Transcript: James Check: Bitcoin Is in the Discount Zone

Marty Bent [0:36] James Check, it's been too long, sir.

James Check [0:38] It has, mate. How you doing?

Marty Bent [0:40] Doing well. Doing well. Wrapping up my my Wednesday evening here with a conversation with you, which I always like the the five p.m. to six thirty conversations with James Check in the middle of the week. How's your morning going?

James Check [0:54] It's all right, mate. I've dropped the kid off to— dropped the boy off to daycare. You know, he's off making friends. It's funny, actually, there's a little girl. She was there for his, like, first hour, like his introductory hour, and she was just smitten with him. She's just turned 3. And it's to the point now where, like, he'll get there and she'll be on the other side of the playground and she'll just, like, start smiling. As soon as he locks eyes and realizes who it is, like, he starts smiling. And she's got a doll at home named after my son. Like, It's just the cutest thing ever.

Marty Bent [1:22] Have the parents started building their Bitcoin dowry yet?

James Check [1:24] I haven't gone down that path yet. Look, I've got a few suitors, man. My boy's got a couple of options on the table. But yes, we're weighing up how orange the dowry is.

Marty Bent [1:33] Yeah. Well, it's great. Like I was saying, my youngest is right around the age of your son, and we've been going through some sicknesses here. That's why we were supposed to record last week. We're here this week. But like I said, A lot has happened in the last week from a price action perspective, so it's probably good that we're meeting after while we're in this air pocket, as you've been describing in the newsletter.

James Check [1:55] Yep. Yeah, yeah. It's interesting. I mean, like, you know, it's a sad thing about politics because we are in a very volatile political environment, just socially, right? You saw that, like, Trump had arguably one of the biggest political comebacks of all time in the presidential election, and within 2 years, he's just, you know, he's pissed it against the wall and You know, now you got the other team in and they're going to do no better. And like, we're just— and my big takeaway from this whole thing, and again, I'm an Aussie, right? I got no dog in the fight. I'm just— I just simply suffer from the consequences of what, what the rest of the world does.

James Check ⋮ So from my perspective, it was a very clear— not a vote for Democrats. It was a vote against what Trump is doing. And I think it's pretty simple, right? My back pocket is no better off than I've been since you got in office. Right. In many ways, it looked like he ran on No more wars, and I'm going to bring the economy back alive. And effectively, they've started a war that made the economy worse off because of inflation. And we're talking about for the real person out there, right? Obviously, the sectors of the economy that are booming, but for most people, they're just going, dude, I can't afford stuff still, and my petrol prices are higher, and you said no more wars.

James Check ⋮ What are we doing here? So it's very much a vote against what they were doing rather than a vote for the other team. But that also means that this football is going to get kicked Back and forth, left, right, and center. I feel like, and we see it here in Australia as well. We've got for the first time, certainly in my adult life, and I think probably in most people's lives, we've got a third party on hand. Now, look, they've never run a country before, right? One Nation, they're going to have a big say and a sway, but they're no different to like your reforms in the UK or your— what's the other one?

James Check ⋮ There's like two in the UK.

Marty Bent [3:33] Restore.

James Check [3:34] Yeah, restore. There's this third party thing. where people have just had enough of the status quo and they're just voting for something different, even if that something different is just as retarded as the other system and no more experienced. What are you currently doing on blue and red just isn't working. So people have just like a volatility of how willing people are to put up with stuff, I think is really hitting its— it's hitting its limits, which is an interesting part and very Fourth Turning type setup.

Marty Bent [3:59] I was going to say the Fourth Turning vibes are rising by the day. Yes. In the West and globally. And I mean, I think we caught up in May or June, so it's been quite a bit, at least 5 or 6 months since we last sat down. A lot has happened since then. I think we start with today. Let's talk about the air pocket. Where's the price action today? But then I want to go back and talk about the time pain that we went through in the summer. Obviously, we had the AI trade blow up in the middle of the summer with This is me. You're scaring me, Leopold. We had the AI-enabled attacks and vulnerabilities discovered in Bitcoin. We had the largest heist in the industry's history with Binance a few weeks ago. There's a lot to catch up on, but let's just start with where the market is today.

James Check [4:55] If I'm not mistaken, if we last spoke like in May, June, Price is probably dead flat between when we last had a chat because I think we would have rallied to the high in May. Then we had our time pain capitulation, which was interesting because that period, that's where we hit max bearishness. 5 billion over 8 weeks. Saylor started selling. I think he sold like 6,000 coins or something like that. Then we had Coldcard, which was its own like shock to the system for Bitcoiners. That was a big one. We had a failed soft fork, right? And through that whole period, we're chopping in and around like we tagged $58,000.

James Check ⋮ But for all intents and purposes, right, we hit $59,600 back in February. We hit $58,000 in June, July, start of July, I think was the bottom. It's the same price. So that's that price pain, time pain that we would have spoken about at the time. Then we just went into this, just like dead apathy, just sideways at $62,000, $63,000, $65,000, just full stablecoin for like 2 months. And at that period, you've got a bunch of bad news. And my read was like, guys, this just looks like seller exhaustion. I think we've run out of sellers at this point. And the other thing is we're trading around the 200-week moving average, just a classic bottom level, right?

James Check ⋮ Just typical. We're in the bottom quantiles of all these things. Like it was the right place for a base to form. Now you reach seller exhaustion and then the market just shoots higher. And when it rallied to 87, a lot of it, not all of it, but certainly in part was driven by a short squeeze. There was a ton of people who were just net short. And what I don't read that so much as like why the market went up, it's more so the fact that people were short shows you that they just did not believe that a bottom could be in. They couldn't believe that.

James Check ⋮ So they were going to bet against it. So we had the rally to 87 and that rally is actually quite meaningful. Now, from my perspective, the way I look at like, have we killed the bear? Right. And again, we don't know. And I say this all the time, we don't know until we look back in 6 months' time in the future and we go, oh yeah, okay, the bottom was in, right? It's really obvious once you're at $100K, $120K, but we're trying to work out the probabilities of the bottom being in at the time. Right. And that's the hard part of the game. So the way that I try to frame this up, I believe we put in a sufficiently large bottom.

James Check ⋮ It looked like every bottom that we've seen in the past around $58K, $62K. That zone was just like, you know, 25% of the realized cap. All the wealth was in that zone. Really solid base. From that point, the rally up to '87, it returned a metric shit ton of coins and wealth and investors to profit. So now you've got a bunch of people who've had a breath of fresh air, right? After just the lengthy pain of the bear, the downside, the chop, the frustration, the nothingness, the bad news. Finally, they got a breath of fresh air. Some people start to go, what if the bear's done right now?

James Check ⋮ Not everybody. The vast majority of people, in fact, to my read, consensus remains that the bear market is still in play. And again, we won't know until this thing resolves itself. But my base case remains, even at this point in time, that we're in the process of trying to set, trying to set a monthly higher low. We've set a weekly higher high and a weekly higher low. So on a weekly basis, it's now trying to move back to the upside. on a monthly basis, we've had a new high, but we haven't set the low and then a higher high. Right. Because that's what an uptrend really is.

James Check ⋮ So the way that I look at it, and if you're going to set a monthly higher low, it's going to take months. It's going to take a long time to do because it's a monthly timeframe type chart. So that's my current thinking. $72K is what I've got at the moment as being like, it's, it's the level that we probably need to hold because otherwise you probably do head back down and retest that mid-$60Ks. The 200-week moving average is like $68K now. We don't really want to go down there. It's not an ideal setup, I would say, for the bull case. But at the same time, do I think that we're going down to $45K?

James Check ⋮ No, I think that we've formed a resilient enough base down in the $60Ks that that level will ultimately hold. And again, we'll see how this market wants to play out over time. But my bigger picture view is we've entered what looks like the reaccumulation period. And if you go back and look like 2023 is the perfect example of this in the past, we formed— in fact, 2019 as well, even though it was a bit weird 2019 because of a really strong rally. But really, what was 2019? It was like several months of chopping around trying to form a second floor that is higher than the bottom, right?

James Check ⋮ So you set the low, that's like the capitulation low. People realize it was too cheap down there, so then they're willing to step back in. But there's still this like bear market PTSD. People still think that the bear is going to just resolve itself again. 2023, there was a ton of people locking in losses because they were really afraid that like it was just going to roll over and this bear was never going to end. But then it just started moving higher because you'd formed this second plateau amongst a ton of bearishness, no consensus that it was a bull. BlackRock files their ETF and then away you go, right?

James Check ⋮ You just need this one thing. And it's not because BlackRock filed the ETF that we went up. the market was going to go up anyway because we'd reached that seller exhaustion point. It was just the final match that just lit the fuse and the cake was already baked. We're just putting the cherry on top. So I think we're in the process of baking the cake as we speak.

Marty Bent [10:13] Going back, and that's again, we'll only know in retrospect, look back 6 months from the bear market bottom at a much higher price and say, ah, that was it. But again, considering the sentiment, that's one thing I've been saying is that the sentiment, despite the relative shallow nature of this particular bear market compared to others from just a peak-to-trough perspective seems to be somewhat detached from the price at least. But when you consider, again, everything that's happened from this time last year, we were coming off all-time highs. Everybody's very bullish. So the last 12 months have been like, okay, we thought there was a bull market correction.

Marty Bent ⋮ We were in the midst of it at this point. 3 billion heist across many different crypto wallets. with that in retrospect, looking back, it's like, okay, this is probably what you're going to see in a bear market is a bunch of gut punches consecutively or tied together over the course of a year, which seems to be happening right now.

James Check [11:41] Yeah. And it really has been an onslaught. And like, this is, this is across many levels. I mean, you probably saw there's a bunch of posts semi-recently where it was like over like a 48-hour period, just the— not just Bitcoin, like just the internet in general, programming languages getting hit, website servers getting hit, credentials getting hit, just like stuff just getting ripped apart. So we're in this global inoculation period as AI just finds every loophole that could possibly be found. It's going to be probably a rough 12 months just as everything just gets tested. And, you know, one thing that I find very interesting, there's been a lot of attacks, hacks, cracks, breaks.

James Check ⋮ The Bitcoin codebase, right? Bitcoin Core, like lowercase c and uppercase C, is like bulletproof. It's amazing to watch, you know what I mean? Like some of the best written by humans, some of the best written code ever, the most battle-hardened, tested code ever. It's such an amazing thing to watch and see. So I think that's very cool. It's like a dynamic. I don't think it's really been talked about enough that like—

Marty Bent [12:48] I don't think it's appreciated at all.

James Check [12:49] No. And I think, you know, there was this whole— if you wind back the clock, what, 3 months ago? Not even. The primary debate was that Bitcoin Core is crooked and corrupt. And then I just look at it, it's like, well, those crooked and corrupt folks have written some of the most amazing code ever. So let's give them some props there. That's pretty remarkable. I mean, that's not an easy thing to do, right? To just be able to write this stuff to be so bulletproof. And it's part of Bitcoin's design, right? So simple, and elegant and it just does one thing, right? No, sorry, that's not correct.

James Check ⋮ It does many things, but it's a simple program, right? It sends, receives, holds, signs. It's like a really, really fundamental thing. And look, you can look way ahead and go, what other assets have risks? There's elements of businesses that just don't have moats, right? So businesses, are they competitive anymore? How much of the S&P 500 is investible? Honestly, like, like most of it probably isn't. And that's only going to accelerate further. We saw this with this like software ETFs getting wrecked because everyone's just going, well, you know, and I don't think that like every company is going to write their own email client, like they're just going to pay for it, right?

James Check ⋮ This is how these things work. However, there's very little moat anymore, which brings people into the entrepreneurship and all those things. Gold, right? Gold's one of these few assets that like will stand the test of time. Maybe they can do alchemy now. Maybe like that's, that's like now actually a thing that could happen. Now again, it relies on fusion and we need quantum to kill Bitcoin. So there's all this like left-of-field asteroid mining, but there's all these things where you look around and go, which assets over the long arc of time can actually be there on the other side and reliably so? Will, will Nvidia still be the biggest company in 10 years' time?

James Check ⋮ I would say probably not because There's a $5 trillion market cap there. It's a prize for someone to come out and outcompete and create other AI chips and just create competition. Is RAM and memory— is it going to be as ridiculously priced and valued as it is today? It will still be highly valuable, highly useful. But I guarantee you there's going to be a mountain of companies coming on board to produce more of it because it's a commodity. So how many commodity businesses and just commodity elements are going to be super, super profitable in the way that they have been in recent months regarding the AI trade?

James Check ⋮ Probably not as many. So this idea of what can stand the test of time, it really is quite a small basket. And I mean, to me, Bitcoin's one of the few things that has a very, very defensible moat across a number of levels.

Marty Bent [15:27] But I've been told by Jason Calacanis, the infamous investor, that I should drop Bitcoin and get into the AI trade.

James Check [15:35] Did you see though, the most important part of that tweet was, here's all the reasons that Bitcoin's going to die. Second tweet, buy this shitcoin. You know what I mean? How many times have we seen this bloody narrative and story? And by the way, how many times is— I'm not an all-in listener. I have listened to my fair share of episodes to understand their dynamics. If I was to choose any of those guys to be like, Yeah, I think he's fairly accurate. Jason's not the one. You know what I mean? That's just my opinion. He's not the guy that I look at and go like, yeah, he's been pretty on the money for most things. That's not been my takeaway.

Marty Bent [16:10] No. And not to straw man Jason, because I think we can put together a case, the two of us right here, building on what you just said. I mean, when we talk about the stock market, what's investible, I think objectively already, if you look at the concentration of the stocks participating in the AI trade, I think it's something like 7 stocks are driving 60% of the returns in the S&P 500. Something like 95% of S&P 500 companies have not outperformed the index.

James Check [16:40] And whatever crazy amount of the economy is being driven by those 7 stocks spending a ton of money, you know, it's like, it's a very concentrated setup.

Marty Bent [16:48] Yeah. And then not only that, if AI continues on the trajectory that it's taken over the last few years by many observers, metrics, it is actually outpacing expectations pretty dramatically ahead by half a year, depending on who you ask in terms of the ability of the models to complete particular tasks that take a high degree of intelligence. And when you get into that world, to your point about moats and defensible business models, what business model is defensible? in that world. Yeah.

James Check [17:23] Oh yeah. No, it's, it's really challenging. And like, even just like from the security element, I just imagine how much cost is going to go into fixing, repairing, understanding the problem in the first place. Like, think about all your banks. I worry about things like utilities, like these, you know, government websites. How, how well protected is any of this stuff? And the answer is not very at all. So it's a really, really— it's a very hairy scenario for a lot of things. And the costs are going to go up eventually. They will go through this inoculation period. But in the short term, there's just a ton of costs, a ton of obsolescence that will come out of this. It'll harden everything over time, but man, it's a tricky time.

Marty Bent [18:01] And on top of that, you have the likes of Elon Musk. And I think with the blue tsunami, the blue wave that we got here in the United States in our midterm elections, and many people looking at the last 2 years of Trump's presidency, I think he's not going to be able to do much. And The way things have historically worked in US elections, if there's this much of a bloodbath in the midterms, it's likely that the party that benefited from the midterms will take the presidency in 2 years. And you can definitely see a scenario in which— you can see 2 scenarios which I think would be beneficial for Bitcoin.

Marty Bent ⋮ One, they basically try to curb AI which would lead to more Orwellian sort of control, command and control of the economy, which would highlight the pressing need for a sovereign asset outside the purview of governments and the regulators. And then 2, maybe they don't do that. I think they will, but even if they don't do that, I think universal basic income or universal high income is on the table as well, which I think we both know is an oxymoron and would bode well for Bitcoin as well. And then I guess the 3rd tact is if for some reason or another, which seems very possible at this point, the AI infrastructure build-out, the people involved in that took on too much risk, particularly credit risk, and they need a bailout.

Marty Bent ⋮ If AI supremacy is deemed a matter of national security, you can see the money printers turning on for that as well as a backstop.

James Check [19:34] Oh yeah, there's a ton of things. I mean, look, the one thing that I think is pretty obvious The Republicans came in on the, you know, one of a few platforms, but we're going to cut spending. Right. Doge lasted 15 minutes. The richest man in the world couldn't put a dent in it. And like, there's no interest in cutting spending or austerity of any form anywhere in any political system worldwide. There's just none. It very much feels like they're just so far past the point of control that they're just like, just just press on. There's no political will to change the current setup. So I mean, look, I can't see deficit spending not continuing indefinitely.

James Check ⋮ And again, this is very much a gold bug type argument, right? But at the same time, like, you just look at the equation, go, guys, it's mathematics here. They can kick cans. And that's, that's honestly what I think is one of the more interesting components for me. I mean, I try to get my head around these markets and They're challenging at the best of times. And I know I've always known this to be the case, but it's remarkable watching how far and well and often they can kick cans. They get very, very creative in how they keep this ball going. And in some ways it's a bit of a shared delusion.

James Check ⋮ We all don't want the system to fall apart. I mean, again, how many people you manage to convince that like fiat money is a thing? It's very hard to explain just that simple idea that they print it at will. And I've often thought about like in, you know, I come from an engineering background and I see how the finance world analyzes stuff, you know, simple things like compound annual growth rate, CAGR. CAGR is just a dogshit metric. If you go back to that period I was talking about before, we're at $28K, $26K, sorry, $65K, just chopping sideways. The 4-year CAGR, right? There's a bunch of people being like, oh bro, over 4 years it's like flat.

James Check ⋮ The 4-year CAGR actually jumped from like 2% to 40%, even though price was doing— going sideways and was at the bottom of a bear. And you're like, why? Because its anchoring point is exactly 4 years ago when it was falling down the 2022 bear market. So your anchoring point— I look at the way that the financial world analyzes things and I go, really? This is the system that you use? This is your metric? Makes no sense at all. When you look at the bond market, how many times do they plug in CPI? Because that's the number that they have to use because it's the Schelling point.

James Check ⋮ It's like I have my own inflation number as a hedge fund manager or whatever, but everyone else has a different number and I need to still consider what everyone else considers to price this stuff. So I find it really interesting. There's this shared delusion that we have to all just accept that fiat money's a thing and you can't get away from it. And we also can't— that's the Brent Johnson argument, which I think is very valid. I think he's a great thinker. You can't just walk away from your debt and the US dollar's going to remain a core part of the system for, I mean, I would imagine for our lifetimes.

James Check ⋮ There's all these things where like the system kind of needs by almost self-defense to stay, stay in one part. It can't be allowed to fall apart and it's going to go through these stress tests. The market's going to— because we know that the mathematics doesn't work, but there's this human element of we can't let it fall apart because it's just going to be horrible. Right. And the whole system that we know will fall apart. No one wants change, right? No one wants change in any way. But we're also in a period of great change. And that's why I think this environment is so interesting. It's painful at times, right?

James Check ⋮ I mean, how many Bitcoiners— I would imagine everyone listening to this, you feel frustrated and irritated by the fact that Bitcoin has all these wonderful properties and it makes all the sense in the world to be kicking ass in this environment. And it will, right? Over the arc of time, it will, because the mathematics will come to fruition. But there's all these ways that they can keep the can, keep ticked and rolling and alphabet soup programs and all of these things. But the more cracks that form and the more that Bitcoin just keeps producing blocks and surviving, I'm of the view that this next cycle, whatever this next cycle looks like, its primary underlying— there'll be a narrative out there, there'll be a bunch of narratives, but I think the primary underlying thing that's really going to drive capital into it is normalization.

James Check ⋮ Bitcoin's just become a normal thing. Goes through the next all-time high. It just survived again. It came back from the dead again. And you're just going to see passive flows just allocate to it because they haven't allocated to it before. And people worry, they're like, oh, we've gone from the individual phase to the company phase. Then from the company phase, it has to be sovereigns. Without sovereigns, we'll never go up. It's like, bro, you just need institutions to just dial up from— most of them are on zero. 02. That is just— put in a model portfolio at 1%. These numbers are just extraordinary. So that's what I think is kind of coming, but it just takes time.

James Check ⋮ Markets are glacial all at once, right? It's— what's Parker saying? Some gradually and suddenly. Yeah, that's just how it works, man.

Marty Bent [24:29] Well, to your point about the institutional flows and going from 0.1 to 0.2 or maybe 1%. I think we have leading indicators of that potential flow over the last 3 months. And I think the largest one being JP Morgan putting out an official Bitcoin allocation recommendation and putting it at the top of their list of assets that are going to perform the best in the coming years.

James Check [24:53] The other one is Morgan Stanley launching their low-fee ETF. And I mean, it's actually worth looking at. If you look at the Morgan Stanley flows, It's just up and to the right, right? It and Grayscale's mini Bitcoin, which is the BTC ticker. Now these are small. 5%, 4% of total ETF holdings, but it's up and to the right. And if you think about it, why would somebody buy a low-fee ETF? They're not trading it. That's a holder's mentality. These are people who are just buying and allocating. And like Morgan Stanley's launching 2 years after all the other ETFs have gone live. And they're still attractive.

James Check ⋮ They've got their own pool of trillions of dollars of capital. All of these like little signs of it's just going to get normalized. And again, it's really easy to get caught up in the day-to-day chop and worry about like local price action and like, oh no, it's another bear market. But like, just take a step back. Where are we in the overall scheme of things right now? I use my mean reversion index just like a simple tool to, to frame up where we are in the overall spread of Bitcoin's like trading history. At $72K, $73K, we're at Q25. That's the bottom 25%. People, if you look like, if you look back, 25%, Q25 and below is— I color it green because like, guys, you will never regret accumulating Bitcoin in that zone.

James Check ⋮ And here we are at $73K and people are scared, right? They're like, oh, but it might go to $45K. It's like, yeah, it also might go to, you know, $200K or $300K or $400K. And you're going to be wondering why you didn't just take advantage of the accumulation period when the market presented. If you wind back the clock 2 months at $87,000, everyone's going, oh man, I really wish I bought more in the $70s and the $60s. I love a pullback. Here's the pullback, guys. What do you do with it? Right? Take it. Take a step back. Unless your opinion is that Bitcoin is going to die.

James Check ⋮ And we've talked about this before. You just have a very simple flowchart. Is Bitcoin going to die? There's a case to be made there. Maybe that's one that we argue. The other one is if it's not, then hit the green button. What are you doing?

Marty Bent [26:55] Yeah. I mean, you have to do that weighted probability. Absolutely. The probability

James Check [27:00] is a 75% chance it wants to be higher. Q25, 75% of the time it's higher. Which one do you want to do?

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Marty Bent ⋮ I was wholly convinced that we were going to get into the sovereign debt crisis. It was going to be a cascading doom loop. But to your point, I think the incentives are such that that cannot happen because you need to keep the system in parts and hopefully do a slow transition away by any means possible to keep social cohesion. And I think one of the factors that has led me to increase my respect to the system's ability to kick the can is this focus on stablecoins, and particularly here in the United States and the attempt to ingratiate it and integrate it into what we're doing in our banking and financial system here.

Marty Bent ⋮ I think despite the ability of the Trump administration and the Republican Congress to follow up on the promises made in 2024, it is interesting that one of the only earmarked bills that they got passed was the Genius Act, despite the fact that Clarity didn't pass, SEC, CFTC, OCC going ahead with rulemaking to integrate stablecoins. And it seems very clear to anybody paying attention to what the Treasury specifically is doing is that they want to integrate stablecoins into the economy to the furthest extent possible in the quickest amount of time possible because you have this decrease in demand from foreign buyers of treasuries. And I think that's an interesting narrative to follow.

Marty Bent ⋮ But your most recent newsletter that you sent out yesterday, you had some commentary on that stablecoin volume or excuse me, stablecoin market caps have fallen pretty significantly recently.

James Check [31:48] Yeah, we're seeing quite a heavy redemption period over the last couple of months at a rate of $14 billion a month. I think they're down $22 or something billion from the highs, mainly driven by USDT and USDC, the 2 big ones, naturally. So yeah, very interesting there. I mean, one of the things that I— so I can certainly see and appreciate the— and just from a free market standpoint, the developing world, not the governments, the people, you know, go to Turkey, go to Venezuela, go to, you know, lots of places in Latin America. Tether is very common, right? Parts of Southeast Asia, Tether is very, very common because it's just better than their currency, right?

James Check ⋮ Digital, easy to move, easy to hold. So on and so forth. So this like dollarization or the dollarization of the populace by natural forces, I think, is a real thing. Now, how much in terms of like total size, like we're talking about tens of trillions of dollars here or a couple of trillions, probably in the order of like a couple of trillion market cap total TAM. Now, one of the challenges I think the administration is having is how do you get them broader than like you know, third world countries? How do you get it to like a much bigger market? How do you dollarize Europe?

James Check ⋮ You know what I mean? How do you compete with the euro locally? That's an interesting dynamic. Now, maybe just like because Europe's going through a bunch of things now and, you know, France and all the rest of it, bond yields, they're probably much closer to a we got to make the euro worth less than the US is, which I think very much is in that dollar milkshake idea that Brent Johnson talks about. the dollar is going to be the strongest, least dirty shirt in the hamper. It's going to be the one that outcompetes all of them because the problems that the US has that we all look at, yes, they're very important.

James Check ⋮ The debt problem in the US is an important one, but it's no better anywhere else in the world. In fact, they're worse off in many places. So Europe's probably a place where we might see that debasement start to kick in. And as we know, once one starts devaluing, they all start devaluing because Then there's the competitive element. You make your, you know, you're— by printing money, you're effectively devaluing your population globally as a workforce. So by devaluing your population, you become more competitive. You can sell your stuff for the same euros, but it costs less for foreign buyers. Therefore, if you're Australia, for example, maybe they want to devalue their people as well.

James Check ⋮ So they're also more competitive. So it's going to be this like competitive devaluation process. with the stablecoin dynamics, I think the challenge they're having is getting it widely distributed. Right. I mean, we're at $280 billion or something. The numbers— someone can check those. But, you know, it's just a hair below $300 billion. $300 billion is not fixing a $40 trillion debt problem. You know what I mean? Like, it's— it will probably help at the margins, but it's really not changing the overall mix. So certainly interesting that we're seeing this redemption. I don't know if this is election related. I don't know if it's just like pure Liquidity, really just taking money out of system.

James Check ⋮ We just need dollars in bank accounts instead. I don't know if it's, you know, politically motivated. We'll see. We'll see how that all plays out.

Marty Bent [34:55] I wouldn't be shocked if it's Binance related. Could be seeing people seeing the stablecoins flow out of Binance be frozen within hours. And if you are operating in that gray market, black market territory with stablecoins, probably got the message like, okay, maybe maybe it makes sense to convert this to something else rather quickly.

James Check [35:15] Yeah, it's possible. I mean, because the numbers are far— I mean, it's not the numbers that were frozen. What was it? $2-point-something billion, $14 billion a month, $22 billion down total. It's a much bigger number, 10 times what they froze.

Marty Bent [35:28] Yeah. Do you think they're— I mean, this is one thing I've been pondering. Do you think Bitcoin needs a narrative refresher? You think it's going to need that? The narrative will come after the price goes up, but it doesn't seem like it's—

James Check [35:46] Yes. Yeah. I mean, Bitcoin has one, I mean, it has many remarkable skills, but one of them is it just reinvents itself over and over and over again. And I think it was Travis Kling actually who had this great line some time back. He put out a post where he's basically saying that Bitcoin, for whatever reason, it's an asset that when it goes through its bull cycle, it just attracts the most noxious, horrible scamming, grifting people of all time. Just— they're just attracted to it like baby shit to a blanket. And once they're on it, it has to then go through the cleansing process, which is the bear market.

James Check ⋮ And once you go through that process, it just sheds its skin and suddenly it leaves all those grifters and all the scam and all the corruption and everything behind. Like 2022, perfect example, sheds its skin, crawls out, and then bang, it's got a new narrative and away it goes. So I have no doubt that Bitcoin will come back with a new narrative. I've been pondering this as well. I think part of the fatigue— I've said this before— a lot of people who are in Bitcoin are somewhat similar to probably not your vintage, but probably my vintage, 2017 or the 2018 bear through 2021. That period from 2018 through, let's just say, 2022, I would say that that period was the all-time high in Bitcoin education and Bitcoin minting.

James Check ⋮ Right. We just, we pulled in so many new people and there was so much to talk about, so much interesting stuff that was new and novel. Right. One of the perfect case studies here, there was a whole period of a couple of years where mining was suddenly becoming load balancing and getting behind the meter and mining on landfills and all this stuff that like is insanely innovative and awesome. Right? Really, really cool stuff. That hasn't stopped. That is still going on. But it's just for people like you and I and people who are listening, it's not fresh anymore. Right? That doesn't mean it's not badass and awesome and really, really useful.

James Check ⋮ That demand response component is a super important part, like having Bitcoin mining as part of a grid somewhere in the system. I actually really think it's quite interesting. We talk about the mining sector as well, but We're seeing this purging of public companies. And what I've been saying recently is the moment you've got an HR department, that difficulty adjustment is going to rip you out. It's just going to tear your business apart because it's just too competitive. I think that mining wants to decentralize. It wants to find an entrepreneur with a container and a cheap stranded piece of power. That's where it wants to go.

James Check ⋮ The alternative is like sitting behind the meter as part of your grid infrastructure for load balancing. They're the 2 areas that I think make the most sense. These big public companies moving to AI makes honestly makes all the sense in the world because you've got this new demand. It's bigger. It's all the rest of it. It's like not it's not a commodity-based business as I mean it is, but it doesn't have the price cycles that Bitcoin does, right? AI is in this growth phase, and you know it's just more broadly applicable to just like daily life like the internet. However, I think once those miners like we've seen this hash rate almost hit a new all-time high recently.

James Check ⋮ It went through a bear market. Everyone's going, oh my God, it's all over. And then suddenly, like, what happens? Those rigs get redistributed to somebody else with a better balance sheet and a better idea and a more entrepreneurial spirit and a lower cost basis. And they go and plug them in and they start mining again, right? The rigs and the system just moves around. So anyway, going back to my original point, I think that the reason it feels stagnant for a lot of us is not because there's not cool stuff happening. It's just that we've been in this industry long enough. Like, how many times have you been in a job for 10 years and you get bored?

James Check ⋮ Right. Things get boring, things get normalized, and you go looking for something else. I just think that that's why I think this normalization process, it's a passive flow that like for us who've been in the trenches for a long time, it may not feel overly exciting, but the vast, vast, vast majority of people have never heard of all this cool stuff that we've been studying for years. So what is normal to us is truly exciting and innovative to other people. You know, I was describing the other day, my, my, my son's grandparents gave him— or great-grandparents gave him $100, right? As a, you know, your birthday present.

James Check ⋮ What do you do with $100? I'm not going to save it in cash because it'll be worthless by the time he can use it. So I'm like, okay, well, do I go and buy a silver coin for him? All right. That's $75 worth of metal in Aussie terms. $75. But they're charging me $95 for it. Okay, well, that seems like a pretty bad deal. Gold. You can't really buy any gold, any amount of gold for $100. And even then, the premium is too high. It's kind of hard to buy $100 worth of stock. UTXOs, man. UTXOs is just like the most obvious thing to save his capital in.

James Check ⋮ So I think that this, like, as people get like Bitcoin's going to be like the internet for young people. I remember when I was in as a civil engineer, I was the dude they'd come to when they got like a big data problem and they're like, hey, we need to solve this. I'm like, all right, I'll go into Excel, I'll build a big-ass spreadsheet, I'll write basic code and, you know, filter through all sorts of stuff. Like, yeah, just give it to him because he knows how to do it. And I think about kids coming through the next generation. AI is going to be second nature to them.

James Check ⋮ Things like Bitcoin is going to be second nature to them the same way that Excel was like my thing. It's going to be their thing. And Bitcoin is going to be so normalized and ingrained in younger people. Where else would you save your capital? It's such a— the fundamental core properties still make Bitcoin just sing. And that's why I have no issue with just like when I don't know what to do, I buy gold and Bitcoin and more often than not, going to be Bitcoin because I understand it a whole lot more. I can track it, I can see it, I can understand the dynamics of the market, and I know it's cheap right now.

James Check ⋮ So, all these things just marry up.

Marty Bent [41:22] Do you find any merit in the narrative that Bitcoin, at the very least, will see significant uptick in activity and maybe purchasing due to the agentic economy?

James Check [41:33] No. Look, I don't think so. I think this narrative that AI bots are going to be using sats, I think it's The bot will use what you ask it to use. So if you ask it to use Bitcoin, it'll use Bitcoin. Yeah. So I'm not— there's that whole debate around medium of exchange versus store of value. I'm very much of the view that medium of exchange is important. We are decades away from that being a centerpiece of the equation. Bitcoin absolutely can be, should be, and probably will be used as a medium of exchange in some way, shape, or form. But we are so far away from that that I don't think it's something that we should be stressing about if it's not happening.

James Check ⋮ You know what I mean? I think that you have to go through and this goes back to the original point. Things just take a long time to happen. You know, of all people, Murad Mamedov, I think his pinned tweet, maybe not anymore, is some meme coin shit, but He used to have this chart.

Marty Bent [42:32] XBX 6900?

James Check [42:33] Yeah, whatever it is. He used to have this chart. It was like a big logarithmic curve and it showed all the different— it was like little stars showing all the different stages of monetization. And what I found interesting about it, there's no actual timeline to it, but the store of value phase, there's all these increment— I can't remember them now, but there's all these incremental parts from collections up to store of value. And there's all these little things and you're like, yeah, we're kind of there. And you're really early on that curve. And your medium of exchange comes further and further down the line. So that was, you know, that's something that's always just stuck with me. It just takes a really, really long time and it's got to go through tons and tons of stages before you reach that level.

Marty Bent [43:11] Yeah, I'm looking for the chart now to see if we can bring it up. I can't see it though. I'm not going to find it here. But no, that is a great chart. I mean, you brought up Murad and I forgot to bring this up when we were talking about Trump administration shedding the skin. I think that is, I mean, at least from the American perspective, I think that's what we're going to go through over the next 12 months. And it's going to accelerate in January when the Democrats take over Congress. They're going to go after World LibertyFi. There's going to be a bunch of trials about it. And I think that's going to be the job of Bitcoiners in 2027, And hopefully not 2028, but probably 2028 as well, leading up to the next presidential election, is separating Bitcoin from crypto, particularly meme coins.

James Check [44:02] It's an endless battle, isn't it?

Marty Bent [44:03] Which should be fun.

James Check [44:05] It's an endless battle, but it's an important one. And going back to the AI agentic thing, what I do think is very interesting is that AI understands the difference. If you go and ask an AI why crypto, why Bitcoin, it does actually understand. And whether that's just because Bitcoin is memed enough on the internet, could be. But certainly there is this underlying— and I think that separation has largely happened. It doesn't mean it's not going to be a constant fight, but I do think that we've done a pretty good job of actually creating that very clear and distinct separation between the two. So it'll be a constant fight.

Marty Bent [44:39] Well, we need private Bitcoin. We need Zcash.

James Check [44:41] Yeah, sure. Yeah. It's interesting, isn't it? My read on that— now look, Zcash, I'm sure, has great technology. I've always thought that Zcash and Monero are 2 projects that the privacy side, it's really important. And I'm not going to dispute there are some really, really qualified people working on it, some really, really cool technology. Problem is network effects. You know what I mean? You can't fork Bitcoin and expect to get the same setup. It's just not going to be the same. There is only one original invention of digital scarcity. And I've been saying for the longest time, Bitcoin, the most important part of Bitcoin is not the proof of work, not the code base, is not the 21 million, right?

James Check ⋮ It's the UTXO set. It's the history of people who have interacted with this thing, bought, sold, held, still hold. The UTXO set is the most important part because that is the one thing that can't be replicated. And someone could say, well, I can fork it now. I've got the UTXO set. It's like, yeah, but no, you don't, because from the moment that that fork happens, your UTXO set is differing from consensus. So you don't have the same UTXO set from the point when you forked. So unless you can attract the whole system, in which case you are Bitcoin. So the important part about Bitcoin is the UTXO set and the history that cannot be replicated.

James Check ⋮ 5 trillion versus everything else, which is not even close to a trillion.

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Marty Bent [48:58] You mentioned that 2018 to 2022, heavily retail-driven. Like, does retail have enough money to get into this market in size moving forward?

James Check [49:06] Yeah, I mean, I think so. So my general view and the way I try to look at things, we think about things from a psychological standpoint. So you can, you can bucket up different investors. There's different ways you can do this. You could do it by how long they've held their coin. This is your long-term holder, short-term holder, hotter wave type stuff. The other way that I like to do it is you look at who is taking profit, who is taking losses. So if you have bought coins from below $58K, you are going to be in profit and meaningfully so. Right. So everyone who's in a meaningful amount of profit is from a previous cycle and you can argue fairly tenured.

James Check ⋮ So on the age-based component, we're like 80%, 75%. This is like bottom of bear market type stuff, early bull market type stuff. 80 to 75 to 80% of the total wealth in the Bitcoin system is long-term holder based. Now that long-term holder group is mixed into really 2 groups: people from previous cycles and lower prices, people who bought the top. There are your 2 buckets of long-term holds in profit, in loss. So now you've got kind of a sub breakdown and I'll get to the point in a second is when I've got these cohorts, what do I do with them? You then got another cohort which is the short-term holder cohort, and they also have a 2-part breakdown.

James Check ⋮ There's short-term— this last 5 months, what was happening over the last 5 months? We formed a bottom and we rallied to $87K. They're the 2 things that have happened in that short-term holder period. So who are the short-term holders who bought the bottom? Well, let's not kid ourselves. If you were stepping in and buying in size around the 200-week moving average and putting the bottom in, you ain't a speculator, right? You're smart money. Speculators got blown up on the short side betting against those people. So the first bucket of short-term holds, about half of them are people who bought the bottom, or what we believe is the bottom.

James Check ⋮ The second bucket are people who saw the rally. And I know, like, I got many messages on Twitter and from subscribers and all sorts of things over recent months saying, hey, I didn't allocate as much as I wanted to. We're at 87, we're at 82. What do I do? Right? What do I do? I'm feeling very sidelined. What do I do? And my advice is the same, DCA over the next couple of months because, you know, you're going to spread out your buys. We're probably not running to an all-time high anytime soon. So there's a ton of like people who are asking that question are smart money because they're realizing, hey, I need to, I need to think this through, like, you know, to try and find someone who can like help me guide this stuff.

James Check ⋮ Other people just look at the chart and go, oh my God, I didn't buy enough. I need to ape in right now. And they go absolutely ham and they buy way too much at $87. Then what happens? We got 82, we get 80, we get 78, we go to 76. What we're now seeing is those people who bought the local high capitulating and selling very sizable chunks. Like it was like $420 million a day on this dip. 5 billion. So we're talking about like a third of the damage in terms of fear from just people who bought recently going, oh shit, I bought another high.

James Check ⋮ Capitulating. Now they're selling at a Q25 on my mean reversion framework. So they're capitulating in large volumes at the point where if you just closed your eyes and came into Bitcoin for your very first buy, you'd look at it and be like, wow, I'm buying in the bottom quarter of the distribution. What a great time to enter. These people are scared and selling. Like, guys, wrong decision. It's like even if it goes lower, you are making the wrong decision by doing that just from a probability standpoint. Unless you have decided on your tree that Bitcoin is going to die. So now let's answer that question from just a market standpoint.

James Check ⋮ Is Bitcoin going to die? If the consensus view that was— and like this was a widespread thing that was like permeating through Bitcoin investors, that we are truly in a like endless bear and Bitcoin will never come back. If that was the opinion of the majority, what would I expect to see? I would expect to see people who bought at much cheaper prices taking profit. Get out while you can, right? 5% of all the coins that moved over the last 7 days. 1%. That's background noise, folks. That's like just— that's noise. They are such a small component and realized profit is so low. If you like— and again, What I like about on-chain data, it's like sitting at the poker table.

James Check ⋮ You cannot tell the future. You don't know what cards are going to come out on the flop and everything else. But what you can see is that that guy's been in this market for a long time. He's a good player. This guy knows how to bluff, and this guy is drunk as all hell and doesn't know what he's doing. So you can see all the different characters at the table and you understand how they play. That's what I think on-chain data is good for. The really seasoned, tenured folks with cheap coins from previous cycles, sitting on their hands doing absolutely nothing. The guy who bought a little bit too much at the top, they're panicky, they're flighty.

James Check ⋮ They're still selling some, but significantly less than they were a couple of weeks ago. The people who bought the top have kind of accepted their fate by and large. There's a few of them who capitulate on, on sell-offs, but for the most part they're like, yeah, whatever. I bought the bottom. Sorry, I bought the top. But you know what? I probably bought more at the bottom as well. I'll just sit tight. Don't really care. The folks who are selling the most right now are the ones who are drunk, can't bluff to save their lives, bought a little bit too much because they didn't buy enough at the bottom.

James Check ⋮ So they bought too much at 87 and they're now going to sell it all at 73 and then they're going to buy it back at 85. Good. It goes up again and they're just going to get minced by the chop. So that's my current read is like the people who are currently active in the market are folks who were indecisive at the bottom, bought too much at the local high, and are now selling at a level that like just probabilistically ain't the place that you want to be selling. So that's my general read. And you can kind of think of that as you will.

Marty Bent [54:59] Are there any abnormalities— excuse me, I can get it out there— that you're seeing on-chain?

James Check [55:05] No. Honestly, the one thing that I covered in my recent report that I found very interesting and a little bit surprising actually was transfer volume. I don't look at on-chain activity metrics. And when I say activity, active addresses, transaction counts, on-chain volume, fees, those kind of things that show network activity. And there's a handful of reasons for that. Active addresses are somewhat poisoned by inscriptions just because of the way, like, same address, we don't double count them. So the same address transacts multiple times on the same day. It's one address. Transaction counts, same thing. The way that miners have been packing blocks, just the way with the witness discount and all that stuff, transaction counts are through the roof.

James Check ⋮ So like you can't compare modern post-inscription 2023 addresses and transaction counts to previous history. It's actually like it's a new block structure in many ways. Fees are still relevant, but then miners started accepting less than 1 sat per VByte fees and kind of shot themselves in the foot there. So that's also like in a new regime. The one that is always relevant is transfer volume because monetary transactions, generally speaking, miners will put those in because they're going to pay a higher fee. That just has been the historical dynamic. So those monetary transactions where people are actually moving volume, that's in a very strong uptrend. So the way I track it, just do a 30-day moving average compared to its 1-year because there's lots of day-to-day noise.

James Check ⋮ The 30-day is blasting. It's not at all-time highs, but it's, it's trending that way. So my simple framework for the Bitcoin network is if people are moving a lot of value around and further to that point, it's not value coming from people taking huge profit because if you've got a lot of volume, But it's people like we saw in 2025 taking massive profit. That's not a good sign. But when you've got a lot of activity, the network's quite alive right now. I think it's like $10 billion a day in transfer volume. And this is not related to like some of it's going to be Binance, of course, but like it's not really related to Binance because we're looking at a 30-day trend.

James Check ⋮ We know we're getting rid of those, you know, small spikes here or there. It actually looks like the network's quite alive and people are not taking heavy profit. So I look at that and go, that's kind of interesting. The Bitcoin network's much more alive than I think a lot of people give it credit for at this point in time. So that's certainly an interesting dynamic I've seen recently.

Marty Bent [57:24] That is shocking.

James Check [57:25] Yeah. Yeah, no, it's really trending higher. So there's a lot of volume, a lot of people settling value on it, which I find intriguing.

Marty Bent [57:33] We've got Thanksgiving here in the United States 2 weeks from tomorrow. What should the conversation at the Thanksgiving dinner table be for, for the freaks out there who get, who get knocked on by their family members? Or maybe they're— maybe this is the year they get the presentation. How should they present it to their family?

James Check [57:53] Look, honestly, what I've found to be the most effective way to handle this is to just have people ask questions. Don't lecture. Allow people to ask questions because they're going to have counterpoints that they've heard in the news and stories and all that kind of thing. There are so many, like, and you can go back and look at what Andrew Bailey and co did with Resistance Money where they do all these philosophical tests. All right, I'm going to pull you out of your body and drop you somewhere else in the world. You're going to be someone of the 8-something billion people out there. Would you rather Bitcoin existed or not?

James Check ⋮ Right? You get pulled out of your Western American self and you get dropped in and suddenly you are in Venezuela or you're in Iran or you're somewhere like that. would it be better that Bitcoin existed or not? And I think that's such a really good just like test. Wouldn't it be better for this thing to exist so that you can in fact take your money? You could in fact flee the country if you needed to. You could in fact hide money from an abusive partner. There's all these things that like there's, there's these beautiful components to Bitcoin that is, I mean, frankly, the great irony is that left-wing politics seems to hate it and it's like the most left-wing thing ever.

James Check ⋮ It's just like pure freedom. You know what I mean? Like, it gives people choice and opportunity and, you know, yeah, have people ask questions. It's usually the best way.

Marty Bent [59:12] Yeah, I completely agree. And again, to your point about the left wing should be very aligned with Bitcoin, I mean, again, going back to midterms last week, I think that was the crux of the issue. You mentioned it, my back pocket is no better off. The big meme going around the United States outside of subpoenas to come for the Trump administration is affordability. Affordability. This was a referendum on affordability at the end of the day. And that's the, the great shame of the platform of the left here in the United States and how it's evolving, is you have the Democratic Socialists coming to power and saying we need to seize all the wealth and redistribute it to the working class.

Marty Bent ⋮ It is the large corporations and the greedy, the greedy government giving favors to their crony capitalists who have supported their their campaigns. And there is a kernel of truth to both things. There obviously is corporate greed. There is crony capitalism between corporations and the Trump administration. But at the end of the day, that's not the core of the problem. I would present that that's not the core of the problem. It's the money, stupid. Sure. And it's trying to help people realize that you can. And I think it's a— it's It's a way to actually bridge the large political gap that exists, not only in America, but I'm sure globally.

Marty Bent ⋮ I think everybody pays attention to what's happening in America, but I think these problems are pretty consistent throughout the world. Bitcoin can be a great connector of the two sides. Yes. It's fair money for everybody.

James Check [1:00:58] That's it. And the other side to this whole thing is it's very hard to pitch the— I've said this before, but like, so let me tell you about fiat money and how the entire world's a scam. It's a big eggshell to open up, right? So it's how you lose people along the way with that conversation. So that's a tricky one as an opening line. However, I think that Bitcoin is one of these unique assets. Gold is a good analogy here. because it's just honest. It just is. People have opted and selected Bitcoin just of their own volition. They've opted gold of their own volition over thousands and thousands of years.

James Check ⋮ It's the Schelling point idea. So I think keeping it really, really simple in why did people choose this thing? I mean, we are more digitally native these days. It has this amazing property where it's digitally scarce and it's the only thing that is absolutely scarce. There is going to come a point in time, if you roll the clock forward long enough, at some point they're going to start— I mean, why are 2 of the richest men in the world launching stuff into space? Because there's valuable stuff up there. There's obviously from like, there's surveillance and satellites and all those sorts of things, but there's also like an infinite amount of metals out there in the world.

James Check ⋮ At some point in time, we're going to haul one of those things back and gold's going to be worthless. It's going to happen now. Probably not going to happen anytime soon. But if you think like, as I like to use, the extremes inform the mean. If the gold price goes to $10,000, how many more mines are going to be ripping that stuff out of the ground over the next couple of decades and diluting that supply? 5%, 2% inflation rate is consistent because we keep getting much, much better at mining it out of the ground. So there's this natural dilutive component to everything. Now, it's significantly better than fiat money, but Bitcoin has no ability to produce more of it.

James Check ⋮ In fact, one of the metrics— I've got my Block Lock behind me, right? Cursed be that damn company. But I still love the bloody piece of hardware. One of the things I've got on there is the circulating supply. And it goes through price and it goes through a couple of metrics, but one of them is circulating supply. there's less than 900,000 left to go. You know what I mean? Like, we're in the— we're in the final phase of like getting coins out of the ground at this point in time. 900,000, like that's going to halve again in a couple of years. It just like— and again, I'm not someone who's going to say that the halving is like, you know, massive impact, but there's— go back to that UTXO set.

James Check ⋮ It is a history of who owned what and when. And we're getting to the point now where it's like How much do you have? What have you got? Your share? Have you got your allocation? And one of the approaches I like to use in terms of like, because I, again, like you, I've been in this market long enough that Bitcoin is a huge part of my net worth, right? So could I continue to keep buying it as like the only thing I owned? I could, but I got other things in my life, dependencies. Like there's just other things that I need to do and other things I need to own.

James Check ⋮ But my one thing I will do is I will always look at how much I currently have of the supply. I will look at how much in that year is going to get mined, and I will always make sure I buy my percentage of what's going to get mined that year. So I never dilute myself. Right. And that number will continue to shrink. The dollar size may continue to go up, but that's like how I, at a minimum, I must be accumulating this much. And you'll be amazed just by doing that calculation, you'll actually realize that you don't need to buy much. to like take your fair share back out of the newly mined supply.

James Check ⋮ So, you know, there's this question of like, are retail going to drive, you know, can we drive capital markets higher? Yeah, I think we can. And if you, if you actually just look at how other markets work, retail used to be the dumb money that Wall Street would just religiously trade against. And we've seen a handful of instances. GameStop was probably the first one that was like, front and center where Wall Street was just plain wrong. And the tariff tantrum, they stepped in and they bought the dip and Wall Street was going, it's over, it's finished. And retail, like billions of dollars flowed in, bang away the market goes.

James Check ⋮ So I think that retail is probably a bit underestimated because at the end of the day, like that's, that's a huge part of the capital base. And people are in this, you know, hyper-financialized environment, people are investing more. And that's, you know, I won't go into the boring details of this, but When the Australian government changed our tax rules recently, jammed those through Parliament, one of the things they did, they were trying to address housing affordability, but they actually went through and said, no, we're actually going to make the tax, the capital gains tax worse for all assets, shares, ETFs, Bitcoin, the whole lot. And they were like pitching this as we're helping young people.

James Check ⋮ And what did young people do? They go, dude, you just made my stock portfolio that I'm using to save for a house worth less. Sorry, you lost my vote. So I think people are more aware they must invest in something. Let's go back to the Thanksgiving dinner table. People know they must invest in something to get ahead because otherwise you are going to fall behind. And in many ways, many people are already behind. You must invest in assets. Why are you investing in assets in the first place? Because the currency is getting worth less. They keep diluting the money. So you have to do this to get off the treadmill.

James Check ⋮ So, you know, there's all these different components, but yeah, I don't even know where we were going with that. But—

Marty Bent [1:06:24] No, I mean, another point to rag on Jason again, get into the AI trade. Well, it's like, well, all these companies just went cash flow negative for the first time. Instead of using their cash to buy back stocks, they're now issuing and diluting the overall amount of their company currency, their stocks. as well. And so to your point about demand elasticity, not only does it exist for commodities like gold and oil, but it also exists for equities as well.

James Check [1:06:54] Yep. And another thing, which is kind of a totally separate topic, and again, I don't pay close attention to the equity market, so someone can tell me I'm an idiot for saying this, but I've noticed more that I think Google did a series of preferred shares I would not be surprised if what Michael Saylor and Strive and all these companies have been doing with the preferred stocks, it would actually amaze me if that doesn't turn out to be like a bit of a turning point in capital markets where more companies start doing that and using that as a vehicle. I have a feeling that like people may rag on the guy, right?

James Check ⋮ And I've got my issues with Saylor specifically around those heinous slop videos, but that's a different thing. Aside from that, there's no question that they're innovative, right? And they're creating something that is novel and new. And the market, I think, is paying attention. So I find that to be an interesting dynamic. It's just one of these things where like Bitcoin in all of its forms, I just think has this amazing ability to just insert itself in the conversation and say, here I am. And it's hard to see what it's going to be when it comes, but I just think Bitcoin is going to insert itself in the conversation once again.

James Check ⋮ Honestly, one of the simplest things I listen to a ton of macro podcasts. Yes, people talk about it less in the bear, but I still hear very credible analysts when they're talking about what's going to perform in X, Y, and Z scenario. Bitcoin is no longer like a sideline character. It's part of the conversation alongside other assets.

Marty Bent [1:08:25] Yeah. It's thrown in gold and Bitcoin. Gold and Bitcoin.

James Check [1:08:27] It's been normalized. Yeah, totally. And then they usually caveat because they always got to caveat. generally caveat being like, you know, if you're in your 30s or your 40s or you're young and you've got time, then maybe Bitcoin's a better allocation because you've got that growth potential. Where is Bitcoin going to be in the next, you know, 30 years? We've got to retire. You know, I've got a retirement account. Where is Bitcoin going to be in 30 years' time when I need that? Lord knows, right? It's only 17 years old. So add another 2 times its life, man. Exciting stuff. If you're older, then gold's probably better.

James Check ⋮ It's the same trade, but lower volatility, more trusted, right? It's going to be the first port of call. All this stuff, but that doesn't negate Bitcoin's capacity. And let me just go back to another point we said earlier, and I think a lot of people miss this. They focus on the local price action. I released a chart recently, one of my reports where I basically mapped Bitcoin's performance. And I, I don't want to look at like the last couple of years because you can cherry— we all know you can cherry-pick a date where Bitcoin kicked ass, right? Oh yeah. Since 2010, Bitcoin's destroyed everything. It's like, yeah, were you around in 2010 buying Bitcoin?

James Check ⋮ No, none of us were. So it's an irrelevant starting point. I think one of the best starting points is January 1st, 2023, the bottom of the '22 bear market, which wasn't a Bitcoin bear market. It was a global bear market. Bonds lost 50% of their value. TLT went down 50%. Half fastest rate hiking cycle in history. Equities fell, Bitcoin fell, gold fell, everything. It was a starting point. And not only that, the reason it was a starting point of a new regime of higher interest rates. Interest rates been going down for 40 years. They bounced off zero. Now we're in an uptrend. That's a whole new market regime that frankly no one alive has traded.

James Check ⋮ It is brand new. So we're in a new multi— I would say multi-decade bond bear market. Doesn't mean that yields can't come down at points in time. Bear markets are full of uptrends and downtrends. But I think that is the perfect starting point. So what I did is I took Bitcoin's performance from 1st of January, 2023, which I think is a very fair start of year, end of bear, all asset type benchmark. AI didn't exist. I mean, it did, but not— we hadn't had the ChatGPT moment. And then you look at the different ETFs that kind of represent the power and infrastructure side, the super semiconductors, the— there was the software, there's the hyperscalers, the Nasdaq.

James Check ⋮ Go and look at how Bitcoin has performed relative to all of those. It kept pace with the best performing sector, which was power and infrastructure through 2025. Sorry, one sec. Kept pace with the best performer, started to deviate to the downside, had its own idiosyncratic bear market in August '25, August into October, started to break to the downside. It had its own internal bear market that wasn't happening elsewhere from that benchmark. of January 1st, '23, if you had bought the— it's one of the biggest semiconductor ETFs, SMH. If you had just bought semiconductors, you bought Bitcoin. Guess what? Including Bitcoin's bear market, you got the same return right now, right?

James Check ⋮ A lot of ink has been spilled about how AI has eaten Bitcoin's lunch. Yeah. During Bitcoin's idiosyncratic bear market. Yes, of course. If you cherry-pick from the top of the Bitcoin bull market, and then go, look, here's the explosive part of the AI trade. Yes, they're called alligator jaws. But if you zoom out and go to a much more fair benchmark, which is the full AI run and the full Bitcoin run, including a bear, you would have been equally as well off if you owned Bitcoin and semis. And during the boom times, Bitcoin was the best performing thing alongside, you know, sure, there's Nvidia, which I think was one of the few assets that outperformed on an individual stock basis.

James Check ⋮ Yes, of course, if you're a stock picker, credit to you, hats off. But I think people miss that forest for the trees. They get stuck looking at the trees and go, oh, Bitcoin's done shit in the last 6 months, 12 months. But they forget that, yeah, but when it really gets going, it really gets going.

Marty Bent [1:12:28] Yeah. Incredible point there. That'll be clipped. We got to wrap up here, but just to make sure we have well-rounded coverage for everybody, fingernails, air pocket down to $72, potentially down to the mid-$60s. What should people be looking for on the upside?

James Check [1:12:46] Yeah. So look, my general view is that we want to be holding $72. And again, if we don't, it doesn't change my overall view that like, guys, we're in the, we're in the discount zone, you know what I mean? Like, if you think in the low $70s, up to $60s, take it, right? Just take it unless your flowchart is that Bitcoin is going to die, which I view is not likely, and the rest of the market The tenured guys at the table don't seem to see that either. If we are to set a monthly higher low somewhere, right, maybe 73, 72, whatever it is, then the next move probably is a springboard up towards 100.

James Check ⋮ And my general view is if once, once we clear 100 or approach 100, we leave the phase. Now, every Bitcoiner who's been in this market for more than one cycle will know this feeling. Right now we're in the period where you're frustrated and bored and agitated and you wish that Bitcoin was higher. There is a point in every bull cycle where you look back and go, oh shit, it feels expensive now. Like, I don't know if I can buy anymore. You know, like, you get that Bitcoin feels expensive again. Once we approach $100K, there will be a collective feeling that that is true. And that is where we start the acceleration.

James Check ⋮ I think once you start approaching $100K, it's just going to be off to the races. Now, I don't think that's going to be happening. You know, I'm not anticipating that happening tomorrow or in the next— maybe not even this year. But I think that we're in this period, this reaccumulation period, this forming of a second floor, this establishing a new uptrend, the shedding of the bear market PTSD. I'm of the view that the next couple of months are what you should be looking at as opportunity, right? Whatever the price does, it is very easy to get caught up and look at the traders and the red candles and the stop loss levels and the liquidations and all this shit.

James Check ⋮ At the end of the day, if you believe that Bitcoin is a valuable asset and will be more valuable in the future, we are looking at a zone now which, based on previous— the way that Bitcoin has traded historically, it's the zone where you're going to look back and go, God, I wish I allocated more. I wish I took more advantage of it. I wish I didn't get scared. I wish I didn't listen to all these people who were bearish and trying to— you know, people naturally want to be bearish. It's kind of interesting because like human beings are naturally net long. We're natural buyers, few people short, but people, because we're naturally long, people tend to be bearish in general because they're always worried about losses and that only gets let go at the peak of the bull.

James Check ⋮ So that's the opposite. When you— when people are no longer— you can't find a bear anywhere to be seen. That's the most risky period. The point when everyone is bearish and everyone wants to be right about their calls about the market going down lower. that is actually the point in time of maximum opportunity because you have the least amount of buyers who care. And the people who do care are the ones that ultimately get rewarded. Markets are not fair. Free markets aren't fair. Nature isn't fair. The one that has the conviction to tough it out through the bad times, it's called natural selection. You know what I mean?

James Check ⋮ Like, be the one who survives because you have the conviction and the understanding and the reason to own this thing and you are willing to step in when nobody else is. You've got to take some time pain. You've got to take some frustration pain. Don't use leverage because leverage is the one thing that in this period of time is going to cut you up. But if you're just taking advantage of the, you know, 75% odds that it wants to go higher, the gravity is to the upside. So take advantage of it because there will come a point in time when we will look back at this specific price range and go, damn, I didn't take enough advantage of it.

Marty Bent [1:16:20] You heard it here first. Perfect place to end it, James. As always, thank you for your time. It's always incredible catching up.

James Check [1:16:27] Thank you, Matt. It's good to be back.

Marty Bent [1:16:29] Peace and love, freaks. Hey there. Thank you for watching the whole video. If you made it this far, I imagine you got some value out of it. If you wouldn't mind liking and subscribing and maybe sharing with friends and family, it helps us out here at TFTC immensely. And then beyond that, we have a very valuable newsletter. called The Commoner. io and subscribe to that. We cover Bitcoin, AI, energy markets, macro, political, cultural discussions. We've been running it for a decade. Highly recommend you sign up for that to stay up to date with what we're covering beyond these conversations. io/ai as well. We have an MCP server with all the episode transcripts, all the newsletters we've ever written, and even some data, Bitcoin ETF flow data, Treasury auction data, Treasury general account, US debt.

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