• The analyst examines Bitcoin's current position within the 4‑year cycle.
• Upcoming conference 'Investing Through the Cycles' in Miami this November is promoted.

The 4‑Year Cycle

• Bitcoin tends to form a low and a high approximately every 4 years – similar to the S&P 500.
• A 4‑year cycle does not make Bitcoin a bad investment; it reflects human psychology and liquidity patterns.
• The cycle refers to lows, not necessarily to highs.

Current Cycle Position

• Measured from the last low (2022), we are on day 1,354; previous cycle bottoms occurred around days 1,430–1,440. We are approaching the expected cycle bottom.
• Measured from the peak, we are 304 days into the bear market; the average bottom is at 406 days – about ¾ of the way through.
• Historical bottoms: January 2015, December 2018, November 2022. An October 2026 bottom is plausible.

Comparison with 2019

• The macro environment (three rate cuts, end of QT) strongly resembles 2019.
• Back then, there was also no rotation into altcoins and the top occurred during market apathy.

Technical Indicators

• The 50‑, 100‑, and 200‑week moving averages show exactly the same pattern as in the previous three bear markets: loss of the 50, then the 100, then a test of the 200.
• This time is not different – the charts are clear.

Conclusion & Strategy

• We are in the final third of the bear market. Further downside is possible, but the long‑term outlook remains positive.
• Dollar‑cost averaging (DCA) is a sensible strategy for investors with a long‑term horizon.
• Critics of the 4‑year cycle will likely embrace it again once the bottom is in.

The Largest Hack in History Hit Binance

On October 29 at 4:00 PM Eastern Time, North Korean hackers made off with $6.3 billion from Binance – the largest hack ever, not just in crypto. Fortunately, about half was frozen, but the incident remains unprecedented.

How the Hack Unfolded

• An infected developer laptop was the entry point. 9 out of 10 major attacks in the last three years started this way.
• The hackers gained access to a service container that could sign transactions – like having access to a pen in a bank that issues checks.
• They pre-signed 50 transactions with different nonces and used one to convert the hot wallet into a smart wallet (via EIP-7702).
• From there, they drained all assets while new deposits kept flowing in and were instantly stolen.

The Role of EIP-7702

• EIP-7702 allows a regular crypto wallet (EOA) to temporarily borrow a smart contract's code.
• The hackers used it to drain all assets in one transaction – more efficient, but not the root cause.
• The hack would have happened with or without EIP-7702; it just sped things up.

Key Takeaway

• This hack is a story about operational security, malware, and likely social engineering.
• New features like EIP-7702 expand the attack surface, but the core failure was inadequate protection of signing capabilities.
• The community must learn from this to prevent future attacks.

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Listen to the full conversation on the podcast 'Unchained' with Laura Shin – live every Monday and Thursday.

The New Political Reality

The 2026 midterms resulted in a historic Democratic sweep of both chambers of Congress, fundamentally breaking the political paradigm of the last decade and reshaping the landscape for crypto regulation.

• The Clarity Act is widely considered dead. The window for industry-friendly market structure legislation has closed, at least for this Congress.

The Internal Democratic Fight

There is a severe split within the Democratic party on how to handle crypto:

• The Revenge Wing (Warren Faction): Senator Elizabeth Warren (incoming Chair of the Banking Committee) is expected to launch aggressive oversight and regulation. The hosts describe this as an 'anti-crypto army' focused on litigating past grievances.
• The Pragmatic Wing: A wave of new, younger millennial members (Tarico, Andrews) is less interested in waging war on tech and more focused on kitchen-table issues like affordability and anti-corruption.

Key Quote: “The extremism of some members of the crypto industry mirrors their antagonist in Elizabeth Warren. ...they are more similar to each other than they are to people in the middle.” (Horseshoe Theory).

Concrete Threats to the Industry

• Market Structure Bill 2.0: Rep. Maxine Waters is drafting a much stricter bill, likely including stricter DeFi rules, expanded SEC jurisdiction, and mandatory 24-hour payout audits.
• Genius Act Implementation at Risk: Even though enacted, the Democratic Congress can hamstring its implementation through budget riders and hostile oversight of the rulemaking agencies.
• Investigations: A major focus will be the Trump family's crypto ventures (World Liberty, meme coins). This scrutiny creates a political opening for other companies to position themselves as good-faith actors.

A Strategic Reset is Required

Panelists Mike Katz and Justin Slaughter strongly advise the industry to change its strategy immediately:

• Super PACs are a weapon of last resort. The massive spending (e.g., $56M against Sherid Brown) failed to intimidate Democrats and may have backfired.
• Build Bridges: The industry must stop relying on raw financial power and instead engage in good faith on Democratic terms, explaining crypto's utility in areas like cheaper payments and financial inclusion.
• Pick Your Battles: Accepting stricter rules on custody and audits while pushing back on extreme DeFi bans is the path forward. The next two years are critical to avoid a much worse outcome if Democrats win the presidency in 2028.

Market Mechanics and Current Situation

• The stock market shows remarkable resilience: despite rising interest rates (10-year Treasury from 4% to 5%), higher oil prices (55 to 95 USD), and geopolitical events, stocks gained 11%.
• The market is currently the second most expensive in history (only surpassed by the dot-com bubble), with a dividend yield at historically low 1%.

Key Market Drivers

• Passive investing dominates with 55-60% of market activity – automated purchases via 401(k) plans and retail investors.
• Foreign inflows: $1.6 trillion flowed into the US market in 2025.
• Stock buybacks by companies: approximately $800 billion annually (including stock-based compensation).
• Inelastic market hypothesis: Each invested dollar increases market capitalization by $5–8. Combined, $2 trillion inflows explain a $10 trillion rise.

What Would Trigger a Proper Crash?

1. Reversal of 401(k) contributions: Starting in 2028, baby boomers may generate net negative contributions for the first time.
2. Panic selling by foreign investors: They hold over $20 trillion in US assets; a $5 trillion withdrawal could push the market down by $25 trillion.
3. Halt of stock buybacks due to a recession.
4. Negative inelastic market: Selling would amplify the downtrend.

• Prerequisite: A severe recession like 2001/2009 – as long as the US economy grows (Q4 accelerated), the market remains stable.

Outlook and Strategy

• Mark Spitznagel predicts a crash around 2027–2028 with an 80% decline, but remains short-term optimistic and hedged.
• Value investing opportunities still exist: Realty Income (dividend + inflation protection), Netflix, Kaspi (high dividend yield), Chinese internet stocks (oversold).
• Recommendation: Focus on fundamentals rather than timing a crash. Buffett quote: "When others are less cautious, we should be more cautious."

Key Takeaways from the Interview with Russell Clark

Russell Clark, founder of hedge fund Bramble Capital, discusses the economic and political consequences of the US midterms and the dynamics of AI investments. His central thesis: Rising government spending, higher inflation, and growing wages are systemic – not a short-term cycle.

Political Landscape After the Midterms

• The election result was less a vote for Democrats than a rejection of Trump's policies, driven by people wanting more money in their pockets.
• Trump's successful immigration policy removed a key political pillar; high oil prices and cuts to social programs weakened his base.
• Clark expects pro-worker and inflation-friendly measures to intensify. Trump will likely veto tax increases, but higher spending is probable – the deficit will not shrink.

AI Bubble: Why Not Short?

• The best short opportunities arise from overcapacity driven by logical incentives – e.g., China, where companies compete for market dominance.
• Clark sees no such clear overcapacity in AI: demand for data centers remains enormous, and hyperscalers are fully booked.
• AI is an existential threat for Google, Microsoft, etc. – they must invest, even if it looks financially irrational.
• Governments may step in to prevent China from gaining an edge, limiting downside for shorts.
• As long as equity markets keep funding AI projects like SpaceX or OpenAI, the crucial evidence for a bubble bursting is missing.
• Even Oracle, despite a fallen stock price, has not drastically cut capex – it continues to raise billions in capital markets.

Capital Scarcity and Inflation

• The vast capital pools from Asia that used to flow into US Treasuries are shrinking – central banks hold fewer dollar reserves.
• This leads to higher capital costs and tighter financing conditions, likely hurting private equity and alternative asset managers.
• The US is in a kind of Cold War with China, which permanently elevates defense spending and investment – reminiscent of wartime economies.
• Wages are the true inflation driver, not oil. Once the Fed cuts rates, the long bond market may sell off because investors realize inflation is not being fought.

Opportunities and Risks for Investors

• Clark is positive on Japan: its long stagnation was politically imposed (US pressure to limit semiconductors). Now investment returns, and rising property prices are less politically sensitive than elsewhere.
• US homebuilders and franchise restaurants could come under pressure as margins shrink due to higher labor, energy, and interest costs.
• Share buybacks remain the dominant market driver, with Apple as a prime example. Companies without existential AI capex needs may benefit long-term.
• Oil is a “dead investment”: road transport demand has peaked, and the link between energy consumption and GDP is weakening.

Conclusion

Russell Clark sees asymmetric risks: while the AI bubble offers a poor risk-reward for short sellers, structural inflation trends and capital scarcity are the key factors for the years ahead. He continues to search for concrete evidence for a short position – but hasn't found it yet.

📉 Market Under Pressure: Echoes of 2018

This video analyses the ongoing losses in the US stock market after the midterms and draws striking parallels to 2018. Back then, a post-midterm rally quickly reversed into a sharp Q4 sell-off – a pattern that looks set to repeat.

🔍 The Three Key Factors Driving the Decline (Then & Now)

• 🐦 Hawkish Fed: The Federal Reserve continues to signal rate hikes despite dropping markets. There's still a ~75% chance of a December rate increase.
• 🌍 Escalating Trade Wars: Similar to 2018, tariffs are squeezing profit margins for companies like Caterpillar, 3M, and Ford. Today, tensions with Iran add another layer of uncertainty.
• 🔍 Tighter Regulation: Increased scrutiny, especially around Artificial Intelligence (AI), is weighing on sentiment – mirroring the regulatory headwinds tech stocks faced in 2018.

💡 Outlook: What Does This Mean for Crypto?

The presenter warns: If the NASDAQ can test its July low, why can't Bitcoin? He expects a potential capitulation of the last remaining optimists before the next bull market begins. Markets are currently driven by headline fatigue and high uncertainty.

📅 Conference Note: The 'Investing Through the Cycles' conference in Miami takes place in just over two weeks – check the description for details.

Peru's Coffee History at a Glance

• Coffee cultivation in Peru began between 1740 and 1760, back when the Kingdom of Peru was much larger.
• The first coffee exports went to Germany and England in 1887.
• In 1873, after defaulting on a loan, the Peruvian government ceded two million hectares of land to Britain, where coffee was soon planted.
• In the 1970s, large coffee farms were divided up and sold to smallholder producers under Juan Velasco. This was ultimately positive but posed challenges at the time.

From Quota Systems to Organic Certification

• The International Coffee Agreement helped Peru maintain prices, but also reduced the incentive to invest in infrastructure.
• In the 1980s and 1990s, the Shining Path (Sendero Luminoso) brought violence to coffee communities and hindered rural investment.
• From the late 1990s, demand for ethically certified coffee like Fairtrade grew. NGOs invested heavily in Peru.
• Today, around 25% of the country's 100,000 smallholder producers belong to cooperatives, giving them access to financing, technical support, quality improvements, and large buyers.
• Peru is now the world's largest producer of certified organic Arabica coffee.

From Late Bloomer to Specialty Coffee Destination

• For a long time, many producers lacked infrastructure, so delays between harvest and processing hurt cup quality.
• That has changed rapidly: more quality-focused smallholders and producer groups now pay close attention to variety, processing, and cup quality.
• Traceability is often available down to the cooperative or producer group, and frequently all the way to a single estate.

Alternative Models and Mountain Farming

• Beyond traditional cooperatives, there are collective models where several farms help each other with harvesting and share resources – a creative response to labor shortages.
• Coffee grows on steep mountain slopes and must be harvested by hand. Getting the coffee down to processing facilities is extremely labor-intensive.

Flavor Profile and Challenges

• Most Peruvian coffee is washed.
• Peruvian coffee used to be described as sweet and full-bodied but not particularly complex. Today, specialty lots can be floral, juicy, aromatic, and multifaceted.
• A major challenge is leaf rust, a fungus that attacks coffee trees. Popular varieties like Typica and Caturra are susceptible.
• Some farms are adapting by planting new varieties like Geisha and different Bourbon types.

Key Growing Regions in Peru

• Cajamarca (north): well-organized smallholders; around 20–22% of production.
• Junín: around 20–25% of total production; the region suffered greatly in the 1980s and 1990s.
• Cusco: closely linked to tourism, especially visits to Machu Picchu.
• San Martín (eastern Andes): small farms of 5–10 hectares; formerly a coca-growing area, now also known for coffee, cacao, and honey.

Conclusion

• Coffee is a big deal in Peru: more than two million people are directly or indirectly employed in the sector.
• Peruvian specialty coffees are definitely worth exploring.