Published: Monday, November 24, 2025 · 8:00 PM | Updated: Monday, November 24, 2025 · 8:00 PM
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🗝️ Key Points
- 00:00 Speaker A There was a lot of retail investors that bought cryptos at the top this year.
- What should they be doing in and and thinking as we get into the new year?.
- 00:09 Speaker B Well, I hope that what they bought was not their entire position on a dollar base of what they were planning on spending.
00:00 Speaker A
There was a lot of retail investors that bought cryptos at the top this year. What should they be doing in and and thinking as we get into the new year?
00:09 Speaker B
Well, I hope that what they bought was not their entire position on a dollar base of what they were planning on spending. So every time I’ve been asked about this, um during bull markets, bear markets, whenever it is, again really any idiosyncratic asset, any volatile asset, um even one that you expect to go up over time, dollar cost averaging is your friend. I mean it’s just I I don’t I don’t I’ve been working in the hedge fund space for 20 years almost. Um I don’t know any, I’ve known the best investors in the world. Um none of them think that they can market time. And if they think that at any period in their career, they get slapped in the face by the market really, really fast. So I I genuinely hope these people took that advice. And if they did, if that was an opening position, whatever their intended investment plan was, if that was their opening position, the worst thing you can do at this time is not be consistent and persistent. Um so yeah, so so I hope if they did go all in and try to market time, I hope they learned a lesson from that and don’t do that in the future for Bitcoin or any other asset class. Um but if they didn’t, we know for a fact that not entering the market at the right time, not continuing with that pattern is what hurts alpha over the long run. That we know with 100% certainty.
01:45 Speaker A
What what’s the catalyst? You you ticked off a couple catalysts and to your point structurally, things seem the same as they were a couple months ago. What’s that next, first of all, what would arrest this sell off? Like what would you need to see?
02:04 Speaker B
So, for me, I need to see changes in the market structure. Like so what I mean by that literally is, um, a narrowing of depth and breadth of market participant. So markets, we talk about like, people say, oh, this market’s really liquid. Um, that means you can come in and out with little friction. You don’t move the price when you come in and out. But there’s an that’s market, so that’s market uh depth, how deep is the market. There’s also market breadth. How many participants are in the market? And then even more importantly, how many different types of participants? You can’t if everybody wants to sell their bike, you I don’t care if it’s a billion people, you don’t have a functioning market because everyone wants to sell their bike. If you have a mix of buyers and sellers, that’s a good start. But if everybody buying the bike wants it for exactly the same purchase, you don’t have good liquidity, because maybe you selling your bike, it’s not the right color, it’s not the right timing, it doesn’t have the right speeds or gears on it. So you need breadth of market participation. That means you need institutional players, you need retail, high net worth, average people. You need ETF buyers, you need accredited purchasers, you need strict retail. You need people entering as speculation. You need people who are hedgers. You need all those different types. So that’s the one luxury we have at Coinbase is we get to see the breadth of that market because all the market participants come to us. And that encourages me. is I’m seeing more diversity and breath of market participation than I saw 3, 6, 9, 12 months ago. When that starts to break down, when that starts to narrow, which is correlated to my prior comment about open interest, when open interest decreases, that means people are leaving the market. They’re closing a position, they’re not opening up a new one. If you close your position and open up a new one, open interest stays level. Okay? If you close your position and go home and say I’m I’m done with this, it goes down. So as long as the breath of participation’s increasing, as long as open interest is staying stable or increasing, then I’m confident, because I believe in the asset. If you don’t believe in the asset, you have a different view, but it’s hard to on price direction, but it’s hard to say that the market structure is suffering when you have those metrics.
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