The DeFi Report

Ryan Sean Adams:
[0:10] Welcome to The Report. This is a special episode today, a time where we get to zoom out. This is your guide to the coming bull market. This isn't a regular market update. It's not the typical thing we do on a Wednesday. This is a full three-year guide, four-year guide of what you can expect moving forward. Of course, a few weeks ago, this is September 11th that we're actually recording, but a few weeks ago, Mike switched to full bull mode. He is fully deployed, fully risk on. He made that call, not to say that we won't see dips in the future. We could. Maybe TDR is off base on this call slightly, but the weight of probability, according to Mike and the TDR and all the research he uses, now has switched towards bullish. So,

Ryan Sean Adams:
[1:02] We are taking this on faith that we are in the early bull phase of the cycle. And the question for all listeners of the TDR, everyone who's dialed into Mike's work is, how do you play it? How do you play the early phase of this coming bull market? And we want this to be a timeless episode for folks. So we're going to go through four sections in today's episode. First of all, get grounded on the stages of a crypto cycle and what we expect to see in this cycle. So we'll draw that map to the coming bull run and then also how to play it and then finally we want to talk to you guys about how to lock in to TDR Research so that you can dial right into Mike's Investor Journal alongside you. Mike, we are recording this episode a few days early because you're getting married this weekend. So first of all, congrats on that. This comes out next Wednesday. This will be the first episode I guess people listen to and you'll be a married man. So we're all very excited for you and congratulations. You were doing this the day before your wedding. So is your hair on fire? Are you going crazy on this stuff?

Michael Nadeau:
[2:10] I think we got all the preparations together. And yeah, this is the last piece of work before I head off to get married and recording a few days early this week. We're recording on Friday at the 11th, but I'm excited to share, I think, what, will be, you know, hopefully a really good piece of guidance for people as we head on. You mentioned, I think we're sort of pre-early bull stage, maybe about to confirm the early bull stage, and thought it would be a good idea to put out this piece of content that really goes through how we think about cycles. This is a theme we come back to a lot in our research. I think it's a really good time to revisit sort of this framework for how we think about cycles and the stages of cycles and how things sort of reflexively build on each other as we go. So yeah, excited to get into it.

Ryan Sean Adams:
[2:59] Yeah, I wonder, was your fiance waiting for the early bull in order to get married?

Michael Nadeau:
[3:05] It's decent timing, I gotta say. It's decent timing. Maybe it's good luck for us and pro members for this cycle.

Ryan Sean Adams:
[3:12] I think so. I think, and pro members have had great luck so far. Can you just reiterate, this is as of September the 11th, 2026. How is the portfolio done? So what percentage up are you relative to Bitcoin? What's the non-Bitcoin portfolio? Where do things look overall right now?

Michael Nadeau:
[3:30] It's doing well. You know, something that we've mentioned multiple times on this show and a lot of the work that we're doing in the bear market is to try to get into positions where we have high conviction and sectors and themes that we're excited about, and get into those positions in a way that we can be up on them, sometimes one to two X before kind of the early bull, signals, before everyone else sort of catches up to that. I think we've done a pretty good job of this. The portfolio as a whole is up 95% right now. This is pretty volatile. It's moving around, but we're up 95% in total unrealized P&L. Our non-BTC positions is up about 147% today. So in good shape, very happy with the performance so far.

Ryan Sean Adams:
[4:15] And the timescale here, Mike, this is from what, July 2025 up to now? And the reason you're taking this from July 2025 is that's when the TDR portfolio and TDR Pro actually went live, right? So that's the measurement. So this, it's really about a year and a couple of months of data here.

Michael Nadeau:
[4:35] That's correct. That's correct. So all of our reporting is measured from TDR Pro Inception, which was July of 2025. So, you know, we're benchmarking to Bitcoin's performance over that period, but Bitcoin's down about 33% over that period. So we were able to, you know, go to cash, you know, ahead of the bear market, get into a nice position, do all of this work. We talk a lot about how I get excited in bear markets because that's when we see the fat pitches. That's when we can kind of build out our thesis to all this really good fundamental research that we share in the watch list each Friday. Build out those positions and get ourselves into a really good position going into the next phase. So I'm pretty pleased with what we've been able to execute on. And the work is not done. It never ends.

Ryan Sean Adams:
[5:21] The work is not done. But Bitcoin since inception down 33%. You up 95% on the TDR portfolio and the non-Bitcoin positions up almost 150%. So this shows, I've been working with you since at least that time, July 2025, and then even before. But I think this shows, the performance is showing your ability to use some of the tools and some of the research that we'll talk about later in this episode to effectively get out of positions at the late cycle of last, the last cycle, essentially, in early October, and then re-enter the right positions coming into this cycle. Is hopefully going to be the early bull market. So congrats on the performance. And I think that it's really showing that what you're doing is working. So let's talk about what you're doing. So the first part of this report is called Stages of a Crypto Cycle. And can you walk us through the stages of a crypto cycle and how you think about it?

Michael Nadeau:
[6:27] Yeah, so this is, again, a theme we come back to a lot. And we are big believers in following how market cycles function. I think most people sort of fall back on this as the four-year cycle and sort of, you know, Bitcoin has a roughly year-long bear market, merges out of that. We tend to, you know, peak about three years later. And this is just the way it's played out historically. So people can default to that and that's fine. We do not think of the cycle that way. We think of it more from like first principles of how leverage and credit builds throughout these cycles, how that feeds on investor psychology, investor sentiment, how that feeds on, you know, venture capital and demand for credit and DeFi and stable coin supply. All of these things kind of combine together with media attention and sort of like, you.

Michael Nadeau:
[7:26] Basically feed into how these cycles play out. And I think this framework, if you can kind of follow this framework, we're going to go through each phase of this, of how this works. For me, this is like the secret sauce that like gives me confidence in sort of managing risk through crypto cycles, which are extremely volatile assets. And if you don't have something to anchor yourself to, I think the volatility of crypto asset prices can often shake you out of positions. Maybe you sell something too early when, cause you, you thought, you know, it's up so much, but maybe you're in the early part of the cycle and you want to kind of have, understand where you're at. Maybe, you know, you hold something too long because you didn't realize that you came into a cycle, maybe in the wealth distribution phase of the cycle. So we're going to get into how we think about each stage of, of, of the cycle.

Michael Nadeau:
[8:18] And I think for, you know, to level set where we're at right now, I would say we're kind of, you know, we've been covering this in our research, but we think we're sort of entering what we call the early bull phase of the cycle. In the last cycle, this started in early 2023. And some of the, I guess, like things that we look for as the early bull is starting is kind of what we see in the market right now. So Bitcoin has come off its lows. A lot of people have been, you know, sort of anticipating maybe we would bottom sometime in October. It looks like maybe the bottom occurred actually on June 30th. And we've had, you know, kind of like a move off the lows, about a 36% rally, which we're now holding kind of in the upper 70s. And we haven't broken the 50-week moving average, but that would be the key indicator that the early bull cycle has started to kind of like kick off. And we're seeing some like early signs of speculation in other parts of the market that, which pairs up pretty nicely with what Bitcoin's doing in terms of what we have seen historically as well.

Ryan Sean Adams:
[9:21] So at the time of recording, this is going to be a timeless episode, we hope, but at the time of recording, you think the weight of probability is that we are in an early bull, which is why you've deployed fully risk on, but we don't yet have full confirmation of that. We're still waiting on confirmation of that early bull. Let's go through the cycles in just a moment. But before we do, I want to emphasize another part of your work, a part that I've seen that sort of lays a foundation for these cycles that I haven't seen from other research houses. At least I haven't seen anything like this emphasis. And that is an emphasis on coin rotation. You know, as we've been doing these episodes, I've been reading the reports over the last 18 months or so.

Ryan Sean Adams:
[10:04] I've seen coin rotation as sort of a core pillar of how you think about this. And so as we look at these phases of the cycle, it's almost like coin rotation types of phases. And this is what other research shops, I think, don't see when they talk about, you know, Bitcoin for your cycles. They bring a lot of macro insight into it. They might bring a lot of historical precedent type insight into it, but they're not looking at coin rotation in the in-depth way that you do. And I feel like that is one thing that is different, differentiated, and even that emphasis. Can you talk maybe about coin rotation and how that informs your view on why these cycles actually have fundamentals, why it's just not a kind of, I don't know, just a pattern that will always play out, why it's actually grounded in some fundamentals?

Michael Nadeau:
[10:56] Yeah, it's a great point. And this is probably the most important thing that we track in addition to other stuff that's happening in the markets and macro. But this is probably the most important thing. And it's a gift. I consider this a gift that these blockchains have given to us. And that's the transparency of what's happening now. On chain. And I sort of like describe it as like, imagine if you could, you know, study when I talked to my dad, my dad's more of a gold investor. Imagine if you could understand when gold's in a bull market, sort of the cost basis of all the investors that are coming into gold. And if you understood that, and you could look at that and say, wow, look at this, all of these new investors came into the gold market at sort of the top 20% of the rally. And that lasted for six months. And look, there's a lot of leverage building here, it would change how you think about the market structure of that asset. And we have this ability in crypto. You can't do this in gold. You can't do this with other commodities or stocks. So I think this is really interesting and it anchors me to like what is happening in the market structure? What is happening with the holder base of Bitcoin? The macro is certainly important and there's other things that we overlay onto this. But to me, this is like the most important thing that we kind of anchor the research to.

Ryan Sean Adams:
[12:17] Yeah, it's great. And it's brought some confidence, I think, into some of these calls. Let's talk about the different stages of a crypto cycle. So we have four here. I'm gonna get you to hit them one by one. Early bull, and then we have wealth creation, and then we have wealth distribution, and then we have the one everyone hates, wealth destruction. So there are four phases to any crypto cycle phase and you expect this to play out into the next phase. So let's talk about them one by one. So early bull. What have we seen previously? What can we expect to see here?

Michael Nadeau:
[12:54] So early bull, this is, you know, kind of where we sit today. We're waiting for Bitcoin to potentially, you know, establish the 50-week moving average right around 80K as support and start to separate from that. The early bull typically is, you know, the first 9 to 12 months after that period happens. This is when if you're a crypto data and you're really focused on these markets, you probably have a pretty good feel for what's happening inside of crypto. And maybe some speculations coming back. Bitcoin's showing some strength. Most of the broad, I would say, finance industry investment community is not really paying attention to Bitcoin at this stage. It's still trading well below all-time highs. And there's not a lot of broad, I would say, media coverage, crypto natives sort of see what's happening and you're starting to see um some of these signs so we expect to see 50-week moving average we have not seen this, confirmation just yet um golden cross is another thing another signal that we're looking for this we sort of we haven't had like a full on golden crosses is when the shorter term 50-day moving average actually uh inflects above the longer 200-day moving average. This is another indicator that typically comes around the same time that we would be breaking the longer 50-week moving average. So we just had this hit a few days ago.

Michael Nadeau:
[14:23] Historically, we do see a little bit of volatility when this is a bullish indicator, but oftentimes you'll see a little bit of a pullback on this. What we're looking for here is to maintain the 200-day moving average as support. That's right around $70K. So early bull, the way I think of this is you start to see some pockets of speculation come back. We talked last week about things that we saw back in 2023. There were plenty of indicators, maybe not indicators, but pockets of speculation that were happening. We're seeing this currently mostly in the social trading sector of the market. In 2023, we had like the L2 launches, we had Bitcoin ordinals, we had some NFT speculation, things like friend tech. So we're starting to see some of that in this cycle. And another thing that I'm looking for is Bitcoin dominance. So Bitcoin dominance tends to fall. Sort of into your cycle lows. And we can see this on the chart here. In the last cycle, Bitcoin dominance falls, and then we start to see it moving up as you move into the early bull period.

Michael Nadeau:
[15:34] When we look at the current phase here, the current cycle, same thing, Bitcoin dominance falls into the lows around June 30th. And now Bitcoin dominance is starting to pull up. And so So that's a signal that we look for as we go into the early bull phase of the cycle.

Michael Nadeau:
[15:53] The other thing we'll start to see, and I would say we haven't really seen this just yet, but what I expect to start to see is some users start to come back. We're seeing some of this, users coming back mostly in that social trading sector. But what will become interesting is once other crypto projects, once other areas of the industry start to see that users are coming back, we'll start to see more marketing. We'll start to see marketing efforts ramp up.

Michael Nadeau:
[16:25] It's like a critical period if you're a crypto company to capture new users when they come in. And so there's a lot of competition to do that. And we'll see incentive campaigns. We'll see boosted yields in DeFi. We'll see lots of advertising spend starting to come back into the market. We haven't quite seen this, I would say, in the current cycle, but that's another thing that I'm looking for. This is when you'll potentially see some on-chain wealth effects, new projects come to market. We're seeing some signs of this again in the social trading sector. New projects launching, possibly doing well, creating some wealth effects around that, airdrops. And so this is the early bull. This is kind of what we expect to see in the early bull. And I'd say what we're seeing right now largely lines up with expectations.

Ryan Sean Adams:
[17:19] How should you play the early bull? Maybe, I guess you can't provide custom investment advice for every individual, of course. Maybe the better question is, how is TDR playing the early bull? I noticed you are about 90% deployed, so you still have some cash reserve, but you're risk-on, fully risk-on, as risk-on as I've seen you. Is that the best positioning, is to be fully risk-on? And then secondly, you mentioned these pockets of speculation. Is the play to just follow pocket-to-pocket, or are you trying to get a little ahead of it? How are you playing early bulls?

Michael Nadeau:
[17:54] So the way I'm setting this up is, you know, we did a lot of work over the, during the bear market on, you know, trying to understand where the puck is going in terms of the sectors, the themes, the assets that we want to have exposure to. And I think we're well positioned for, I would say, early bull and also maybe going into wealth creation, which we'll get to a minute in a minute here. But I would say like some of the largest gains in a portfolio can occur sort of at these earlier stages of the cycle. And it can be when stuff that's longer tail, maybe newer, more speculative, can see like really outsized returns, even sometimes before Bitcoin has even hit its cycle peak. So the social trading sector, we have exposure there. That's one area that I'm excited for for this part of the cycle.

Michael Nadeau:
[18:49] You know, when we go back, if you go back to the last cycle, um pepe launched in uh april of 2023, and it got to a 1.6 billion dollar market cap you know that was before really any other speculation had come back on chain before bitcoin bitcoin is probably trading at 30 35k at that time it'd be maybe lower, um that was like if you go back and think about it that was a pretty good signal for what was coming with meme coins and and other parts of speculation that came after that. So to me, what we're seeing with social trading right now is a pretty strong indicator of what's coming later. So I think that's kind of how I think of this. And then we'll monitor things as conditions evolve. There's a chance that that, because of the way that crypto markets trade, and the way that sentiment and psychology and everything get out over their skis, it's a chance that that actually separates to a point where we're uncomfortable and we have to sort of like rebalance portfolio. So that's kind of how I think about the cycle. And then, you know, Bitcoin will start to have its move later on. And, you know, another maybe good just like kind of perspective for people is like Solana was like one of the best performing assets and a lot of Solana ecosystem assets were some of the best performing assets last cycle. Solana didn't start to make its move until late in 2023, well after.

Michael Nadeau:
[20:17] You know, Pepe and well after some of these other pockets of speculation had already played out and when Bitcoin was just starting to kind of like separate from the 50-week moving average. So I would say we're very early here, but I think the big takeaway is that the things that start to get hot that are bringing in new users can get overheated earlier in a cycle.

Ryan Sean Adams:
[20:42] Okay. So you want to be like the way TDR is playing it. You want to be as deployed as possible, as risk on posture as possible. You want to have done your research during the wealth destruction phase and during the bear market. And that's what really the watch list is that, that research. But then it sounds like you want to let a lot of the winners kind of ride and also allow those winners to provide clues as to what's to come for the rest of the cycle and try to get on side of those investments and those trades for the rest of the cycle as well. Okay, let's talk about the next phase, which is wealth creation, I believe. So you have nine to 12 months early bull. That's what you anticipate. So again, if we're here in early bull, if that gets confirmed in September, you know, 2026, then we have about a year, maybe less than a year of early bull. And then we get into wealth creation. What does that look like?

Michael Nadeau:
[21:43] Yeah, so this will have a different feel to it for sure. And the wealth creation, if we go back to the last cycle, wealth creation phase started kind of late in 2023. This was kind of when Seoul started to run. Bitcoin, when you look at this chart that we just pulled up there, you can see that that pink line has now separated from the blue line, which is the 50-week moving average. And now we're clearly, you know, in a bull market structure. Bitcoin is making its move. And this is when you start to see more media coverage. So I would expect, you know, CNBC to start talking about what's happening with Bitcoin. Yeah. And, you know, remember that, you know, it's always helpful to remember that narratives come after price. And so there will be a new narrative when this starts to play out. And I don't know what that narrative is going to be. It could be around what's happening with geopolitics and debt loads in the U.S. And Trump doing $5,000 dividend payments. I don't know what it is, but there will be a narrative that is ascribed to why Bitcoin is making its move and why it may make a larger move. right? So I expect this to come, you know, we're obviously early here right now.

Michael Nadeau:
[23:00] As this plays out, this is where like the reflexivity that we talk, um so much about and i think this is just such an important concept as well there's a book george this is like george soros is a big reflexivity guy there's a book um the alchemy of finance people can read it's a really hard book to get through but um really uh important has had a lot of influence in how i think about the crypto markets um but this is where reflexivity starts to come in so now we're in a spot where, um people are becoming more interested in crypto it's in the media. New users are coming on. Crypto natives are levering up. They're going into DeFi. DeFi protocols are doing similar to what you would see in the banking industry when there's a lot of demand for credit. So, you know, when everyone wants to, you know, refi their loans, everyone wants to go out, business is booming, people want access to capital. Banks compete for that demand. They'll lower their lending standards to do more business. This is kind of the same thing that happens in DeFi, where you get these incentives to come into DeFi, maybe boosted yields. There's ways to sort of attract capital for these protocols. And you tend to see leverage and credit start to build. So this chart that we pulled up here, some data from Token Terminal just showing Ethereum ecosystem loans kind of during that, when the wealth creation phase started in the last cycle.

Michael Nadeau:
[24:24] You know, we tend to see just on-chain activity picking up, you know, starting to really, you know, reflexively move. So in the last cycle, Solana... Did a 10x in dex volumes in this kind of like wealth creation you know you know phase of the cycle um there's you know what the other thing we'll be looking for is, in the derivatives market for bitcoin right you'll see perps traders want to lever up their trades they're becoming more confident that there's a wave behind them and they're levering up uh their positions funding rates increase open interest increases in the derivatives markets, so now you've kind of you're now combining like a lot of elements with, sort of money multiplier effects with stable coin supply increasing and then leverage that's being built on top of that. This is sort of like M2, you know, this is your global liquidity indicator that's specific to the crypto markets and then the ability for that to be a money multiplier. We don't have, you know, it's not like the banking system where, you know, one loan gets levered up 10 times. We don't have that credibility and DeFi. These are over collateralized loans, but you still have a money multiplier effect in terms of stablecoin supply, active loans, and just kind of like the credit that builds within this.

Michael Nadeau:
[25:43] And then, you know, Bitcoin will probably break its all-time high during this period. And then that's, you know, you just get it in even more reflexive mood, more media coverage, more people interested in crypto. This is when, you know, my friends and family, people will probably start asking me about crypto. You know, what assets do you like, Mike? And I'll probably say, why didn't you ask me about that a year ago? It's kind of my answer every time.

Michael Nadeau:
[26:10] But that's, you know, this is just, it just kind of, it's fascinating when you've been through multiple cycles, just how the conditions feed on themselves and how that impacts sentiment, psychology, human behavior. This is the period of the cycle, I would say, that the stuff that's doing well, that's outperforming, probably sort of peaks out. It goes into a frenzy. And we saw this with MemeCoins last cycle, bonked at a 222x during this period last cycle. So this is when things just kind of go nuts and, you know, the market just completely detaches from reality for a little while. And this is, you know, this was this all happened before, you know, Bitcoin had peaked six months later. All of this played out well before Bitcoin hit its highs in October of the last cycle. So I'll pause there. But that's kind of like some idea of what to look for, I guess, in wealth creation.

Ryan Sean Adams:
[27:12] Okay, so other than answering your family member's texts about should I buy XRP after Bitcoin has topped or whatever, because you know that text is going to be sent. How do you intend to play wealth creation? Is that where you just like sit back and let the winners rise and then start thinking about selling? Or high level, how do you intend to play that? What's been effective in previous wealth creation eras?

Michael Nadeau:
[27:41] I think this is when I will start to get... More concerned about the structure of the market, what's happening. I'll be looking at leverage positions. I will be looking at sentiment in the market. I'll be looking at our positions, our portfolio, and whether certain parts of the portfolio have grown in size that I'm uncomfortable with, or maybe I need to rebalance. So I will be starting to turn into risk-off, Mike, when I see things. Just as everybody is getting over their skis, I'll probably start to get a little nervous about the structure of how everything's playing out. And, you know, we'll see. I can't predict like how things are going to play out. What I'm trying to do from a high level is like deeply understand where we're at in the structure of the market, make sure I'm just able to observe the market as it is and not get too caught up in it myself, and be able to sort of manage risk, manage the positions as that, as that plays out.

Michael Nadeau:
[28:45] The, the thing that I would say is like, The wealth creation phase is like this basically peaked out when Trump launched his meme coin, when there was like multiple presidents launching meme coins, like those types of moments. Like to me, that was the most speculative period in the last cycle. And I was starting to go risk off at this point. This was like January of 2025. So it's still 10 months before Bitcoin had peaked. But if you go back and look at that period between January of 25 and October of 25, what you'll notice is like all of the highly speculative pockets of the of crypto the charts were going down like they were down from that period uh bitcoin you know was sort of holding its level and and you know kind of grinding up and maybe some other uh pockets were were seeing you know capital locations the hop all on money is sort of moving to other sectors, but it's an indicator when you see like some of these charts they've already peaked right they've already peaked very early. And we want to be like, we want to be mindful that that can happen just because something's going up. You don't want to say, oh, Bitcoin hasn't peaked yet. This thing's just going to keep going. Well, maybe not. Maybe the hot ball of money is going to rotate to other areas. And that's something we definitely want to be mindful of during this period.

Ryan Sean Adams:
[30:03] So during wealth creation, expect to see if you're a TDR pro member, a bit more alerts for selling, A bit more rebalancing, risk-off type posture to try to get ahead of what is to come, which is the next phase, wealth distribution. So what happens during this final phase of the, well, actually, there's the wealth destruction we could talk about. The third phase, wealth distribution, what happens there?

Michael Nadeau:
[30:30] Yeah. So, you know, I think this is probably a good way to think of it. So like, just as Trump is launching his meme coin in January of 2025, Solana peaks out. We were exiting our Solana position at that point and kind of started, it wasn't selling Bitcoin yet, but was selling the things that had gone up the most at that point. Well, let me ask.

Ryan Sean Adams:
[30:52] Were you exiting Solana for Bitcoin or was it for cash or was it kind of a combination?

Michael Nadeau:
[30:57] We were just going to cash. I did end up buying some more Bitcoin after it dropped in April of 25. So there's always ways to like take some of those gains. And if you think Bitcoin still has a 50 to 100% move, you know, you can catch that, you know, that upside in Bitcoin later in the cycle. But we were starting to go risk off, right? And I think this is how people should think about it, especially if you've been in the market from the lows, is the people that have been in the market, you know, have been waiting for these moments for like lots of uh capital to come in and other you know things to really take off and so if somebody's up you know 10x and people are new people are coming into the market maybe there's plenty of new demand coming in, um but the market structure starts to shift because the the sort of smart money is leaving and you're bringing in a new cohort of users that may be new to crypto um, that you know are just learning about these things they think they're but they're actually very late to the cycle. So you're now the market structure, and this is week we're going to cover, we covered it all the way through the bear market, how the coins are shuffling between cost basis cohorts. But at the top of the cycle, what gave me pause back in September, October, was that we had basically a nine month period from January 25 through September, October 25, where Bitcoin was kind of like in a range.

Michael Nadeau:
[32:20] So you had plenty of new money coming in, but you knew the sort of smart money that was up 5, 6x, they were leaving. And so the market structure had shifted where the most coins were held in these top buyer cohorts. And then we had DAT season and all the leverage that came in on top of that. So that was like a very clear setup. In hindsight, obviously we did act, we got out of the market, but we were contrarian to do that. But I was comfortable being contrarian because I'm following the market structure, and how I think the risk is building and then sort of lining that up with the narratives. And if I don't agree with those narratives and no one's talking about market structure, then, you know, to me, it's an indicator that we probably should be going more towards a risk off stance at that stage.

Ryan Sean Adams:
[33:08] So during wealth distribution, you're really keeping an eye on the coin holder rotation metrics that you talked about. I mean, you could see it in the chart here for those who are paying attention to this, a ton of profit taking, even while everyone thought the bull market was still on. And we were still kind of early. You saw the profit-taking and that caused you to position well for then the wealth destruction phase, which is the fourth phase, I suppose. And that's sort of the end. I mean, the bull market is early bull wealth creation and then wealth distribution. High level, do you expect that to play out over three years again as previously? So are we talking about, if we're early bull right now, 2026, 2027 and 2028, and then things start to turn in 2029. What does that look like to you? Obviously, this will depend on what you see in the data, but broad strokes.

Michael Nadeau:
[34:06] Yeah. I mean, it's fascinating to me that we have just consistently seen these roughly one year with this bear market, possibly a little shorter, but we've seen roughly one year bear market and then like three years of expansion covering these phases. Yeah. I don't have a great explanation why it's happening over these four-year cycles, other than in some ways it lines up with sort of what we're seeing with fiscal policy, monetary policy, global liquidity, some of these other things, the sort of debt refinancing schedule. I think some of that is playing into this with Bitcoin and these four-year cycles. But the thing that I'm most anchored to is the data that we track to try to identify where we're at within the cycles. That's going to really inform how I sort of manage risk and manage the portfolio. But yes, I would say I'm always anchored to like, yes, if it happened in the past like that, So I'm sort of anchored to that. And then I'll be looking at the data to see if there's anything in the data that's going to shake me out of that position.

Ryan Sean Adams:
[35:09] Let's talk about what's different, what we can expect. So this is the second part. If those are the cycles, what are your expectations for the coming bull run? So the bull run that maybe has started in 2026, September, I think you said this in today's report, that you actually expect that this bull run could be even bigger than the last. Can you talk about that?

Michael Nadeau:
[35:34] Yes. And I was wrong about sort of some of the calls we made in terms of like where we thought Bitcoin could get to. I thought we'd see, you know, more than 126K last cycle. So I'll preface with that.

Ryan Sean Adams:
[35:47] What did you think last cycle?

Michael Nadeau:
[35:48] I thought we would see 150 plus, 150K plus. And so, you know, but that was something I had to change my mind on and say, all right, I'm going to have to exit the market because the market structure is telling me that the probability is probably not going to happen. And, you know, when you go back and just, you know, why did Bitcoin have a little bit more of a muted cycle, which was still, I would say, you know, still went up 6, 7x from the low. So that's a wildly outperform any other benchmarks during that period. But why did it sort of maybe not get to some of the levels we thought it could get to, especially during a Trump presidency when, you know, they came in and we got a much more aligned SEC, all of these things? I think, you know, we know that obviously AI... Really captured the mindshare of investors in the past cycle. We know gold and silver had bull runs and gold outperformed Bitcoin. It just wasn't looking very good for Bitcoin. Sort of the.

Michael Nadeau:
[36:47] Appeal of Bitcoin is not great when gold is outperforming it. So I think some of these things sort of put a damper on people that wanted to come into crypto in the last cycle. And then just from like a kind of liquidity, monetary policy, fiscal policy perspective, the Fed was reducing its balance sheet during the last crypto cycle. So I think if you had said to someone before that cycle started that, hey, the Fed, you know, interest rates are going to remain kind of elevated and the Fed's actually going to be reducing its balance sheet through a crypto cycle, I think people would have had a hard time imagining that we'd have meme coins going crazy and that Bitcoin would still go up 6, 7x. So the fact that that happened is pretty interesting when you think about where we could be going in a cycle where actually the balance sheet is increasing. You've got like this new accord between the treasury and the new Fed chair.

Michael Nadeau:
[37:46] We've seen a lot of these early signals. And part of the reason that Bitcoin has been doing well over the last month is these signals coming from the treasury department about their concern, with interest rates, with interest expense of the government, with the amount of debt that we have over $40 trillion, and potentially trying to prevent volatility on the long end of the yield curve with buybacks and trying to prevent the long end to sort of go to where the free market wants it to go. If that's the case, what i think is going to happen is you're going to investors are going to do the rational logical thing and they're going to you're going to push capital, into these other store value non-sovereign hard money use cases and i think crypto is in a pretty good position to to capture this at a period when bitcoin has already been financialized uh, into the the the traditional finance system um, and i think just education around these around crypto and demand for crypto we know you know roughly 50 million americans own crypto it's you know i think the stigma of crypto is wearing off so all of these things, are combining we're seeing mobile apps i think the infrastructure is ready so just it's a lot of things that are kind of coming together, that make me think that um you know this could be a bigger cycle at a time when like even crypto natives are a little bit down on sort of where you know maybe where the industry is going so um.

Michael Nadeau:
[39:10] Yeah i think when you combine it all together, I think the probabilities are that we see a larger cycle and we're going to have our, um sort of upside price targets that we'll be sharing um, with with pro members this comes with your pro subscription we'll be sharing those as soon as we have confirmation that bitcoin has um shifted out of this uh shifted into the the early bull stage here.

Ryan Sean Adams:
[39:33] That's really cool so you think this cycle could be larger than the last and i think that implies you know bigger bitcoin appreciation so did we do like a 5 6x last cycle

Michael Nadeau:
[39:46] Almost 7x from like the very low bottom to top.

Ryan Sean Adams:
[39:49] Yeah so you think it could exceed that and you're going to call sort of the bull price targets for each of the assets on the watch list I think there are what like 30 assets in the watch

Michael Nadeau:
[40:00] Five or so on there.

Ryan Sean Adams:
[40:01] Yeah 35 assets in the watch list previously during the risk off mic season those all had fair value ranges and also deep value ranges. So those were price calls on kind of the bearish side. Now you're going to be publishing in the weeks to come the upside targets, the bull market targets for each of these assets on the watch list, and that's available to TDR Pro members. Okay. So that's exciting. That is broad expectations for the bull run. Can you talk about how you are playing it so far. Maybe highlight a few of the sectors and themes that you like right now that have provided some of that overperformance for TDR and that are signs maybe of things to come in the early bull and the wealth creation phases of this upcoming bull cycle.

Michael Nadeau:
[40:54] Yes. So Bitcoin still anchors the portfolio. It's a smaller percentage of the portfolio than it normally is. And part of that's because the non-Bitcoin exposure has outperformed. But in the bear market, we allocated about 44% of the capital that was deployed, actually went to Bitcoin. But it actually represents a much smaller percentage of the portfolio right now because of outperformance from other assets. But the things that I really want to have exposure to, especially early in this cycle, we built a thesis for the social trading. I call it kind of fast DeFi area of the market. We started talking about PumpFun back in, I believe it was April 2017. And this is something that I was monitoring at the time. I think most of the attention was on perps and Hyperliquid and what was going on there. And we started to look at PumpFun. We built a dashboard.

Michael Nadeau:
[41:51] I think it's the most extensive dashboard like available in the market in terms of everything that's going on on PumpFun. And I was just surprised that it was doing, you know, a million dollars a day in revenue. It was doing a lot of revenue in terms of creators making lots of money on the platform. We did some user retention statistics and I was just kind of like blown away at like the user retention stats relative to what you would look at, like comparing it to other consumer apps and stuff like that. So I kind of built this view that like something interesting is going on here. And then when you go on crypto Twitter, they're just the discussion around pump was like mostly like I would say like 95 percent negative about sort of the asset. Everyone sort of had these views that these revenues are fake.

Ryan Sean Adams:
[42:41] Basically, it's dead. It's wash trading. It's never coming back. That was a fad. That was Beanie Babies. And you're seeing different indicators.

Michael Nadeau:
[42:49] That was kind of what happened. And so we built a thesis there. We shared a lot of research we thought that um pump was a better, uh investment to to build conviction on than hyperliquid from where hyperliquid's valuation was we did actually we built a dashboard comparing the two assets from a fundamental, perspective so yeah so this is an area we think this is just a growth sector for for crypto um and i think in some ways it's hitting a, a different user than like your typical crypto twitter uh user i think pump is is is becoming somewhat of like, this is a social experience. I think this is the piece that I try to focus on with meme coins is like.

Michael Nadeau:
[43:29] This is a social experience. It's kind of more of gaming. It's trading, it's gaming, it's social. It's kind of this interesting mix of things that seems to be resonating with the younger kids. I think we're becoming sort of like these unks, I guess, in the crypto space. This is not an area that I'm playing in, but I'm watching it. I'm downloading the apps. I'm testing it. I'm involved, but I'm not down there in the trenches. but I respect what's going on down there. And we've built a thesis. So this is an area we've got, this was our highest conviction play. We then allocated to pawns and we got into pawns at a very low market cap. And we're excited about that. We're holding that position. It went way up. Now it's down 40% or so from where it was, but we're still up multiples on that. So that's one way to play sort of the, I would say maybe the early bull. And we'll see if this sort of detaches, you know, we'll see where this goes. And we're going to monitor it as the cycle plays out. There's a lot of competition. So it's getting, you know, more difficult to, project, you know, kind of how this is going to play out.

Ryan Sean Adams:
[44:37] So to link people to the process here and just to go through what you built, you saw something the rest of the market didn't see, which was contrarian and some of the on-chain fundamentals of POMP that caused you to publish research about POMP and to create a fair value and deep value market price on it. The TDR portfolio then took action. So TDR Pro members saw all of that research And then they also saw the price alerts when you were purchasing. And at times during the bear market, you were underwater on the pump position. So you had to have conviction. You had to kind of hold through that. And now you're up right now at this point in time, something like a 3-4x on that position, if I'm tracking correctly. But then that conviction, that early bull win also led you to see another asset that was kind of similar adjacent to it very early on, which was pawns. And then deploy not a crazy amount, but a small amount of the portfolio there. And that paid off in a big way. Something that grew from like, I don't know, one, 2% of the portfolio to like much higher, like a 10% or something like that. That is how you generally play these sectors and themes and these assets and identify the winners. It's rigorous research. It's kind of like, you know, testing your assumptions. It's conviction buys. And it's open sourcing all of this as an investor journal to the TDR community.

Michael Nadeau:
[45:59] That's right. And, you know, one of the advantages, I guess, of just being somebody who publishes content and gets instant feedback is like we, you know, we don't hide anything. I put this pump thesis out there for anybody that could have access that we share the dashboards. And but the value for me of like giving all this away is like we get, feedback from the market. So I wanted, when we form a thesis, like I want to know what are all the opposing views on my view so that I feel like I'm smarter than the people who disagree with me on the subject. This is a Charlie Munger topic that I think is like incredibly valuable. So we actually, the report we published was, it was basically produced because we formed a thesis, we went on social media, we talked about it. And then I took all of the feedback that I got that I disagreed with. And we wrote about that and why we disagree with it. So people could understand this is the view of the market. And this is how we're thinking about it. And I think if people go back and look at that, I think we were the first people talking about some of these ideas.

Ryan Sean Adams:
[47:01] I think you were. And that's a great example of basically how you play it. You also have some positions in stable coins. Maybe another one to just talk about is on-chain perps and options. And of course, the broader portfolio, what you're trying to do in the TDR portfolio is beat Bitcoin. So that's your benchmark and your index and doing that incredibly well so far into kind of this early bull phase. And then have a allocation of what? 10 to 15 or so positions. So some concentrated positions. You're not trying to invest in everything out there. You're not trying to chase narratives or chase pumps. It's high conviction bets that form the basis of the portfolio and another category you've looked at is on-chain perps and options. So what are your winners there and what did you see?

Michael Nadeau:
[47:54] Yeah, so obviously with the performance of Hype over the last few years, really since they've come to market, this has been an area of interest. We have really not participated in Hyperliquid. We had a price target of $15 to $20. Actually, it was our bear market range, and it came down to like $22. I actually remember recording with you around this time. We talked about it, and I didn't end up allocating. And of course, it just kind of took off from there. We were doing a lot of research at that time trying to form a view of where we thought the perps market was going. And kind of what I concluded was that, And sort of like real world asset trading around real world assets was actually going to be first expressed through perps markets. We're now seeing this with tokenized assets with Robinhood. But I think for the most part, we're going to see sort of interest in real world asset trading on chain through perps. And so we wanted to have exposure to this.

Michael Nadeau:
[48:53] What was maybe good about the fact that we thought hype was overvalued was it forced me to look into some other areas. And that's how we found lighter. Um lighter was a 250 million dollar market cap when we started doing the research it started to um.

Michael Nadeau:
[49:09] Allocate to lighter and what i started to realize there was i thought the product was was better actually than than hyperliquid which is we could sort of say hyperliquid is more kind of infrastructure and they want others to come in and build lighter type apps on top, but lighter was in the ethereum ecosystem we could sort of build a view that like, this is an interesting uh project for Ethereum and Ethereum, community would probably get behind this project, but also just really liked the way that they set up the product where basically all of the accounting for what happens on LiDAR runs through Ethereum. It's really interesting from that perspective. It's leveraging the security of Ethereum. So it has some features that make it kind of interesting when you just compare it to Hyperliquid. And then when we tested it and kind of used it, we thought it was a better product. So, um, built a, same idea, built a dashboard, started talking about lighter. And that has been one of the, the better performing assets as well. And it's actually gone up to X from what hype has done since we, since we entered that, it's still only about 5% of hyper liquids, uh, market cap, uh, lighter part of our view there was that there was a chance that lighter would actually get integrated into, um, into the Robin hood app.

Michael Nadeau:
[50:25] That was not something I thought was imminent. That happens very quickly. And now roughly 90% of the perps volumes that are going through the Robinhood app are actually routed through Leiter, which is really interesting. That was a rev share there between Robinhood and Leiter. So that's a really interesting position, I think, for this stage of the cycle, because I think it can actually go, it probably has a lot of upside, even though it's up 3, 4x in our portfolio right now.

Ryan Sean Adams:
[50:53] And am I right in saying, Mike, that this work continues into the early bull? So the work of research and publishing research and figuring out fair value targets and whether you should buy something and that that work gets instantiated in sort of, I guess, your stake weighted reputation of you're actually like, you know, publishing your portfolio, whether it's wrong or whether it's right, you're publishing that portfolio as well. And then other people on the TDR journey who are subscribed to this and members of TDR Pro can tap into all of that research and those price calls and look at your portfolio and compare it with where they are going. This also means, Mike, you don't have to catch everything. So a little bit of regret and missing hype. It did lead to a winner on the lighter side of things. I know you've had a little bit of regret in missing some Zcash purchases, but you don't have to get everything right, I suppose. You just need to get a few things right in the portfolio for it to exceed and for it to perform against Bitcoin.

Michael Nadeau:
[52:00] Yeah, I think that's a good point that you're making there because I think a lot of this comes back to like mindset. And we talk a lot about this. Like, it's easy if you're on X, like there's always going to be someone in an asset that you don't know and that's talking about it. And, you know, you're not going to you're not going to hit everything. You're not going to be perfect. You got to kind of like level set with yourself. You don't need you only need a couple sort of outperforming assets. You only need to get the cycle largely right and sort of manage risk through that. And I just think having the right mindset, having an abundance mindset, you know, thinking of ways that you can add value and help others. And like, that's what I mostly, you know, try to do. It's fun to invest and make money. I'm super competitive and I love doing this, but it's like almost more satisfying sharing the research, getting feedback from people, helping, you know, helping, you know, bring some people, pull some people up the ladder, you know, because everything that I've done is learned from others as well. So we're just trying to, you know, pay it forward a little bit.

Ryan Sean Adams:
[52:56] Well, let's end with that then, kind of the final piece of this is how other folks can lock in for the early bull market with TDR. The very first thing you should do and what you should know is Mike and I publish podcasts on a weekly basis. This is sort of a zoom out guide to the next three years or so. But on a weekly basis, we're basically talking about what's happening in the market with market structure, what things are looking like and shaping up on a week to week basis. Those episodes come out every Wednesday. You can subscribe to them on Spotify or if you get your podcasts, also YouTube. There's also a report that accompanies that that's published on the TDR website.

Ryan Sean Adams:
[53:39] So you should sign up via email. The reports are for TDR Pro members, but there is a Friday report on a particular asset that is also free every week. So subscribe on those channels. And then if you wanna fully plug in and get access to the Investor Journal, the watch list with price targets. If you want the research, including this guide that we talked about today. So there's a whole written content piece with all of the charts and all of the instructions, how Mike is approaching this market. It's called the guide to the coming bull market. You can get that in your inbox if you become a TDR Pro member. So you get the portfolio, you get this guide, you get the Wednesday research, you get the price targets. It's what I do with all of that information as well, and this has been huge for me, is I plug that into my Claude and I match that with my portfolio. And with that synthesis, I...

Ryan Sean Adams:
[54:34] Essentially allow Mike and Claude and my portfolio to sort of inform where I'm going. It's an incredibly powerful tool. And you can get that for free. Actually, there's a 30-day trial. So if you just want to try that out, you could sign up. There's a link in the show notes and you can get the TDR for free as well as always these podcasts will be free for you. So you can sign up that way. Um mike this is exciting time man we have a very cool set of weeks ahead of us and uh i'm pretty excited about this is this going to be i guess the fourth or the fifth crypto bull market how are we counting these things now are we in number four number five

Michael Nadeau:
[55:14] Um so i would say probably 2013 was number one uh 2017 to 2021 was three last cycle four so i would say we're entering the the fifth you know we're mostly when we compare uh, cycle to cycle we're mostly focusing on the more recent ones because the market structure is shifting and all that but yeah fifth fifth cycle um eath's been around what since 20 over 10 years so um, bitcoin's what 15 bitcoin's over 15 um and you know solana really just you know just coming over five years old so um the entire ecosystem is maturing we've We're integrating, with TradFi regulations. I mean, this is what we've all been waiting for, I think. So very excited. Expect lots of volatility. Expect things to be up and down. But hopefully this framework can help people, enjoy the cycle a little bit more and kind of feel like they're a little bit more in control of things by anchoring to data and history.

Ryan Sean Adams:
[56:14] Well, thanks to all the new listeners for the early bull market. We're excited to be with you. Let's end it here. None of this has been financial advice. Of course, this is an investor journal and we're on the journey right alongside you. So until next time, stay curious.