Bitcoin, altcoins, and macro conditions as Q4 begins
Rob from Digital Asset News hosts Guy from Coin Bureau and analyst Ben to discuss Bitcoin's Q3 performance, the outlook for Q4, altcoin dynamics, and macro conditions as the fourth quarter begins.
Summary
Rob, Guy, and Ben open Q4 with a review of Bitcoin's strong Q3 — up roughly 50%, the best quarter since 2017 — and debate whether the four-year cycle thesis still holds. Ben argues that as long as Bitcoin holds above $83K, the burden of proof has shifted to the bears, while Guy contends that spot ETFs have fundamentally broken the old mechanism by which capital flowed from Bitcoin into altcoins. Both note the paradox of Bitcoin rallying despite rising yields, a strengthening dollar, and elevated energy prices, with Guy pointing to Bitcoin's growing correlation with gold as evidence of a sovereign debt and fiat debasement narrative taking hold. Ben outlines the conditions under which yields might top — likely within four to six weeks — and explains why the reason yields top matters more than the fact that they top. The episode closes with rapid-fire questions on overrated narratives, charts worth watching, and dream conference speakers.
Key Takeaways
FULL TRANSCRIPT
Q3 Review and the State of the Four-Year Cycle
Rob: All right, everybody. Welcome to Q4 as we kick off after a pretty good Q3. I'm joined as ever by Guy from Coin Bureau and 20 other channels. Guy, how you doing?
Guy: I'm all right, thanks Rob.
Rob: And of course Ben, Bitcoin dominance, my man. How you doing?
Ben: Pretty good. How about you?
Rob: Ah, pretty good. I wanted to dive into this and get going. Time is valuable, especially with what we have for today. Now, this is the first day of Q4, and it's quite an interesting time frame, especially as we go from the all-time high, which was just one year ago in five days — October 6th is coming up on us quite quickly. And we had a massive Q3. We can see right here on this website — it's Into the Cryptoverse, there's a link in the description where you can check it out. There's a lot of things that are free, but there's some really good stuff behind the paywall which is worth it. We can see that July, August, September was a pretty good quarter, which some saw coming, some did not. It doesn't really matter — dollar cost averaging works out okay. 7%, 25% in September, and we haven't had a quarter like that since 2017, where we had this massive 8%, 67% positive month and then a down month.
So the question I have, going across all different things, is: it's October 1st today, only got five more days till we reach the previous cycle peak. So far Q3 has been great. So what broke? Was it the cycle itself? Was there something going on in the macro hiding behind everything? Or was it like an unnatural exuberance for AI plays and the picks and shovels that have to deal with AI? Ben, kick that off and then we'll ask Guy with an additional question.
Ben: I don't think you could argue that anything broke. Bitcoin normally has 40% rallies in Q3 — this was a 50% rally, so it did go up a little bit more than it normally does, and it did go higher than I thought it would. Looking back, if the July low is the low — which, as long as we're above $83K, the burden of proof has certainly shifted to the bears, not the bulls — I think we would look back at this in 20 years and still say that in the midterm year, Bitcoin went down and it went below the 200-day moving average, which is what it did in the cycle before and the cycle before that. This is just what always happens. But when you're living through it, it obviously feels very different.
When we've talked about the four-year cycle in the past, and in the context of the S&P 500, there are times where most of the time the S&P would bottom in Q4 and then occasionally it would bottom earlier in the year. So it's not an exact science. And as far as it being a year out from the prior all-time high — it's not really over until we're through the fourth quarter as well. It's hard to jump to conclusions before we even get through Q4, because in some ways if we do break back down, that doesn't mean we need to go back to a new low. I'm not saying that's a necessity, but there could still be some type of event that spooks people. I certainly have no idea. With Bitcoin holding $83K, it's shattered my expectations, so I'm trying to be less deterministic about this stuff.
If you look at the length of the last two cycles, it would actually put this one not towards early October but towards late October, because I think a couple of them were around 500 days rather than the exact anniversary. We'll see what happens. Right now you have the long end of the yield curve going up, and normally what happens — at least what's happened this year — is the long end goes up and then Bitcoin either stays flat or goes up slightly, and then when the long end goes down, Bitcoin has dropped. With Bitcoin taking out the May high, it's certainly called a lot of things into question. But look — if you told me the dollar was going to be going up, energy prices were going to be going up, the 30-year yield was at 5.6%, the 10-year was breaking 5.3%, I would not have assumed Bitcoin would be trading at $83K. It just goes to show that markets don't have to conform to our expectations.
Rob: That is the truth. We had a lot of expectations, but I thought it was going to go down too, and here we are. It's a good thing that we just stay in the game. The people watching this video are the ones that were buying in the bear, so congratulations — it ain't easy throwing sand in the ocean.
Guy, same type of question but with a little add-on. What Ben was talking about made a lot of sense — the four-year cycles. Is that still the right lens to look at things? And do the ETFs really change how things have gone? As a reminder, we had a pretty massive setup for this last cycle: the foundation was there, ETFs in 2024, BlackRock, Fidelity, government support, the CFTC and SEC coming in because Congress couldn't pass clarity, and digital asset treasuries. So across the board it looked pretty good. Did the ETFs change things, or do you think it's not a big deal and we'll just keep going along?
Guy: I think the ETFs definitely changed how capital finds its way into crypto and what it then does after that. In previous cycles, capital found its way on-chain via exchanges into Bitcoin, and then as Bitcoin holders' investments went up, they became more tempted to go and explore higher-risk stuff, moving out along the risk curve and into altcoins. And then we'd get this across-the-board melt-up. What ETFs did is completely shut that route off. Capital still finds its way into Bitcoin, but it's through a regulated wrapper that doesn't generally tend to move out of. If it moves out, it might go to a spot ETH ETF, but it will probably go back out into someone's brokerage account and be reallocated elsewhere — most likely to stocks or commodities or other assets that aren't crypto.
So yeah, the ETFs have changed things because capital just doesn't enter crypto and then disperse through crypto like it once did. That's not to say new money doesn't find its way in, but the old dynamic of how a crypto bull market worked has been broken by the ETF. It's taken a bit of time to get used to, and I'm sure there are plenty of people who disagree with me on that, but that's the way I see it and I've yet to be convinced otherwise.
And then as to what's happened recently — Ben made a very interesting point about how there's always something that spooks people in crypto at times like this. What better illustration of that than the fact that we're five days off the high from last year, and also nine days off the anniversary of the day when crypto lost many multiples of billions in a single day — far more than went down the tubes when FTX collapsed. We're just over a week away from the anniversary of October 10th, which was an absolute catastrophe, and in many ways I think we're still recovering from it. That's as good an illustration as any of how quickly this market can change and how quickly sentiment can change.
Macro Conditions: Yields, Inflation, and What the Market Is Seeing
Rob: No, it's a great answer. And this will go into the next question, which I'm going to direct right towards you, Guy. So you just talked about all the things — we've got nine or ten days away from that anniversary. That's interesting because in Q3 we saw a massive run-up even though we had all these problems. Ben talked about those as well. But we've got the Fed — it looks like they're going to hike again, and it looks like they're going to hike also in December, so potentially three rate hikes. I'm not saying it is — I don't have a crystal ball. And then of course we've also got treasuries: the 10-year, 20-year, 30-year at 5.2%, 5.6% across the board. Inflation is going up after all those things. We've still seen quite a rip. So the question I have for you and Ben is: what is the market seeing in the crypto space that other people are missing?
Guy: It is so surprising that under these conditions Bitcoin and crypto more generally have gone up, because it's totally counterintuitive. My best guess is this: if you take the Fed hiking interest rates and probably doing so again before the end of the year, that's an inflation story. The 10-year yield at 5.25%, the 30-year even higher — these are multi-decade highs. That's also an inflation story, but it's also a story about borrowing out of control and fiat currencies becoming worthless.
You've also got the Clarity Act failing in the Senate. I think a crucial thing is that Bitcoin isn't really affected by the Clarity Act — that's much more about stablecoins and tokenization and things like that. Bitcoin itself is a much more neutral asset. If I had to guess, my best guess would be that Bitcoin's correlation with gold has become the highest it's been in years. I think this is a story about people looking at the dollar and looking at fiat currencies more generally — because as you said, the dollar's up, so other currencies are doing even worse — and going, "I need something that is outside of this system." Everyone knows $40 trillion of debt is just not going away. It only goes up. That doesn't get paid off. So I think Bitcoin particularly is the only way many people see out of that — along with gold — and I think that correlation with gold being so high is probably not a coincidence.
I think there are serious concerns around sovereign debt and the dollar, and also around the competence of governments and the people responsible for this. You look at Scott Bessent's attempted intervention in the bond market, which kind of set this whole rally off just last month — that didn't work, it did absolutely nothing. And I think that was an instructive moment, because people are like, "Okay, these guys want to do something, but there's actually nothing they can do." That was a powerful reminder of just how bad this debt situation is.
Rob: Yeah, well said. It really does come back to the basics of basics. We take a look at the debasement of the currency, there's so much debt out there, the M2 money supply — they're going to keep printing. So why wouldn't we get into assets? Especially as we're careening toward what I think at some point has to be a recession. I'm not saying it's in six months or a year or three years, but these are the things. Just for a little context — this is the national debt today, and in 1980, this was the national debt. The government's really going to get us into a bigger hole. So it's up to us to make sure that we are protected.
Ben, same question Guy just answered. Well answered. But I'll add something else: does this make you more bullish or more nervous? We just talked about some pretty nervous things — the wall of worry — considering we just had the best quarter since 2017 and we're on a nice little rally still. So taking all that, what do you think about the markets moving into Q4? And you did say in the beginning that if history repeats itself, Q4 can be pretty awful.
Ben: Usually what happens is commodities bottom. Commodities go down while the dollar and yields go up, which is kind of what's happening — gold and silver are dropping. What I would look for is when commodities bottom before yields top, and normally the dollar tops before yields top as well. So if we start seeing strength in gold — normally gold starts showing some strength in the later October to November time frame — if we start seeing strength in metals, then we're probably near the top in yields.
Then the question becomes: when yields top, why are they coming down? In 2018 and 2022, yields topped in the late October to early November time frame. So if yields top in late October or early November, when they come down, the reason why they come down should then dictate what's actually happening in risk assets. Because if you look at small caps like the Russell or the equal-weight S&P, that stuff is going down right now — the Russell is down almost 10%. The reason is the Russell is more rate-sensitive than the Mag 7. The Mag 7 has so many billions of dollars in cash sitting there that it's a lot easier for them to make it through harder times, whereas a lot of companies are struggling a lot more.
What's interesting is that in 2018, the Russell started dropping about a month before the S&P did. The reason why it's hard is because I would say 70% to 80% of the time, when the Russell drops, the S&P eventually also drops — the large caps eventually get the memo. But there are some times where the Russell catches back up to the S&P, and we'll figure that out whenever yields top.
So we have to figure out: why are yields topping? If yields top because the war in the Middle East comes to an end and all of a sudden the energy trade is no longer a trade, and yields come down for that reason, then that would probably be bullish — you'd probably have the Russell catching up to the S&P. But if yields top because there's a growth scare — which can often happen after the long end goes up, borrowing costs go up, a lot of things change — then what happens is the S&P goes down to where the Russell is and the Russell goes even lower. That's what we saw happen in 2018 and in some of the other similar periods.
Actually, if you look at the lows in the market this year for Bitcoin and the S&P, they correspond to the long end of the yield curve going down. The long end went down in the February-March time frame — that's where we had that first low in the S&P. We also saw the long end go down in the summer — that's where we had that correction in the S&P. A lot of times you don't even see the S&P show any weakness until closer to the time that yields are topping. That's why in 2014 and 2018, the weakness didn't really show up in the S&P until October — especially in 2018, where the S&P was basically at all-time highs even on October 3rd, and it wasn't until after yields topped that it showed that weakness.
So I think a lot of it is just going to depend on why yields top. Are they topping because of a growth scare, or are they topping because the war in the Middle East finally comes to an end and oil prices drop $20 to $30 overnight? If it's that, that would be a reason to be more in the bull camp. My guess is yields will probably top within the next four to six weeks.
Rob: Good answer, Ben, as usual. How much time have you thought about that over and over in your head?
Ben: Well, I just published a report yesterday about it, so that's why.
Altcoins: Rotation, Real Utility, and the Dominance Question
Rob: All right, great answers, gentlemen. Moving along — we'll get to the Q&A pretty quickly. We're going to switch gears a little bit to altcoins, because it seems like this last quarter was pretty good for Bitcoin but it was great for some altcoins. Not all of them, but that's just how it is. I'm going to direct this to Guy since he has a couple of different channels devoted to this.
Altcoins are ripping on the back of a bunch of big announcements. Zcash — I still don't understand why this rips so much — had an announcement of Grayscale's ETF filing, and it's up 65% in three months, but over 18 months it's up over 800%. Solana ETFs have had inflows for 12 straight weeks. Near is pivoting from an L1 to cross-chain trading and payments for AI agents. Quant just had a huge moment — they were selected for an interoperability role in a bank-led tokenized money network clearing house for US payments. So these altcoins have gone up, and to me personally it's always been three parts speculation, one part utility — just give me a tiny bit of utility and a boatload of speculation and we can have this market actually move. But does it really mean that's going to be sustainable? What's your take?
Guy: The Quant one is interesting. I said on Twitter that a crypto coin pumping on the announcement of a partnership with a TradFi entity is so old school — so 2017, 2021. I'll be honest, I don't know quite how consequential this clearing house announcement is, because crypto is very good at doing things like announcements of announcements or announcements of partnerships that actually turn out to be a bit of a nothing burger. But I'm going to reserve judgment on the Quant one because I don't actually know.
I do think it's really interesting to see that sort of price action off this kind of announcement, because that hasn't really happened more recently. Zcash is benefiting from the whole privacy narrative, and as you say, things like Grayscale's ETF filing as well. I think there's also an element of quantum resistance and whether this is a possible alternative to Bitcoin. Then Solana — Soul is still a pretty useful coin to hold if you're going to trade on Solana. Near again has demonstrated some real utility, though I'm seeing some news of Near Intents maybe getting exploited — I'm not too sure of that.
The questions that arise from all this: is this price action down to new capital? Is new capital finding its way into the crypto ecosystem? Are new people coming on board? I'm not sure that's necessarily the case. Some of it will be new capital, but I do get the sense that this is capital rotating around. Nevertheless, there's good news out there. Clarity failed, but the SEC has kind of picked up the bat — it's working on regulations, and there's a fair bit of speculation now that this could lead to a sort of ICO boom 2.0. I think we are now in an environment where crypto will only produce a handful of winners. People are becoming more selective. Real utility counts for a lot these days, and people are more easily able to sniff out the rest. Good projects with solid fundamentals and good backing and a good story can still do well, but that's not going to translate into everything pumping like it used to.
Rob: You crush me, but you're right. A lot of these altcoins are going to have to go away, and I think it's a rotation of capital. So this will lead me to Ben — and I know this is your favorite subject, just like macro is my favorite subject: altcoins. Same question applies to you. If we take a look at Bitcoin dominance, we can see it was around 70% in 2021, then we had the great altcoin season of May with it at 40%. We topped out around June 2025 with Bitcoin dominance down at 65%, and now we're down to 58%. Is this sustainable or is this a counter-trend rally like you've seen before?
Ben: I mean, I think as always — I'm not talking about your alt, and anyone on the show, not talking about your alt. But this is Total 3 minus USDC minus USDT divided by Bitcoin, and this massive alt season that people are talking about is literally just this little move here. I just don't really buy it. I don't think altcoin pairs against Bitcoin are going to have a long-lasting durable rally until after Bitcoin has had a euphoric rally itself. Until Bitcoin has a euphoric rally, I would expect eventually the collective altcoin market to just bleed back to Bitcoin.
Now, recently the reason why altcoins have outperformed Bitcoin is because the Fed funds rate is not restrictive. Yields have gone up a lot and the Fed has not been chasing the two-year yield like they normally do. The two-year yield, if you approximate it as the neutral rate — which isn't really accurate, but just as an approximation — is around 4.9%. The Fed funds rate is 90 basis points below that. When you think about where the Fed funds rate was for basically the entire last cycle, what you'll notice is that the Fed funds rate was basically above the two-year yield from around 2022 until 2026. So the reason right now why you're seeing altcoins have a rally is because the Fed funds rate is no longer restrictive like it was for several years.
The bear case for all Bitcoin pairs eventually would just be: if the Fed continues to raise rates, there's going to be a time where the Fed funds rate gets back above the two-year yield again, and then you would still likely see altcoins bleed to Bitcoin. It's a long process. That doesn't mean you can't make money in altcoins — a lot of altcoins are doing well. But collectively they're still not really durably outperforming Bitcoin. If you look at Bitcoin dominance excluding stablecoins, we're still at like 65%. I kind of think we're in a similar ballpark to where we were in the context of the last cycle. Remember, last cycle dominance did not top until after that final parabolic rally Bitcoin had in late 2020 to early 2021. So even though you could see altcoins outperform Bitcoin in the short term, I still think in order to have a true drop in Bitcoin dominance back down to like 40%, Bitcoin would have to have a euphoric rally first. That's kind of where I am on all Bitcoin pairs — and that's where I've been for the last six years.
Rapid-Fire Questions: Charts, Narratives, and Conference Speakers
Rob: And of course, Ben has been very consistent on these things and it's worked out pretty decently. Let's get into the last rapid-fire questions, get a Q&A, and we'll get out of here. Ben, I'm going to direct these last ones to you. The most overrated narrative in crypto right now — that's the first one. One chart that you check that almost nobody else does. And the last one is: if you could have one person speak at the ITC conference, which is November 21st or 22nd, who would that person be?
Ben: I wouldn't mind having Jerome Powell come talk. I'd like to hear what he has to say, because the last time we heard him really talk at an FOMC, he was saying that the next move would likely not be a rate hike — he would say that very frequently when people would ask him. And I'm like, well, what do you think is going on now? I feel like he would provide a little bit more forward guidance than Kevin Warsh would, and I'd be curious as to what he has to say. So that'd be one answer.
Rob: The other one is the most overrated narrative in crypto, and then one chart you check that nobody else does.
Ben: I look a lot at how the long end is lining up with risk assets and kind of where those windows come from. I also look a lot at stablecoin dominance, but I imagine a lot of people are looking at that too. Let me show you one I've looked at a fair amount — let me share my screen.
And while you're pulling that up — you know what would be great about Jerome Powell being there? As he speaks we listen, but then afterwards you could ask him the real questions. "Hey, what do you really think, Kevin?" That'd be good stuff.
So this is a chart I've looked at a lot. This is Bitcoin dominance plus USDT dominance plus USDC dominance. The reason I've looked at this is because I've sort of been under the impression that we're just going to be spending some time at these highs, like we did last cycle. In order to have this drop, you would need a reason for much looser monetary policy, but you can't have much looser monetary policy until there's a reason for it. That's why I kind of think this chart will continue to hang around the highs for a while.
And actually another thing you can do to make it a little more interesting for the altcoin people — you can add in ETH dominance as well and kind of just see how last cycle you didn't have that alt season until you actually broke through this sort of barrier. In order to get that move down, which would be reflective of an alt season, you would almost argue that you first need to break through here, convince everyone that altcoins are truly dead against Bitcoin, and then it goes down. That final move up — who knows when that's going to be, because we've been at these range highs since June of 2023. Nothing's really changed.
Rob: Nice. Okay, Guy, same thing for you. Three different questions: what's the overhyped narrative, and who would be the speaker you want to have at ITC?
Guy: Overhyped narrative — I think it's probably privacy. That might sound like a controversial answer. I only think it's overhyped because I think 99.9% of the population don't care about it one single bit. I think it's really important and there are people out there rightly shouting about it and underlining how important it is, but no one gives a damn about it. Crypto people can shout about that until they're blue in the face, but it won't make any difference — people are just fundamentally incapable of understanding it. So privacy is an overrated narrative, not because it's bad, but because people don't engage with it. I could talk for a long time about that.
For speaker, I would go for maybe Stanley Druckenmiller, because he just seems to be tied to everyone in power, everyone in high authority. He seems to have mentored a great many of the decision makers out there at the moment, has been there and done that, and also has some interesting things to say about crypto as well. So he'd be my choice — although I think Jerome Powell would be great as well. I'd pay to watch both.
Rob: I would love to see what Gary Gensler would say there — he could take a victory lap on all of us and start dunking on everybody. "See, told you so. This is what you wanted. This is what you got."
Guy: It was so obvious when he resigned that the memecoin floodgates were just going to flood open.
Audience Q&A: Tesla, Altcoin Picks, and Bitcoin Entry Points
Rob: All right, everybody, all great answers. Let's do a couple of minutes of Q&A and then we've got to get out of here. What do we got? Ben, you did a video just recently about stocks. What do Ben and Guy think about Tesla — good value here or overvaluation? And do you think SpaceX will eventually come under the big Tesla umbrella?
Ben: I picked up some Tesla at around $140 and then again at $220, and I've just been holding it since then. I missed it at $100, so I ended up getting it on the two higher lows after that. I'm probably just going to continue to hold it for now. There could be corrections — maybe there's a correction in Q4 — but regardless of whether there is one or not, I think the business cycle will likely live on, especially through the Anthropic IPO and the OpenAI IPO. The OpenAI one is not until next year. I also own SpaceX. I did a video on SpaceX when it came out, basically saying that normally they rally for a couple of days and then drop for a few weeks, and that usually ends up being a reasonable entry.
Rob: Guy, same thing — Tesla, do you have any of that?
Guy: I don't own any Tesla directly. I own Tesla through ETFs and things that buy indexes. I think it's a very interesting story at the moment because what is Tesla going to be going forward? That might sound like a stupid question — obviously it's a car manufacturer — but I find it really interesting that they haven't released any new models for a very long time, if you forget the Cybertruck, and seem to be pitching heavily into robotics, which I think is potentially huge and could maybe end up being even bigger than cars. But that's what gives me pause — I don't really know what that company is fundamentally about anymore.
Rob: Who knows? But I think if you believe the debasement of the currency is happening, why not get in there? Real quick question from the audience: is Tron a good buy now? It's been sideways. It's an altcoin. And then: what's the best price to enter Bitcoin for those on the sidelines? For me, it's just dynamic DCA. I use the big three — Ben's website, Into the Cryptoverse, and Wes's SMC bot — and I use the risk levels. As the risk levels go down, I buy a heck of a lot more; when the risk levels go up, I buy a lot less. You guys got anything?
Ben: I think DCA is the right fit. Normally you just buy in the second half of the midterm year and then you celebrate a couple of years later.
Rob: Guy, anything on that one?
Guy: Yeah — do whatever, but I think if you try and wait for the best price, you may end up waiting too long. If you want to hold some Bitcoin, hold some Bitcoin.
Rob: Worked out pretty well, especially as time goes on.