Actually, Ben, this is a great example right now of Bitcoin is below its prior all-time high, – but Ethereum is pushing to a new all-time high. – Yeah. And so it just shows you that they don’t have to coincide with each other. I mean, Bitcoin still what? Like 20% below its prior all-time high?
And Ethereum’s pushing to $2800 potentially here in the not too distant future. So this is clear evidence that what you said is correct. You know, they don’t move in tandem. And actually this is the perfect chart to show that because this is not the Ether/USD valuation.
It’s the Ether/Bitcoin valuation.
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Guys, today, I brought on a very special guest, Benjamin Cowen, to discuss not only the market cycles, but Ethereum. What are the prospects? Is it realistic or not that Ethereum could hit $40K in this cycle? Could Bitcoin hit $500,000 in this cycle? So we cover all those topics and get Benjamin’s analysis on what is happening in the markets in the long term and for this cycle.
You’re definitely not going to want to miss it. Let’s go ahead and jump into the interview. Alright, guys, today, I’m very happy to be joined by a great friend of the channel, somebody that I watch.
I think he’s phenomenal. Benjamin Cowen, welcome to the show.
Thanks for having me back. Yeah, we were here a few weeks ago. – And it’s a pleasure to be back on your show again. – Yeah, absolutely. I love what you do.
I think a lot of the analysis you do is very unique. Right now, Ethereum is ripping. So let’s just, you know. Let’s not dice words here. Let’s get right into Ethereum.
Show us what you’re looking at on some of your charts and some of your analysis.
Are we at a top for ETH? Or are we looking at more upside? So, yeah, in the grand scheme of the cycle, I feel like Ethereum still has a lot of upside to go. And there’s a few different ways we can look at that, of course, but the best way, in my opinion, is looking at how it’s performing against Bitcoin, okay?
And I think a lot of times people overlook this very critical valuation because you want to know how is it performing against the No. 1, right? How is it performing against the No. 1? And what’s interesting is despite the fact that Ethereum has been on this roller coaster against Bitcoin basically since 2019, the general direction remains upwards, right?
The general direction remains up. And what’s also interesting though is we are nowhere close nowhere close to the levels that we reached back in 2017 or 2018. But there is a nuance to this that I want to make clear.
The first thing we can note is that in order to get to, say, the weekly close that we reached in January of 2018, Ethereum will need to go up another 113% against Bitcoin. And if we extended that to the top of the wick, another 150% almost.
And if we were looking at, say, back in the summer of 2017, that would actually correspond to closer to over 200%, okay? So about 208% return from the Ethereum/Bitcoin valuation would get you to the prior all-time high. However, there is a nuance to this type of analysis that we have to keep in mind. And that is the supply of Ethereum– you know, the supply is not constant, okay? So it might not necessarily be the fairest comparison to measure the price of Ethereum directly to the price of Bitcoin when talking about theoretical market cycle tops because we know the supply is not constant.
Well, what might be better is measuring the Ethereum market cap divided by the Bitcoin market cap, right? So that way, we’re not actually– we don’t care about the price.
We care about the market capitalization. And from this measurement, we still have a long way to go, right? We still have a long way to go even from this measurement, but it’s not quite as much, okay?
So to get to the theoretical– or to get to the prior all-time high of the Ethereum/Bitcoin market capitalization ratio, we still have 134% to go, which, again, is still substantial, still substantial, and it’s not quite as high as it would be, say, going to the exact price comparison, but I think this is an important distinction to make because a lot of people might not always consider what the supply is of the cryptocurrency, and, you know, when you’re getting into those crazy FOMO times, you know, it’s really hard to predict how high things will go anyways, but it might be somewhat useful to at least compare the market capitalization and realize that even with that, it still seems like we have a long way to go.
You know, you might look at 134% and say, “Well, does that mean that Ethereum’s USD valuation is capped at another 134%?” And I would say absolutely not because we know it’s a function of what Bitcoin’s value is, and I certainly think that Bitcoin will go higher than $64,000 in the grand scheme of this market cycle. So, you know, it always goes back to what Bitcoin’s valuation is. And Bitcoin’s valuation is not invariant.
So, again, 140% just to get to the prior all-time high of the Ethereum/Bitcoin market cap valuation, and that still depends on Bitcoin’s valuation, which I think still has a ways to go in and of itself. Yeah, I think, obviously, we’re not near the top of the market. But what I want to say here is if you remember when Bitcoin Cash launched, when Bitcoin Cash launched, it went insane.
On some exchanges, it went all the way up to $8,000 within the first hour that it launched on Coinbase. And I look– if you look at Bitcoin Cash and you look at the charts, and you look at its previous all-time high, which a lot of places put around I think $5,000 or $6,000, but on some exchanges, it is much higher, it was an anomaly.
It was just something that happened that you can’t really– like, the chart itself can’t really bake that anomaly in. And I feel the same way when I look at the Ethereum chart, when I look at that first run-up it had, to where it got all the way up to where one Ethereum was basically 15% of one Bitcoin, the value of one Ethereum versus one Bitcoin. When you look at that, that was I believe the run-up to when it got put on Coinbase. It’s only the second coin on Coinbase. There will never have anything again that will be the second coin on Coinbase, right?
Coinbase was already the No. 1 exchange the United States, and people finally from Bitcoin had an option. And I feel like that was an anomaly in the charts.
I look more at the 2018 price around 10% as actually kind of where I think the ceiling is. And I don’t necessarily know if it’s going to bust through that again.
My expectation is that we don’t exceed about 8% or 0.08 BTC for this run for Ethereum. But even at 0.08, we could still depending on how Bitcoin goes, depending on how high it goes, looking at, you know, Ethereum around $20,000 to $30,000. Actually, that’s a really good point.
You know, one of the things I’ve discussed before is the idea that maybe we’re not going to keep putting in new all-time highs for the Ethereum/Bitcoin valuation. What if it’s just sort of converging to whatever that fair value is over the long haul.
And then over here, it really overshot it. Here, it went way below it. And we’re sort of just slowly converging to that value.
I agree with you. I honestly don’t think Ethereum will make it to 0.15. I think that would be a bit too far-fetched. But at the same time, I think the most– the best way for people to approach Ethereum is to say, “You know what?
Yeah, it seems like 0.08 is theoretically possible.
Maybe a little bit higher.” And that’s not to say that it can’t go higher, – but at that point, you need to be exceedingly cautious, right? – Of course.
Right. Because even though people look at this and say, “Hey, it went to 0.15,” – it was only there for a very short period of time. – Yeah. And very few people would have actually had a chance to sell at those levels.
So we have to look at the fact that, hey, we actually spent barely any time at those levels. – We also barely spent any time at 0.1. – Exactly. And, you know, a lot of people spend their entire lives trying to figure out if they had bought at the bottom and sold at the top, what their ROI would have been, – but who is actually able to do that?
You know? – Yeah.
– Well, a time traveler. That’s basically– – Right. But, you know, let me know what you think about this because I think this is something that people have to take into consideration too, is that if let’s say Bitcoin gets to 10– or let’s say Ethereum gets to 10% of the price of Bitcoin, and let’s say Bitcoin peaks out at $360,000.
That number right there would exactly match the last bull cycle where it 18X’ed its previous all-time high. 17.8X but close enough, okay? Well, what people don’t factor in is when Ethereum peaks against Bitcoin, Bitcoin is not going to be at its peak.
So it’s not actually– like, if we say it’s going to get 10% of the price of Bitcoin, and Bitcoin goes all the way to $400,000, that doesn’t mean that Ethereum is going to peak at $40,000.
They’re not going to peak at the same time. So, like, I guess, you know, it seemed like– you seem to agree with that? Yeah, I think we talked about it a little bit about last time. Like, basically, you know, back in 2017, Bitcoin peaked on December 17, – and Ethereum peaked on January 13. – Yeah, right.
So they had about a month difference. And actually, I believe, you know, correct me if I’m wrong, but I believe that by the time Ethereum hit its peak, – you know, Bitcoin was at like $14,000 or 17– – Yup. – it wasn’t anywhere close to the $20,000. – About $14,000, I think. Yeah, I think it was around $14,000.
It wasn’t anywhere closer. So that’s something else you have to consider. I mean, I’m a little bit more conservative on the price predictions for Bitcoin. Like, I feel like, you know, $300K to $400K might be a little bit– I mean, I don’t want to say we can’t make it there because if anything, this cycle has been accelerating a lot quicker than I thought it would.
But I would say, yeah, it’s a good point.
You know, you have to remember that that one can come after– And actually, Ben, this is a great example right now of Bitcoin is below its prior all-time high, – but Ethereum is pushing to a new all-time high. – Yeah. And so it just shows you that they don’t have to coincide with each other. I mean, Bitcoin still what? Like 20% below its prior all-time high?
And Ethereum’s pushing to $2800 potentially here in the not too distant future. So this is clear evidence that what you said is correct. You know, they don’t move in tandem. And actually, this is the perfect chart to show that because this is not the Ether/USD valuation. It’s the Ether/Bitcoin valuation.
And so, you know, here’s an interesting chart. I don’t know if I showed you this one before. But this is like logarithmic regression rainbow for Ethereum that I made. And I think a lot of people, you know, they’ve either seen mine or they’ve seen– – there’s a number of these regression going– – I’ve seen the rainbow chart they call it.
There’s a number of these for Bitcoin. And so one of the things we can take away from Bitcoin is that each cycle, it tends to drop down a little bit on these regression curves, right? It’s not able to consistently keep up. Because if it did, if we stayed on, say, the top red band for, say, two more cycles, then in 2017, we would have already gone to $250,000, – which we didn’t do. – Yeah.
And so that same implication could apply for Ethereum as well. You know, maybe we don’t make it up to this band again. And this band is quickly running away from us. I mean, it’s already– I mean, first of all, we have to remember this is changing every day, so that the prices I say today aren’t going to be the same as they are a month from now or six months from now, but, like, right now the upper part of this one is already approaching $20,000.
So for the valuation of Ethereum to reach this one, it would have to go to $20K almost immediately, and it’s only going to get further and further away as time goes on.
And remember, this is a logarithmic chart. So if you just look at it, it might not look like it’s much. It might not look like much, but, I mean, this quickly moves up the price scale. So this is another another way I would say I look at the chart and we just recognize that, yeah, I mean, each cycle, it tends to do quite well, and I’ve often said, you know, I feel like it could easily conquer more of these regression lines as we continue along the way. Yeah, and I know that you– like, you’ve got a lot of charts that we’ve talked about in the last video that we did together and you do on your channel where you kind of show the market, but here’s what I want to ask you though.
I want to ask you what your opinion is because if you say that you think $300,000 to $400,000 is a little too high, and I would say for me, personally, that that’s– $300K to $400K is the most bullish scenario. I can see a crazy moon scenario where it tops out at $500K just like a huge wick from $400K or $500K, it goes back down. I don’t think that’s going to happen. I think that the $350K range, $300K to $350K range is where we go. But what’s your opinion on the stock-to-flow chart?
Because stock-to-flow chart shows a, you know, $289,000 Bitcoin, – which is very close, you know, to that 300 number. – Yeah. So when you say you think it’s too high, like, you think that could happen? Or, you know, what’s your opinion on the stock-to-flow? I think it’s all about, you know, what’s the probability that it’s going to happen.
Like, so for me to say that $300K can’t happen, which is basically what stock-to-flow is predicting– – I think $288K is what stock-to-flow predicts. – Yeah.
For me to say that it can’t happen, I’m not really doing those models justice. I mean, I think all models provide some useful insight into the market. And at the end of the day, all models are going to be somewhat wrong.
I don’t think any of us are going to come close to predicting the exact day the market peaks or the exact price that it peaks, you know.
But we can use all these models to try to get our best estimate. And I know, you know, if you look at, say, like the ROI from the halving, right? If you look at the ROI from the halving, you can see that we could still theoretically have a ways to go, and we know the valuation of Bitcoin was around $8500 or so on the day of the halving, and the last cycle from the halving put in a 30X.
So if we were to say 30X times 8000, you know, we’re looking at around $240,000 Bitcoin.
But it was above $8000, so we’d be looking at close to $250K, you know. And now, we get you to that $250-300K window if we were in fact able to do a 30X, again, from the halving. The only reason– and, Ben, believe me, I would love it if we had a $300,000 Bitcoin. I would consider that to be the most bullish scenario. And I actually, yeah, I think that this is the most bullish scenario.
It would be like a $310K, $300K to $350K Bitcoin, like, the most bullish. If it happens, great. We’ll celebrate. If it doesn’t, then we’re still doing quite well. – You know, we’re still doing quite well.
– Yeah. But, yeah, if you look at this chart, you see the ROI after the first halving was 100X, and the ROI after the second halving was 30X, and so, yeah, it’s certainly possible.
And by the way, we’re currently at a modest 7X from the halving. So it sort of shows that, you know, it seems like there still is a lot of potential room for upside. And I would say, you know, my theoretical cap on what I can see the upside being as measured from the halving would be 30X because that’s what happened last market cycle and also it happened at a lower market capitalization, you know.
Last cycle, we didn’t have institutional money. – We didn’t have like Tesla putting in $1.5 billion into Bitcoin. – Yeah. I mean, they also sold a little of that recently, too.
But we didn’t have that happening. We didn’t have that happening. But, again, the market cap is higher so I would say, yeah, this is why I say, you know, $300K would be like the most bullish scenario because if we go up 30X from the last halving, we’re looking at exactly what we did last cycle. I would say it’s theoretically possible, but I don’t necessarily– I don’t– I wouldn’t necessarily say I’d put all my eggs in that basket.
And again, if you look at the market cycle ROI from the bottom, you can see that the first one– and by the way, these are not– they’re not entirely done justice.
The first one, if you took like minute data and hourly data, this would easily go up to like, you know, 700X, 800X, 900X, but it’s because I’m using daily closes that it’s actually only at a modest 600X. But this was 600X, 500X, 100X, and currently, we’re looking at a more modest 20X, okay? And so, from where I’m sitting, you know, I go back to what you said, and you’re saying, you know, you think a 300, a 350 is theoretically possible, that would be the most bullish scenario in my opinion because that’s essentially putting in 100X from the bottom, right? I mean, Bitcoin hit $3100 at the bottom, so 100X when there’s $310,000. And that would put the market cycle ROI as measured from the bottom on par exactly with what happened last cycle.
And so far, we’re actually ahead of schedule, right? – So far, we’re ahead of schedule. – Yeah, and that’s what I was going to say. According to most charts I see comparing this cycle to the previous cycles, right now, we’re actually ahead. Like, if you looked at the stock-to-flow, during 2017, we actually stayed kind of under the mean line, – but now we’re bouncing off it.
– Right. And so I think there’s a lot of stuff that seems like– like, look. We got institutional money. We got corporate money. We have pandemic.
We have stimulus. Like, it’s just really been a perfect storm. But I still– like, that’s why I stick to my, you know. I definitely stick to my $322,000 number. – It’s right in that $300K to $350K range.
– Right. I think that all of the bullish stuff– because you do have to think about the market cap and just how big that’s got to be. Like, even if everything’s going right, that’s still like, you know, your average person looks at that as outlandish, but, you know, we’ve been pretty dead on with where we thought Bitcoin was going to be, you know, all year by our earlier projections, and so I don’t think that’s going to change, but, of course, you know, who knows what’s going to happen? We could have a stock market crash or the Fed could come out and say – they’re going to reduce interest rates or whatever the case may be, – Right.
Or increase interest rates, whichever one it is.
And, you know, it could get thrown off. But as of right now, I think we’re on track for, you know, a $300,000 to $325,000 Bitcoin. But if we get, if we– This is what I’ve always said. If we only get a $200,000 one, I think we’ll all be able to feed our families. Yeah.
You, know, I think the other thing too if you remember too is like, you know, if we do go to $300K, which I would say is probably the most bullish scenario, we’re probably only going to be there for a very brief moment in time before we come back down to Earth for a while because if history is any indication, after these crazy bull markets, you do get some pretty volatile movement to the downside.
Now, I mean, I don’t– I think there’s evidence we’re getting diminished volatility, so not only to the upside but also to the downside, which is people don’t like to hear it for the upside, but it actually works in your favor to the downside. So, yeah, I mean, I would say, you know, “Hey, Ben, I’m right there with you.” Like, we’re looking at the chart and it looks like right now we’re ahead of schedule. If we’re able to continue to stay on schedule, then it essentially means we’re going to be going up another 6X by the end of the year or maybe even a little bit earlier than the end of the year.
So I think we’ll have more data– I mean, by the summertime, we should have more data. We’re either going to be on track with it or we’re not going to be as we head into the final part of the year.
So, yeah, let’s see how it plays out on the chart. I mean, I would love to see $300,000 Bitcoin this year if it happens. Well, I think it’s definitely possible.
I can’t wait to see if it happens. Benjamin, as always, thank you so much for coming on the show today. I look forward to having you back on the show again in the future. One of my favorite YouTubers. And, guys, make sure to go subscribe to Benjamin Cowen’s channel.
You guys can get access to that down below in the video description. We’ll put the link for you guys to go to subscribe. Anything you want to leave us with today? You know, I think, in general, I think a lot of people are always worried about the short term, but I think, you know, whatever you think, whether it’s stock-to-flow, whether it’s the 4-year cycle, whether it’s– whatever it is, you know, basically every single chart– most of them seem to indicate that in the grand scheme the market cycle, time is on our side and that you should not sweat the daily moves.
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