When Will Bitcoin Bottom?

Summary

• The sell-off is macro, not crypto — Jonah’s anchor is the Bitcoin/S&P ratio, which has stayed stable through the drawdown “unlike 2022 when the ratio tanked.” Trump is shifting taxation from income to consumption and GDP from government to private spending, which shakes markets, but “he didn’t get elected on a mandate to tank asset prices” — Jonah sees the S&P floored ~10% below, meaning maybe another 10% dip in Bitcoin, 20% max. “10%’s a lot in S&P. It’s not a lot for crypto.”
• Avi’s value math: no momentum for three months, so trade on risk-reward — if the US government buys “even a tiny little bit of Bitcoin, this thing’s going to 150K,” so the 2x entry sits at 75K, about where price stabilized. Jonah goes further: great risk-reward in the low 80s, and at 75K “you’re buying with both hands” — that’s the top of the pre-election range.
• The sellers are tourists, not natives. An audience poll of conference crypto-natives found almost nobody sold core holdings since the election, so the huge ETF outflows are the people “in for a trade” — and their exit “clears the thicket for maybe another rally.” Avi thinks people are underallocated given three months of good news; the favorable signal is VIX sustained under 20 and an S&P that grinds rather than pops.
• “Inverse alt season is the new alt season.” Altcoins are in a “savage bear market,” no longer beta to Bitcoin — most assets ex-BTC are flat-to-down since the election, Ethereum TVL is falling even in ETH terms, and with a million tokens a week minted, “finite amount of capital, infinite amount of alts makes for some good shorts.” The Sharpe on shorting garbage “is pretty high,” and Jonah thinks it works another two to three months.
• The turn signal to watch: Jonah’s notional-neutral pairs trade — short Cardano (SPR inclusion walked back), long Litecoin (ETF story) — is dead flat after a week and a half, “which makes no faking sense.” That means “market maker on market maker violence,” one correlation algo battling another. When fundamental pair trades start showing P&L, the turn is coming.
• Macro wildcards, both from Avi: a ~5% probability of kinetic war with Iran shutting off what is likely the Strait of Hormuz (a third of world oil, crude to “$200, $300 a barrel at least”) would tank everything; the flip side, maybe a Ukraine ceasefire, tanks commodities and leaves the Fed “no excuse to hold off on cutting rates.”
• RWA is the green shoot; stablecoin adoption is the metric — up to $4.6bn of US Treasuries now tokenized, and stablecoin market cap is the metric for how much finance has moved on-chain — the sequence after that is yield, then tokenized equities, then tokenized startup equity. Sending a dollar takes 10 seconds on likely Zelle; sending one share of SPY takes two weeks. “It’s a question of when, not if.”

Deep dive

1. Only 20% above the 2021 peak — weakness or coiled spring?

• The puzzle Avi opens with: despite the ETF, a Trump administration, and an actual national strategic reserve where “the government has announced they’re not going to be selling Bitcoin,” BTC sits only 20% above the 2021 high of ~70K. Either price is too low and a tremendous one-to-three-month opportunity is coming, or — Jonah’s trader instinct — “weakness when there should be strength… is a pretty big red flag.”
• Jonah’s mechanism for the weakness: post-election enthusiasm and SPR speculation got fully baked in at 110K, then “reality sets in.” Trump governs unpredictably for equity investors, volatility rises, the value of cash increases commensurately — and people raise cash first in the most volatile asset that just went up a ton. Bitcoin sells off first not because crypto broke, but because it’s the volatile thing in the portfolio.
• Jonah’s disaggregation — the load-bearing chart is the Bitcoin/S&P ratio, “fairly stable throughout the sell-off” unlike 2022 (tanked) or 2021 (ripped). By that measure Bitcoin is holding up better than it should through a macro sell-off.

2. The macro floor: S&P down 10% max, so Bitcoin down 10–20% max

• Jonah’s framing of the Trump realignments: transferring taxation from income to consumption, and GDP contribution from government to private spending — “those two big realignments are shaking markets.” But “I don’t think he got elected on a mandate to tank asset prices.” Another 10% off the S&P is real correction or recession territory, and Jonah says they don’t have the mandate to suffer a much bigger drawdown. The tools exist: rates can be cut a lot before QE, plus tons of cash and private credit to cushion any dip.
• The arithmetic that follows: if the BTC/S&P ratio stays consistent, that’s maybe another 10% dip in Bitcoin, 20% max before stimulus or cuts buoy things. “10%’s a lot in S&P. It’s not a lot for crypto.”

3. Momentum is gone, so trade the value level — 75K is both-hands territory

• Avi’s two-reasons-to-buy framework: momentum or value. Three months sideways-to-down kills the momentum case, so the question is where risk-reward gets extremely good. His construction: if the US government buys “even a tiny little bit of Bitcoin, this thing’s going to 150K” — so the 2x sits at 75K, “about where Bitcoin price stabilized last week.” Jonah’s version: great risk-reward in the low 80s, and at 75K — top of the pre-election range — “you’re buying with both hands.”
• The confirmation signal is texture, not level: Avi wants VIX sustained under 20 and an S&P that grinds up rather than pops — “if you get like a 3–4% day in equities… I always get really nervous.” Avi calls Bitcoin “a beach ball underwater”; slow and steady is the healthy tape.
• Jonah’s live audience poll — how many of you sold core holdings since the election? — drew a sparse show of hands. Avi’s read: the huge ETF outflows aren’t crypto-natives, they’re people “in for a trade,” and their exit “clears the thicket for maybe another rally.”
• The exogenous risks, in Avi’s oil-trader terms: a ~5% probability of kinetic war with Iran, where Iran, if really threatened, could shut off what is likely the Strait of Hormuz — a third of the world’s oil — and crude spikes to “$200, $300 a barrel at least,” tanking the S&P. The mirror catalyst: a likely détente and maybe a Ukraine ceasefire tank commodities, inflation falls, and with federal unemployment ticking up “the Fed has pretty much no excuse to hold off on cutting rates.”

4. Bitcoin isn’t mature yet — but altcoins have lost their beta

• Jonah calls Bitcoin “a truly mature asset”; Avi disagrees outright: everyone in the room can name a trillion-dollar pool with a 0% Bitcoin allocation — what if that goes to 10 basis points? With the SEC no longer suing institutions, “the institutions are coming” seems realer. “I’m not worried about new capital coming into Bitcoin. I’m worried about new capital coming into altcoins.”
• The altcoin picture is a “savage bear market” — sentiment dire, retail tapped out, no clear new source of funds. Since the election the vast majority of assets ex-BTC are down or flat while Bitcoin is up 20–30% — “that would have been crazy back in 2021,” when everything else was leverage on BTC. Fundamentals now genuinely matter, and they change fast.
• Avi’s structural point: open-source crypto means very low switching costs — tell someone in 2019 that Ethereum would cede major share to a new L1 and “people were calling you a bit nuts,” yet Ethereum’s TVL is now down even in ETH terms — it’s bleeding usage. Everything outside Bitcoin “can be disrupted in a month, two months, three months,” which is why positions need constant re-underwriting — and why the two of them are traders.

5. “Inverse alt season is the new alt season” — short garbage until the algos lose

• The actionable trade of the past two months: with token creation commoditized and “another million tokens a week” minted, “finite amount of capital, infinite amount of alts makes for some good shorts.” Every coin trading over $10M a day has a derivative; short the bad, buy the good, and the Sharpe on shorting garbage “is pretty high.” Consensus is still anchored in the 2017/2021 idea that alts are beta to Bitcoin — “they’re not anymore.”
• Jonah’s timing tell — worth keeping in full: at the Trump crypto summit he shorted Cardano (sovereign buying “abundantly clear” not happening) against long Litecoin (an ETF story), notional neutral. A week and a half later the P&L is flat, “which makes no faking sense” — the pair trades tick for tick, meaning “all that’s going on right now is market maker on market maker violence,” one correlation algo battling another. When fundamental stories re-emerge and trades like that show P&L, “that’s when you know a turn is coming.” Until then: short mode, likely two to three more months.
• Avi’s calibration via the Bill Gates truism — people overestimate technology at two years and underestimate it at ten, with crypto’s cycles compressed: “we’re in the sort of despair phase where overestimation of crypto’s near-term potential is being reckoned with.”

6. The green shoots: stablecoins as the when-not-if metric, RWA at inflection

• Jonah’s chain of reasoning from the one thing working ex-BTC: you can’t buy USDC and wait for $2, so ask why stablecoins grow — blockchain is simply “a better technology for moving value around” — then ask what other value needs moving. Answer: every security on the planet. RWA is his one sector showing “green roots,” with up to $4.6bn of US Treasuries already tokenized and growth inflecting.
• Jonah’s agreement and the roadmap: stablecoin market cap is the metric for how much finance has proliferated on-chain, and the sequence is set — money on-chain wants yield, then tokenized equities, then tokenized startup equity. His example as told: sending a dollar takes 10 seconds on likely Zelle; sending one share of SPY takes “two weeks, a million questions, and two hours on the phone.” “It’s a question of when, not if.”
• The closing register, from Avi: survival in this asset class requires pessimism, because at the highs “you’re looking at your portfolio and you’re going, I am the most brilliant man that has ever existed” on this planet… I’m never going to sell." Their job is the sober look under the hood.