Source: 《What Bitcoin Did》
Compiled by: Felix, PANews
Former Glassnode Chief Analyst Checkmate was a guest on the 《What Bitcoin Did》 podcast. During the show, Checkmate explained why the surge to $60,000 looked like a genuine capitulation event, pointing out that the probability of a bottom forming is currently 80%, placing us in a bull market phase, but one that requires a long period of consolidation. He also discussed rising bond yields, a collapsing fiscal system, the end of trust in government debt, ETF fund flows, and more. Finally, he explored Australia's proposed capital gains tax reforms. PANews has compiled the highlights of the podcast.
Host: Are we currently in a bull market or a bear market? Because from my perspective, the worst day of a bear market is often the start of a bull market. But is it too early to say we've entered a bull market? Or do you think we are already in one?
Checkmate: That's the right framework for thinking about this. The worst day of a bear market is often the start of a bull market. As I've always described it, it often takes months or more to know when the bottom is in. We spoke in February when Bitcoin hit $60k, and I called that the 'price pain capitulation' phase, a stage where all price-sensitive people almost simultaneously despair and give up. You could see massive losses, token transfers, and market panic then, and my inbox was flooded. It felt just like the crash in June 2022.
Looking back at past bear markets, after the bottoms in 2015 and 2018, we experienced slow uptrends lasting for months. During the FTX collapse in 2022, that was the only time we broke below the previous 'pain capitulation' low. Due to recency bias, many people thought a new low was inevitable, but that's not necessarily true. We might retrace to $65k and bounce, or form a higher low at $75k. So from my perspective, I think the probability that the bottom is in is about 80%. That means we are in a bull market. But consolidation will take a long time, just like in 2016 and 2023, where it took a full year to break above $30k. A whole year of boring meandering, with everyone fearing every sell-off would push prices lower. You need to build confidence. Unless Bitcoin goes to zero, we must all be confident that at some point, we will return to a bull market.
Host: With 80% certainty, what specific indicators give you such confidence? Are institutional investors really looking at these technical indicators?
Checkmate: First, look at the technicals. I'm not a technical analyst, but I understand what institutional traders using Bloomberg Terminals look at. Bitcoin's weekly RSI touched 26, which is a historically low level. Historically, every time this indicator fell below 30, it marked a bottom. Many institutional traders only look at Bitcoin's position relative to the 200-day moving average; when the indicator turns from red to green, they pay attention, completely ignoring the daily noise and volatility. I personally have a mean reversion index that combines nine models from on-chain, technical, and trend factors. Falling to $60k was a 'Q10 event,' meaning historically only 10% of days have seen prices below this relative level. I've seen many bears say it might drop to $45k, but in my model, that only happened in 2011 when Bitcoin was at $2, so I wouldn't use that as a baseline forecast.
Host: You often mention 'Realized Price.' Why is it one of the most important indicators right now?
Checkmate: 'Realized Cap' is calculated based on the value of each coin at its last move, not the current spot price, which can be used to measure the cost basis of holders. For example, Satoshi's coins are large in quantity but have zero dollar value in the Realized Cap calculation. To more accurately reflect human investor behavior, Dave Puell and I developed the 'True Market Average' framework. If you exclude lost coins and dormant coins and look only at active investors, their current average cost basis is around $78k. Metrics like the average inflow cost for ETFs and the production cost for miners are between $75k and $82k. $85k is the midpoint of an important supply cluster. Once broken above, market sentiment will flip, and people will start 'buying the dip.' Before that, $78k is the first resistance line (short-term cost basis, True Market Average), $85k is the second (200-day moving average, large cost cluster), and the third resistance line is $95k (near the 50-week moving average).
Host: How long do you think it will take to break through $85k and $95k? Who is driving the market price right now?
Checkmate: Currently, my mean reversion index is at 33, still in the bottom third of the range. It's still a good price, but people are no longer in that state of blindly buying with eyes closed. We've hit a ceiling around $80k now, needing to experience a pullback. The market needs to transition to a full 'buy the dip' mode.
Driving the price up really relies on sustained incremental capital inflows, possibly because people buy more as they age and their income increases, or because companies grow larger. On the institutional side, I did research before (though outdated), institutional holders in ETFs account for 20-25%, many of which are small institutions or Bitcoin hedge funds. Large institutions still have very low allocations. Even moving from 0.001% to 0.002% means billions in capital. Once we break $100k, institutions that don't have the guts to enter now will come in. In terms of fund flows, current ETF and MicroStrategy buying volumes are roughly equal. They are very strong buyers relative to seller pressure. On-chain realized profits and losses are both low now, which is typical of the late bear market / early bull market phase, with the market in a state of 'extreme apathy.'
Host: Speaking of MicroStrategy, if Saylor custodies some Bitcoin on Coinbase, does this stack risk? Should he self-custody those coins? What if Coinbase gets hacked?
Checkmate: There is indeed tail risk here. Any bet involving this strategy is essentially a highly leveraged long on Bitcoin. If Coinbase has problems, it would be catastrophic for the entire industry, affecting everyone. But regarding MicroStrategy, there's another serious risk often overlooked: when the Bitcoin price falls, if you subtract its debt and preferred shares, the net asset value of its stock could go to zero much sooner. This liquidation price threshold where assets go to zero is actually much higher than the price Saylor himself claims (possibly in the $50k range). Although the probability is very low, this is indeed the specific Bitcoin risk most likely to manifest.
Host: Let's talk macroeconomics. Government bonds seem to be the cornerstone signal for all assets. Right now, the 30-year bond yields in the US, UK, and Australia are all above 5%, with the UK even approaching 6%. Are rising yields, and the falling value of this foundational collateral for the entire system, the market saying the system is broken? Or are they worried about runaway inflation and deficits?
Checkmate: All of the above. The market is essentially declaring it no longer trusts the government. Interestingly, many assets are not trading as people expected. For example, oil prices are surprisingly stable despite geopolitical conflicts; gold, as a geopolitical hedge, has also been flat recently, but that's because it was severely overbought before. Similarly, the Dollar Index (DXY), which should have been boosted by safe-haven flows to break above 100, is now fluctuating between 98 and 99.
Host: Does this mean a crisis will erupt, and governments will have to print money wildly? How would Bitcoin perform in that environment?
Checkmate: The current trend is for both inflation and interest rates to move higher, and this process will be very painful. When you realize the debt obligations of the fiat system outweigh its assets, you want to move assets outside the system, seeking assets that cannot be debased, like gold and Bitcoin. We are in an era of a major monetary system shift. The world will be completely different after this transition. Globally, there is a separation happening between the 'global reserve currency' and the 'global reserve asset.' The US dollar will continue as the medium of exchange (like a stablecoin), while Bitcoin and gold serve as the store of value tools. When a system's debts and obligations become too large, people want to own hard money assets outside the system that cannot be debased.
Host: I've never quite understood your rationale for holding gold. If you think Bitcoin has greater upside potential, why not just hold Bitcoin?
Checkmate: This is mainly due to consideration of the asset's duration. Gold has lower short-term volatility; if you plan to save for a house down payment in the next one to three years, gold is a suitable tool. But Bitcoin has longer-term growth benefits, suitable for saving for long-term expenses 10 years from now, like my son's tuition or paying off a 30-year mortgage. Holding both allows you to find your balance while enduring volatility across different timeframes; after all, besides pursuing investment returns, we also need to live normal lives.
Host: Recently, Iran started using Bitcoin for payments to evade sanctions. Do you think this could be a peak moment of historical transformation?
Checkmate: This isn't the true peak moment. The real turning point happened in 2022 when the US froze Russia's foreign exchange reserves. After that, everything shifted towards seeking hard money. Bitcoin perfectly solves the problems of difficult physical gold transportation and inefficient cross-border settlement. Digital Bitcoin is highly liquid, can be protected with multisig, and is much stronger than hoarding tons of difficult-to-move metal.
Host: Let's talk about those policies in Australia. You looked very frustrated when you arrived today. Can you explain to the listeners what exactly happened?
Checkmate: The past two weeks have been absolutely terrible. Since 1999, Australia's Capital Gains Tax (CGT) had a rule: a 50% tax discount for assets held for over a year. This accounted for inflation over the holding period and helped ordinary people accumulate wealth. Recently, the Labor government proposed a reform in the budget: under the banner of 'helping young people save for a house,' they are actually eliminating this 50% CGT discount for all assets (including ETFs, stocks, Bitcoin, etc.).
They are switching to an 'indexation method.' This means your cost basis only increases by roughly 3% CPI inflation rate. Australia currently has an extremely severe real estate bubble, with a median house price of 1 million AUD (approx. 720k USD), while the median annual salary is only 74k AUD. An ordinary person saving in a bank would need 40 years to save enough for a down payment. To catch up with this bubble, young people must invest in high-growth assets (like Bitcoin or startups).
Host: What does this specifically mean?
Checkmate: This is essentially a scam, a covert currency devaluation of national savings. They let your asset's cost base increase by the CPI of around 3%, but the remaining large appreciation portion will be directly added in full to your income and taxed at your highest marginal tax rate. And they don't index your tax brackets accordingly. The result is that your effective tax rate, which was roughly around 25%, will skyrocket to 40% or even 47%. Imagine if you start a startup and sell it successfully; since your initial cost is 0, this enjoys no benefit from indexation. The government will directly take 47% of your profit. They take no risk but become your biggest shareholder.
Host: Are they doing this assuming people just need to save money in a bank to buy a house, not invest in assets? These politicians are so out of touch with reality.
Checkmate: Absolutely correct. Australia has the world's most outrageous real estate bubble, with a median house price of 1 million AUD and a median salary of 74k AUD. If young people save money in a bank earning 5% interest, it takes 40 years to save enough for a down payment. To buy a house, they must outpace inflation by investing in assets. The government claims this policy helps young people buy houses, but in reality, it severely disadvantages young people saving through investments in high-growth assets like Bitcoin. I ran the numbers with a large language model. This tax reform policy would not only delay an ordinary person's home-buying goal by 2 to 5 years but also directly deprive a child of savings for 1 to 2 years of private school tuition. This is absolutely not about helping young people.
Host: That's absurd. If you hold Bitcoin now, can previous gains still apply under the old policy? What should people who don't plan to leave Australia do now?
Checkmate: They are using what's called a 'Partial Grandfathering' clause, which is also a rogue practice. Before July 1, 2027, your paper gains can enjoy the old 50% discount policy, but all asset growth after that will be forcibly taxed under the new indexation policy at high rates. For those who don't want to leave Australia, first, get a good accountant because the tax system is interconnected, and knowledgeable people can often find new tax avoidance opportunities as the system changes. Second, go to the website of Australian Bitcoin industry organizations, download protest letter templates, and write to your local representatives to voice your concerns. Just because you don't want to move overseas doesn't mean you should take this lying down.
Host: Does this mean the government is trying to steer the economy towards some kind of austerity?
Checkmate: Yes, so I call it a 'trial balloon' thrown to the world (PANews note: refers to 'an action to test public reaction'). Real austerity shouldn't be like this. The current approach is an egalitarian move that makes everyone poorer; it's purely a scam against ordinary people's wealth. They want to test the Australian people's tolerance for such bandit policies. If we don't fight back strongly, this policy will spread worldwide. Young people must understand that to climb the property ladder, you must first climb the asset accumulation ladder. The government has just doubled the tax on your assets. This is unacceptable.
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