Bitcoin Reclaims Its All Time High in 2026, Institutions have Flipped Bullish.

Added: 2026-05-12

[00:00:01]Welcome. It's May 10th, everyone, and I've got a big video today on all kinds of statistical analysis on Bitcoin, specifically how to make money in this Bitcoin market. And I'm one of the founding members of True North. And I always loved looking at the options markets on these things on Bitcoin, on the Bitcoin derivatives, Bitcoin derivatives being MSTR and ASST. And I think there's a lot of opportunity to make serious money both in income books and in Bitcoin books. and I'll go over how I think Bitcoin bulls can use public markets and equities to make money. And I put this all under the umbrella of Bitcoin structured products. That's kind of what I think these markets are. And we're on the verge of tokenized securities markets and Bitcoin being this digital collateral after a massive dispersion of OGs selling out and institutions buying in. So for all those reasons, I think the future looks very positive and there's ways to play these markets. I've been working on various companies for the past year and haven't been trading the my book a lot. Now I'm getting back into focusing on trading my book and I'll go over some ways in which you can optimize your Bitcoin related portfolio, your Bitcoin related securities. I really only focus on one market and that being Bitcoin and Bitcoin derivatives.

[00:01:18]You can really [ __ ] it up or you can really make your uh make your portfolio work for you. that being both in a cashbook format and in a a leverage or amplification type format. And I think there's a lot of things that are, you know, false and a lot of people doing things that won't set them up for success over the next few years or will make them lose a lot of hair on the way between here and 250k Bitcoin and beyond. So, first, as always, the Bitcoin power law is the governing model for for Bitcoin. and it's the only one that's been accurate over the past really four years of time. People had these crazy assumptions for Bitcoin's growth in a in a short in short order.

[00:01:59]Uh especially around the 2019 2020 2021 period of time. They didn't think they didn't want it to take time, but it will take time. And another great power law is the Bitcoin cost of production power law, which shows it, you know, getting to a million dollars around early 2030, so 2033, 2034, you know, Bitcoin's a forever asset, and you have to think think of it like that. Obviously, we bounced off the one standard deviation below the power law trend. Right now, it sits at about 130k Bitcoin. Power law trend is what you would consider the fair value for Bitcoin or one of them.

[00:02:31]You could also argue the Bitcoin power law floor is the fair value and anything above that is speculative juice. I don't know which is the right framing. I think over time uh as Bitcoin's volatility diminishes, you're not going to see these fluctuations of multiple standard deviations from the power law trend.

[00:02:48]specifically at higher and higher prices since this is in log log scale and those sorts of deviations will be ironed out of Bitcoin. Nevertheless, in the short term, the power floor has served as one of the best entry points into Bitcoin in history. My entry point was roughly so this here is 30k Bitcoin. My entry was 30K Bitcoin uh DCAing through the 2022 bare market. uh selling my stock portfolio and selling uh my car uh for Bitcoin. And so again, the power law, I didn't know about the power law then, but the power law has been one of the best models. And why do I talk about it so much? Because it's the governing model to understand why digital credit, which I don't like the term, uh will be profitable over a long period of time. And then I'll get into a little bit about why specifically the power law gives you exponential returns and looks like an exponential a at kind of longer time scales when the kager has been reduced. So you know most people argue financial assets behave exponentially. Why won't bitcoin turn into exponential? And I think it will.

[00:03:52]It'll look like an exponential even if it continues to behave like a power law.

[00:03:56]So here are your power lock curves.

[00:03:59]Depending on which curve Bitcoin rides out, uh this is what the price behavior will look like over time. I think this is very viable as a digital storm of collateral. I'll do another video reviewing Jeff and um Jeff and Coffeezilla's analysis on digital credit talking about my thoughts. So here this is a great video. This is Mark Newton who is Fund Strat's technician that being Tom Lee's technician. And he is very he's very honest in this video saying, you know, he was expecting a 20% pullback in equities that we haven't gotten yet, but may still be on the horizon. He's expecting choppiness in the future, but he thinks the tops in on oil and precious metals will have kind of another blowoff top in a multi-year decline consolidation. He's bullish on Bitcoin. thinks crypto's in for another potentially short-term low but then bullish long term and he really likes equities and he really really gets into this thing it's like I think you can see in the way he talks about the market is that the only option for him is is equities in a traditional portfolio and and why are equities becoming so important is because we're entering a period of financial repression and when the real Fed funds rate is below the core CPI which is the regime in which it looks like we're headed. If CPI and inflation continues to to tick up, but Wars comes in and keeps rates flat, you know, you're going to be losing money holding short-term notes. And that's something that Jordy talked about in his video this week specifically. He talked a lot about how, you know, this period uh of time over the next 10 years, we're going to see massive productivity booms, short-term interest rates, you know, there's going to be pressure on wages upward. There's going to be pressure and demand on pricing the prices that go the inputs that go into goods and services upwards because of the bottlenecks occurring around energy and AI. We're seeing that reflected in the PMIs. We're seeing it reflected in transport prices.

[00:06:01]So what you're entering in is a period of financial repression because the debt has to continue to get it paid. And so the Fed can artificially hold rates low in order to effectively grow their way out of the debt. And this is what we saw at the end of World War II, which is really the only anal like analogous period of time um with debt to GDP to today. So do do I think there's going to be hyperinflation? No. But do I think the purchasing power of the dollar will continue to erode? Yes. The dollar is a bad investment. The dollar will continue to be a bad investment. And even in Mark Newton's podcast, which is a great podcast, he mentions how the dollar is likely to see another low u moving into the future. I think the dollar will continue to see a low lows and lows and lows uh priced in real estate, priced in goods, scarce real estate, I don't mean rentals. And there's a couple big uh influencers, podcasters like that um that guy that talks about financial um like financial circumstances. Caleb something or other. He's moving his rental properties into equities. The coffee hour guys are moving their rental portfolios into equities. And you know, I don't know if that's Look, I just think real estate is becoming less and less of a viable asset class, specifically with the way interest rates are trending today. But in addition to this sort of financial these financial conditions, I think people just like the liquidity of equities. And this could be a case for the tokenization of real world assets, but I don't believe the tokenization of real world assets will happen with third-party tokenizers because there's too much risk. there's too much risk involved and if we see the tokenization of public markets um which is effectively just 24/7 trading like we you could argue stocks and bonds and stuff are tokenized today. It's just whether or not they're permissionless.

[00:07:48]It's this idea are equities permissionless and as equities become decentralized permissionless maybe they don't have borders there's going to be need to be some sort of worldwide regulatory regime. There's just so many regulatory hurdles. But again, crypto is effectively a unregulated security. And I think the world and the market starting to price in the fact that unregulated securities are a lot different than a bearer asset backed by energy, that being Bitcoin. And this divergence I expect to continue and crypto will continue to compete with equities markets, especially as equities markets become higher speed and potentially permissionless. So permissionless equities markets and crypto are now a synonymous thing and the the world's going to have to figure out uh where it settles on that. This is the S&P 500 in line with what Mark Newton's saying. We're along this kind of 10% this 7% annualized historic Kager. Uh obviously the rolling 10-year realized Kager is up around eight and a half percent for the uh for the S&P 500.

[00:08:54]But look, I we're not in 2000's type periods for uh annualized return. So I think a lot of people talking about bubbles, talking about crazy, you know, overblown markets, they're just uh they're a little misguided, but uh we'll continue to look at the data. and Jordy had great data in his video talking about the consumer sentiment lining up with speculative peaks in the stock market and saying, you know, realistically right now we're nowhere near those types of speculative manas uh that occurred in in um periods of time in 2000 and 2008, but obviously that was in the housing market. So VIX has declined back down. VIX I consider more of a lagging indicator than a leading indicator. Um but it's it's recovered after the Iran problems and more here just talking specifically about Eric Balcunis in this interview where you know the OG selloff the distribution of Bitcoin the long-term holder selling the long-term holder selling was really a great indicator of why the price nuked. But if you look at ETF inflows we've now reached a record high in net ETF inflows and we're starting to tick back up. So really boomers, institutions, long-term holders have absorbed a lot of the selling pressure from the OGs. And this is very positive for Bitcoin over a long period of time.

[00:10:10]Bitcoin's largely uncorrelated to broad broader equity markets over the past 6 months in a negative fashion. But I expect this to continue moving forward.

[00:10:18]Bitcoin is the ultimate debasement asset. As long as M2 is up and to the right, you can expect inflows, monetary inflows into Bitcoin, you know, in all market conditions. So I'm less less worried over time with macro conditions and more concerned with just time. You know, Bitcoin's only real correlation is to that of times. It's also correlated to PMIs and those are growing higher. So this has been one of the scenarios why uh you know people or smart people like Spenc don't believe in the four-year cycle narrative and I really don't believe in it either. We're 36% off all-time highs. Uh I think it's silly to expect a further correction um while everyone sits and waits for, you know, 50k Bitcoin. There are a lot of people, a lot of smart, original Bitcoin people that are just have been caught off sides. I I know a lot of people that sold out and are waiting for for lows in Bitcoin that are, you know, don't want to see another bare market, can't deal with another bare market. It's like, look, that's not how this asset, this is not how you trade this asset. You don't sit around and just you don't get your entries, you know, and you don't always get the entry you want.

[00:11:23]ETFs. Again, these are the ETF flows.

[00:11:25]Massively, massively important ETFs mopping up spare bitcoins. And this leads me into the next part of this video, which is more the trading aspect of of the Bitcoin power law, digital credit, etc., etc. One of the main points in the Jeff and Coffeezilla video is there's only one real fundamental misunderstanding. I actually think Coffeezilla uh generally understands the risks of these credit products quite well. And you know the the risks of these credit products are not simply just Bitcoin's return.

[00:11:57]There's a lot of issuer risk and a lot of issuer credit quality and execution risk that that is bared along which does not have to do with math. It's actually um qualitative. It's how well does the issuer execute on their digital credit strategy. Now with the terminal compound annual growth rate I'll use porkopoulos which is a fantastic site and you can see the decline in kager of a power law based asset and over time this begins to decline less and less. So right now the annual decline in kager is about 3% and in 2035 that will be about 1% annually.

[00:12:33]So what does that mean? I mean it means in 2040 the expected annualized kager will be you know 20% dropping to 10% over the next 30 years and these are all just approximations. This isn't actually necessarily true but it's in line with sailor's model and if this is the case that then this is the supporting evidence it's not factual necessarily but it's evidence that you can issue high t high annualized rates of return credit against this bearer asset. And there was a really good post made recently talking about how power laws manifest themselves. Oh, it's specifically from this guy, Money Order Debt. He does great work.

[00:13:09]Power laws manifest themselves uh between participants in networks. And right now, that's shifting from individuals driving the adoption to institutional institutions, pension funds, sovereign funds, and individuals who manage large amounts of capital that are starting to become orange pill over time. It's the capital, it's the large pools of capital that Bitcoin is starting to tap into. Thank you know this is really a result of ETFs and MSTR and uh other institutional investors.

[00:13:38]Money order debt did a great post on why the high um power law based returns will support Bitcoin over time. He talks about Bitcoin's expected power law trajectory. It's dampening volatility and the skew of returns being in the positive direction, specifically those with those high volatility periods of time. This is why something like stretch effectively transfers the volatility arbitrage um volatility to the positive side between MSTR and STRC. And I'll talk about that later. And that was one of the things I think Coffeezilla got wrong in the interview and that wasn't articulated quite well was that MSTR holders are the ones taking on the performance risk of Bitcoin relative to the cost of capital being in STRC or uh SATA and it's again the market it strategy is actually not taking on the risk. It's the public market equity holders. So they're, you know, they're effectively outsourcing the risk to holders even though a lot of the management team and employees hold the stock itself. So where does that leave us? Well, I love the power law floor. Uh Josh man talks about a lot. I like to talk about a lot. And this power law floor gives you direction. It gives you an understanding of where the price of this asset of Bitcoin will be over time.

[00:14:57]And what it gives you is essentially a put floor for price. And look, I really like the put floor and I've sold a lot of covered calls and I've started on a more aggressive put selling regime because I think put selling is a better expression of the qualities I believe to be at play with Bitcoin and MSCR specifically. It's a durable longduration asset that has less third party counterparty risk than anything else in the market. So I believe selling insurance against it is one of the most profitable um methods and uh people generally pay for overpay for insurance and underpay for the upside uh especially when the volatility explodes to the upside and is less sensitive on the downside. So that's why put selling has been kind of my new uh strategy. These are some of the back tests I run. Really anyone can do back tests is more about execution and and luck or chance or how the asset performs over time. But if you believe in a power law trend, then I believe selling spreads or puts against SATA or STRC is a wonderful way to generate massive returns. And you know, some of the different strategies I look at, they vary significantly during different periods of time because of the implied volatility. But I love strategies that have returns of 26 to 100% annualized based on historic weekly data. that being selling 12 and a.5% OTM weekly puts and buying 27.5% uh OTM weekly puts on on MSTR. SATA is not quite liquid enough for these put spread options, but you can start selling puts and their IV is a little bit higher than MSTR, so you get really strong returns. This has been a back tested portfolio. you're looking at, you know, compounded 132% annualized um or excuse me, compounded 87 87% uncompounded, but 87% annualized uh and 132% over the duration of this back test. So, what does it all lead? Well, that's one form of trading you can participate in is the put selling. And I'll give more updates. I think I might post like a live public portfolio of my automated put selling on with a you know a SATA or probably not SATA but like a stretch backing and then that leads you to the long portion of the portfolio. Well, if you're at a power law support band uh you better buy some leverage. So the thing about options is the IV varies dramatically and you if you want to sell these options you face a decision to realize a tax gain and or exercise into the options etc etc one way to do this is uh look at the price performance or payoff based on different periods of time and you know I'm looking specifically at the January 2028 leaps on AI assuming Bitcoin's at 200K at this this period of time which is 146% return and assuming AI returns two times out of Bitcoin AI being at 60 bucks the the optimized return is a $27 call which returns 6.5x so the equity would do a 3x excuse me a 4x and the option would do a 6.5x now if you're looking if you're at a you know 25% 20% long-term cap gains bracket or if it's short-term cap gains, you're at a 30 37% tax bracket.

[00:18:26]You're not beating the buy and hold of the equity with the option and the option carries significantly significantly more risk in the case these price targets aren't met by that period of time. Look, I just don't think these options are that attractive um based on these price targets simply because the equity performance is is good enough is good enough. And uh especially these longer duration these longer duration plays, you know, at the power law trend floor, you need to get real significant pullbacks in the equity prices or serious MNAV expansion for these calls to pay off meaningfully more than the equity. And will that happen? I mean, it could. It could, but I prefer the risks associated with equity of participation, especially if you're not like the question I think that individuals need to ask themselves more so than how many calls do I buy is what percentage of my portfolio do I expose to MSTR or ASST? And that's the real question. And I think that over a long period of time, specifically for the tax reasons, uh, is a more prudent question to ask. And again, using the options in a strategic fashion, I still think option spreads have really, really high payoffs if you nail kind of the power law bands. And we can go into some more examples of that later. Um, it's now time to get into the total MSTR. And this is what everyone loves.

[00:19:59]It's my spreadsheets on Bitcoin MSTR.

[00:20:03]I'm using I'm using a 30% annualized return. Okay, so these are the chart headers here.

[00:20:11]This is the month, the year, the bitcoins. It's up to date with current bitcoin prices, capital raise, convertible debt, um assuming the convertible debt rolls off, ATM used to pay the dividend obligations of the preferred and then with an assumed MNAV, what you get for prices uh based on shares outstanding for MSTR.

[00:20:33]You know, some of the price targets I'm looking at here is I I'm modeling out a million bitcoins by end of 27 for MSTR and a bitcoin price in 2030 of 350,000 uh into 400,000. This is about the power lock trend or cost of production power law floor. And I think these price targets are reasonable at a 1.2 times MNAV and a sustained 30% amplification rate. This is the thousand MSTR. So MSDR will meaningly outperform Bitcoin over that period of time. And then similarly, you know, 2035 strategy getting to plan C's kind of terminal 2 million Bitcoin, you could see a $6,000, you know, share price. So all this is to say, I think over a long period of time, STR will be highly highly successful in their Bitcoin accumulation strategy. What is that market cap in that period of time? Well, it's about two trillion, right? Going going to 10 trillion. Uh it's going to take a while. Like that's the thing about Bitcoin. It's a forever asset and takes a takes a really really long time to get, you know, crazy crazy returns, but it happens. So in my my little model, I have Bitcoin at um 3 million bucks in 2038 2038 3 million bucks and MSTR at a $7.8 trillion market cap or $15,000 a share.

[00:21:54]And so that would be massive um you know over that period of time. And I think this is completely reasonable. Like the thing I love about power law, my power law analysis, it's like I haven't been scared out of my Bitcoin position.

[00:22:04]Specifically because uh specifically because I haven't had crazy price targets. You don't want to have crazy price targets and then get freaked out and pissed off and you know compound interest is an amazing thing.

[00:22:17]The power law compounds your wealth and compounding will take effect here because Bitcoin is a durable forever asset. It's also the other reason why selling insurance on such an asset can be highly profitable over long periods of time. So, moving forward, more to come on options, put selling strategies, uh how to how to set up your long call portfolio and kind of arbitragees around the press. Again, I think the preps are full disclos like I don't hold any of the press. I probably won't hold any of the press. I think holding press for Bitcoin maximalists may serve certain people in certain scenarios. Um, but look, you know, I think digital crowd is a fantastic opportunity for a lot of funds, a lot of institutional investors with specific mandates.

[00:23:02]But for someone that's not scared of volatility, I'd argue the risks associated with stretch are very similar to the risks associated with Bitcoin um over over long periods of time. So yeah, I don't subscribe to this idea that Stretch is a bank account. I think you need to create a NEO bank with FDIC insurance for Stretch to have the same risks as a bank account. I think Stretch will be a killer killer product in financial markets as Bitcoin becomes accepted as pristine collateral. But today, I think taking on Stretch risk over a 10-year period of time is a bit silly relative to taking on Bitcoin risk. Um, look, I still think Stretch is going to be a massively successful product. I think it's one of the most important products. I think it's going to drive Bitcoin to $10 million per coin. As people who study these things and understand these things, I think you want to be a Bitcoin holder here. You know, Bitcoin looks very attractive at these prices. It's one of the few things in the equities markets. Well, based on PEG ratio, there's a lot of really attractive companies. Um, but I think we could be in for another good two, three, four, five, six, you know, 10 years.

[00:23:54]Look, the world of AI is changing a lot of things, and I'm super excited for the future. So, see you at Bitcoin, uh, Bitcoin 1 Million and MSTR MSTR 10,000.

[00:24:03]Thanks for watching.