxing documents to our to each other, right? And then at some point we started trusting for example scanning and then emailing and then maybe just the email itself etc. So, internet computer is a level of technology that allows interaction like you're on the internet, but you're on a blockchain. And that level of technology is integrating itself into websites that we use and other things that we typically think are online can be on internet computer. And what I really like about it, what is special, what I think doesn't get enough ink out there is internet computer is a blockchain that can pro it inside its own blockchain. It can hold the full nodes for Bitcoin and Ethereum and Salana and more are coming. So you can process transactions on other blockchains using internet computer. So at some point like like you might think of the internet as well I can watch my cat videos and I can uh send my emails and stuff but at some point we all I think have come to the realization that well the the internet isn't just transactional. It has worked its way into being the fundamental technology that just about everything else is built on top of. I think internet computer is headed that way that it's a fundamental technology that we can access other blockchains inside the capabilities of internet computer and that's unique. It's it's hard to get your arms around. A lot of people probably listening to this saying so what? Well, that would be like saying in 1999 or something, so what if you can send things over the internet? Well, the the so what is we check our medical records over the internet now, right? like I have a portal that I can go check. That wasn't possible in 1999 and we didn't trust the internet to that extent. Do we even hesitate before we buy something with a a credit card over the internet? Now we we don't anymore. But fundamentally speaking, I think what internet computer is building is something that works like the internet and like your computer and like blockchain all in one package. >> Well, Eric, that's fantastic information. Thank you so much for joining me. very exciting projects. Uh for those of you at home, don't forget to check out stansberryystem.com to see how AI is changing investing and how you can stay ahead of the curve, find the right stocks to buy, and build a better portfolio. That is all for now and I will be back next week.
Bitcoin Drops to a 6-Month Low 📉: Is it a BUY Opportunity?
Summary
Transcript
Crypto has gotten pummeled, dropping 20% after a great bull run. Traders got obliterated. Hodlers took a loss. It's been a rough time for Bitcoin after this long bull run. And the big question is simply, what's next? Well, I'm here to tell you, I've been a financial analyst for nearly two decades, and I've been a crypto miner and investor since 2013. And at Stanberry Research, we have some of the best crypto research you will find anywhere. So, you are in the right place to figure this out. Now, to understand Bitcoin's future, you have to understand why this crash happened. True Bitcoin holders have become accustomed to the volatility. But the recent upward climb had put risk in the rear view, at least for some, and crypto seemed to only climb upward. Now, this 20% decline from 120,000 to 100,000 has believers wondering if this is the end of the long bull run. Now, digging in, you'll see that the reasons for the decline were the very same things that drove Bitcoin's rise. And that lets us know precisely what will happen next. And speaking of what happened next, you should know that Stansbury Research has built an AI based system that takes the best businesses in the market and combines them into a simple 20 stock portfolio designed to beat regular market returns. We just launched it and you can learn more by visiting stansberryystem.com or scanning this QR code. Now, back to Bitcoin's crash. I need to tell you about three things that drove crypto higher so you can understand what's happening. So number one, crypto had a great 2025 thanks to dramatically improving fundamentals. Now, as a stock guy, I often say that Bitcoin doesn't have any fundamentals, right? It doesn't have earnings or cash flow or any of the true intrinsic value that you can hang your financial analysis on. But that's not exactly right because Bitcoin does have real fundamental drivers that pushed it higher this year. And I am referring specifically to changes in the political environment and Bitcoin's growing acceptance in the established financial world. So let's start on the political side. Immediately after President Trump's election, I got long-term bullish on crypto. The unclear regulatory environment that was maintained by the Biden administration hung over crypto like a dark cloud. And it was clear to me that any sort of clarity under the Trump regime would send crypto soaring. and I told that to my readers. Uh, now aside from a pause during the global tariff tantrum, that call has been spoton. Bitcoin rose from around 70,000 prior to the election to more than 120,000 in October and then it got struck by this big decline. Uh, and by the way, you can sign up for those updates for free at stansburyest.com. But but if you look at the financial side, the opportunities to invest in Bitcoin through exchangeraded funds expanded. major investment firms started making allocations to Bitcoin. Governments talked about establishing national Bitcoin reserves. So, all of those things were helping Bitcoin out. But the last bit of rocket fuel for 2025 came from somewhere else. And that leads us to the second thing, and that was leverage. Leverage drove crypto higher. And that's also what caused this month's crash. So, you have to know this. Financial markets aren't just driven by buyers and sellers. They are also driven by borrowers. When assets boom, excited investors use margin and leverage to amplify their returns. They do it with stocks, they do with bonds, and more and more they do it with Bitcoin. Leverage bets on Bitcoin rose dramatically in the last year. Now, international exchanges had long offered future contracts as a way to make levered bets on crypto. And then lighter regulations in the US led even more conservative exchanges like Coinbase to offer the same. So starting in July, you can trade futures in a Coinbase account and leverage your Bitcoin 10 times over. International exchanges let traders leverage as high as 125 times over. And certain decentralized exchanges even offered 1,01 times leverage. And traders have been taking advantage. Uh if you look at Bitcoin's open interest, that's a measure of all the outstanding futures contracts. The open interest exploded from just 20 billion at the start of 2024 to a recent peak of $94 billion according to data from Coin Glass. And it's basically a law of financial markets that leverage increases the volatility of an asset. It magnifies moves up and it magnifies moves down. And in certain cases, leverage can lead to a spiral of selling. So here's how it works. At 10 times leverage, if Bitcoin rises $1,000, you make $10,000. And if Bitcoin falls $1,000, you lose $10,000. And when fast moves cause those big losses, traders need to sell to get out of their losing bets. If the losses are big enough, they can get automatically liquidated, forcing them to immediately sell their position. So you can see how this works. Losing traders get liquidated as their positions lose value which increases the selling pressure sends prices down further leads to more liquidations and more selling. And that's how it leverage can create a downward spiral. And there's more and that's the third thing you need to know. Over the last year a new major buyer of Bitcoin came to the market and then it had to back down during this crash. So we covered Bitcoin treasury companies in July. These are publicly traded stocks like strategy that buy and hold Bitcoin and other cryptos. And these companies had a little bit of magic that fueled their returns. And that is that they traded at a premium to the value of their holdings. So back in July, if you look at strategy, it held $70 billion in Bitcoin, but it stock had a market cap of 120 billion. Now, with a premium like that, it makes financial sense for these companies to sell stock in the market and use it to buy more Bitcoin. And Strategy did that again and again, buying more and more. And they eventually amassed 641,000 Bitcoin or or 3% of all Bitcoin outstanding. Now, more than a 100 companies started copying the strategy to various degrees and all told, they owned more than a million Bitcoin. And these treasury companies were a major purchaser of Bitcoin through 2025, driving the price up and then they went away, right? Because this treasury play only works if these companies trade at a premium to their holdings. If instead they trade at a discount, the proper move for them is to sell Bitcoin to buy back shares. And now I had warned at the time that the premium was at risk of eroding as more treasury companies are launched. And that's exactly what happened. So then as Bitcoin started to decline, investors backed away from treasury companies and their premiums collapsed. And now Strategy's premium has declined to just about zero. That means its market cap matches its Bitcoin holdings and many of the less popular treasury firms trade at a discount. Uh so all these companies stepped back from the market as a buyer of Bitcoin. Uh if you look back from January through September, these publicly traded companies bought nearly 50,000 Bitcoin per month. Now since the start of October they bought only 10,000. So those are the three things at play fundamentals leverage and those treasury companies. Now when you pair the deleveraging with the evaporation of these major buyers you get a violent correction. Now the question of course is what happens next? Now I think there's two things you need to know. So first the Bitcoin leverage cascade appears to be over. Most of the leverage has come out of the system or at least a lot of it. The number of liquidations has declined to near zero. And the simple fact that Bitcoin's price has stemmed its rapid decline is a huge sign that all that forced selling has stopped. So that is bullish for Bitcoin. And for longtime Bitcoin holders, I'm confident that this pocket of violent selling has run its course. To make sure though uh that you are an intelligent Bitcoin investor, I want to leave you with two things to watch. two questions hanging over Bitcoin. One I think is bullish and the other might be a little bearish. So first, Bitcoin's fall coincides with a rise in the value of the dollar. So back to fundamentals here. One key reason to own Bitcoin is to protect against the ongoing debasement of the US currency. That's the same reason we like to own gold and silver and gold mining stocks and quality businesses. These things protect you against a falling value of the dollar. And the dollar got hammered for most of the year, driving gold up, driving Bitcoin up, but now it's staged a bit of a bounceback rally since midepptember. And Bitcoin's recent fall mirrors that rise in the dollar. But if you think long term, all the reasons for the dollar debasement trade, that's inflation, rising national debt, uh challenges to America's place in the global financial system, all those are still in place. So expect that to continue over the long term. expect dollar debasement to continue and so stay bullish on Bitcoin and gold. But Bitcoin's not a perfect analog for gold just yet. That's where the risk comes in. Bitcoin's price still behaves like a speculative investment, more like a tech stock. So despite its uh promise as a store of value and a type of digital gold, Bitcoin tends to rise when investors are feeling speculative and it tends to fall when stocks fall. It has not yet offered investors diversification against broader market moves. It still amplifies them. So, Bitcoin and the NASDAQ com composite are still moving together. So, you do want to be careful with what will happen to Bitcoin prices if the stock market crashes. So, that's what you need to watch out for. So, in summary, the leverage decline looks over. Uh the fundamentals are intact as regulation of financial markets still favor a bright future for Bitcoin and the debasement of the dollar will only continue as inflation rages and interest rates go lower. Bitcoin successfully flushed out the leverage and looks ready for some strong performance to catch up to the broader market. But don't forget, it's a speculative asset that thrives in a bull market and hasn't proven itself through a bare market just yet. So to go deeper on Bitcoin, I brought in Eric Wade. He's Stanberry Research's crypto expert. He's a former financial manager. He's been an angel investor of a crypto miner and he's been writing for Stanberry Research for nearly 10 years now with an incredible track record. Eric, thank you for joining me. I I just want to start at the top here. Do these moves in Bitcoin have you excited or panicked? >> Matt, um first off, thank you for having me on my show. After listening to that, I now understand why investors love to tune in and listen to you. That that was great analysis. >> Thank you. >> Um c caught us up on an incredibly complicated market in a really accessible way. Um I appreciate that. >> Now, with that said, I'm going to say something that's probably not going to satisfy anyone who's watching right now. I am neither excited nor panicked right now. Um background on this. This is the fourth correction that we have had like this in a three-year pattern. We saw Bitcoin go from 16,000ish to like 30,000 and then pull back to 26. Then it rallied to 72,000ish and then pull back to 54,000. And we're talking years long, you know, 10 months to 12 months in these rallies. dropped back to 54,000, then rallied to just over a 100,000. If you remember, we were excited, new all-time highs, and then pulled back to 78,000. Most recently, rallied to 123,000 and back here to our 100,000 level. What I'm saying is the floors keep getting higher, right? The floors that we pull back to are marching up like stair steps. and Bitcoin sitting here at $100,000, that would have been at all-time highs we would have been celebrating just eight months ago. So, I'm going to say nothing has really changed from six months ago. I expected volatility, I expected corrections. What hasn't happened yet that I think investors really need to keep their eyes open for is we haven't gotten to that parabolic euphoria stage yet, right? We haven't gotten to that. Your Uber driver is telling you how much money they're making off of their altcoin portfolio, etc. We haven't gotten there yet. And that's also part of every bull market rally, every cycle. And that's why we're still here in this market. So, yes, the leverage, it got flushed. Painful, but healthy at the same time. And you'll notice the system self-corrected without bailouts, without needing money, without tarps, without please inject billions of dollars, Mr. Government. That is uh anti-fragility that we we cherish in cryptocurrencies. That's anti-fragility at work. Uh yeah, just speaking of of froth, Eric, I was at a resort over the weekend and there was a guy next to me at the pool and he had a shirt that said infinity over 21 million and I knew that was a Bitcoin shirt, but I I did not start a conversation with them because I didn't want to get too sucked in. Um so just on the fundamental basis uh the stuff we've talked about you know Trump being more crypto friendly and and Wall Street sort of accepting this more does this 20% draw down change anything that you would have thought about Bitcoin on a fundamental basis you know six months ago >> absolutely not um this is and unfortunately it's it's par for the course with Bitcoin rallies all previous dramatic rallies We have seen 20, 30, even 40% corrections within the bull run. And I know in most traditional assets, you would say, well, 40% correction means you're done, right? You're not still in your bull rally. But with Bitcoin and with uh altcoins, this doesn't change anything. 20% drop does not end the bull rally. >> Yeah. And you know, we say in finance, higher highs and higher lows. That's the That's an uptrending market. And I think kind of your takeaway is, you know, 20% draw down. You're you're long-term optimistic, but it could be a 30 or a 40 and it still wouldn't be out of the realm of of normal Bitcoin movements, right? >> P Yes. painful. I'm not going to I'm not going to deny that. It would be painful and it would shake out even more investors because you you you nailed it. We shook out the leveraged investors over the last 30 days and that was painful but we haven't shaken out that second round of investors who weren't leveraged but were who just you know speculative and most Bitcoin rallies do do that at least once. So hasn't changed anything as the way I'm looking at it. This is this is actually part for the course. And if anything, you could say it Bitcoin had gotten to a point where we were investors were [snorts] so comfortable that they did overleverage themselves and our volatility has stayed lower than you'd think for longer than you'd think, which encouraged that leverage and a lot of that has changed. So investors have changed, but Bitcoin rally hasn't. >> Yeah. It's sort of the the chaos theory of markets that smooth markets lead to choppy markets because people get too comfortable and overlever. >> Yeah. >> Um Okay. So, the truth about your research, Eric, I think, is that you really don't spend a lot of time forecasting Bitcoin's price. You get much more excited about other crypto and blockchain projects that are bringing new technologies to the world. So, what's the what's the state of the industry right now? How are the new blockchain projects going? I would say they're going really, really well. And yeah, of course, we have a bit of a tailwind from this pro- crypto administration. Um, builders are continuing to build. We're starting to see American builders maybe poke their heads up out of the foxhole because you're not just automatically getting threat of lawsuits from the regulators. Uh, SoFi just became the first US national bank offering retail bank customers crypto in their bank accounts and they're saying they could be opening it to as many as 12 million customers by the end of this year. We're not talking about a theoretical by the end of next year type of thing. They're saying our c SoFi is saying our customers should be able to buy crypto by the end of this year. Um, and on the on the tech building side, Injective, which is a a chain that was specifically built to address moving traditional finance onto blockchain, addressing a quadrillion dollar market. They just launched their multiple vol virtual machine capabilities this week. U developers can now use web assembly and Ethereum virtual machine ethereum virtual machine simultaneously on Injective. So if you're going after a quadrillion dollar market, that's a step in the right direction. And then um the the government is even making progress. We were seeing bipartisan drafts of bills. We're seeing potential that the uh CFTC could roll all crypto uh administration in as as uh commodities when it's appropriate and the SEC having uh handling securities when it's appropriate. Believe it or not, we have trillions of dollars in crypto and no clear path through American regulation that could be getting cleared up as well in the next few months. That's fantastic. Uh, Maple Finance, it's something that's in our in our portfolio. We have Maple, they just crossed five billion dollars in DeFi that they're building. So, there there's a lot going on. Infrastructure is being built and adoption is rising dramatically. So, it's a it's a great time to be on the hunt for good projects. >> So, it's taking a long time, but crypto is getting closer and closer to being a part of people's everyday lives, it sounds like. And there's a lot of cool whether they know it or not. >> Yeah. >> Um and so Bitcoin's had this pullback. Still been a great couple years. You've shared with me that you think there's an altcoin season coming ahead of this. Uh can you tell our our viewers what an altcoin season is? >> So altcoin season is defined as when Bitcoin dominance peaks. And I don't mean Bitcoin price. The price of Bitcoin can continue to rally through an altcoin season. But when Bitcoin dominance and that is just easily defined as what proportion of the entire market is Bitcoin because whether people know it or not right now Bitcoin is the oldest coin that's out there and there's been a lot of innovation since Bitcoin launched but Bitcoin is still worth more than half of the entire crypto market cap. So when that dominance peaks and the other coins, altcoins, when they start rising because capital is starting to rotate into these alternative currencies, cryptocurrencies, altcoins, that's what altcoin season is. And the historical pattern is Bitcoin leads the rally, establishes the new range, brings a lot of outside money into the ecosystem, and then altcoins explode. and we haven't gotten to the euphoric phase of that yet. And that's typically when prices go parabolic. Now, you you you be wise to acknowledge the risk of that. Obviously, it can get really really choppy. As I mentioned and you mentioned, we are in year three of a bull market, which is typically the neighborhood where tops start forming. So we are in high risk, highreward waiting for a meltup, waiting for an altcoin season phase. And those those euphoric phases can double triple even more your money. Even on the large projects, even on the blue chips, we're still in the phase where we could get a double or a triple coming up to us. I I'll give you an example. Internet Computer just showed you exactly what I'm talking about in the last couple of weeks. It had bottomed under $3 per coin for Internet Computer. The ticker symbol on that one is ICP. It had bottomed under $3 and then in one week's time, it rallied to $9, above $9. That's more than a triple in about a week time. Now, it's given some of that back because cryptos are volatile. settled in around $6 or so. So, still a double from where it was just a couple of weeks ago. That's the kind of move that happens when the sellers just dry up, when sellers vanish. Because when internet computers started rallying, the sellers said, "I think I'm going to hold on to my internet computer because I know what's coming, right? I higher prices are coming." Obviously gave some back. Some of the sellers said, "Hey, I've tripled my money in a in under a week." So, they started selling a little bit. triples in a week. Not sustainable even in crypto. But think about that. A blue chip project tripling in a very challenging market. That's a preview of what altcoin season is going to look like. When altcoin season really hits and we get to that euphoric phase, then these moves like this are going to become the norm, not the exception. And what's nice about internet computer is it has the technology to back it up. It's not vaporware. It's not speculation. It's not just FOMO. It has the technology to back it up. It's not just vapor. So, my portfolio holds 40ish plus projects for exactly this same scenario. When capital starts rotating into Bitcoin or away from Bitcoin into these altcoins, you definitely want exposure to the ones that have been building this technology that we think the entire world is going to adopt in the coming years. This is the definition of asymmetrical ep upside comparing your risk and reward, right? But you do need conviction to hold it through the volatility like what we're seeing. Okay. So, this is a blue chip crypto that almost no one uh normal people know about. Um, but I know you love it. You've explained it to me before. It's called Internet Computer. Give me the 20 second explanation for a normal person of what they do and why it's so exciting. If you if if you know anything at all about technology, you know technology comes in waves of adoption. Like at one point we were faxing documents to our to each other, right? And then at some point we started trusting for example scanning and then emailing and then maybe just the email itself etc. So, internet computer is a level of technology that allows interaction like you're on the internet, but you're on a blockchain. And that level of technology is integrating itself into websites that we use and other things that we typically think are online can be on internet computer. And what I really like about it, what is special, what I think doesn't get enough ink out there is internet computer is a blockchain that can pro it inside its own blockchain. It can hold the full nodes for Bitcoin and Ethereum and Salana and more are coming. So you can process transactions on other blockchains using internet computer. So at some point like like you might think of the internet as well I can watch my cat videos and I can uh send my emails and stuff but at some point we all I think have come to the realization that well the the internet isn't just transactional. It has worked its way into being the fundamental technology that just about everything else is built on top of. I think internet computer is headed that way that it's a fundamental technology that we can access other blockchains inside the capabilities of internet computer and that's unique. It's it's hard to get your arms around. A lot of people probably listening to this saying so what? Well, that would be like saying in 1999 or something, so what if you can send things over the internet? Well, the the so what is we check our medical records over the internet now, right? like I have a portal that I can go check. That wasn't possible in 1999 and we didn't trust the internet to that extent. Do we even hesitate before we buy something with a a credit card over the internet? Now we we don't anymore. But fundamentally speaking, I think what internet computer is building is something that works like the internet and like your computer and like blockchain all in one package. >> Well, Eric, that's fantastic information. Thank you so much for joining me. very exciting projects. Uh for those of you at home, don't forget to check out stansberryystem.com to see how AI is changing investing and how you can stay ahead of the curve, find the right stocks to buy, and build a better portfolio. That is all for now and I will be back next week.