No, will it make a new high. I think it will because,
quite frankly, I think we are in a new parabolic advance because bitcoin tends
to follow the rules of parabolic equation when it has these advances, and so
we go up in a parabolic curve, which is basically an ever increasing advance.
Parabolic advances mean the advance at an increasingly greater rate, and so early
in the bull market the pace of gain is less than it is later in
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dot org. Link will be in a description. Welcome to the Thinking Crypto
podcast. I'm your host Tony Edward, and with me today is Peter Brandt,
legendary trader, author and the founder and CEO of Factor Trading. Peter,
great to have you on the podcast. Hey, it's great to be
hones with you. Tony and I both got the memo about black so that's
good. Absolutely, Peter, I'm astatic to be speaking with you. I've
been following you for a long time. I appreciate your knowledge in the markets.
And yeah, it's amazing to have with someone like you on say.
It's an honor and thank you so much for taking the time. Oh no,
I really enjoy it, Tony. Every chance I get, really to
kind of share whatever knowledge people I have that people might find you as fault,
I like to share it because I've you know, I've kind of learned
by my mistakes. Trading is all about making mistakes and trying to learn.
And if I can share things about mistakes I made them, I keep other
people from making the same mistakes. I'm all for that, and I know
that certainly early in my career there's some guys that were in Chicago on the
Board of Trade that really, we're very selfless with me and sharing with me,
and so I kind of look at it as my opportunity to say thank
you to them, even though they're not around anymore. But at least the
appreciation of getting wisdom from people that have come before us is always important to
do. I love that. So Peter, tell us about where are you
from? Where did you grow up? I grew up in Minnesota. I'm
a Minnesota guy. I grew up spent my first I think twenty two years
in Minnesota. I grew up in Minneapolis, actually in the city of Minneapolis,
although I spent a hic of a lot of time up in kind of
the boundary waters or the lake area that's kind of wilderness in Minnesota is where
I'd spend my summers. But that's where a group I went to I started
out out of high school. I was an ice hockey player. Wow.
And I played ice hockey for a team that actually last year was number two
in the country in the national championship, Saint Cloud State University. It's a
Division one hockey program, but then decided my junior year it was more of
a party school than it was a real school, and I probably needed to
get an education and something that there actually were jobs for. So I transferred
to the University of Minnesota and got my degree in business marketing advertising type stuff
at the University of Minnesota and from there. And this was back in the
days when jobs were plentiful, unlike today, where these young people have to
be, you know, real selective in what they're going to graduate in because
in some fields, you know, becoming a Starbucks barista is kind of the
education track there on, you know, unless they have some real skills or
they're really grinders and can create jobs for themselves. But so there are plenty
of jobs back then, and I was hired by at the time was the
third or fourth largest advertising agency in the world, handling major, major accounts,
very very large accounts, and that was in Chicago, and I was
young by then, I was married, I had a child, We had
our kids, real young, and so we packed up and we moved to
Chicago, and I went to work for this advertising agency and worked on the
McDonald's account, worked on Campbell's soup company count craft foods accounts, so we
had some real, real big accounts that we worked on. It was great
variance. But then about three years into that, I had met a guy
in Evanston is where we lived in northern suburb just outside of Chicago, and
I met a guy actually through sports programs my kids were in who was a
soybean trader, and he invited me to come down and have lunch with them
at the Chicago War to trade. Come on down, Peter, I have
lunch. I think maybe you'll get to kick out of what we do down
here. And I had never traded a stock. I had never traded anything
at that point. I was completely naive about the financial markets. I was
aware there were such a thing as financial markets, and you hear it on
the news that the stock market was doing this or that or another thing,
but really had no knowledge of working knowledge of public markets and how they operated
and what they did. And so I'd go down and have lunch with them,
and we'd bet the members dining room on the fifth floor the Chicago Boarder
Trade overlooking with big windows there the trading floor itself, and you look down
and you see they're trading silver and gold, and soybeans and corn and ice
broilers and oats, and it was crazy. I mean it was pandola.
You know, it was just pandemonium down there, you know, and you'd
sit there for a while and guys would getting fist fights and push and shove
and yelling and screaming, and I just kind of go like, seriously,
guys do this for a living. I mean, how is that impossible that
guys come down here and they got these old tattered ties, because that was
really you had a word tie, but could have been a bolo tie or
an old tie. And traders on the floors were superstitious, and so they
were wearing the same tie they were wearing twenty years earlier when they happened to
have a good day, and you know, in their trading coats. And
I kind of went like, wow, this would be a cool This would
be kind of a cool way to make a living. And so I studied
up on it a little bit, just what it was about. I you
know, go down to the education center at the Board of Trade or Chicagomercantyle
Exchange. They would have brochures or you know, this was pre you didn't
go on the internet to look for this. Internet didn't exist, but they
had printed brochures and you'd do or books, you'd buy books, and I
was captivated by it. And you know, back then, you know,
there was no MBA fast track. You didn't you didn't get hired out of
Harvard or Yale for a large salary because you had an education degree. Everyone
starts at the bottom. I mean, you started by being an order clerk
or an apprentice to somebody, or an assistant. And but I just felt
like sometimes when you're in your twenties and you're a guy, you feel you
can't fail at anything, that there's nothing you can you can do, you
can get hurt. It was pretty irresponsible of me. Frankly, I didn't
have a lot of money in the bank and I had a wife and two
kids. I had a rent to pay, food to grow to buy.
But I found a grain company, Continental Grain Company. They're not around anymore.
At the time, they were the second largest grain company in the world,
next to Cargil, which is the largest. And you know, they
offered me a six month deal to bring in business. You know, here
you can learn, you can learn the business, but you got to bring
in business. Everyone starts at the bottom. Everybody has to bring in business.
You want to be in the business, bring in business and that's how
you learn. And lucky that I actually brought in as clients Continental Grain,
Campbell Soup Company, and McDonald's and Homestake Mining was at the time was the
largest goal miner in the United States, and so I was able to bring
in business. But then I knew, even then, Tony, I wanted
to be a trader. I didn't want to be what we defined as a
customers man handling customers, because with these customers, I'd get a fraction of
a cent for every bushel of corn that they would buy and sell through Continental
Grain. And so within a year of doing that, I had replaced the
income I had given up in the advertising business. And you know, everything
beyond that was then gravy at that point. But I knew I wanted to
be a trader. That's what I wanted to do. I didn't want to
be talking to customers. I wanted to be down there in the pits.
I wanted to be yelling and screaming. But you had to learn the business
first, and learning how to trade is And when I say trade, I'm
not talking about you come in and you hit bitcoin and you go to the
moon, and you know, you cash in and you get a forty x
move or you know, I'm talking about trading as a career. I wanted
to make my steady living as a market speculator, and to do that,
I needed to learn the markets. Then I needed to learn actually how to
trade, and that really was like five year process. And I tell young
guys today, you know, yeah, you can come in and you can
get lucky with game stock, or you can get lucky with bitcoin or ether.
But you know, well that's one round. That's one round to a
fight. It's still got fourteen rounds left. What are you going to do
that mark speculations of marathon that's now the sprint and who cares how you did
in your last trade. That doesn't mean anything. It doesn't prove anything other
than maybe you're lucky. But how do you how do you make it?
And then how do you learn not to give it back? Right? I
mean we've seen that in bitcoin where we have the huge run ups and then
Bitcoin stalls and you get alt season and you have these big run ups and
then it's like a balloon that expands and somebody punctures the balloon and you give
it all back, you know, And I, you know, you got
guys today that they go, they get a ten x move, but then
they give they get a ten x loss and they end up back where they
started. And I didn't want that. So I really needed to learn how
to trade. Like the guys were really good traders traded, and there were
plenty. I mean I worked in the Chicago Boarder Trade Building where you know,
half the building were professional traders. These were guys that were the best
at the best of the best at what they did. And you know,
I blew up accounts, I probably, you know, I'd save up money
and Continental let us trade. They let us trade our own account, no
problem with that. Just couldn't front run your customer's orders, you know,
So I couldn't. You know, I'm sitting with an order to buy a
million bushes of weed. I couldn't buy ten thousand bushes for myself and then
stick in the customer order. So you know, there were rule and regulations
about that, but not about trading. All that was required is I had
to at least have a ten thousand dollars account I had. They didn't want
me to come in and trade one thousand dollars. I mean I had to
have a ten thousand dollars account to be on deposit and then trade. And
I supposed I blew out three or four, ten or twenty thousand dollars accounts.
And that's the price of learning, because you make a mistake and you
kind of go, Okay, how how can I go with that the next
time? Yeah? You know, in the reality is usually have to make
the same mistake more than once. And you know, I'm fifty years into
this since I've made my first future market trade, and heck, I made
a mistake last week. I screwed up a trade big time last week.
You know what happened. But finally, you know, and I tried trading
all kinds of ways. I tried trading on cycles and seasonals. I tried
trading on the news, trying to be a fundamentalist taking a look at the
macro situation. And so I tried a point figure charting. I try to
whole number different ways until I kind of stumbled on a book written in nineteen
forty eight, Technical Analysis of Stock Trends by Robert Edwards and John McGee,
and I read the book and it just kind of stock. You know,
I had had enough experience trading to know this kind of makes sense to me.
Maybe there's something here for me. And so, you know, that
was nineteen seventy nine when I started looking at charts and what we define as
classical chart patterns, and that really the patterns that were originally identified by Edwards
McGhee, but even before that by a guy they named Richard Schabacher who wrote
a book in nineteen thirty three, Technical Analysis and Stock Market Profits, and
that was the original book. Define this is the head and shoulders. This
is a rectangle, This is a tread line how you draw them. This
is an ascending triangle, This is a whole worn this is and this is
what they mean, and this is what's going on in the markets to create
these patterns. They just don't happen haphazardly. They get created for a reason,
and what are those reasons? And how do you read those things?
And so it was a matter of just finding my way through. I gained
a little bit of traction trading chart patterns in nineteen seventy nine, and then
nineteen eighty came and I had really my first really good year and good not
only because I hit some really nice markets, but good because I didn't give
it all back. You know, I'd catch a move and I'd capture it.
Sure you give yahwas give profits back at turns? You know I'm not.
I don't date trade. I don't believe in day trade. I think
day training is foolish. You know, I hold positions for a couple of
weeks to a couple of months. That for me is kind of my sweet
spot trading, and as futures, I trade futures and crypto and four x
and so you know, it just and it takes a while, and you
need to not just know what the chart patterns are, but you need to
think through sizing and timing because you know there's two components to a trade,
direction and timing, and if you get one of those wrong, you're wrong.
You know the trade's wrong. It doesn't matter. Well, I knew
this market was going to go from A to B big deal. You know
that you can flip a coin for that. But you know, how do
you get in? And then how do you size the trade? And how
do you manage that trade? And how do you let your profits run?
And you know how do you get out? I'm getting out of a trade,
getting out of a profitable trade. It's probably the toughest trade to make.
I mean, for me, getting out of a losing trades, but
there's no brain that's a no brainer me. It doesn't take much brains for
me to get out of a losing trade. But getting out of a trade
that's a winner. And you got a good trade and the market starts stalling
and you're not sure there's more money left on the table. Here do I
get out? If I get out, will I need to get back in?
Or do I go on and look at something else? And you know,
that's just a trial and error. And for me it was just a
matter of making enough trades. And I figure I've probably made somewhere between the
thirty five thousand and forty thousand trades in my life. Wow, in future
is crypto? Of course, crypto not going all the way back to the
nineteen seventies. I'm crypto, you know, going back to two thousand and
fourteen, twenty fifteen. But you know, so you make a trade and
you learn. If you're willing to learn, if you're willing to problem solve,
you go, you know, I made the trade and that didn't feel
very well. I got slapped down pretty good. Well why do I get
slapped down? I mean, and so it's just it's it's learning through trial
and error what your best practices are. So that for me is a matter
of best practices. I want to make trades that comply with what I believe
to be the best practices in making trades and getting into trades and getting out
of trades. Quite frankically, it's it's getting It's easy getting in a trade,
you know, getting into trade is easy to do. Getting out of
a trade is where the bills are paid and the money is made. So
a question on under trades, and and I know this is this might be
a tough question, but on average, what is the ratio of good trades
to bat trades? Because look, bat trades will happen, right, because
things happen. Oh yeah, yeah, yeah, I mean having bad trades
that that's that's part of the process of finding good trades. I mean,
I would say to your listeners, they have an emotional problem with losing trades,
they probably out not trade. They ought to probably find, you know,
put their money in a Schwab money market fund or find a good stock
fund or put it into a bitcoin et F and forget your own it.
Because if you're bothered by losing trades, that's that that's a good red flag
not to trade. So it varies, but for the most part, I'm
right about half the time. My going in assumption, Tony is I put
on a trade, I assume it's going to be a loser. That's my
mental attitude. And some people go, oh, you need to have more
hope, Peter, you need to have you need to have positive expectations,
feel good about yourself. That's a bunch of bunk, you know, because
I want to I want to start thinking defensively from the minute I get into
trade. So I assume this trade is going to be a loser, and
for the most part it is now in reality, if I go back and
I keep really really good statistics on my trade. I'm obsessed with keeping metrics
about my trading, and so I'm basically right about fifty four percent of the
time, wrong about forty six percent of time. I'll take a loss on
a trade, but I watch my losses. Uh, you know, I
will only risk about six tenths of one percent of my capital, So I
have X amount of dollars that I consider I can employ this. I can
buy bitcoin with it, I can use it to buy stock, I can
use it for margins on a four x trade. I can use it for
margins and trading corn futures, soybean futures. And this is my block of
money. This is my pot of money. And so so if I,
let's say, have a million and a half dollars at my pot of money,
I'll only risk six tens one percent of that on the next trade.
On the next trade I do. And so you know that's that's basically about
nine you know, about nine thousand dollars. So I'll put on the trade.
I'll risk nine thousand dollars to start with. Now, my goal when
I put on that trade, aid is I want to I want to move
to break even on that trade as quickly as I can, hopefully within a
week. I mean, I really like even if I can do it in
a few days, where I can adjust my and I always use protective stops.
Now, guys that say don't use protective stops because you're gonna get stopped
out and then the market's going to go your way, it happens sorry,
it happens. You know, I can't tell you a number of times I've
been long long something and it got stopped out at the low tick of a
day. I mean, it's it. It's part of trading. Welcome,
Welcome to living. So you have to take accountability. You got to own
your trades. Can't blame it on its manipulation. And the wheels came in,
they tried to dump me. Take ownership, Yeah, because I tell
you, take ownership, you'll never own it. And so but I look
at it and say, hopefully within the three or four days, I can
adjust my stops and I can move my stops where you know, I'm instead
of losing nine thousand dollars, maybe I'll only lose three thousand if it goes
against me, or even come to the point where I can move my stops
and break even. And you know. So you know, and I remember
back the old guys, and I'm talking about when I joined the Board of
Trade. The season guys in the pit were World War Two veterans. I
mean, these were guys that were born in the nineteen twenties that were in
their prime trading in the pits. When I started in the pits. These
were late guys in their late forties early fifties that had a lot of success
in trading, and they were just you'd ask him, what's the secret,
And to a man, they'd say, cut your losses short, let your
winners run. Now, the devil's in the details of that, twenty of
course, right, I mean cut your losses short. What does that really
mean practically? You do? You know, how do you do that?
You know, what's what's the technique or the principles or the rules by which
losses get cut short and let your profits run? So what does that mean?
And so you have to kind of go through a process of self discovery
for what your own mentality is and you know what you're able to put up
with emotionally, and and you know, that's a process that takes It takes
time. It's self education. It takes time to get there. So by
you know, eighty had a good year. Eighty one I just had a
giant here. And you know, nineteen eighty one, I gave up all
the customer business I had. I sold a bit, I sold the customer
business to another broker, and you know, put a eight thousand dollars into
a train account and incorporated Factor Research and Trading as a clearing member of the
Chicago Boarder Trade and no rest was history. Right. Eighties were great years,
And I look back and I don't take credit that it was my own
intelligence that got me there. I just think I had some good tutors.
I had some people who invested in me, gave me really wise advice,
and I happened to be in the best commodity markets that have ever been in
history, and that was in the nineteen eighties, the single best trending markets
ever for future markets. And so kind of like the guys that have been
in crypto in the last five six years, right, I mean, they
came in to markets that were just absolutely incredibly beautiful. So lucky enough to
participate in those markets early on in the nineteen eighties, and you know,
built up a good size account and you've learned to a couple losses short and
I learned to let my profits run and so it's it's been a good run.
Like I said, this is the fiftieth year. This year marks the
fiftieth year since I traded my first futures contract, and that was a few
years contract in bags of pree nineteen sixty five silver coins that had ninety percent
silver content, and that was the first silver contract futures contract trade in the
US. And so, you know, I kind of pinched myself that I've
been able to make a living doing what I'm doing, and it's you know,
I've I've had some losing years. I think I've had. Last time
I looked at it, I think through that time, I've had, of
course, many losing trades. I mean, probably twenty thousand losing trades in
the process, but I've had four losing years. I think they've averaged about
maybe down five percent. My worst losing year was actually two thousand and fourteen
was my worst losing year in my trading history, and I was down fourteen
percent. But I've had a lot of good winning years. I've had all
my performance added it and I've you know, I've managed to average a little
bit north of forty percent a year during that time, and so the markets
have been good to me. And twenty eleven, I happened to publish a
book. John Wiley and sons wanted me to write a book by trading.
I wrote a book in twenty eleven, did a lot of work. You
don't make money writing books. But they wanted me to write a book and
I published and part of that they had me go on Twitter. They set
up a Twitter account for me. And prior to then, I was unknown,
you know, prior to twenty eleven, nobody really knew who I was.
I had operated for decades as just a private trader. Like most of
my peers, I mean, most of my peers think I'm crazy for having
a social media presence. Say, what are you doing, Peter, that's
why are you doing that? But so I got involved in Twitter primarily to
promote the book. And what a crazy world. I guess you call it
x now, but what a social media What a crazy world that is?
So, Peter, question on that because you brought up a great point and
given your plethora of experience, and how do you see social media that dynamic
playing out in markets now? Because you see game Stop in AMC, you
see meme coins right where people are now crowdsourcing and they can have an agenda,
they can have pulled their capital together. Have you seen anything like that
in the history of your time trading? No, I think you know that's
new to these small stocks. That happened as small, and it's new even
there, I mean game Stock and Robin Hood. I think the professionals who
would be my peers on the stock market side, you know, they were
flabbergasts that all these little guys operating from a PC in their mom's basement were
able to you know, take them out of their short positions in some of
these stocks, right, I mean, because just the volume and ganged up
upon them. Yeah. So, you know, in the last ten years,
both through things like robin Hood and game Stock and then crypt Bitcoin of
course, and then the olt coins and all the memes and all of that,
it's it's you know, it's a brand new world. I mean,
I feel I feel kind of fortunate because on one end of my career as
a book nd, which is the beginning of futures trading, right, I
mean, when I started futures, there were not goal futures. US citizens
could not trade gold futures, I could not trade silver Bollian futures. They
could not trade foreign exchange futures, they could not trade a treasury yield futures,
stock index futures. Those weren't around when I started. And so there
at one end and at the other end, I've got this you know,
bookend, which is cryptos that I've been able to live through this whole period.
Now I'm seeing cryptos which aren't crazy. So you know, we've we've
got a lot of new blood that have come into the world of market speculation
through you know, stocks like game Stock, and you know, coming in
through Robinhood and you know, and na Vidia, and through the alt coins
and bitcoin and memes and so forth. There's a lot of new players.
But my guess is in the end there'll be a blowout rate that'll be similar
to what the blowout rate was in futures traders back in the nineteen seventies,
where for every one hundred people that came in, there's probably only going to
be two or three that will merge and say they can make a whole career
in market speculation up here. Obviously you've been training for a long time,
you know, wealth knowledge, what keeps you going? And why do you
want to keep trading? How coming you're not, you know, somewhere on
the beach tired. I would love to. I just I'm genuinely curious about
that. You know, why are you still well? For one thing?
I love it? I mean The markets are in my mind, the ultimate
and try and trying to beat yourself. Uh, My competition's not the markets,
is not another trader. It's not the exchanges. It's not the manipulator,
is it not. Uh, it's not some bank that's rigging the silver
market. It's you know, it's not the whales. It's it's how do
I it's self mastery? How do I? How do I? How do
I overcome the inner demons that try to sabotage me in every turn? The
hopes of Greer is the fomo, the the emotions? How do I?
How do I excel? So, you know, I would say for me,
at the beginning, it was kind of the excitement of guys yelling and
screaming, as well as the money they made. I mean, the parking
lots of the border trade were filled with Porsches and Mercedes that would drive up
the Gold Coast to mansions and lake forests and monetca. And so it was
the money that these guys were making that appealed to me. And now it's
being really good, it's it's I've just found for me that I've been able
to break down kind of every aspect of what has to go into the process
of trading for myself from what what charting platforms do I use? How do
I most excellently use analysis? What's excellence and analysis look like? What's excellence
and order management look like? What's excellent and post trading performance metrics look like.
So it's for me, it's the challenge of being being better this year
at what I do than I was last year, believing that if I pursue
excellence and I'm obsessed about details, that the money will come out at the
end and it just becomes up as a byproduct. It's not my goal in
terms of trading. I've got a lot of physical limitations to me, Tony.
I fell off a house in nineteen eighty four and spent forty one days
in the hospital to relearn how to walk, and so my mobility is not
great, and so I'm not out on the golf course or walking beaches.
For me. If I walk, I need a walker. If I want
to walk with my wife, I need an electric card. And so you
know I've got I've got limitations that kind of keep me in front of me
in an office anyway, not in front of a screen. I don't like
being glued in front of a screen. I hate screens. I want to
turn my screens off during the day. I don't want them on because having
them on, I believe, leads me to bad decisions. And so it's
what are all of the things that can't optimize to the degree possible my ability
to succeed as a market speculator, and what are the things that will interfere
with my success? For me, one of those things that will interfere with
my success is letting my emotions getting involved in decision making. And that's exactly
what happens when you turn on a screen and you don't like what the hourly
chart looks like. So you go to a five minute chart and you don't
like what that looks like. So you go to a weekly chart and you
keep looking until you find a trade. Well, I don't want to find
a trade. Don't want trades to find me. You know. I only
want to do two trades a week. And that's my goal going in is
I want to be able on average to put on two new trades. Somewhere
between one hundred and one hundred and twenty new trades a year is what I
want. And so I kind of know what those trades are going to look
like on a chart, and you know, so I'm looking at all the
major cryptos. I don't look at all coins. I think I have no
interest in all coins. I have no interest in memes. You know,
I'm interested in four or five of the crypto coins, mainly only Bitcoin,
however. And then the futures markets. I trade global futures, you know,
everywhere from then Nikai Dao and the Osaka stock exchange to corn at the
border trade, to gold at the comex, to bitcoin spot. I trade
bitcoin Spot, and so you know, there's probably a list of forty markets
I look at every every weekend, and that's when I do my work.
Which one is your favorite to trade? If you weren't all time, it
doesn't exist that they phased out the market. Last year it was euro dollar
futures, which is basically the interest rate of holding US dollars in Europe,
similar to the T bills. It's a t baill rate, but it's the
equivalent of t bail rates for dollars held out of the country. And that
for me, was a wonderful market because it trended so well, with such
a good trending market that I liked it. I like grains simply because that's
where I got my start. I got my start on the floor trading corn.
So I'm from the Midwest, you know, where you can't go anywhere
without driving through cornfields, and so I like the grain markets. I like
currency markets, and surprisingly enough, I not only like holding bitcoin. It's
the only asset really that I hold that i'd buy and I haven't even looked
at the bitcoin I hold. I don't mean pay any attention to it.
But also I'm an active trader in bitcoin. I will a whole separate pot
of money. I like trading bitcoin. I think bitcoin is a great charting
market. But so I would say bitcoin is probably right up there as one
of my favorite markets to move in and out of, but really as a
swing trader. So so Peter, since we're on bitcoin, would if you
wouldn't mind shure your charts, what you're seeing from bitcoin and your outlook.
Sure you know I had heard a bitcoin, Tony. I mean you know
you're not frequently. Bitcoin wasn't talked about much. I mean you younger guys
knew about dcoin outs older guys. It was just something out there that we'd
hear and what a bitcoin is? Computer money? And some guy bought a
pizza with it somewhere, some guy bought a pair of shoes with it.
Some electronic computer money someone invented. I mean, that's what I thought.
And then they're pretty active, pretty well known guys. Name is Raoul Paul
as a friend of mine. He lives down in the Caymans. And Raoul
sent me a chart of bitcoin in twenty sixteen, and he emailed me a
chart and said, Peter, look at this chart and tell me what you
think about it. And I opened this chart of bitcoin and went, holy
crap, this is a butte. And so I almost immediately called and said,
how do I buy that? I didn't know how to buy how do
you buy a bitcoin? I had no idea about buying a bitcoin, even
man Tony, I no idea whatsoever. But bitcoin was somewhere around five hundred
bucks plus from my hundreds fifty bucks hanging around in that neighborhood. And Raoul
set me up with a company that he was using at the time for purchasing
bitcoin. So I didn't I mean, initially, I think I called my
broker and this guy by bitcoin and buy what So I bought bitcoin, and
that was in twenty sixteen, March or April twenty sixteen, and yeah,
so the rest is history. But I take let me, let me.
I'll pull up a couple bitcoin charts and I'll kind of give you a macro
view, because what I really want bitcoin is I want to have a narrative,
and I'm not dogmatic. I don't go like I'm going to go through
a few charts. I'll kind of talk through them if you have questions.
Uh, you know, some of these charts are going to show you kind
of They're the charts I keep for myself. They're not charts I necessarily publish
because there's such a disaster. I got so many marks and scribbles on them
that they get, they get. They get pretty messy after a while.
But at least I have numbers on there that mean something to me, and
I'll kind of try I'll try to talk through it. I really have I
have. I like to have narratives in my mind and then I like to
say, Okay, this is what I see happening. Now I need to
see prices support this narrative, because I'm not going to let my narrative dictate
what I do in the markets. I want the markets to dictate my narrative,
not the other way around. And so I try to formulate narratives in
my mind that makes sense of price, and then I can use then rolling
forward and what we have in bitcoin, if you go back to bitcoin and
take a look at the history of bitcoin, you'll see a couple of different
things. Kind of show them on this chart and talk to them. But
what you have in bitcoin is you have these bull markets that are multiple x
moves, you know, twenty x, fifty x, one hundred x price,
these big multiplications of price, and you have these big bull markets and
Bitcoin that form parabolic curves. They're governed by parabolic curves. Not just parabolic
curve, but they're governed by parabolic curves on the log chart. And so
in bitcoin, what you see is we had a parabolic move in twenty eleven
to thirteen, another parabolic can move in to the bull market that topped out,
then again in twenty fourteen, another parabolic move that topped out in December
twenty seventeen, and another parabolic move that topped out well, some people say
it topped out in February March twenty twenty one, though we made a slightly
higher high than in November. So but nevertheless, the parabola was broken at
the first top. And so what do you have in bitcoin? If you
explain is people, what does bitcoin do? Say? Bitcoin is an asset
has these bull markets that multi by price many times. Many times. When
those bull markets are over, you have very prolonged bear markets that correct eighty
percent of the price of the bull markets. And that is the behavior of
bitcoin. Bitcoin behaves that way. It had a three one hundred and ninety
one X move followed by a ninety four percent correction in the two thousand and
eleven to twenty thirteen bull market. Then I have five hundred and seventy two
X move followed by an eighty seven percent correction, then one hundred and twenty
two X move followed by an eighty four percent correction, then the twenty two
X move followed by approximately seventy eight percent correction. So you'll have Bitcoin that
has these huge bull markets that then have massive corrections that correct more than seven
twenty percent of the price, and corrections that last a long period of time
before we see a new all time high. That we went after the first
big parabolic bull market was twenty one months before we made a new high.
Mark went sideways for twenty one months, and we broke another parabolic move,
and for forty one months we didn't see a new high, another parabolic move
topping in twenty seventeen, thirty six months before we saw a new all time
high. And now we have a situation where we broke the bull market back
in April twenty twenty one, by my and when you look at bigcoin and
an adjusted adjust inflation adjusted basis, we still haven't taken out that high.
Wow. And so everybody here recently have talked about this new all time high
buil coin. I don't quite frankly buy it. I mean, sure,
by a couple thousand dollars, you made a new all time high, but
for the most part, we're right where we were in April twenty twenty one,
and then again in November twenty twenty one, Bitcoin had not made a
new high. Now in thirty eight months, you know, will it make
a new high? I think it will, because, quite frankly, I
think we are in a new parabolic advance. Because bitcoin tends to follow the
rules of parabolic equation when it has these advances, and so we go up
in a parabolic curve, which is basically an ever increasing advance. Parabolic advances
mean the advance at an increasingly greater rate, and so early noble market the
pace of gain is less than it is later in a bull market. But
quite frank say, that's where I think we are. That we've had this
thirty eight month period without making a new high. Yeah, we'd made one
by a few thousand bucks, but I'm not counting it that way. But
that we have this parabolic advance that I believe will go forward. Now where
will it go from here? And I'm going to show you another chart which
kind of lays out the rest of the narrative of the current bull cycle that
we're in, because I believe that's what we're in. We're in a bull
market cycle that will continue. And it started at the November twenty twenty too
low, and so we are now what five six, seven, nineteen months
into it, but from the low. Now having is a big deal in
bitcoin. Everyone talks about in bitcoin. Let me just show you one other
thing for why I think I'll come back to this, the correction that we're
seeing in bitcoin right now, is a correction that I've seen over and over
and over again. It just seems to be a correction that we have all
of the time in bitcoin. Sorry, I have to kind of play with
this chart to get it the way I want to, but it's this pattern
in bitcoin where you get a high and then you just chop. You get
people fomoing on new high, and then you dump them out. You know,
you correct, you bait people in, you get people to fomo,
then you dump them out, you get weak lows, which is really kind
of where we are. It's what I refer to on Twitter as kind of
the hump, slump, bump, dump, pump, and that's exactly what
we have. We had the pump, the hump, the slumps, the
bump, and then we had the dump. Now we think we do the
pump. And this is, you know, very characteristic. And if you
go back in the previous bull cycles in bitcoin, Tony, like the bull
market cycle that we had in twenty sixteen, you'll see this pattern over and
over and over again. It just reoccurs. Sure, so it looks like
your next target up is around eighty something thousand, Yeah, I think so.
But now I want to show you something that happens at having. There's
a couple other people that have written about it. For the most part,
it's something that I have followed. But if you take a look at having
where we aren't having, and you take a look at where having is and
but in bull market cycles, something absolutely amazing takes place. Now, whether
it continues or not, I'm not sure, but you have to assume that
it probably does. At least you have to in your initial hopes on that
that having takes place had exactly the halfway point between the low that started the
bullmarket in the eventual bull market high. Is if you take that bull cycle
and look at the having halving took place exactly halfways. You had seventy five
bars before the having seventy five bars to the high after after the having,
then we had the bullmarket that topped out in November of October November of twenty
one, where from the low to the having was exactly halfway seventy four bars
to the having seventy five bars to the top. Wow. And if you
look at where we are right now at the having from the low point that
we had back in November of twenty twenty two and the having that suggests to
me that that is going to be the halfway point. We're just a having
process pause, which we've had before. We've with the Marcus drifted side sideways
at the Having point in the past, and that we have a top that
comes into Bitcoin. It was seventy three bars into the Having, now will
be seventy three to seventy five bars out to the Having. We should top
out in the middle of September. Now where do we top out? I
just project. I just look and take a look at the parabolic curve and
say we are going to top out based on the parabola, and so I
just think, okay, we're going to be somewhere in the one twenty five
to one fifty area relative to the parabola seventy four bars weekly bars after the
Having point. So that kind of becomes myst mester narrative. Now I'm looking
at that narrative and it's driving me. Now there's another narrative that I'm looking
at that really conterdicts this. And so I am not the kind of trader
that says I'm going to make up my mind once and no one's ever going
to convince me I'm wrong. I mean, I want to have a reason
to believe what I want to believe, but I also want to know what
do guys on the other side of my trade believe. I mean, I
got to believe that there's some really, really smart people that are not thinking
like me, that think something's going to happen quite different. And these aren't
idiots, they're smart guys, and they're not willing to place their bet the
way I do. And there's something in bitcoin that really has kind of begun
to bother me. And let me show you what that is. And what
I call it is exponential decay. The bitcoin market has been subject to exponential
decay, meaning that each success of made your bull cycle in bitcoin has been
substantially decayed in robustness from the previous bullmarket cycle. That if you go back
to the bullmarket cycle that ended in two thousand and eleven, we had approximately
a three thousand x move. Correct. Now, the next bullmarket cycle lost
eighty percent of its power because eighty percent of the three thousand x move gave
us approximately a five hundred and seventy X move, So we had an eighty
percent exponential decay in the energy of the bullmarket that ended in the December of
twenty thirteen compared to the previous cycle, same thing happened with the bullmarket into
the two thy seventeen high. It was one hundred and twenty two x move,
again, approximately an eighty percent decay, exponential decay relative to the previous
cycle. And lo and behold in the bull market cycle that broke the parable
of finally in twenty twenty one, at a twenty two x move represented an
eighty percent decay, and the energy of the market. Now, if you
take that same decay and you say that it is not this having that is
going to be the narrative that will carry the day, that the having takes
place at the halfway point, and that the parabola continues from the halfway point
to the end of the cycle. But instead you adopt the narrative of exponential
decay, market's already top. Oh wow, that you take an eighty percent
decay of the last bull market gives us basically somewhere between a five and six
x advance from the low we had at approximately fifteen thousand dollars back down here
in November twenty two. Is really what an exponentially decayed bull market would look
like in bitcoin, and that would bring prices up into that seventy to seventy
two thousand level. We've seen that, and so somebody's a liar here.
This is kind of like two people saying I'm telling you the truth and somebody
else is saying I'm telling you the truth, and the having theory, the
having narrative has raised his hand and said, Tony, believe me on the
truth. Sayer, we're halfway through the bull market. We've got a big
bull yet to come. We still have fifty four weekly bars till the end.
But then you have exponential decay. Raise his hand and say, no,
it's really not that way. There's a whole different way to look at
it. And that way is that we've already topped and will now see a
ball tread, and then there are some ways that you can actually look at
that find it. So yeah, Peter, I absolutely appreciate that you're giving
both scenarios because sometimes many investors only look at one scenario, but you have
to look at all because you never know what could play out. And like
you said, there's diminishing returns here each cycle. The data doesn't lie,
so the possibility of a top already being in there is there, It's just
it's about probabilities which one is likely to play out? Right? Right?
And so what I want to look at is the shorter term price. You
know, is there a chance? Can I get a clue from other charts?
Can it get a clue from weekly charts? Can I get a clue
from bull under bands? Can I get a clue from other things? That
will tell me? Uhh, the market is showing its hand. Where's the
tell? It's like playing poker, trying to figure out the tell of my
opponents. The opponents be in the market itself, trying to figure out what
the market's telling me. Because now if you look at this where we have
the entire bull history of bitcoin as a parabolic curve on a log scale,
but you also have an upper parabolic curve which tends to suggest exponential decay,
which tells me that, hey, I believe in the Bitcoin story. I
buy it. I buy the story that fiat currencies are doomed, that Bitcoin
has a chance to emerge here as an important store of value, that it
has a great story to be told. If you look at all the characteristics
of bitcoin, it has a great story to be told why it can emerge
as as a l one store of value in the global financial scheme of things.
Right. So, but if you look at this, this tends to
support the concept of exponential decay in that we're topping out against the upper parabolic
curve, which tells me that they're truly bitcoins going to a million. Like
some people say, bitcoins a million, ballocks too many? You name your
products? Who cares? Who cares what it is You're going to blow out
through the top of this upper red parabolic curve. And that is how I
will know that bitcoins going to a million. Ah, that's that's interesting.
So, Peter, do you think and this is where, like you,
I'm trying to figure out as a bitcoin holder an investor, you know,
are those narratives that going to million legit? Because it would take something incredible,
right maybe ets, maybe central banks holding bitcoin where it breaks out of
this parabolic curve. Would it take a catalyst like that? Yeah, I
mean I don't know. I mean, basically, the US dollar is the
number one one, l one layer of store value in the in the in
the global economic scheme of things, right, I mean it's one, It's
the major global reserve currency. And so what happens where the US dollar gains
such disrepute that they're a whole new currency scheme that somehow gets created all of
a sudden. The price of oil, the price of real estate, the
price of gold, the price of hard assets gets expressed as a bushel basket,
which is twenty percent the price of crude oil twenty percent, the price
of gold twenty percent, the value of the dollar twenty percent, the value
of bigcoin ten percent, the euro currency, whatever it is, you know,
figure it out, make it up. Is that Bitcoin gets included in
a master currency basket that really represents going forward the new world order, you
know, or at least an important player. You know, it gets wider
acceptance as a place. Now. You know, most Americans their store of
value, whether they admit it or not, as US dollars, because when
they liquid data and asset, they return to dollars. It's their return,
it's their home base, right, Their home store value is the US dollars.
They sell a stock, it goes back into US dollars. They cash
out on a treasure bill goes back in the US dollars. And I think
you're in a generation where people are now starting to think, I don't want
to really be holding you US dollars. I'm more comfortable with anything that's not
employed in the stock market, or a venture capital deal or a private equity
deal, or a stock I'm in love with, like Navidia or Apple Computers
or Robinhood Counts, or an apartment building that they're trying to buy to own
rental real estate that they returned they returned to bitcoin, and that bitcoin is
forced its why I mean think of this way. I lived through the nineteen
eighties, which your audience probably isn't going to relate to, but it was
a period in corporate America where we had hostile takeovers where a group of investors
felt like a company was undervalued. You had a big company that was selling
at a share price that was less than the sum of its parts. That
you could buy a corporation and break it up. You could break it up
to its individual parts and sell it off, own it for a year and
make thirty to forty percent. Because these corporations back in the early nineteen eighties,
most of the Dow Jones in a large portion of the S and P
corporations were selling at a share price it was less than the book value per
share. They were cheap relative to the some of their parts. So yet
hostile takeovers. The board of directors and the management of these companies weren't players.
They were being bought up by these hostile people. These hostile people demanded
a seat on the board of directors, They demanded changes that they were trying
to take over these corporations so they could break them up and sell off some
of their parts. They were being opposed by the management of the company.
That in effect is kind of what we have. Bitcoin is a hostile takeover
of the economic Fiat system system, and it's not well accepted by the people
in the board room and in government. And that's why it's a hostile takeover,
because it's it's an attempt to redefine what the currency is that is not
wished for by central banks and governments, and so it's being forced upon them,
and it's being forced upon them and they're fighting against it. In the
end they're going to lose the fight, I think. So a great perspective
there, and you know, we'll have to see you out with the future
holes. But I like you. I'm fascinating to see you know, what
will be the catalyst to drive Bitcoin outside this parabolic curve or it just stays
within it. And it's not a million dollars by twenty thirty, right,
it's just maybe a narrative out there that people are using. Yeah, yeah,
well, you know, we're going to enter the world of quantum computing,
and you put quantum computing together with artificial intelligence, and you know,
fifteen years ago people wouldn't have imagined that we could have this thing called bitcoin.
Bitcoin was created by the world of computers. Who knows? Is bitcoin
the highest form of intellectual attainment that we can make in the monetary system?
I don't know if I want to make that belt sure you know that I'm
going to bet against the creativity and imagination of humanity of very smart people who
want to employ AI and quantum computing to come up with something even better.
And so you know, who knows. Who knows what the Bitcoin of the
year twenty thirty five is going to be. But I'm going to allow for
the fact that there may be something that I don't know about right now.
I'm not going to be a live for it. So I'm not worried.
Now. I know you trade e theorem as well, would you be able
to show us if you have any charge for ETH? Yeah, I do,
and I'm I'm I'm kind of an ETH hater. I get a lot
of grief on I get a lot of grief on social media for not being
an enthusiastic youth person. But I'm not and I'm not because I've dealt with
the I've you know, you need ETH to get involved in some of the
other things that the Internet has to do. It's a cumbersome thing. I
think ETH is in the first place. I think the they claim it's decentralized,
Now, that's a bunch of bunk. It's not. I mean,
bitcoin is if you take all of the viable these central crypto coins, Bitcoin
has liken five percent share of the mark. You know, it is the
decentralized coin. And I personally think that the future can belong to decentralized crypto.
And well, ETH makes the claim it is. It seems like ETH
is always saying, well, if you don't like Ether, they're coming out
with another version. I mean, whenever you got to come out with another
version of things, Hey, you're admitting that what you had before is broken.
And so that's the story of youth. Well wait for eighth version two,
wait for ETH version three. You know the best is yet to come.
Well that's pretty pathetic story. So I just I'm I like ETH because
whenever I want to defend my bitcoin position, I look to sell it.
I want to short it. I do not short spot crypto, you know,
I only will short futures contracts, and so I will look to ETH
when I'm a little bit nervous. I don't like to take short term capital
gains. I want all my bitcoin transact since it possible to be long term
capital gains. And so if I'm close to a long term capital gain tritment
on a bitcoin purchase, I don't want to, you know, eleven months
into the ownership sell it and take a short term capital gain on it.
You know, I want long term capital gains. So there have been occasions
when I've short at E futures against my bitcoin is kind of a hedge of
protection. I'm just not I'm not an enthusiastic ETH user. I think there's
going to be a lot of disasters come up. You know, we've seen
a lot of big bankruptcies already in in the crypto world. It's been a
history of them. The crypto world has been a history of fraud, it's
been a history of bankruptcies. It's been a history of big failures, and
when they're failures, they seem to be big failures. I think that this
whole staking thing is going to be a disaster. There's going to be horror
stories. It will come out, and it'll come out of the whole staking
endeavors that are going on right now. In the first place, I don't
think the US government's going to allow staking forever because it's really competition. The
government's going to say, you're earning interest on an asset. Now, it's
not US dollars. You're not buying treasure bills, You're not buying a CD
issued by local savings and loan. You are buying an interest bearing instrument.
And interest bearing instruments need to be governed by the Federal Reserve Bank and the
Treasury. And so just as the SEC has attacked some of these cryptos as
being securities and not cryptocurrencies like bitcoin are, I think we've got a world
ahead of us where we're going to have a lot of failures and disasters that
will be link to the whole Web two, Web three, staking worlds.
So I would advise people, know where your money is. You know,
it's like, hey it's it's eight o'clock. Know where your kids are,
right, I mean, hey it's twenty twenty four. Know where your money
is. So for sure, Peter, I know I kept you over time.
I got some wrap up questions here for you. First. Yeah,
well I should say it's rapid fire questions versus favorite food I got. I
gotta go with pizza. I gotta go with pizza. And favorite musician are
bad. That's hard for me because I like all kinds of music. You
know, when I go to my radio stations and do shuffle, I never
know what's gonna come up, YouTube or some new band. It's it's I've
got I've got quirky tastes in music. Favorite movie, favorite movie, Wow,
gonna pass on that one. Not a big movie, not a big
movie watcher. How about favorite book? Bible? And when you're not doing
any trading and things along those lines, what are you doing for fun?
I bike ride, and I can't bike ride because I have a I can't
walk. It's hard for me to walk. But when I'm on my bike,
my postures leaned forward and I can hold the weight of my torsa with
my handlebars. So I bike a lot. I do two three hour bike
rides. I'll bike third forty miles when I go bike it. So that
for me is the exercise. And I do play some racket sports only because
again, if you're playing racket sports, the correct body posture and playing rock
Colt sports is your bend at the waist, which is how I walk.
I you know, I'm one of those old guys that you see at the
mall and you say, look at that poor old hunchback man over there walking.
I mean, that's me. It could have been me. So those
are things I can do. And swim. I swim too. That's good.
And then at least you're in an area where you have good weather.
And yeah, I'm sure you probably have a pool or something like that.
Well, we have a pool here. In the summer, though, we
go we got a heat. It gets, you know, one hundred and
fifteen degrees in the daytimes, a little hot, and so we three four
months a year we'll go to Minnesota. And we have a lake place in
Minnesota. So we'll go up and spend the summer at the lake and boat
and go out to restaurants and so forth. We get out of that,
We get out of the Arizona seat heat in the summertime. Peter, that's
awesome and absolute pleasure in chatting with you. I appreciate all your knowledge and
insights, and I wish I had a few more hours to look you up
markets Well, it's good talking to you, Tony. Very good. Thanks
You're you're a great You're a great host and a great interviewer, and I've
appreciate speaking with you. Likewise, Thank you so much, Peter, Bye bye,