The Pattern Nobody's Talking About: Bitcoin & PMI

For 10 years, Bitcoin lived by a predictable metronome, having pump, dump, and repeat. But what if that clock broke along the way? Smidstston with aka Smitty is back on Bitcoin for millennials. Our previous episode together hit 100,000 views because Smitty doesn't do hype, he does data. His latest research on the ISM PMI suggests the 4-year cycle many have relied on seems to have been replaced by something much bigger. He reveals why the business cycle has hijacked Bitcoin and what the cost of production tells us about the floor price for 2026 and beyond. We also dive into the gold versus Bitcoin rotation and why the recent red signal in Smitty's charts suggests a massive divergence is right around the corner. If you were enjoying my content, it would mean a lot to me if you could subscribe to the channel and like my video to support my journey. Thanks a lot. Now, let's dive in to this episode. All right, Smithston Smitty, welcome back to Bitcoin for Millennials. >> I'm back with Bran and I couldn't be happier. How are you, my friend? >> Very good, man. Yeah, I'm very happy you're back. Uh, our first episode uh is one of my most watched episodes. I think it's actually number two, over 100K views. We went through your Bitcoin retirement guide, which was an incredible video. I I will also link to it at the end so people can check it out and in the description. Uh because I just think it's really great to uh you know how how you put the strategy together. And uh yeah, I'm happy you're back. I just told you like there's like three people that I call you know sometimes I repost on X and I say you know like this is my quant and that's you and plan C and James Van Stratton. So, I'm I'm happy you're here and um yeah, I thought this this uh episode could be kind of a an an update to uh and maybe you can give a little background, you know, as to what you're doing with regard to Bitcoin, but uh you know, your new insights based on the data and um yeah, let's just go through whatever you found. I I have no idea, so I'm ready to to be surprised. >> I love it. Yeah, it's it's so great to reconnect with you again, Brim. I uh by the way it's really high praise to hear that from you the the quant nod from you uh from the great brand Canstein. I I have the the respect is mutual. So uh I think few people are intellectually producing as much as you are out there in the Bitcoin content space. So thanks a lot for those kind words. Um yeah and I'm happy. You know what? Uh I think last time we connected we there the focus was on the retirement stuff and there's clearly some other areas of focus that I that I've been spending time on and I'm happy to walk through the the most recent stuff. So >> awesome. >> Yeah. >> Can go ahead and kick it off and I'm presenting here. Um I think you connected with our good mutual friend Plan C. He was a collaborator on this this work. It was our first It was my first and I think Plan C's first X article ever and you're no stranger to that but we called it how the business cycle quickly became the Bitcoin cycle which is right off the bat sounds very contrarian because right now I think you can see in the space you've got kind of generally two schools of thought right like maybe two and a half schools of thought you've got one group who they're fouryear cycle theorists right and they think that that is there's something underlying, you know, related to the havingss perhaps. Maybe some people think it's not related to the halves, but regardless, there's a four-year cycle periodicity here that is just inherent to the system, and it comes around around the same seasonality every four roughly every four years. Um, and there's a few few sub subgroups within that camp. And then the other side are kind of what I'm starting to build out here. And I think we it gained some traction. I mean this this article did pretty well I think and what my thesis is here and I'm all totally open to data supporting the opposite end of this but the idea is that early on in Bitcoin's life right since Genesis the havingss were a substantial drop in the inflation rate huge so it actually had an impact on the supply and demand dynamics which could we know if you go back to the miners and their profitability uh can have a more of a direct impact on price pushing up those bubbles. And those bubbles are kind of how people generally measure the four-year cycle. So either from the tops or the bottoms, but basically the nuts and bolts of this are that there there is a 4-year cycle, but it's actually more it seems to be more tied to the business cycle, which there's a variety of different definitions there, but I use the ISM PMI um as a proxy for that as a single sing single indicator. Of course, you could make a whole comprehensive holistic macro indicator out of that. There's different ways to do it. But in this article, we're saying, okay, in the early days, the ha basically the having probably had an impact on driving this four-year cycle. But by the second having um the correlation there dropped substantially and the correlation increased substantially uh with the PMI and so basically Bram this is the this is probably the most basic and eyepopping way to visualize that. >> Mhm. Could you maybe >> and I'm actually not using Yeah. Go ahead. >> On the ISM and PMI like >> what what is it and and what makes it up basically? >> Yeah. So it's the Institute for Supply Managers, right? Is what the ISM stands for. And so this is the uh manufacturing index that you know if you're looking at the raw PMI index which I'm sure you've taken a look at that but you see um a time series data. So uh just imagine this green line here is absolute PMI values and this zero line here is a value of 50. So it's like a percentage scale essentially. If you're below a 50 line, it means that supply chain managers and things like that are being surveyed and answering to that survey overall on average they're doing less business if it's below 50. Right? So they're they're actually the rate of of of doing business is decreasing in terms of new in new order intakes, uh prices, deliveries, making it on time, things like this. Versus if it's above 50, it means they're on a growth path. It means that their business is actually growing from a from a manufacturing standpoint. >> And so it happens >> spending of money from businesses basically. >> Exactly. Exactly. So businesses that make things being able to to uh to grow the grow their that business, right? And so the I think the idea is from a theory standpoint, why is this starting to become more correlated? I mean, you could just see by the eye test, right? Especially if you look at the second and sorry, this third and fourth bubbles here, 2017, end of 2017 into 2021. I mean, it's pretty striking, right? Um and it's starting to build a good amount in 2014. It's not perfect. the the Bitcoin bubbles kind of live inside the PMI bubbles which is interesting. So uh but yeah I guess the theory there Bram to wrap that the theory is that uh in times of sort of loose looser monetary uh conditions and macro conditions like there's more of a risk on environment in general and so higher investment um is warranted by investors by VCs by you know taking out loans uh for all sorts of different new business and Bitcoin Bitcoin can kind of be looked at both of a riskon asset as well as a risk off asset. >> Yeah. So that's sort of the risk on behavior showing still with the in terms of these bubbles. >> Yeah. >> Yeah. What I find interesting I I wonder I talked with plan C about I think it was the same slide actually um about how does this also correlate to kind of like the liquidity cycles because there's also this theory uh and and I agree right like in the beginning when Bitcoin was smaller the havingings probably had uh a way bigger impact on uh the available supply versus you know uh the the people wanting to sell and as Bitcoin grew um to a a a bigger asset, it kind of became more correlated to kind of like these waves of liquidity. And I think there's also I just tried to Google it, but there's also this um this idea that uh >> Satoshi actually launched Bitcoin whether it was on purpose or not, right? that speculation, but really almost at a bo at the bottom of uh these larger liquidity cycles that kind of move move in like five or six years. And um I've always been interested in that, but I've never really seen anyone really like uh zoom in on that. But but here you can kind of make the relationship, right? If liquidity is higher, if rates are cheaper, um more people are going to borrow and you know >> pay and try to grow their company basically, right? And although it's a risk on uh time, that's the second thing I find super interesting because I think in in in essence just from the characteristics of Bitcoin and um well I I think Bitcoin is the ultimate riskoff asset, right? It's literally a parallel money system that is totally outside of the actual >> it's both. It's actually both. I I totally agree. Yeah. >> Yeah. and well yeah so so um I think plan C said the same like it's both but I think you know it's if you look at the characteristics or like the fundamentals of Bitcoin I would say it is definitely a riskoff asset but the perception of the majority of people i.e not US right is that it's a risk on thing right it's an asset it trades with the NASDAQ and etc etc and so um I think it's quite logical uh it's very cool to see it in the data right but it's quite logical to still see you know uh with an increase of liquidity increase of risk increase of spending from companies you know uh increase in in buying of Bitcoin uh is is also present >> my main argument just to be to be brief when I say I think it's both a risk on and risk off. I don't think you can see my cursor on here, but that's okay. If you look at So, if you look at the price bubbles, well, it's actually Zcore here for Bitcoin. If you draw a straight line from the left axis all the way across, just cut through horizontally. >> That's not actually moving sideways here. It's it's moving according to that 5.9 exponent power law. Right. To me, that's the risk off. If something happened to you tomorrow, could your family access your Bitcoin? Not probably, not they'd figure it out, but with certainty. I thought about this a lot. Whatever custody solution you are using, inheritance is the piece most people haven't solved yet. Billions in Bitcoin have already been lost because someone died without a plan. With on-ramp, inheritance planning is built directly into your custody setup. Your Bitcoin stays segregated and in your control, secured across independent institutions in multiple jurisdictions, insured through Lloyds of London, and accessible to the people you choose when they need it. And it doesn't matter where in the world you or they are. 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They'll walk you through your setup, personalize everything to you, and help you get a much stronger position very quickly, whether you're a beginner or more advanced. That's the bitcoinway.com/prum. the way that we perceive time, you know, and we can't think longer than usually a few months when we're looking at things like this. >> Uh we don't understand that it is risk off because we're paying attention to the price dayto day or monthtomonth and things like that. And so the risk on type of behavior in in my view is when you start to see these actual bubbles and that's when you get more of the the you know the FOMO sort of the group the group think the piling in and uh but that's that's what I mean when I say it's a it's at its core fundamentally it's risk off like you said but I think it has these these bubbles are sort of risk on times. Yeah, >> it's funny, right? Like the the underlying thesis and the fundamentals is is a long-term outlook which is uh risk off. Um but the short-term outlook for more more people than hodlers is risk on, right? So it's just an it's just an investment basically. And that's also why for riskon type people the price of Bitcoin is most important. they either think it's too high so they don't buy it or they think it's it's it's low or it's going to go lower right and and then they also don't don't buy it basically so anyone who trades or see sees it as an investment uh fundamentally I I would say sees it as a risk on uh asset whereas you know when you understand the fundamentals and why it exists and when you look at it over a long enough time frame that's why this next slide I think is so interesting >> it is risk uh off but you need to be able to zoom out or at least understand the long-term underlying thesis. So, yeah, super cool to see. >> Very well said. And and I'm a I'm a super visual person. So I, you know, I feel like half of what I do is uh actual, you know, under the under the hood sort of coding and and uh the mathematics and the theory and things, but I really like I like the messages that we that we pull out of the data and the frameworks that we're working the data with and show what's actually going on. So I had this idea, Bram, where I you you've seen this log log chart, right, with with the the Bitcoin price before and you see the we call it the line that you can't unsee. we draw a line straight through it and whatever you think of the power law or whatever, right? The straight line exists. And so I just wanted to take that PMI data that we were talking about before and normalize that to that straight line so that you could see you know you see the price and what it's doing into 2027 2028 going going for projecting ahead and you see in the last 5 10 plus years what the bubbles of PMI have been doing and these price bubbles living inside of those. So, yeah, it's just I think it's a really interesting perspective to me because it's it's a little less abstract than uh looking at like something like the last slide where you're looking at these two squiggly lines going up and down here. It's like in log time, this is what the price is doing and along that same normalized axis as the x-axis, that's exactly what PMI is doing. So I think it's just a more kind of compelling and what's to to me what it stands out besides the bubbles look at the last three years um since really since the bottom of the the last cycle bottom. So end of 2022 when I think the price dropped down to like what was it 16,000 and we've just been I've been calling it a crab crawl since then. And there's this sort of another split camp the schools of thought where people are like look dude we had you know we had a bull run. we went from 16,000 to uh was 125,000. But when you look at it relative to the long term or even and then relative to the the macro cycle, the business cycle, um it's I think it's been suppressed. So I me and plans have kind of been using the term pseudo bull run or or like a faux I don't know. I can't remember what he says faux bull run or something. So to me it's like I I the four-year cyclists as of the last few months have kind of looked pretty good cuz they're like four year cycle tops going to hit you know just watch and it kind of like it's a little painful but if you zoom in to look we've had 3 years of contraction and just since January it's a relatively short sliver of time we've peaked above that line. So we hit 52.6 52.4 4 52.7 and you look at the last couple cycles, there's a lag there's a significant lag here and so I'm still like really bullish right now actually. >> So what what would invalidate uh it's funny, right? But wait, another one like why is there a lag you know? Um I wonder if you can correlate also to S&P, NASDAQ, whatever other uh stuff people invest in and you could follow, right? Because you know my my um assumption for lag would be you know if you've had a significant time where you know we've been below like you can see here on the on the chart you know when when you get cheap money cheaperish money um >> or the appetite for for borrowing money goes up again borrowing and spending money you know is investments the first thing you're spending it on or are you actually spending it on uh you know what whatever you need to fix that uh you know uh happened in this red part basically right so I what I think is so interesting like there's like human behavior and there's just the data and and I think trying to find the connection between it is uh >> it's very interesting but it's really it's really hard so I I just wanted to ask you like what would invalidate this because I'm follow I'm following the logic And uh I mean you know you have a lag now that you're that you're showing. So I would I would you know want to ask like when would you expect it to catch up or like what would it invalidate it because uh overall I think it's pretty compelling what you're sharing. >> Yeah. And I just want to say uh that's a really good question. I don't think, you know, I'm not willing to hang my hat on this indefinitely and say like this is the only I think a lot of people misconstrue because I've been posting so much on this because I just think the data the data is really striking. They go, you know, what what's the there's what's the positive relationship? You're saying PMI drives, you know, Bitcoin price. That's nonsense. And I'm like, yeah, you know, that's not really what I'm saying. I think what I'm saying is that these two uh are correlated. That pretty much I'm saying that there's a correlation here. And so the question that you're asking in there of like why mechanistically is there a correlation there and then why would there be a lag in there? I think those are the right questions. I mean I think there's a first of all what would invalidate a lot of it. I think if we give it six I think if we go to the end of the year and we still I think if we plummet if the price keeps dropping down to say October and the PMI stays where it's at or it keeps driving higher like if we do a PMI bubble like we did in 2021 2022 I think um and then the price keeps trickling down to oc I would say okay there's something wrong with the the understanding here. >> Mhm. Um, but then there's a couple things in there, right? There are, I think, a dozen or so different questions in the PMI that ultimately get you an aggregate PMI value that can be between 0 and 100. So, there's some nuance right now. What's driving a lot of the PMI going up is the inflation, the prices, and things like that. So the business is doing well >> um for certain reasons but in other areas like new orders are still growing but that the growth of the new orders is slowing things like that. So there's some nuances to what causes this to go up and down. And then the third thing is that I think for the lag I think it's a good question. I think it's it's open for debate. Um, I like to think that, you know, businesses and industry are doing uh real time transactional supply chain work to get products out and and and products purchased and then they need to see their accounting fulfilled. I think that by the time the public I think these the price bubbles are largely more of a socio uh social sort of phen phenomenon, right? when uh retail or larger investors or whatever are starting to pile in and pushing the price up. Um that I think that there's a human sentiment lag there that that comes after you start to see the businesses giving you that earlier signal. And I think that's >> that's probably my top explanation, but there could be other explanations too, I think, for the lag. >> Interesting. >> Yeah. So, um, yeah. I don't know if you had any other thoughts on on this. >> No, I like the next one. I saw the >> I'm really exper This is to me an experiment though. Just guys, everybody >> and well and and maybe maybe one thing to add to that like that's why I like what what you and plan C do, right? It's it's um again, right, there there's like people that buy Bitcoin based on a fundamental thesis. There's people that still trade Bitcoin, right? like uh there's so many different opinions and levels of understandings and and ways that people judge Bitcoin that it's also interesting and hard at the same time to try to figure out why is this basically going up in a in a straight power law log line right like why is that even happening and I think just saying that you know as as I do is it's not enough but like the fundamental thesis is you know fiat money will be printed forever uh you will be debased forever right your purchasing power is is is gone forever like you need to move out of this system you know I I I I don't think that's the best uh argument for the majority of people or I I also don't think that is what actually drives the the power law right so what else is there right and and I think that's just interesting to try to figure that out because something is apparently happening, right? >> Yeah. Because the problem with that argument is the problem with that argument is that applies to pretty much everything else out there, any other like >> so why would the why what what's special about Bitcoin giving it this specific unique exponent exponent of growth. So I think yeah I think that argument fails. I agree. >> Uh but there's a lot more exploring to do. Um sort of shifting topics a bit. This is something I've been just noticing because sentiment has been so bad. Brim I mean know you're on multiple platforms. Um I I tend to I like to go back to Google Trends which is just an available data set for anybody can tap into this. And what I I just kind of hadn't looked at this in a while, I guess, and I realized that uh at least for the US, this is US data, the amount of Google searches relative to past years, it's it's a little bit higher than what it was in the middle of 2021, which I'm kind of like, that's really interesting. Um especially because I have a really old post, Brim, where I showed the long-term Google search data versus the price data. and the power laws of both match really well. And so I kind of forgot that this is happening in the background. Kind of going back to our conversation about um kind of risk off and like the adoption that's going on when you're not experiencing a a FOMO bubble. I mean it's sort of like you know we are first of all the price is right around what it was at the peak from last cycle. And then what I the way I look at this is sort of a proxy of okay people are thinking about this and and on the you know on their search engines wondering about the topic of Bitcoin roughly in the same prop you know in the same amount as what people were thinking right off the backside of the the last uh Bitcoin bull run but we don't think of it that way and you look at the the rates right before the last big bull run it was much lower actually. So >> yeah. Yeah. >> Yeah. Well, I I do think it's interesting that compared to 5 years ago, we are at literally 50% of what it was, let's say, 2021, right? Like the >> Yeah. At the peak peak peak retail. >> Like that's a decent amount. It's more than you would think if you wouldn't have pulled this data up. >> Yeah. >> Well, if Well, it's funny, right? because it's always like there's a peak and then Bitcoin died like one two or you know a 100 times or whatever and people lose interest and um you know I I really like this idea of of every cycle whichever one you define as a cycle how long right there's people that adopt Bitcoin on the way up then it goes down a certain amount of these new people also drop out right they sell at a loss or whatever and there's always like a new group of of hodlers that then you know make this little step change basically and then um it goes on and on but like the first thing I'm thinking when I'm seeing this is also there's been a massive amount of FUD as well right so uh uh oh yeah >> you know you see the peaks here let's say you know between 2024 and 25 you have these two uh peaks of interest and that's also where the price goes up funnily enough it's about halfway through the actual price movement, right? So >> gosh, there's been so much and remember Jane, we we're all forgetting about Jane Street and like all these all these sort of negative narratives over the past, you know, five. >> Yeah, but that could also make the spikes, right? So, uh or like the little spike, I see what you're saying. Like it could also be that people are like, "Oh you know, Bitcoin didn't die, but there's new FUD. I need to check it out, right? Because I don't want Bitcoin to win or I don't want to understand it or whatever." It's a good point. It's a good point. Like it's because this doesn't tell you if it's positive or or negative news, right? So, I don't know. >> I think when I've zoomed in, I'll just say I think the only reason I would push back on that is that the negative stuff I immediately jump to see what Centon is doing and it causes these really big spikes like like kind of what you're what you're alluding to. But I think >> I like the spike after 2021. Sorry. Like I like the spike after 2021 which is literally the the the >> the double top, right? It's like super interested and boom like it it just it just dropped >> and we had that second top despite Yeah. like engagement or you know engagement around the topic of being half. So >> yeah. Yeah. Yeah. Yeah. >> So something to watch uh for sure. Golden macro I I I crowned myself a macro analyst in addition to Bitcoin as of last last year sometime. So, I'm being a little tongue and cheek, but so I think gold gold there's this idea which is true, which is that the Bitcoin bull runs tend to follow gold bull runs. Uh, but I think most what a lot of people don't see is like it's not obvious when we're having a gold run. And I don't even know if people remember when they've been because the one that we've had since, you know, 2024 has been so gargantuan and historic. There's been nothing like it in in uh especially for millennials. You know, your podcast is for millennials. It's like I don't think most of us remember anything like this for gold. So, what you can do is normalize it for the moving average. So, the top plot there is again the residuals. So, you can see the true bubbles of Bitcoin highlighted those those bull runs in orange. Did the same thing for gold. So, you can kind of trace these to each other. And the interesting thing to me about this is there's been a chain. There's been sort of a lag. So, it's a squishy. This is a squishy narrative which I totally admit. But the lag between say the peak of when you know Bitcoin or sorry gold starts to cool off and then Bitcoin starts to take off. The lag there has been shrinking and shrinking. And this is just something I I I put this might have been a week and a half or so ago um or maybe a little bit more at this point. But I mean, in the midst of gold having its heyday, it it actually took like a 25% drop, which you can see here. This is what I was trying to highlight in this post. Uh you see it in the residual plot as well as the raw price plot. Um pretty massive drop relative to what gold's been doing. Jump ahead to this. You can see it stand out in the returns, the relative returns. So, here I'm showing the relative returns of gold uh and Bitcoin uh the difference between the two. For my European friends that want to buy Bitcoin with ease, check out Relay. I've been a longtime fan and happy to partner up with what I think is the best Bitcoin only platform for Europeans. They offer a super simple beginner-friendly app with no distractions and no shitcoins. You can do a quick one-time smash buy or set up automatic purchases when you're stacking regularly. And here's the thing that matters most. Relay is 100% self-custody. Every set you hold is yours. Your keys, your coins. If you want to get started, download the app via my link below or in the description and use code brum. That's br at checkout to get 10% off your fees. A huge shout out to Relay for sponsoring the show. Now, let's continue. I feel sometimes that you know the Bitcoin adoption is driven by an actual fundamental understanding. A lot of people are not going to like this but you know I I think you need to do more I I think you need to do more work. Yeah. I think you need to do more work to actually understand Bitcoin. But once you understand it and like if if you even understand the point that you know Bitcoin is gold with teleportation built in and way more like if that doesn't interest you but you're interested in gold then you know I I don't really know what to tell you but anyway like the the fundamental understanding of Bitcoin and in and the in its place in the thesis that it has that I just mentioned right like the infinite the basement of fiat money and so on and so on and so on. Um I think it takes more time. So, Bitcoin is slower, but Bitcoin holders, I think, are uh >> are growing also when you look at the the hollow waves, right? So I think they're more steadfast and when the uh kind of like the narrative picks up of oh there's scales in the world or money printing or uh you know whatever many people that haven't done the work just go to the narrative oh you know this is this is when you need to own gold >> um and and so I think the gold narrative is just I'm I'm still going to make a video that is uh gold is a memecoin right because I think the gold narrative is way stronger stronger than the Bitcoin narrative obviously and it's also that Bitcoin is just way harder to to understand. Um so I hope that makes sense like the the bar to actually understanding Bitcoin >> uh at a deep level so that you're holding it in >> cold storage uh forever basically like a lot of OG gold bugs uh are doing as well. I think that just takes a longer time. So the the the the bar to get to or how do you say like the the the hump people need to get over to get into gold is just way way lower than um uh Bitcoin. So this is also why I think you know gold uh kind of outperformed Bitcoin in the in the previous months because yeah just more people know about it and they know you know own gold in times of chaos or whatever the the the narration or the meme basically basically is I think it's just way stronger with way way way more um people. So that's kind of my thought around this. But then fundamentally right you know bitcoin is leaps uh beyond gold especially in an in you know in a digital age like 2026 but that's a different conversation but I I just think it's interesting that there is a kind of understanding of the need for hard money or a hard asset but the step from just knowing you know you need to have gold in chaos to oh let let me see why they call Bitcoin hard money or whatever. I think it's just too big for the majority of people. So, it's just >> Yeah. Yeah. >> Getting into gold is just easier. Way way easier. >> I I I agree with pretty much everything you just said there. I mean, I I don't even know. I think I've always sort of thought that there is a characteristic time delay, right? Like the adoption of Bitcoin, just talking about adoption, which I think is the key to >> uh Bitcoin price in the long term. and that we are seeing that. It's just again in the short term we don't really notice it but it is happening. It's still happening. I agree and I've always thought that there's a characteristic human brain rooted uh time delay uh to gaining that understanding of what money means, how to secure your own money, how to manage the technology. I mean there's a lot that goes into it. I mean I don't know if you you've probably >> tried to train and onboard a lot of your friends and family or whatever, but it's not >> it doesn't happen overnight. and the systems are the the rails are already in place for gold. And so it's like you get into it because you know that's the hedge against that's the hedge of production and in and uncertain times and that's that's the narrative. It's got a it's got a narrative in place. Um so it's got the institutions in place and we're we're seeing that trans transition now but I think it with Bitcoin it always seems to happen around this. It takes about the same amount of time per person to get them on boarded on average. Yeah. So, >> but the uh the gold outperforming Bitcoin uh from 2025, like let's say July 25 to now, I think it's very red, right? So, >> could you go longer back? I think that would be interesting to be honest. Like, could you go back longer and have like uh certain relationship to whatever happened then like what what does the co time look like is something I would >> That's a good question. I don't I need to pull I need to make that chart. So you got to think like does it change? >> That's a great point. I don't think you're the first person to ask. >> Yeah, I think going back to co times basically what you could sort of infer proper chaotic time is more what I mean like you know where it was clear to people that something >> I think you know you know Matthew Masinsk's right one base money he's he's excellent he's also going to be we're doing a panel with him at Prague by the way. >> Oh very cool. Um, it's going to be awesome. But he had a couple shows, couple charts or whatever showing the years that gold, like gold actually does outperforming of Bitcoin in certain years and then other years Bitcoin just blows gold out of completely out of the water, right? And so my guess is if I were to back extrapolate and show the years past uh CO and all that, you'd probably see some speckles of of red with a little bit of dips like this and then it would go back to pretty shallow. >> But relatively speaking, you would never see anything like down into the drawing down in the negative 20s or 30s where gold is just kicking, you know, Bitcoin's butt. >> This is just why I think gold is narrative driven if I'm completely honest. like it it is driven in this time of chaos like this is what you need to buy and central banks are buying and this and that and I mean it's it's not untrue um but I think there's a different deeper thesis that Bitcoin plays in well that people that figure out Bitcoin figure out right that it's a it's a it's a longer time frame than just the XYZ months where something is happening and there's global chaos and and and and whatnot. So that's kind of the for me the difference. But I know a lot of people don't like hear me saying that. Put that away. >> Well, I think a really good a whole other podcast we could do on just like what is going to happen if we have something like a global financial crisis too, right? Or people were afraid that oil was going to go up to 200 and stay up there and we're going to have a complete global economic meltdown. What does Bitcoin do then? Right. That's a good question. Well, there's a lot of people that say, you know, it it would go down with everything because still the majority of people treat it as a short-term investment type risk on asset, right? And so a next global financial crisis would be ultimately >> uh risk off. So although you and I might think all these people would be wrong in uh not picking Bitcoin um >> they might look right. >> I probably align with that. Yeah, because still the majority of people see it as an investment or a trade. So that's kind of why I think that is so but yeah more more cheap sets for us and then and then later on they'll they'll tell us we got lucky. So, >> I mean, it's it's if you look back over Bitcoin's life to see the amount of negative narratives that Bitcoin >> Mhm. >> has looking four years back had completely destroyed and then moved in order of magnitude higher. >> It's just it's so I have to believe it's going to do it again in a situation like that. It's just >> it's entertaining, dude. It's just fun. >> Yeah. Yeah. So, this is like basically the same data, but I I actually made it more specific. So, I wanted to see when Bitcoin is outperforming gold. Is that because of Bitcoin's price moving or is it because of gold's price tanking? And then vice versa. So underneath uh I didn't mean to make these Ukrainian flag colors by the way, but got the the uh on the downside uh the negative values here are when gold is outperforming Bitcoin, but it's split out. If it's yellow, it means that it's that is due to gold having a surge versus Bitcoin having a tank, if that makes sense. So, I figured if I if I got this specific and then I zoomed in, of of course since like uh beginning of January. >> Yeah. >> I noticed this right here, this hodge podge of sort of orange and then a lot of red >> picking up from the blue. Yeah, this is interesting to me, too. And you don't really get it from the uh there. You don't really get it from this. You only get it if you do this. And if you look back at say the last uh 3 years of data, you pretty much haven't seen any of that. And this is around the same time scale that gold has started to go on an exponential trend kicking Bitcoin's butt. >> And so I again it's this is a hypothesis, but I think this might be the beginning of a gold rotating into Bitcoin signal. And the reason of that is that while it's not the first time we've seen Bitcoin having a a small relative run against gold, it's the first time that this has happened in the past 3 years that's due specifically to uh gold's massive drop. Like that's a first in in a really long time. And so that's why I think it's an interesting thing to keep an eye on. And of course, this also represents a huge drop. And what did gold's market cap do here, right? and Bitcoin stayed stayed pretty much the same over that >> that would be my question, right? Like if Bitcoin crabs along sideways um and gold drops, would you see this signal or is this really the divergence between gold going down and Bitcoin going up? >> This is basically the what you're seeing here, this rise from the blue up into the red here, which is unique over the past 3 years. This is the impact of Bitcoin. Uh let's see because this is the Bitcoin gold ratio. Yeah. So Bitcoin staying roughly the same and gold taking a huge relative drop. So that's what the that's what the red specifically means. See gold drop is driving the red >> and that's the unique signal that you're really seeing from the past from the past month or so. >> Let's see. So this is so speaking of this is a new area of research I'm doing which is looking at the cost of production and this specific model is heavily inspired by an analyst on X named Ka uh or Paul I think he goes by Paul I don't know him personally but pretty much all he's focused on I think for years is looking at cost production uh frameworks and so people should definitely go give him a follow if they haven't already on X. Um I took his framework where you're you're basically looking at um issuance and difficulty. Um and I'm building a model that is uh essentially fit to the bottoms of the different cycles here. So I think we do the fitting a little bit differently between the two of us. I'd like to have a conversation with them. Um, so this is a an approximation I would say this this solid blue line of the cost of production which you can see traces the bottoms and the price really doesn't like to go below that very often but there are periods when it definitely does. So, what I did was I I think I'm the first to show this, but I actually fit that cost of production data um that was generated to a power law. And the power law fit is an even stronger fit than the price itself. So, it's I think it's like 98. It's like 98 point something. >> And so, to me, it's like now you've got an average sort of floor price model, which is kind of cool. And if you zoom in, there's really only been one time that the price has fallen below that quote unquote average floor price, which was the the FTX crash, the the end of the end of the bubble from 2020 2021. >> Yeah. >> The other cool thing about this is that if you use the cost of production data um or the proxy to it at least, uh it's a steeper incline for the fundamental power law, right? that it's a it's a higher uh growth it's a steeper growth curve. I guess that's the way to put it. Uh for the support and keep in mind this is all for the support. So the volatility lets the price dance all around this but pretty much solely on top of it. So that the volatility is all to the upside. But that tells us that you know right now we're pretty much right there for the average cost of production floor. Calling it a floor with air quotes. But in 2 years and that's at 70,000 today. In two years, it's basically double. So, and that's the bottom floor. So, we're going to be almost, you know, 95% chance we're going to be well north of that in two years. And then in four years, it's going to be 250,000. So, anyway, I just love I love to look ahead and it kind of it's like it's exciting to look at. Um, long-term bullish. I think this is pretty much the way we can wrap it up. Bram, I just wanted to tie it back together and let everybody know that I have not forgotten about my retirement content that I shared a lot of last year and I we we chatted about. So, I pretty much just updated the numbers, but 2025 is in the past. Um, but the numbers have changed a minuscule amount. I it's like not even 2%. And in uh 2030 it's looking like at least if you are living off a US dollar uh framework and you are living on the equivalent roughly of $100,000 a year uh by 2030 theoretically according to this with 7% adjust uh inflation adjusted somewhere between 3 and a half to to to 4.5 seems to be the magic number if you're looking at a 2030 timeline for for most ages. And is this you have to be the age at in that year. >> Is that >> uh No, that's the that's the age today. So that's in four four years you'd be >> Yeah, exactly. >> Yeah. four years older. Correct. >> Okay. >> So, >> yeah. Nice. Yeah. I love this. So, I mean, I would encourage everyone to to check out our previous podcast where we go deep on on this and uh really like lay lay it out and how it works and also what it's based upon. Right. It's the the it has the the power laws, the fundamental basically prediction of where the price uh goes. So, um yeah, uh I would love for everyone who hasn't seen it to to check it out. And uh yeah, very cool to see you updated it. I think you should uh you know, it it would probably automatically update, right, with with all the new data, but um uh you also told me you're going to make a website, right? Or do you have that already where where you can do this? >> Yes. Yeah. >> Yes. Long time coming. So, speaking of a live updated version uh of this, please keep an eye out for not to tease again to tease I I don't want to over tease, but very very soon Bram that website will be up smidstston.com and uh folks can have various versions and access to something like pretty much just like this. Uh >> yeah, >> so I'm excited about that. >> Yep. >> Awesome. Yeah. Well, I'll I'll link to your X and also to your YouTube channel. I think you had a you had a slide with a YouTube. Yeah. Started a YouTube as well. Yeah. >> Yeah. Awesome. So, I'll link to that so people can follow you and check out, you know, um any new data and stuff that you uh that you post. So, uh I think uh I think it's very interesting and uh yeah, just a a cool update. I hope people found it valuable and uh I'm going to see you in Prague. I think you're going to have a a cool talk and then uh I actually get to see uh get to see your face. So, I'm looking forward to that. >> Yeah, we'll see. my face might start to escape into the public. So, but I I'm really looking forward to to seeing you in person there, Bram. And you're I got to say, uh, for the amount, you know, I don't do a ton of these podcast, but you're absolutely one of my top favorite personalities to interact with intellectually and and otherwise. So, thank you, my friend, for having me. >> Appreciate I appreciate that. All right, man. See you soon. Cheers. >> See you soon. >> I hope you enjoyed this episode. If you did, you can click here to find more just like it. and click here to find all Bitcoin for Millennials podcast episodes. Also, if you want to help me shine a light on the message of Bitcoin, please like this video and subscribe to stay connected. I hope to see you for our next episode. Bye.