Deryck Graham: In this episode of Bitcoin and Beyond, we're breaking down how crypto closed in Q1 2026. Structurally the strongest it's ever been, yet still capped by macroeconomic headwinds unrelated to Bitcoin. We discussed the record $316 billion of stablecoins sitting on the side of the market, Bitcoin exchange reserves at eight year lows and a clear seller exhaustion. And we'll cover the three key catalysts to watch and why this macroeconomic ceiling appears to be the only thing holding back an otherwise structurally sound market. Good morning and welcome to another episode of Bitcoin and Beyond. My name is Derek Graham. And with me today, of course, is Greg Galton. Good morning, Greg. Good morning, Derek. And good morning to all our regular viewers. a lot happened in the first quarter of 2026. So, Greg, where did Bitcoin and the broader market actually finish the quarter? And what's the big picture takeaway, do you think? I think, yeah, it's been an incredibly frustrating first quarter to the year. Bitcoin and the market generally is pretty much ended there almost exactly where it started. Crypto is structurally stronger than it's ever been, but it's been held back by macroeconomic forces, as you said, that have nothing to do with blockchain. So, know, Bitcoin rallied to $75,000 almost two weeks ago on the landmark SEC, the Securities Exchange Commission. and Commodity Futures Trading Commission classification that basically said most tokens are not securities, that they're commodities, which is a fantastic outcome. yet, Bitcoin closed the quarter right around the 66,500 level. So we've got a situation where ⁓ the war with Iran is now in its second full month. We've got oil above $100 US per barrel. And that's sort of that one single projected rate cut. that the Fed has in place for 2026 feels increasingly theoretical. So the price action was muted, but the underlying foundation is really rock solid. Yeah. Well, look, the week of March 23 to 30 was pretty wild. Maybe walk us through what happened on March 23 with Trump's true social post and the Iran response and why that moment felt so important to the world of crypto. Yeah, I think that that Monday morning, perfectly illustrated the new normal. So everyone's following Trump's social posts and we all know that he tends to post outside of US trading hours. So Bitcoin was trading around about 67 and a half, 68 and a half in the Asian session. Trump then post that US strikes on Iranian power plants will be paused for five days. because of, in his words, very good and productive conversations. I'm not going to try and mimic the way he talks. He had Bitcoin was up $3,500 higher in under an hour, a 5.5 % move driven almost entirely by short covering. And of course the rest of the market surged with it. And yet minutes later, Iran's Fahir news agency denies any direct communication with Trump whatsoever. and threatens retaliatory strikes. So Bitcoin immediately gave back over a thousand dollars and we ended up seeing $415 million in liquidations in crypto in just four hours. The $280 million short and $135 million long. And the net impact was incredibly frustrating. The net price move was modest, slightly higher, but the damage to leverage traders was huge. It wasn't random volatility. It was a market structure story. with crypto very much at the center of that. Look, it's extraordinary whether some of these statements are made, you know, in view of having some people better set in the market because they are so radically different to each other. And a lot of people then are looking at Bitcoin and calling this the first real time war market marketplace. What does it actually mean? And why is it structurally shift can't be unlearned? because it has changed from the days of Bitcoin, whales and retail to the world of institutional investors, hasn't it? Yeah, absolutely. We know that there's much more institutional investor participation in crypto or in Bitcoin specifically. And yes, you can't trade those ETFs outside of US trading hours. And I think some of these tweets, these announcements have been made. Clearly knowing that the outside US trading hours having a market reaction and then often walking them back before the US market is even open again. I think every major geopolitical event now outside these regular trading hours is now a crypto event firstly. For example, when Trump announced the start of operation Epic Fury on February 28th, traditional markets were closed. Crypto was the only liquid market open for global price discovery. all weekend. We talked about that before, the oil contract that's traded on hyperliquid 24-7 was the only one that was able to react. And of course, people shorted that. They also shorted Bitcoin because they knew that their equity positions and their bond positions were going to be impacted Monday morning. And I wanted to at least make some profits on a short position in crypto. And I think March 23 repeated the same pattern. And I think there's something that we follow Matt Haugen from Bitwise, the CIO there. He called the February weekend, the weekend that changed finance. And I think now that's the baseline. You've got the New York Stock Exchange and NASDAQ are scrambling to extend trading hours precisely because they're trying to close the gap that crypto has created. The transmission mechanism is now faster than ever. Trump tweet, oil rockets up. changes Fed policy expectations, that'll have an impact on ETF flows. So you sell your Bitcoin or your short Bitcoin on an exchange that's open 24 seven. That's all happening in real time on 24 seven order books. It's quite phenomenal. And it is phenomenal because in the past, traditionally presidents didn't announce major decisions or policy statements from their bed at two in the morning. And that's what It's what Trump is often doing and he is, if nothing else, a master of controlling the narrative and Truth Social, just his platform that he's releasing the information on, is now controlling that narrative. This has never happened before. Markets have always been well informed during market times. And so yeah, you are seeing this totally different phenomenon and crypto is there 24 seven. So it's able to. take these swings and Bitcoin is the largest volume turnover. It all makes sense, doesn't it? But beneath all the headline noise and the on-chain data tells a very different story. What are the key structural positives that we're now seeing with the on-chain data past the headlines, past the institutional investors that are just trading the oil futures on the weekend and what sits underneath it? Yeah, well, I think just three numbers tell the real story. Stablecoin supply just hit a record $316 billion. That's capital that's not left the ecosystem. It's sitting on the sidelines waiting to be deployed. Secondly, Bitcoin exchange reserves are near 2.3 million Bitcoin. That's the lowest levels in 2018. So the amount of Bitcoin available to sell is historically constrained. Thirdly, finally, well accumulation data shows that large holders are still adding, not exiting. And you've got a situation where realized profit across the network has collapsed about 96 % from its July, 2025 peak, which means the sellers who wanted to cash out have already done so. Now that doesn't mean the Bitcoin can't go lower. If things really escalate into, you know, World War III, you will see people take short positions, but a lot of the sellers are exhausted. would only be the speculators that would drive Bitcoin lower. And look, you've seen fear and greed has been stuck below 25 for more than 50 straight days in a row. None of this looks like a pitulation. It looks like a market that's waiting with the highest ratio of potential buying power to available selling supply that we've ever seen. What's extraordinary about Bitcoin and this crypto market is that the level of real-time visibility and historical visibility and ownership holdings are very, very available. They're just immediate. There's no T plus two days or T plus one day or anything like that. You can see it. And this is one of the reasons why we're able to sort of look at, look at the marketplace and analyze it say, well, you know, why did Bitcoin, ⁓ you know, outperform the rest of the market last week, despite the drawdowns, you know, what does this tell us about where we are in the cycle and how should investors think about things like ETF flows, which although external to Bitcoin, of course aren't cause they ultimately acquire their Bitcoin back to back on the marketplace. We're still seeing noise and story, but not a lot of the facts that are actually happening on the Bitcoin chain. Yeah, think what we're, you still get a lot of people in crypto are hoping for an alt season. And that's looking less and less likely at the moment. So Bitcoin dominance continues to grind higher heading towards 60%. And that's the market really saying when risk off sentiment hits capital consolidates into the liquid most institutionally backed asset first. Now I'm talking about risk off within crypto. As we know, crypto is a very much highly leveraged risk on asset, but within crypto coins, clearly the sort of the most liquid institutionally backed asset. But what we did see is we did see the first simultaneous net outflow day. across Bitcoin, Ethereum and the Solana ETFs on March 26. That was $171 million out of Bitcoin ETFs alone. That was driven by two things. think firstly, the 10 year treasury yields approaching 4.5 % in the US and a stronger dollar as the market priced in no Fed cuts whilst the oil price stays above a hundred US bucks a barrel. But look, I think you need to understand these are sentiment signals. They're not structural exits. The cumulative ETF inflow is still strongly positive. And again, that $316 billion in stable coins is parked and ready to go. And when the macro ceiling cracks, i.e. the oil price, the same infrastructure that generated $280 million in single day short liquidations can just as easily generate massive inflow surges. and create another period of short liquidation. that's really just waiting for that to occur. It's a classic example of on the other hand, you know, we need a one-handed economist here because the statement is structurally it's strong. Look at the fact that we've got huge $300 billion worth of stablecoin sitting there. It sits and waits for only one reason because they're not getting a return on it. In most cases, it's waiting to enter the marketplace and Bitcoin selling is nearly exhausted. I mean, there's just There's a lot of indications saying it's exhausted. So it's sitting there indicating that Bitcoin should go for a solid run, but we never know what's going to happen with the next tweet. And that's the path that's very hard to predict. With all that in mind, looking ahead in Q2, what are the three biggest catalyst investors should watch for with the consideration of maybe deploying some of their dry powder? Yeah. And I think looking into my crystal ball, it's a bit cloudy at the moment, but I think you have to look at that record stable clone supply sitting inside the ecosystem. It hasn't left the ecosystem. still there. Combined with those eight year low Bitcoin exchange reserves creates a situation where even a modest redeployment of capital into Bitcoin runs into a historically thin supply. Now, I think there are three catalysts that could trigger this and these are In order, think of, of, of likelihood, any verified ceasefire or meaningful de-escalation in Iran that pushes Brent crude sustainably below $90. I think that will be the biggest catalyst to see a recovery of flows back into Bitcoin and crypto more generally and risk on assets more generally. I think we can sort of talk about the probabilities of that happening, but at some point in time. That has to happen. So it's a question of time. The second potential catalyst is an April, April CPI print that lets the market reprice a Fed June rate cut. I think that's unlikely. I think that obviously the CPI is going to be affected by the oil price, but on the other hand, the Fed has a dual responsibility and that's also to keep a check on the US employment outlook. And that's deteriorating. So there's a chance that we get a number that's good enough that means that we could see a rate cut. But I put a lower probability of that. And then finally, the Clarity Act reaching the Senate floor vote. we think that will eventually happen. Trump's really personally pushing it as hard. He's pushing it as a geopolitical issue with China in terms of dominance of the US dollar, because we know that the dollars faced a period of de-dollarization. And obviously, West Stablecoin sort of helped restore that hedge of money of the US dollar. we're in a, and that's, you know, probably has a fairly high probability of occurring, but we just don't know when and it's very politically driven. So I don't like to predict political outcomes because they can turn on a dime. But this combination of low fear and greed, a lot of dry powder has historically delivered median 90 day returns of about 38%. That would see a very solid quarter in our universe. The only thing holding it back is the old driven price macro ceiling. If that ceiling breaks, the structural strength that the ecosystem has built over the last two years finally gets to price it in. And we would expect a significant price rally on the back of that. You know, these days more than ever, it's extraordinary. In fact, it's impossible to predict what Bitcoin will be in two weeks or a month or, you know. whatever in the short term. In the longer term, you know, there's a great deal of confidence. Everyone I speak to everyone involved with this, everyone that's not sort of, you know, a gold bull or a Luddite is interested in seeing Bitcoin's long-term position and viewing it as very robust. But the reason it's impossible to predict is not because all the indicators aren't there because they are, you just went through them. They're there very clearly. It's impossible to predict because We now live in a world where a president does wake up at 1.45 in the morning and put a tweet out and you can't predict what that's going to be or what the impact of the market is going to be. So all we know in the short term is the market's volatile and it will change on a regular basis. But in the longer term, we still have the same view of accumulating Bitcoin's, fair to say. Any last words, Greg? Yeah, I'll just highlight that the first quarter proved that Bitcoin isn't broken. It's just simply waiting. And I know that sort of quiet is easy to say, but the on-chain data and the foundation there is the strongest it's ever been. Again, remember, and this is obviously we don't provide financial advice, but these leveraged cascades are noisy, but temporary. The dry powder argument is real. The lack of supply is real. And the macro ceiling is the only thing that's keeping the lid on the Bitcoin price. the first geopolitical de-escalation or Fed pivot that cracks $90 oil. is going to let that capital redeploy into the thinnest supply we've seen in eight years. My advice to people would be to stay patient, size positions to survive the headline volatility, and then the setup for the rest of 2026 looks extremely constructive once the macro noise clears. And then I think that's fairly solid advice. And having said that, we don't give advice. So we just provide our opinions on the way through. I think, you know, what you're suggesting there makes good common sense. And that's how it should be received and considered from the investors along the way that are listening. This is an extraordinary market. The news needs to be updated on a regular basis. We're delighted to be part of that activity and we look forward to our next Bitcoin and Beyond episode in a week or so. All right. Bye for now, Greg. Thanks, Tariq.